Project of constructing regional center for waste management for the region of Niš in accordance with ppp model with elements of concession

The primary goal of the project is establishing sustainable waste management system by analyzing all waste treatment options, for the purpose of reducing environmental hazard and preventing space degradation. Implementation of the primary goal will be carried out through partial project goals which refer to:

  1. Meeting the amplified requirements for environment-friendly waste removal (the result of which will be increased disposal costs);
  2. Applying the principle of charging real costs of waste disposal to the polluter, waste producer;
  3. Implementation of new production technologies and waste treatment procedures;
  4. Researching recycled products market.

Communal waste in the region of Nis is mostly collected by public communal enterprises which are founded by local self-governments. Vehicle organization and waste container arrangement are based on assessment and previous practice, not on appropriate analysis of the number of residents, frequency of filling and emptying the containers and vehicle capacity. The following waste collection and transportation problems are to be emphasized: inappropriate number and structure of waste collection containers; inadequate arrangement of containers; lack of appropriate waste transportation vehicles; inadequate frequency of waste transportation; inappropriate transportation routes; unsolved problem of transporting waste from health institutions and some enterprises.

Disposing waste at landfills is the only way of organized waste treatment. Every local self-government in the region of Nis has its own landfill- dump. Capacities of the existing landfills- dumps are already filled and majority of landfills does not meet the minimum technical requirements. Landfill gas, which occurs as a result of waste decomposition, is not removed which may lead to fire or explosions. Infiltration water from the landfill is neither collected nor treated, which might endanger underground and surface waters and soil due to high content of organic matters and heavy metals. There is no systematic monitoring of emissions, infiltration water, landfill gas, etc.

Integrated waste management implies treating waste, from the moment of its creation, minimization, collection, transportation, to treatment and disposal. Decision on choosing the most favorable treatment option is adopted after analyzing waste life cycle and it considers the characteristics of the location where waste is created. The concept of waste management hierarchy points to the fact that reducing waste creation is the most efficient solution for the environment. However, if further reduction of waste is not applicable, products and materials may be reused for the same or other purpose. If reusing is not possible, waste can be used for recycling, composting or producing energy. Only if none of the above mentioned options can be used, waste is to be disposed at the landfill. Having all this in mind and analyzing Regional Waste Management Plan, building Regional Center for Waste Management is absolutely necessary. The Center infrastructure will contain the following elements:

Regional landfill for non-hazardous communal waste. Inactive waste landfill and infiltration water treatment plant can be constructed within the Center, all in accordance with the regulations.

Recycled waste separation plant is set up next to the landfill. It contains technological line for automatic or manual waste separation. Recycled materials are baled or pressed and then transported to appropriate recycling plants.

Waste treatment plant can include the entire mechanical-biological waste treatment, or just aerobic waste treatment at the plant or at compost field which is located next to the landfill. The final product of the plant is energy from the treated non-hazardous waste.

Description of project feasibility and sustainability

Efficient and reliable waste management service is the backbone of urban economy development. The goals of reducing service costs may be different from environmental protection goals. In order to define the appropriate costs, it is very important to provide reliable information on the source, quantity and composition of waste, as well as on the number of households- service beneficiaries and the percentage of communal service debt collection in the region.

At this moment, the only economic instrument for managing waste in the region is collecting debt. Communal waste collecting and disposing is charged. Collection is mainly calculated per square meter of residential or business area. Sometimes, other collecting criteria may be used: the type of residential building or, in case of business sector, the surface area of used space, location, type of activity or waste quantity. The application of the well-known instrument has a long tradition related to communal waste. As a rule, collection is carried out by public enterprises which collect, transport and disposes waste. Households are charged once a month, by means of unified system for charging communal service (usually with water consumption bill), or separately. Large cities usually apply unified collection systems, while smaller towns charge services separately. Introducing separate tax for waste treatment is planned in the future.

Explaining the need for initiating partnership with private partner

Introducing the elements of competition and liberating the market of services that communal enterprises offer are of outmost importance. The change of business subjects’ ownership structure does not guarantee increase of allocative and productive efficiency. Sometimes, early privatization may aggravate sector liberalization. Therefore, it is much better to transfer the rights of performing specific waste management tasks to private or public-private partnership by means of concession agreements.

Introducing competition is very important for transformation processes and it is to be done wherever possible. Competition in the concession granting process and constant monitoring of concessionaires are crucial for sector efficiency. If appropriate, competition related to the battle for the market may have positive effects on general affairs. Various types of arrangements (such as Design Build Operate: DBO, Build Operate Own: BOO, Build Operate Dispose: BOD, etc.) may be useful in the field of waste disposing and recycling.

Generally speaking, private sector’s participation in the areas which have traditionally been controlled by the public sector is clearly increasing. Private sector’s participation may achieve numerous goals: providing investment capital, reducing the need for subsidies, improving management efficiency, enhancing technical and managerial capacities of local public organization, etc.  There are numerous forms of public sector’s participation. However, frequent classifications imply the criteria of investment, ownership and liability (risk).

Group one implies the forms where private sector’s participation is the smallest: public sector is still the owner of the funds and responsible for the investments, while the risk is divided in accordance with agreed proportion.

Providing services: private sector is engaged for performing specific activities. Agreements are usually signed for a shorter period of time. Public sector’s interest is in including private sector’s expertise for performing specific technical tasks or introducing competition in the area of carrying out specific activities.

Management: private sector takes over responsibility for production-technology function and maintenance of communal enterprises which are still public ownership. The important element of the agreement is the degree of transferring commercial risk to private sector, which is now motivated to reduce costs and improve the quality of services.

Lease: private sector takes over responsibility for managing and maintaining leased funds, buys the right to enterprise’s future cash flow and takes over the majority of commercial risk. This is often the first step towards including the private capital by means of concession.

Group two, generally referred to as concessions, implies cooperation forms where public sector transfers management rights to private sector, but retains ownership over the existing funds, i.e. after a certain, usually long term (20-30 years), period public sector takes the funds which have been financed by the private sector during the period of the agreement. Typical arrangement is BOT which is mainly used for new projects that imply building capacities (Built), management (Operate) during the agreed period and transferring (Transfer) ownership to public sector after the agreed period. Regional Center for Waste Management can be the subject of such an arrangement.

A brief overview and review of finished documents

The closure of local landfills and dumps, as well as the establishment of Regional Waste Management Systems are envisaged in accordance with the National Waste Management Plan, where Nis region is defined as the Region 24 for waste management. Accordingly, on March 15th 2010. the Agreement on establishment of  Nis region for joint waste management between the  City of Nis and Municipalities of Doljevac , Gadzin Han , Merosina , Svrljig , Aleksinac, Sokobanja and Razanj was signed . For the purpose of forming the Nis region for joint waste management, the signatories agree to develop and implement the Regional Strategic Waste Management Plan. During May and June 2013, Regional Strategic Waste Management Plan was completed and adopted by all the assemblies of local self-government units, which are part of the regional system. Along with making the decision on adoption and implementation of a Regional Strategic Waste Management Plan for Nis region, the local Assemblies made the decisions on the adoption of the Agreement on mutual rights and obligations in implementation of the Regional Waste Management Plan. The signing of the Agreement on mutual rights and obligations in implementation of the Regional Waste Management Plan was performed at the meeting held on 19.07.2013. thus gaining the  legal basis for initiation of the concession process. The Article 21. of this Agreement stipulates that the costs of preparation and implementation of PPP Project are on the Private partner, and they are an integral part of the tender documentation.

The following documents required by the Law on Planning and Construction, and the Law on Waste Management, are completed:

  • Pre-Feasibility Study (EKOCENTAR NIS – Center for collection, selection and disposal of municipal solid waste) – A study was completed in April 2007, prepared by the Institute Kirilo Savic, while the subcontractor was the Urban Planning Institute Nis.
  • General project (EKOCENTAR NIS – Center for collection, selection and disposal of municipal solid waste) – The project was developed in April 2007, prepared by the Institute Kirilo Savic, and the subcontractor was the Urban Planning Institute Nis.
  • A preliminary study on selection of the location – shortlisted locations for assessment with the purpose to identify and propose the optimal location were: 1a Existing landfill and 1b Keles, 2 Lalinske pojate and 3 Civutsko cemetery. The location 1b Keles was proposed as the optimal alternative solution, entirely located on the territory of Doljevac Municipality, bordering with the City of Nis territory.

According to the Law on planning and construction, planning basis was determined in the planning documents:

  • Regional spatial plan for Nisava, Pirot and Toplica districts
  • Spatial Plan of the City of Nis
  • Spatial plan of the Municipality of Doljevac
  • Preparation of Detailed Regulation Plan for the future location of the Regional Waste Management System is ongoing.

Further actions and procedure for the implementation of a public – private partnership project with the concession elements

Before drafting a proposal for adoption of the Concession Act, a Public Body (in accordance with the Article 20. of the Agreement on mutual rights and obligations in implementation of the Regional Waste Management Plan of Nis region it was defined  that the Regional Development Agency South is the Public Body for launching and implementation of the PPP process, in terms of the Law on  PPP and  concessions  ) appoints an expert team of Public Body for  producing the tender documentation. The tasks of Public Body expert team are:

  • Performing the evaluation of  concession value;
  • Preparing the feasibility study  of concession giving ( as well as preparation of required analysis) ;
  • Preparing a proposal for the adoption of the Concession Act ;
  • Providing the assistance to the Public Body for preparing and developing the terms and  tender documentation t, drafting the rules and terms for assessing of bidders and submitted bids, as well as criteria for choosing the best bid;
  • Controlling and assessing the submitted bids
  • Defining the draft resolution on selecting the best concession offer and proposal for annulling concession grant procedure, including the argumentation of such drafts;
  • Performing other tasks which are necessary for implementation of concession procedure.

Planned dynamics of documentation drafting is as follows :

  • Concession Granting Feasibility Study – March 2014.
  • Draft Concession Act – April 2014.
  • Draft Public Agreement – June 2014.
  • Tender documentation – August 2014.
  • Publishing the public call for interested private companies – August 2014.
  • Detailed Regulation Plan of the area – June 2014.
  • Expropriation of land – October 2014.

Documents for download: Download: Questionnaire for bidders (365.07KB)
Date: 03/03/2014
Description: Download: Regional strategic waste management plan for the region of Niš (155.56MB)
Date: 03/03/2014
Description: Download: Agreement on Mutual Rights and Obligations Regarding the Implementation of Regional Waste Management Plan for the Region of Nis (171.68KB)
Date: 28/02/2014
Description: Download: Project of constructing regional center for waste management - Keles (468.81KB)
Date: 28/02/2014

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