AKHILE CONSORTIUM
MSA Section 78(3) to Assess
Alternative Service Delivery
Options
RFP NO: 554C/2008/09
EXECUTIVE SUMMARY
SOLID WASTE MANAGEMENT DEPARTMENT
11th February 2011
Final – Version 7.0
i
CITY OF CAPE TOWN
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Abbreviations
ABC ................................ Activity-Based Costing
AD................................... Anaerobic Digester
ASD ................................ Alternative Service Delivery
BI .................................... Business Improvement
EfW ................................. Energy-from-Waste
EIP .................................. Eco-Industrial Parks
HHW...................................Household Hazardous Waste
IWMB .............................. Integrated Waste Management Bylaw
IWMF .............................. Integrated Waste Management Facilities
IWMP .............................. Integrated Waste Management Policy
MFMA ............................. Municipal Finance Management Act 56 of 2003
MIS ................................. Management Information System
MSA ................................ Municipal Systems Act 32 of 2000
NEMWA .......................... National Environmental Management: Waste Act 59 of 2008
OWM .............................. Organic Waste Management
PACSA ........................... Packaging Council of South Africa
PAMSA ........................... Paper Manufacturers Association of South Africa
PRASA ........................... Paper Recycling Association of South Africa
PETCO ........................... PET Recycling Company (Pty) Ltd
PPP ................................ Public-Private Partnership
REL................................. Rear-end Loader
REG ................................ Regulatory Change
ROSE Foundation ........... Stands for “Recycling Oil Saves the Environment”
RPMASA......................... Responsible Packaging Management Association of Southern
Africa
RTS ................................ Refuse Transfer Station
SATRP ............................ South African Tyre Recyclers Process Company
SWM ............................... Solid Waste Management
SWMD ............................ Solid Waste Management Department
t/a or t/yr.......................... Tons per annum or tons per year
WB .................................. Waste Beneficiation
WCB ............................... Waste Collection Branch
WIS ................................. Waste Information System(s)
WPF................................ Waste Processing Facility (ies)
WtE ................................. Waste-to-Energy
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MSA SECTION 78(3) TO ASSESS ALTERNATIVE
SERVICE DELIVERY OPTIONS
RFP NO: 554C/2008/09
Executive Summary
The City of Cape Town (the City) requires an assessment in terms of Section 78 (3),
Assessment of Alternative Service Delivery (ASD) mechanisms, of the Local Government
Municipal Systems Act 32 of 2000 (MSA).
This is needed to place the City in a position to make an informed decision as to the most
appropriate mechanisms for the Solid Waste Management Department (SWMD) to meet
new legislative requirements and to reduce waste and divert waste from landfill.
The National Environmental Management Waste Act 59 of 2008 (NEMWA) (refer to
Appendix A), which came into effect on 1 July 2009, requires that waste minimisation be
considered by municipalities in addition to municipal services such as cleaning, collection
and disposal to landfill. In developing any ASD mechanism for waste management,
efficiency, effectiveness, sustainability and affordability considerations must also be taken
into account within the City’s municipal environment.
The legislative environment in South Africa has changed in the last 15 years in terms of
waste management giving effect to waste minimisation and diversion from landfill becoming
a key focus for municipalities. (Refer to Appendix A)
The Constitution on the other hand vests the service authority and responsibility to provide
solid waste service with the City – even if it outsources that service to an external service
provider.
Further, Section 76 of the MSA prescribes the various service delivery mechanisms a
municipality may consider (refer to Appendix B):
Internal department (S76(a)(i));
Internal business unit; or
“Other” component of municipality’s administration;
External mechanism (S76(b))
–
A municipal entity;
–
Another municipality;
–
Multi-jurisdictional entity;
–
An organ of state, including:
– A Water Services Committee established in terms of
the Water Services Act, Act 108 of 1997
– A licensed service provider registered or recognised in
terms of national legislation; and
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–
–
– A traditional authority
Community-based organisation or Non-government organisation
legally competent to enter into an agreement; or
A licensed service delivery agreement with any other institution, entity
or person (which could be a Public Private Partnership (PPP)) legally
competent to operate a business activity.
Before embarking on any assessment, a key question that needed to be answered is which
aspects of the current municipal service offering are defined as core or mandated municipal
services and which are not.
"Municipal services" as defined means a service that a municipality in terms of its powers
and functions provides or may provide to or for the benefit of the local community
irrespective of whether:
Such services are provided, or are to be provided, by the municipality through an
internal mechanism contemplated in Section 76 or by engaging an external
mechanism contemplated in Section 76; or whether
Fees, charges or tariffs are levied in respect of such a service or not.
However, the legal opinion received that informs this assessment is that removal of
recyclable waste by the City from the source is part of the municipal service but once such
waste is removed from the waste stream, the waste then enters the "beneficiation stream"
and at that point no longer forms part of the municipal service.
The focus therefore of this assessment, given the above, is to select the most appropriate
ASD mechanism including VISA (i.e. Value for money, Implementability, Sustainability,
Affordability) requirements for reducing waste and diverting waste from the landfill sites as
envisaged by the NEMWA.
The primary MSA criteria that were used include the following:
The levels of autonomy of the MSA option;
The extent of control exercised by the municipality over the service delivery
performance of the option;
Value for money; Implementability; Sustainability; and Affordability (i.e. VISA)
considerations; and
Risk Management.
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Specifically, the MSA legislative criteria include the following key clauses for comparison
purposes:
Table a:
MSA Legislative Criteria
MSA S78 Clauses Relevant Aspects of Clause
S78(1)(a)(i) and
S78(3)(b)(i)
•
•
•
Direct and indirect costs and benefits associated with project
Expected effect on the environment, human health and safety
Service equity (service access, tariff support, indigent support, etc.)
S78(1)(a)(ii) and
S78(3)(b)(ii)
•
•
•
•
•
•
Capacity and potential future capacity (skills, expertise and resources)
Governance
Managerial control, operating efficiency, degree of autonomy
Asset maintenance
Quality of service to achieve customer satisfaction
Access to capital, borrowing and grant funding, competitive procurement
S78(1)(a)(iii)
•
Extent to which administration can be re-organised and human resource capacity
developed to meet objectives
S78(3)(b)(iii)
•
Extent to which local community meaningfully engaged
S78(3)(b)(iv)
•
Sustainable job creation
S78(3)(b)(v)
•
Organised labour engagement and governance issues
S78(3)(c)(i)
•
Definition of service
S78(3)(c)(ii)
•
An indication of the number of years for which the provision of the municipal service
through an external mechanism might be considered
Regarding the options available to a municipality for the delivery of a municipal services in
terms of Section 76 of the MSA, it is noted that a PPP fits most comfortably into the option
where the municipality enters into a service delivery agreement with an “institution, entity or
person legally competent to operate a business activity” other than an organ of state,
community-based organisation or non-governmental organisation (i.e. Section 76(b) (v) of
the MSA).
A municipal PPP is one form of outsourcing a municipal function or a municipal service. It is
a commercial transaction between the municipality and a private party1 in which the private
party:
Either performs a municipal function, manages or uses municipal property, or a
combination of the two; and
1 A "private party" is defined in the PPP regulations to the MFMA as a party other than a municipality,
municipal entity or an organ of state.
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Assumes substantial financial, technical and operational risk in connection with
the performance of that municipal function, management or use of the property,
or the combination of the two (whichever the case may be).
Depending on the nature of the PPP, the private party receives a benefit, which takes one of
the following forms:
The municipality paying the private party for the delivery of the service;
The private party collecting fees or charges from users of the service; and
A combination of the above two forms.
It should be noted that PPPs are governed by Section 120 of the Municipal Financial
Management Act (MFMA) and the Municipal Public-Private Partnership Regulations stated in
the MFMA (the PPP Regulations) and this assessment will also be subject to Section 33 of
the Municipal Finance Management Act, as the service delivery agreements will likely be
longer than three years due to the nature of the investments by the External Parties.
The findings in this report are based on the above legal framework and take into account the
analysis done in Phase 1 (Status Quo Assessment) of the S78 (3) assessment.
As a first step in the process, an assessment of the status quo in solid waste management in
the City was done as a long period of time has already lapsed since S 78 (1) process in
2008 and various legislative changes have occurred since then, which is impacting on the
mandate and operations of the City from a solid waste management perspective.
The City has however proactively started towards achieving waste minimisation city-wide by
developing and running both waste management facilities incorporating MRFs (refer to
Appendix F), public drop-off sites (refer to Appendix I) composting (refer to Appendix P) and
builders’ rubble crushing facilities (refer to Appendix S) and waste minimisation enabling and
awareness raising projects (such as the Think Twice Campaign, IWEX and Waste Wise).
From a diversion perspective, The Radnor and Bellville South Compost plants have been
operational since the late 1960s to treat Municipal Solid Waste (MSW) and convert the
organic component into compost. However, both the quality and sales of compost have
declined over the last decade, for various reasons. Council previously decided to close the
Radnor facility and undertake Section 78(1), (2) and (3) assessments in terms of the MSA
(i.e. whether to continue to operate the composting facilities “in-house” or to outsource the
operations).
As part of this assessment the City has now decided to investigate PPP (Resolution dated
9 December 2010) for both the above facilities and this process is currently underway in the
City and will also need to be aligned with the overall findings and recommendations in this
report from a systems perspective.
There are currently no solid waste energy recovery facilities in Cape Town except for a few
small digesters recovering energy from organic waste by means of biogas. The City is
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currently undertaking a project to determine the feasibility of Landfill Gas (LFG) extraction
and the beneficial use thereof (refer to Appendix R). There is a limited use of sewage sludge
as compost (refer to Appendix P, Appendix O) and biogas for digester heating and sludge
drying at Cape Flats Waste Water Treatment Works (WWTW).
Apart from the above initiatives by the City, it also needs to be noted that there are other
private sector recovery and recycling initiatives undertaken by commerce and industry (and
in particular by private waste companies) as well as some NGOs but this is inadequate and
the private sector is also expressing interest in exploring partnerships with the City.
Waste processing data on the other hand for most of these initiatives is however not freely
available and therefore it is not possible to accurately quantify the current private sector
waste minimisation to landfill contribution (refer to Appendix L) and certain assumptions had
to be made (best estimate of approximately 67% of the waste diverted from landfill in
2008/09).
All indications are that local industrial initiatives within Cape Town manage to divert a
significant portion of waste away from landfills through re-use and recycling. This diversion
can still be improved substantially through a concerted effort on re-use, reduction and
recycling throughout the relevant industrial and commercial sectors.
Where opportunities do exist, the options of alternative service deliveries (PPP, outsourcing
or service agreements) need to be explored to ensure that the waste minimisation potential
is enabled and optimised in each aspect of integrated waste management planning and dayto-day handling of waste.
This assessment confirms that the status quo for municipal waste managed by the City
cannot be sustained. The main reasons for the inadequacy of the status quo in solid waste
management in the City are:
A changing legislative context focused on waste minimisation and diversion from
landfill (refer to Appendix A);
The physical amounts of waste generated in the city, limited remaining lifespan of
landfills and low amounts of diversion (refer to Appendix D, Appendix K);
Relatively high financial costs of the current diversion of waste from landfills;
Inadequate existing SWM capacity, to the extent that re-structuring the Solid
Waste Management Department will “not be sufficient to meet the broader
challenges of funding and other internal capacity constraints which the Solid
Waste Management Department will need to overcome in order to replace the
outlived landfill sites; refurbish facilities; and replace outdated technologically and
ageing plant and equipment”;
Activities that are considered to be non-municipal (eg. processing and
manufacturing); and
Dealing with problematic waste types other than general waste.
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A changing legislative context
The National Environmental Management Waste Act, which came into effect on 1 July 2009,
requires that waste minimisation be implemented by municipalities in addition to municipal
services such as cleaning, collection and disposal to landfill.
The reality is that the impact of, for example, the Draft Waste Classification and
Management Regulations, which will change and replace parts of the Department of Water
Affairs and Forestry “Minimum Requirements” regulations (trilogy of documents) and will ban
certain materials or substances from landfills, are going to have significant impact on solid
waste management and the funding thereof.
The physical amounts of waste generated in the city and the limited remaining lifespan of
landfills (refer to Appendix D, Appendix K, Appendix AA).
Currently, at least 27% of the waste in the measured waste management system has been
diverted from landfill. Commercial and industrial re-use and recycling amounts to 18.2% of
total waste generated, leaving 8.8% of diversion managed mostly by the City. It is
emphasised that this is insufficient to address the emerging problem of limited airspace in
landfills.
It is estimated that there will be sufficient airspace in the city for another 12–14 years only, at
a 2.5% disposal growth rate and without a new regional landfill site. The international
guideline for airspace provision is considered to be a minimum of 15 years and the City is
below this norm. The Vissershok privately owned and operated hazardous waste landfill
(H:H) (the only such facility in the Western Cape) will close in the next 9–13 years and an
alternative hazardous waste facility also needs to be considered.
Additionally, economic and population dynamics have an impact on municipal solid waste
(MSW) generation. Based on an assessment of the socio-economic drivers of waste
generation, it is estimated that for every 1% of GGP growth for the City per annum, the
amount of municipal waste landfilled increases by 0.6% and the amount of waste collected
by 0.42% and a 1% change in population has led to a 0.9% change in municipal waste
landfilled.
Finally, knowing the composition of the waste stream is important to plan further diversion
and investments in waste management. The classification of this waste, in terms of the Draft
Waste Act Classification Regulations, is presented in terms of Mass and Volume in Figures a
and b respectively and these have been categorised and analysed to ensure that the City
focuses on major waste streams to optimise diversion from landfill as per the Pareto
Principles agreed to in the Terms of Reference.
From the above analysis, it should be noted that ‘Builders’ rubble’, ‘household recyclables’
and ‘other trade waste’ dominate in terms of mass landfilled, but ‘household recyclables’,
‘household greens’ and ‘other trade waste’ dominate in terms of landfill airspace used.
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Figure a
Characterisation of Waste Landfilled in Terms of Mass (Tons) (2008/2009)
Characterisation of Waste Landfilled
w.r.t Mass
Household
Household greens
6%
Parks
0%
Hazardous
3%
Greens directly to
landfill as free waste
2%
Other hazardous
6%
Household
Packaging
15%
Household Paper
6%
Household Food
5%
Builders rubble
22%
Household Other
10%
Other trade wastes
(incl. recyclables)
18%
Organic trade wastes
7%
Note: The above chart and quantities have been derived specifically for guiding the Section 78(3) assessment
process. There are some approximated underlined assumptions that are adequate for the purposes of this high
level study, but which may not be suitable for other purposes, studies or publications. The details of the
assumptions used to derive these charts are provided in the Appendices.
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Figure b
Characterisation of Waste Landfilled in Terms of Volume (m3) (2008/2009)
Characterisation of Waste Landfilled
w.r.t Volume
Household
Parks
1%
Hazardous
2%
Other hazardous
4%
Household
Packaging
21%
Household greens
21%
Household Paper
7%
Greens directly to
landfill as free
waste
5%
Household Food
4%
Household Other
7%
Builders rubble
10%
Other trade
wastes (incl.
recyclables)
13%
Organic trade
wastes
5%
Note: The above chart and quantities have been derived specifically for guiding the Section 78(3) assessment
process. There are some approximated underlined assumptions that are adequate for the purposes of this high
level study, but which may not be suitable for other purposes, studies or publications. The details of the
assumptions used to derive these charts are provided in the Appendices.
This therefore provides a rationale for intervening in the waste streams that have the largest
impact on airspace, namely recyclables (packaging and paper) (refer to Appendix M), greens
(refer to Appendix Q) and builders’ rubble (refer to Appendix S).
Of the total amount of free waste (rubble and greens) arriving at landfills, which is a sizeable
amount of almost 24% (by mass) or 15% (by volume) of the total waste landfilled, only an
estimated 15% (by mass) is currently diverted through crushing and chipping. Currently,
recyclables from households account for a mere 0.5% (by mass) of total waste generated
and composting only 0.3% (by mass) of total waste generated.
xvii
An analysis on waste quantities (physical amounts) that can potentially be diverted indicates
the following (refer to Table c for financial implications of diversion):
An additional 46 971 t/yr of green waste could be diverted. This amounts to an
additional airspace saving of 234 855 m3/yr;
Between 88 987 t/yr and 106 479 t/yr of organic waste could potentially be
diverted from landfill, which represents 45% to 54% of the total organics
generated in the city and an airspace saving of between 80 088 m3/yr and 95 831
m3/yr; and
At least 64 t/day can be extracted from the household waste stream in a
conservative scenario and as much as 128 t/day could be extracted if the Think
Twice Programme is rolled out to as much of the city as possible over an
extended period. The landfill airspace saving due to recyclables being diverted
could be between 32 615m3/yr and 64 804 m3/yr.
Taking the above scenarios into account (looking at physical amounts only), a total of
approximately 159 319 to 200 170 t/yr can be diverted from landfills resulting in landfill
airspace savings of between 347 558 m3/yr and 395 490 m3/yr but it should be noted that
these savings are not immediately available and will be phased in dependent on the option/s
chosen by Council until maximum diversion is achieved in the long term.
The relatively high financial costs of diverting waste from landfills are not sustainable
From a financial budget perspective the status quo indicates that the SWMD is primarily a
balanced service with year-end adjustments from rates contributions to balance any
variances in the budget.
The following comparisons compare the actual of 2006/07 to the 2009/10 budgets:
On the expenses side, employee and contracted services increased by R265m
(58%), corporate costs by R84m (141%), depreciation and bad debts by R38m
(47%) and bulk refuse costs by R17m (22%).
Recharges on the other hand represent about 17% of total expenditure budget of
R1.504b (2009/10) and must be analysed further for inefficiencies and
duplications.
On the revenue side, only 58% of revenue originates from tariffs with the rest
from rates, highlighting the relative interdependency of solid waste management
on rate contributions for the rate function carried out by the Department.
Area Cleaning (refer to Appendix N) is fully funded by rates contributions, including the
Indigent Grant. Drop-offs are, apart from other minor revenues, also rate funded.
Collections are tariff-based and Disposals are also tariff-based (recovery through gate fees),
and these impact directly on Collection tariffs.
xviii
There is no fully integrated activity-based costing (ABC) in place to determine the true cost
of a service or what the cost drivers of the services are. There are also high levels of cross
subsidisation among the various functions and across the municipality.
Most capital expenditure is on Disposal (approximately 80% of total budget for the last 4
years), with the bulk of the remainder to Technical Services, and is based on the needs of
these respective functions. Some of the capital spending is budgeted for additional transfer
stations and for the gas to energy project.
Council has also aggressively increased its capital spend since 2007/08 but the source of
funding for future SWMD to support future expansion and waste minimisation and diversion
from landfill is not clear given that the City is potentially under-funding on capital by
approximately 40% to 50%. This therefore represents another rational to consider alternate
funding sources to implement the legislative changes impacting the City’s solid waste
management service.
It is therefore not possible at this stage to ascertain whether the budget is adequate for the
needs of the SWMD and to comply with and to implement waste diversion activities as these
numbers are generally based on corporate processes and City affordability requirements
and parameters.
The operational budget expenditure for the SWMD for 2009/10 was approximately R1.5bn,
with R597m (40%) for Collections, R468m (31%) for Area Cleaning, R332m (22%) for
Disposal (incl. drop-offs) and R108m (7%) for Support Functions, as indicated in Figure c.
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Figure c
OPEX for Solid Waste Management (2009/2010)
Source: City of Cape Town Data
Capital expenditure for 2009/10 was approximately R317m, with R43 000 (0.01%) for
Collections, R1m (0.32%) for Area Cleaning, R237m (74.81%) for Disposal (incl. drop-offs),
R74m (23.38%) for Technical Services and R4.7m (1.49%) for Support Functions (see
Figure d).
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Figure d
CAPEX for Solid Waste Management (2009/10)
Source: City of Cape Town data
On the other hand, and from a sustainability perspective, expressing the costs of solid waste
management functions in relation to the physical quantities managed in each function gives
an indication on relative financial efficiency.
The estimated average cost per ton of waste that was handled for the year 2009/10 within
these functions, including operational and capital expenses is estimated at approximately
R1 700/t for Area Cleaning, R1 200/t for Collections, R400/t for Disposal and R120/t for
Support and Administration Services. These numbers are sensitive to the financial, waste
and socio-economic assumptions and should be treated with caution. It does however
highlight the large discrepancy in service costs between waste management functions.
Given these high costs already, another rationale for alternate funding and prioritisation by
the City is that waste minimisation interventions will require additional financial resources,
but some options are more cost-effective than other options.
xxi
For example, low-volume curb side recycling and drop-off/buy-back options in its current
form are expensive options. Drop-offs (refer to Appendix I) have to cope with high costs of
establishment in relation to low volumes of waste recovered. Larger-scale MRFs, rubble
crushing and chipping of greens as well as composting options are expected to be more
cost-effective to the City and can divert much larger quantities of waste from landfills but the
cost and availability of capital is problematic.
In summary, an analysis of the status quo concluded that the financial sustainability of
existing options (dual collection, small-scale transfer stations and drop-offs) to divert waste
from landfills is questionable, and as will the new Integrated Waste Management Facilities, if
the status quo remains. Much more volumes of waste are needed to make an impact.
Larger-scale, cost-sharing options are therefore sought to reach targets set by the City on
the diversion of solid waste from landfills and to create sustainable and permanent jobs.
Whilst the City of Cape Town’s SWMD is generally regarded as a leading metro municipality
in South Africa in terms of solid waste management and waste minimisation efforts, the
SWMD does not have sufficient capacity to meet the needs of waste minimisation as
envisaged by NEMWA, at least not without the assistance of private partners.
The Section 78(1) assessment also found that the internal mechanisms were inadequate
and that there was a need to explore appropriate alternative service delivery mechanisms to
meet the needs of waste minimisation and diversion of waste from the landfills as envisaged
by NEMWA. This was again confirmed in the S 78 (3) Status Quo Assessment.
The approach taken for further assessment is based on the rationale that the status quo is
inadequate and unsustainable. The approach and analysis was guided by the following:
The Pareto Principle or 80:20 Rule was applied to ensure that the assessment
focuses on those activities which will maximise waste minimisation and waste
reduction to the landfill sites in terms of cost-benefit to the City;
An analysis was done and then confirmed through Stakeholder engagements,
complemented by short-listing or funnelling techniques to identify and prioritise
the high-impact waste diversion activities; and
A systems approach ensured the exploration of the complex inter-dependencies
of activities within the solid waste management system to determine the most
appropriate and viable alternatives. The outcome of the analysis for different
options was tested for the impacts on the broader waste systems as well.
An intensive process involving external stakeholders, Staff and the Solid Waste
Management Team (SWMT) was also used to identify and prioritise different service delivery
options. (The stakeholder engagement, including the community and organised labour
engagement, is a legal requirement for a service delivery review of this nature (MSA Section
78 (3) b)).
As an outcome of this process and approach 46 issues were noted where improvement is
required. These 46 items were prioritised and categorised into a final list of 10, plus HHW
(subsequently included) possible ASDs, as listed in Table b, for further analysis.
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Table b
Possible ASDs for Further Analysis
NO.
KEY ISSUES
1
Additional and optimisation of Materials Recovery Facilities (MRFs)
2
Integrated waste management facilities (IWMFs) with appropriate technologies, focusing on changes in
materials handling to divert waste
3
Separate co-mingled waste recyclables collection service: as feedstock for Kraaifontein IWMF vs other
IWMFs – Impact of waste minimisation on current collections
4
Informal areas: separation at source (economic opportunities)
5
Separate waste stream: area cleaning (refer to Appendix N) and education campaign
6
Sewage sludge options – note not a solid waste competency (refer to Appendix O)
7
Composting facilities – green or organic waste: Consider separate collection of greens
8
Organic waste litter collection e.g. seasonal collections, alignment with Parks, Stormwater, other
Departments
9
Landfill gas-to-energy systems – alternative options
10
Management of builders’ rubble and inert waste
11
Household Hazardous Waste (refer to Appendix T)
As some of these ASDs are interrelated and impact on the systems as a whole, seven
groups of possible mechanisms that are integrally related were analysed. These groups are
as follows:
Group A: Waste Beneficiation through Integrated Waste Management Facilities
(refer to Appendix AA and various other Appendices covering elements of an
IWMF);
Group B: Separation and Collection of Recyclables (Including Informal
Settlements) (refer to Appendix BB, Appendix M);
Group C: Sewage Sludge (refer to Appendix O);
Group D: Composting and Organic Waste (refer to Appendix CC, Appendix Q);
Group E: Landfill Gas (refer to Appendix R);
Group F: Builders’ Rubble (refer to Appendix DD, Appendix S); and
Group G: Household Hazardous Waste (refer to Appendix EE, Appendix T).
A subsequent high-level process was followed to assess these mechanisms in more detail
as required by the MSA (and linked to NEMWA).
Direct and indirect costs were modelled for the groups of ASDs, excluding Sludge and
Landfill Gas, as these falls outside the scope of the project but these were highlighted as it
has synergistic benefits in terms of other components within the solid waste management
system.
xxiii
With the inadequacy of the status quo already established and based on extensive inputs
from stakeholders, staff and the SWMD, the focus turns to analysing and modelling the
selected groups of ASD mechanisms.
From a MSA perspective, the institutional service delivery options that have been short-listed
for further consideration are the following:
A department or other administrative unit within the municipality’s administration;
A business unit which operates within the municipality’s administration;
A service delivery agreement with a municipal entity; and
A service delivery agreement with any other institution, entity or person legally
competent to operate a business activity.
The additional criteria assessed as part of further filtering where (i) the levels of autonomy of
the option and (ii) the extent of control exercised by the municipality over the service delivery
performance of the option.
This report therefore discards those options that are not viable and will consider only the one
external option mentioned below for purposes of comparison with the internal option in the
final evaluation of the Waste Beneficiation (WB)/ Integrated Waste Management Facility
(IWMF) ASD as a whole. (Refer to Appendix AA and Table 5 in the main body of the detailed
report.)
The result of the institutional assessment concludes that there are only the following two
viable options for the WB (IWMF) ASD:
A department (partly ring-fenced and combined with a service delivery agreement
with any other institution, entity or person legally competent to operate a business
activity) which takes the form of an internal mechanism where effective control
vests in the municipality; and
A service delivery agreement with any other institution, entity or person legally
competent to operate a business activity (which could be in the form of a PPP).
From an organisational point of view, it should be noted that no job losses are foreseen from
the proposed WB (IWMF) ASD where maximum diversion is expected to occur and that the
safety and health aspects of staff and public that will make use of the facilities must comply
with all legislation (i.e. national, provincial and local by-laws).
Given City’s policy not to retrench staff, and the fact the ASDs, through PPPs with the
Private Sector, will create additional jobs and skill requirements, there are opportunities for
staff empowerment and re-deployment through this process. The existing vacancies of 220
funded posts (as at 27 January 2011) could also be managed internally to ensure that all
staff are accommodated within any of the proposed option/s finally adopted by Council.
It should be noted that the City has also introduced a Climate Change Action Plan (CCT
Draft Energy & Climate Change Action Plan (refer to Appendix W)). During the status quo
xxiv
assessment it was established that green house gas (GHG) emissions in terms of the
current waste management activities is approximately 10% of the total emissions from
landfills.
From a spatial perspective, and considering the City’s growth and demographic changes and
location of existing facilities, an assessment was undertaken to inform the optimal locations
for the future IWM Facilities around the city. (Refer to Appendix C) Spatially the IWM
Facilities appear well located along major, easily accessible bulk transport networks and
close to economic growth areas i.e. Helderberg IWMF, Tygerberg IWMF.
However, and from a financial perspective, additional funding of approximately 30% of
OPEX (2009/10) of R1,5bn is required to ensure the maximisation of diversion and reduction
in landfilling of waste. (Refer to Table C below)
Given this, it is clear that the City should consider alternate funding sources to augment its
own resources. However, and noting National Treasury’s support for Municipalities to utilise
its assets and liabilities for the benefit of Communities and to augment its financial
resources, it may be opportune that the City through this process consider using it’s assets,
facilities, and waste as potential revenue generating measures (through PPPs) to attract the
necessary investments for any ASD mechanism. This may also assist to smooth out the tariff
impact on the City and the Communities.
Should the City however decide to carry all these additional costs, the tariff implications
(excluding normal budgeted increases) for the WB (IWMF) ASD as a whole are illustrated in
Figure e. These can only be managed and mitigated through waste beneficiation (PPP)
opportunities arising from external capital investments; other revenue streams such as the
sale of waste and rental from the use of municipal assets, as well as potential income from
the envisaged landfill gas projects.
Figure e
Tariff Implications for the WB (IWMF) ASD as a Whole
xxv
It should be noted that to undertake the above modelling certain assumptions had to be
made regarding the capital and operating investments by the City of the various
mechanisms, linked to the spatial layout of the city and the current systems in place, to
determine the financial impact on the City as reflected above.
However, and subject to the nature and extent of the PPP to be finally agreed to between
Council and an external party, the Net Additional Cost (NAC) (including direct and indirect)
below can be negotiated to ensure minimal cost to the City, using the City’s existing assets,
infrastructure and access to waste as potential leverage or funding mechanisms for this
purpose, as mentioned above.
It should be noted that the modelling below represents additional effort over and above the
existing private and municipal involvement in waste minimisation and that the methodology
used to model overall sustainability is the Net Additional Cost (NAC) of the ASD which is
defined as the difference between the Total Additional Cost (TAC) of the ASD and the Total
Additional Benefit (TAB) of the ASD.
The TAC includes the Additional Cost of Collections (ACC), Additional Cost of Processing
(ACP) and other Additional Indirect Costs. Additional costs to Transport are included under
ACC. Additional Indirect Costs include a Decrease in Revenue from Disposal (DRD).
The TAB include Avoided Disposal Cost (ADC) and Savings on Planned Expansions (SPE).
Given the above financial considerations and when direct (Additional Costs to Collect and
Additional Costs to Process) and indirect costs (Avoided Disposal Costs, Decrease in
Revenue from Disposal, Savings in Planned Expansions of Landfills) are taken into account,
it is clear that:
The direct and indirect costs per ton diverted are lowest for the Builders’ Rubble
(Group F) ASD (net savings of R50–R75/t can even be achieved), followed by;
The Organic Waste Management (Group D) ASDs at an additional cost of
between R750–R960/t;
The Waste Beneficiation (Group A) ASDs at between R1 380–R1 470/t;
The Co-mingled Waste (Group B) ASDs at between R1 350–R1 660/t, and finally
The most expensive ASD, the Household Hazardous Waste (Group G) ASD at
between R2 900–R3 500/t. (This main results are illustrated in Table c).
xxvi
Table c
Comparison of ASDs at Full Implementation
ASD
Net Additional
Cost (NAC) per
year
Tons
diverted
per year (t)
Air space
savings per
3
year (m )
Net Additional
Cost (NAC) per
ton
R400m–R425m
290 500
388 000
R1 380–R1 470
Group B: Co-mingled Waste
R45m–R55m
33 300
65 000
R1 350–R1 660
Group D: Organic Waste
Management (OWM)
R74m–R98m
105 000
300 000
R750–R960
Group F: Builders’ Rubble
(R4.2m)–(R6.2m)
83 000
55 300
(R50)–(R75)*
R47m–R50m
16 300
11 900
R2 900–R3 100
Group A: Waste Beneficiation
(WB)(IWMF)
Group G: Household Hazardous
Waste Collection
*Indirect savings are higher than the direct financial costs.
Apart from the WB (IWMF) ASD (refer to Appendix AA) (which includes OWM among
others), the OWM ASD is expected to achieve the highest amount of air space savings and
can be done at the lowest cost to the City.
It should be noted that the potential airspace savings is estimated at approximately R200/m3
This is on par with By-law estimates for this period. See de Wit & Nahman 2009, page vi.
It is also emphasised that certain business improvements (refer to Appendix CC) are
required to support, manage and regulate the implementation of these ASDs cost effectively
as these form an integral part of the waste management system (fleet, workshops, MIS, and
WIS) This should however be further investigated as there is an opportunity for a further
PPP within the Fleet and Workshops environment, due the inefficiencies, high cost and skills
issues therein.
Based on all the above information regarding the status quo and proposed ASDs, a
comparison between internal and external options for service delivery is finally done through
scoring (refer to Appendix V) A summary of scores achieved over all MSA criteria, and as
defined in the MSA, is presented in Table d and the detail is also contained in the main
report.
xxvii
Table d
Scores Achieved over all MSA Criteria – Summary Only (Detail in Main Report)
RATING
SATISFIES THE NEEDS OF
THE SWMD
S76(A)(I)/S76(A)(II)
DEPARTMENT (PARTLY
RING-FENCED)
SERVICE DELIVERY
AGREEMENT
(SDA)
3
Most advantageous
21
45
2
Moderately advantageous
6
8
1
Least advantageous
12
5
0
No difference
0
0
39
58
Total
The key outcomes of the analysis are the following:
The best institutional option for ASD mechanism per the MSA is the “department
(partly ring-fenced and combined with a service delivery agreement with any
other institution, entity or person legally competent to operate a business activity).
There are a combination of integrating mechanisms and the WB (IWMF), which is
but one of them, is an integral and essential service to reducing waste and
diverting waste from landfill sites.
The WB (IWMF) ASD could however consist of various components, some of
which (for example composting, builders’ rubble, materials recovery) are not
defined as municipal services.
The above analysis therefore indicates that the City cannot implement the ASDs effectively
without the support and partnering with other legally competent bodies as per the MSA
(PPP, SDA and Department) coupled with certain internal re-alignments and business
improvements.
Given the above, the systems approach was applied to determine the current and future
waste management processes and activities, and consideration was taken of the City’s area
cleaning, waste collection, separation (at source or other), treatment (processing) and
disposal activities to determine the best opportunities available within the system for PPPs
that will augment the City’s objective of waste minimisation and maximum diversion from
landfill.
In addition, and understanding the private sectors appetite for PPPs a default position or
process was determined to ensure that the City, as a minimum, undertakes it’s mandated
functions if it cannot augment its services via PPPs, Supply Contracts and City Owned
Contracts. It was also evident from this analysis that the City currently cannot do more than
xxviii
its default position, and requires support and funding from External Parties to achieve its
legal and environmental obligations with respect to waste management.
Finally, the individual ASDs, as originally identified (11), were grouped to find the most
appropriate institutional mechanism/s for service delivery, is presented in Table e, and these
will need to be further analysed dependent on the options/s chosen by Council.
xxix
Table e:
ASD Mechanisms/Elements
Group A: WB (ASD) (refer to Appendix AA)
Options (ASD) /
BI / Regulatory
Additional and optimisation of Materials
Recovery Facilities
ASD
ASD
MSA Mechanism
Material Recovery Facility (refer to Appendix F)
Service Delivery Agreement
(SDA) / Public-Private
Partnership (PPP)
Waste Reception (revenue management)
Department
Refuse Transfer Station (RTS) (refer to Appendix J)
Department
Transfer of Waste from RTS to Landfill By Rail
(refer to Appendix J)
SDA
By Road
Integrated waste management facilities
and appropriate technologies, noting
changes in materials handling
ASD
Department/ SDA
Material Recovery Facility (MRF) (refer to Appendix F)
SDA / PPP
Waste Processing Facility i.e. alternative technologies
(e.g. AD plant, Waste-to-Energy, etc.) (refer to
Appendix G)
SDA / PPP
Resource Centre / Eco-Industrial Park (refer to
Appendix H)
SDA / PPP
Builders’ Rubble Management (refer
to Appendix S, Appendix DD)
Collection and Department/ SDA
Storage
Processing
Drop-off Facility (refer to Appendix I)
SDA / PPP
Department/SDA
xxx
Group B: Co-mingled Waste (refer to
Appendix BB)
Options (ASD)/
BI / Regulatory
ASD
MSA Mechanism
Separation at source and separate comingled waste recyclables collection
service
ASD
Dry Waste (Recyclables) Collection service
SDA
Informal areas separation at source
ASD
To be developed
To be developed between
Council and Private Sector
Separate waste stream – area cleaning and
ASD
education campaign (refer to Appendix N)
To be developed
Department/ SDA
Group C: Sewage Sludge (refer to
Appendix O)
Options (ASD)/
BI / Regulatory
ASD
MSA Mechanism
Sewage Sludge
ASD
Opportunity for sludge use forms part of composting
and/or EfW
Department/SDA
Group D: Organic Waste Management
(refer to Appendix CC)
Options (ASD)/
BI / Regulatory
ASD
MSA Mechanism
ASD
Forms part of Composting
SDA/PPP
ASD
Forms part of Greens and organic waste management
(collection and storage)
SDA/PPP
Composting Facilities
Organic waste collection e.g. seasonal
collections and alignment with other
departments as an example
xxxi
Group E: Builders’ Rubble (refer to
Appendix DD)
Options (ASD)/
BI / Regulatory
ASD
MSA Mechanism
Processing of builders’ rubble and inert
waste
ASD
Builders’ Rubble
SDA / PPP
Group F: Household Hazardous Waste
Collection (refer to Appendix EE)
Options (ASD)/
BI / Regulatory
ASD
MSA Mechanism
Household Hazardous Waste (HHW)
ASD
HHW Management
Receipt and
Temporary
Storage
Department/SDA
Bulk Transfer
and Disposal
SDA / PPP
Group G: Landfill Gas to Energy (refer to
Appendix R)
Options (ASD)/
BI / Regulatory
ASD
MSA Mechanism
Landfill gas to energy systems – need to
consider alternative options
ASD
Service being researched and developed
PPP
xxxii
Based on all the information and analysis done to date, and as presented in this report, a
comparison between internal and external options for service delivery as well as the
institutional, technical, financial and sustainability assessments are finally made to determine
the best option available to the City for the SWMD as identified, and to ensure 80:20 impact.
In the consideration of technical options, spatial factors such as uneven growth in
population, population densities and expected urban growth was taken into account. This
analysis was key to determining the final institutional model for the SWMD to meet its’
mandated service delivery obligations and to ensure that its design gives effect to waste
minimisation and diversion from landfill in sustainable manner.
It should be noted that the area where the highest impact on waste minimization and
diversion of waste from the landfill sites can be achieved is in the Disposal Branch, where
the WB (IWMF) will be managed.
Based on the above S78 (3) assessment, the following key findings are made:
1. The City is essentially developing to its urban boundary with the greatest
development being north of the N1, along the western boundary of the city and
Somerset West area and as the City further densifies and grows, additional pressure
will be placed on the City’s waste management services. (Refer to Appendix C)
2. Based on the latest assessments, the remaining lifespan of the City’s landfills, when
no additional diversions from landfill are implemented over and above current
diversions and excluding private landfills, is between 12–14 years counting from
2010 onwards (depending on the growth/decline of waste being disposed at the sites
and compaction effort achieved of the waste at the sites). This includes high, medium
and low economic growth scenarios.
3. Remaining landfill space is below the international benchmark of banked landfill
space of 15 years.
4. Multi-jurisdictional entities are non-existent within the City or region and the City can
play a key role with Province in the development of such entities to optimise
efficiencies and cost-benefits to the Western Cape region as a whole.
5. A SDA with other neighbouring municipalities presents an opportunity to optimise any
ASD’s considered unless regional landfill sites are legislated, and also noting that the
private sector is not restricted to municipal boundaries and such jurisdictions.
6. Some of the activities at a WB (IWMF) ASD, including a Refuse Transfer Station
(RTS) (refer to Appendix J) would form part of a municipal service. The same holds
true for the activities at a MRF, except that once recyclable waste is removed from
the waste stream, the storage and processing of the recyclable waste at the MRF no
longer forms part of the municipal service.
7. The Disposal Branch, where the WB (IWMF) will be managed, is the area where the
highest impact on waste minimisation and diversion of waste from the landfill sites
can be achieved. All the ASDs within the WB (IWMF) complement each other,
including the OWM, and these therefore need to be viewed as a system from a
waste-minimization and cost perspective.
xxxiii
8. From a systems perspective the following key technical findings are identified:
a. There are currently two refuse transfer stations (RTS) operating within the
City (ARTS and Swartklip) and one new facility is under commission
(Kraaifontein) and a further two future facilities (Tygerberg and
Helderberg) are in the planning phase, which are necessary for waste
management and reducing transport costs as growth in waste generation
occurs in the associated catchment areas. This growth must be monitored
by the City. A new facility will be required in future when the Coastal Park
landfill and possibly Vissershok close (post 2020).
b. Bulk transport of transfer waste is an essential component of an RTS and
is currently outsourced to road and rail service providers. Outsourcing
road transfer has found to be more expensive than doing this function
internally.
c. Drop-offs are expensive to operate, and although provide a low-volume of
diversion, serves an important function in waste diversion (greens, clean
builders’ rubble, dry recyclables (Eco-industrial parks (refer to
Appendix H))). The city is well covered at a 7km radius of each drop-off
facility, with large overlaps in the southern and central areas.
Stakeholders supported the idea of providing more drop-off facilities for
improved accessibility.
d. Waste-to-Energy (WtE) and/or Energy-from-Waste (EfW) (refer to
Appendix G) facilities can play an important role in diverting organic waste
(includes sewage sludge) that is not readily compostable. This facility can
complement a composting process.
e. There is a rationale to intervene in the waste streams that have the
largest impact on airspace, namely greens, recyclables and builders’
rubble.
f. Improvements to the management of builders’ rubble hold immediate
benefits and opportunities for the City with minimal cost.
g. Drop-offs serve an important function currently for extracting green waste
(35% of estimated green waste generated) but to increase the quantity for
diversion a separate green collections service may be required in the
future.
h. Synergies exist between the SWMD and Waste Water (sludge) and City’s
Parks (greens) for the beneficiation of organic waste.
i. The culture of separating waste at source in public areas is in its infancy
and depends on economies of scale and affordability considerations.
j. The Think Twice Campaign has been rolled-out to approximately 9% of
the city’s service points. It is currently a costly service to provide but the
new contract going out to tender for the Kraaifontein MRF will inform the
way forward when City provides a physical licensed facility for the
Contractor to use.
k. The bulk collection and recovery of municipal household recyclable waste
are considered to be components of a MRF, forming part of an IWMF
ASD within the process flow of waste management. Such bulk collection
and recovery operations offer limited job creation opportunities, with more
xxxiv
l.
m.
n.
o.
p.
q.
r.
s.
t.
significant employment opportunities envisaged through “down-stream”
private-sector activities such as recyclables processing businesses, buyback centres and craft-making centres (Eco-Industrial Parks (refer to
Appendix H)).
The two existing MRF’s (ARTS and Kraaifontein) have sufficient capacity
in the short-medium term to process the City’s “separated at source”
household recyclables generated from areas of viable yields and
participation levels. In the longer-term, it is expected that private-sector
MRF’s currently receiving recyclables from the commercial and trade
sectors, will increase their capacity to also absorb some of the recyclables
generated from households.
There is an increase in participation where the Think Twice Campaign is
being rolled out and stakeholder engagement has identified a desire for
increased roll-out, noting that the risk and success depends on
participation rates.
The Waste Act establishes extended producer responsibility (EPR) as a
regulatory mechanism and the City needs to engage with the private
sector with the development and implementation of the waste industry
and/or sector plans.
The implementation of a Household Hazardous Waste service would be
costly to the City, with minimal airspace saving or benefit but is
nevertheless a necessary service that must be provided because of
changing legislative requirements.
The City is currently investigating gas to energy opportunities for the three
operational landfill sites and professional opinion indicates a limited
opportunity for the other (closed) sites and the opportunity reduces from
time of waste deposition and closure/capping.
The private sector plays a pivotal role in diverting recyclable waste from
landfill on a commercial and industrial level (trade waste).
The private sector is actively investigating Waste-to-Energy and/ or
Energy-from-Waste plants using their own sourced waste and City waste.
Various organisations are providing private funding for investigations and
investment into Waste-to-Energy and/ or Energy-from-Waste
opportunities.
The Technical Services Branch (TSB) of the SWMD currently provides
technical support services for the servicing, maintenance and repair of
facilities, specialised vehicles, and fixed plant, which are vital components
for the proper operating of the City’s existing and planned future IWMF
facilities. The current asset management and support services of the TSB
are inadequate to meet the present as well as growing demands of the
SWMD service delivery obligations with respect to IWMF and related
facilities, especially regarding fixed plant associated with waste transfer
stations and materials recovery facilities.
xxxv
9. From a financial and sustainability perspective the following key findings are
identified:
a. It remains financially more feasible to landfill waste rather than to collect,
process and divert waste with the proposed ASDs, with the notable exception
of the builders’ rubble ASD, if “funded” by the City alone i.e. City’s contribution
to the ASD show a financial benefit (saving).
b. From a tariff perspective, additional interest and depreciation associated with
implementing ASDs will lead to an increase in tariffs and a significant funding
gap exists between business-as-usual and the proposed ASD model, unless
funded through a PPP where external parties fund the capex.
c. The most significant impact will be on Disposal tariffs of an additional 13%
increase in 2013/14 over and above normal business-as-usual inflationary
tariff increase, unless funded externally.
d. The impact on Collection tariffs is an additional 9.4% increase in 2013/14 over
and above normal business-as-usual inflationary collection tariff increase to
facilitate separate collection of greens, household hazardous waste, comingled recyclables, organic waste management and increased bulk disposal
costs, unless funded externally.
e. The reduction in waste landfilled will have a negative impact on the revenue
of the Disposal budget and this will need to be cross subsidised and/or cost
reduction initiatives will be required to balance this function, if the City is
determined to meet waste minimisation targets.
f. Accounting for all direct and indirect costs, as specified above, the net
additional (over and above existing) unit cost to divert waste at full
implementation are as follows:
i. WB ASD (Group A): R1 380-R1 470/t (refer to Appendix AA);
ii. Co-mingled Waste (Group B): R1 350-R1 660/t (refer to Appendix
BB);
iii. Organic Waste Management (Group D): R750-R960/t (refer to
Appendix CC);
iv. Builders’ Rubble (Group F): (R50)-(R75/t) (refer to Appendix DD); and
v. Household Hazardous Waste (Group G): R2 900-R3 100/t (refer to
Appendix EE).
g. The unit cost of disposal in landfills, including normally projected OPEX and
CAPEX, as well as additional rehabilitation and closure costs not budgeted
for, increases from R216/t in 2011 to R248/t in 2019.
h. On the other hand, preliminary analysis reveals that if the City/Council does
not implement the ASDs it has the following implications:
i.
WB ASD (Group A): R400m–R425m in additional cost to process
and collect waste is not needed; 290 450 t/yr is not diverted from
landfill and 388 000m3/yr in airspace is not saved.
xxxvi
ii.
Co-mingled Waste (Group B): R45m–R55m in additional cost to
process and collect waste is not needed: 33 300 t/yr is not diverted
from landfill and 65 000m3/yr in airspace is not saved.
iii.
Organic Waste Management (Group D): R74m–R98m in additional
cost to process and collect waste is not needed; 105 000 t/yr is not
diverted from landfill and 300 000m3/yr in airspace is not saved.
iv.
Builders’ Rubble (Group F): (R4.2m)–(R6.2m) in additional benefit to
process and collect waste is not saved, 83 000 t/yr is not diverted
from landfill and 55 300m3/yr in airspace is not saved.
v.
Household Hazardous Waste (Group G): R47m–R50m in additional
cost to process and collect waste is not needed: 16 300 t/yr is not
diverted from landfill and 11 900m3/yr in airspace is not saved.
i.
j.
k.
l.
m.
n.
o.
p.
q.
The City can optimally contain costs of ASDs by sharing with the private
sector and/ or other City Departments.
It is not the City’s core business to get directly involved in the sale of “waste”
materials (e.g. recyclables such as packaging waste, paper, compost, energy,
etc, therefore WB, which involves the sale of goods/ services, preferably lies
with the private sector.
The Group A WB (IWMF) ASD is best implemented in a phased approach
with the quantities of waste diverted increasing over time up to the total viable
and sustainable capacity of the WB (IWMF) ASD in order to reduce tariff
impacts.
The aggregate of corporate support costs represents approximately 10% of
the total Solid Waste expenditure and needs to be further analysed for
inefficiencies and duplications or cross subsidisation.
The basis for allocating support costs (R145m) has a direct impact on the
costs allocated to the Solid Waste functions and directly impacts on tariff
calculations.
The Collections Function as an example is a labour-intensive function and
approximately 54% of its expenditure relates to staff, contracts, depreciation
and capital provisions. Corporate allocations are done mainly on the staff
costs yet the level of service provided from corporate services has no direct
correlation with these costs allocated.
The SWMD provides certain functions, the cost of which is recoverable from
rates. This should always be ring-fenced and properly costed for the
recoverability from rates and not be cross-subsidised by tariffs.
The current spend on repairs and maintenance is approximately 5% and this
should ideally be between a benchmark of 10-12% (National Treasury
Benchmark)
There are conflicting interests between tariff funded services and rate funded
services. There is no fully integrated activity-based costing (ABC) in place to
determine the true cost of a service or what the cost-drivers of the services
are.
xxxvii
r.
Trends over the years of the different functions are not directly comparable
given past structural changes, re-alignment of functions and different rate
funding arrangements.
s. At present there is no consolidated and segregated balance sheet for the
Department for proper future financial analysis and modelling.
10. The City (SWMD) is currently implementing a Management Information System (MIS)
and this needs to ensure it incorporates an improved Waste Information System
(WIS) that will facilitate the following:
a. Gathering useable information with regard to the informal sector and trade
waste.
b. Determining the difference between the Net Additional Costs (NAC) of the
ASDs (accounting for direct and indirect costs) and the cost of landfilling over
time to be used as a guide to the costs that need to be shared between the
City and private sector operators.
c. Estimating and including the full cost estimates of the proposed regional
landfill site, once this information becomes available, as it will start affecting
model results in later years.
d. Ensuring that the reporting system for WIS software is consistent for effective
reporting and management decision making and to manage the flow of waste
that impacts the WB (IWMF).
11. From an institutional perspective the following key findings are identified:
a. Significant changes have occurred since the Council Resolution in 2001,
which recommended that an Internal Business Unit (IBU) be created for Solid
Waste Management Department.
b. The current Section 78 (3) is unique in that it is triggered by the need to
comply with NEMWA and unlike the previous Section 78 (3), the choice of an
alternate service delivery mechanism for the SWMD is not the primary
objective of this assessment.
c. The IBU is not an 80:20 issue and, as stated in the Section 78 (1) report,
which was approved by Mayco, the re-structuring of the Solid Waste
Management Department will “not be sufficient to meet the broader
challenges of funding and other internal capacity constraints which the Solid
Waste Management Department will need to overcome in order to replace the
outlived landfill sites; refurbish Materials Recovery Facility’s; and replace
technologically outdated and ageing plant and equipment”. Therefore, the restructuring of the SWMD will have minimal direct impact on waste
minimisation and diversion from landfill sites as envisaged by NEMWA.
d. The ASDs are not expected to have any significant impact on the Solid Waste
Management Department’s organisational structure.
e. Business improvement changes recommended for SWMD’s organisational
structure would be changes required irrespective of the ASDs.
f. The ASDs are not expected to have any significant impact on staff and no job
losses are foreseen.
g. The SWMD is suffering from “change fatigue” and the current institutional
context in the City is an extremely difficult environment within which to
introduce and implement decisions with significant long-term effects.
xxxviii
h. Stokvels are not legal entities and fall outside the MSA but Co-operatives,
which could be established as legal entities, hold potential for job creation.
However, it is not the core business of the SWMD to create jobs and the
City’s Local Economic Development Department, with the assistance of the
SWMD, the private waste industry, and various relevant provincial and
national government departments, should use community-based cooperatives and other existing grass-root organisations as a means to
facilitate, communicate, educate, create awareness of buy-back centres and
other job creation opportunities through participation in waste minimisation
initiatives.
i. There is insufficient capacity to fulfil the regulatory requirements of service
delivery agreements with external service providers within the SWMD.
j. There is no provision which gives the City/Council the right to terminate a
service contract (agreement) in circumstances other than the service provider
defaulting.
k. Further, there is a lack of provision which deals with penalties owed to the
City should it cancel the agreement prematurely for service contracts.
l. The existing fleet and workshops are inadequate to meet the growing
demands of the SWMD service delivery obligations in the long-term and there
exist opportunities for synergistic benefits with other internal departments (for
example Electricity) and the private sector (refer to Appendix Y).
m. The majority of stakeholders are supportive of private sector involvement in
waste management provided that it encourages access to economic,
resources and capacity building opportunities in all sectors with increased
benefits to local communities.
n. There are significant opportunities to improve internal and external
communication and stakeholder engagement processes for the City as a
whole.
o. Based on all the information and analysis done to date, and as presented in
this report, a comparison between internal and external options for service
delivery as well as the institutional, technical, financial and sustainability
assessments is made to determine the best option available to the City for the
SWMD as identified, and to ensure 80:20 impact. The finding is that the Solid
Waste Management Department should therefore remain a “department” until
such time as the Council’s resolution of 2001 is rescinded.
Based on the above findings and analysis, the recommendations are listed below in the
following order:
KEY
RECOMMENDATIONS:
CONSOLIDATED
(These
consolidated
recommendations relate to the more detailed recommendations below);
KEY RECOMMENDATIONS: PER ASD GROUP; and
KEY RECOMMENDATIONS: OTHER.
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This is done to support the systems approach on both the components of the system and the
waste management system as a whole. These recommendations stem from the investigation
into the (unsustainable) status quo of the SWMD, thereafter the listing of key action
elements, which were shortlisted into 11 ASD elements, as well as the subsequent
evaluation of the ASDs for internal or external mechanisms, as per the MSA criteria,
including VISA, for the ultimate purpose of minimising waste and maximising diversion from
landfill, driven by legislation (refer to Appendix A)
To therefore assist the City meet its legal obligations of waste minimisation and reduction in
waste landfilled, the following consolidated recommendations are made to ensure waste
minimisation and maximisation of diversion:
KEY RECOMMENDATIONS: CONSOLIDATED
Based on the status quo assessment and the analysis done as part of this Section 78(3)
process, and taking into account the key VISA implications, the City should note that it is
possible over time to maximise diversion and minimise waste to landfill, but this will come at
a significant cost to the City, albeit with a socio-economic and environmental benefit.
Having said this, the financial risk can be mitigated through alternative service delivery
mechanisms and waste beneficiation initiatives, as recommended below:
1.
Council to issue a clear policy statement of intent to implement waste diversion from
landfill sites through various alternative service delivery mechanisms for services or
functions that are considered to be non-core to the Council’s mandate as per the
legal opinion received in this regard.
2.
The Council Resolution of 9 December 2010 for the 2 composting facilities should be
implemented.
3.
Council should consider the outcome of the WESGRO feasibility study that was
advertised on the 4 February 2011 for builders’ rubble management in the City.
4.
Waste-to-Energy and/ or Energy-from-Waste facilities should be set up in the city
subject to further detailed technical and socio-economic investigations, noting that
the technical assessment indicates a preference for an AD plant at ARTS but that
other locations and facilities may be considered.
5.
Council should extend, but improve, the effectiveness and efficiency of separation at
source and collection of household recyclables, as is currently being piloted (“Think
Twice”) across the City (refer Appendix A), as these are key to unlock opportunities
for supply agreements at the various Integrated Waste Management Facilities.
6.
Council must develop a strategy for hazardous waste disposal, taking into account
the limited lifespan of the existing Vissershok South H:h Landfill site and the Private
Vissershok H:H Landfill site and cognisance must be taken of the Draft Waste
Classification and Management Regulations and National & Provincial authorities,
noting the opportunities available in the establishing of the Regional Landfill site.
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7.
Council may continue the interim approach to provide a household hazardous waste
disposal service in the form of facilities at six of the existing drop-offs (excluding
medical waste). Council must ultimately ensure that Extended Producer
Responsibility supports and takes responsibility for the diversion of HHW from landfill.
8.
To give effect to the ASD’s, as recommended above, Council needs to consider and
implement appropriate institutional mechanisms, as required in terms of the
MSA 78(3) legislative requirements:
a. Council should rescind the original Council resolution of 2001 with regards to
establishing a “fully-fledged Internal Business Unit”.
b. The ASD mechanism may attract certain costs and revenue that may need to be
ringfenced to manage and ensure sustainability of any PPP at the IWMF (WB)
facilities and this should therefore be established as a cost centre, coupled with
an improved waste information system, under the SWMD.
c. A Contracts Office must be established within SWMD in order to comply with
MSA legislative and regulatory requirements and to give effect to the need for
consistency, compliance, inter-departmental integration and standardisation,
noting that the day-to-day management of service contracts to remain within the
relevant line Branches.
d. The SWMD must establish an inter-departmental task team focussed on the
waste management synergies/ benefits and sharing of costs/ resources between
Departments i.e. Roads Department (rubble), Wastewater Department (sludge),
Parks (greens), and various other Departments (QS, Scientific Services, etc.)
e. Given the various policy developments and initiatives at National, Provincial and
Local Level regarding Waste-to-Energy and/ or Energy-from-Waste and Climate
Change, it is recommended that the Utilities Service Directorate establish
sufficient capacity to deal with the development and implementation of interdepartmental initiatives e.g. those presented by OWM and sewage sludge.
f.
The SWMD must develop and implement a Fleet Management System; and in
doing so exploit synergies with the Electricity Department and the Private Sector
with regards to the Fleet and Workshops.
g. The SWMD must re-structure its existing Fleet Management Structures, and
create an Inspectorate Function to monitor and evaluate internal and external
workshop repairs, servicing and maintenance.
9.
To give effect to the ASD’s and to ensure enforcement, legal compliance (including
VISA requirements) and implementation, the following policies and strategies must
also be addressed:
a. Council must develop and implement a policy and appropriate specifications to
allow and enforce the use of crushed builders rubble and inert waste material
(e.g. sand), as applicable.
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b. Contracts and tariffs for the crushing and sale of builders rubble must be revised
for the purposes of improving quality and re-usability by the Council and
commercially.
c. The SWMD future capital and operating budgets must reviewed in its entirety to
ascertain/ determine/ identify funds/ assets (e.g. land and infrastructure) that can
be utilised as “seed funding” or City contributions to future PPP or ASD
investments.
d. Council should make a deliberate policy decision/s to set aside and ringfence (i.e.
the inclusion of all relevant direct and related SWMD services) income to smooth
out the impact of tariff-spikes in future years or the alternate may be tariff
adjustments on a controlled basis.
e. Council must establish a policy and ultimately a strategy, to manage household
hazardous waste.
KEY RECOMMENDATIONS: PER ASD GROUP (A – G)
Refer to the List of Appendices for further analysis and argument, which has been
included under the relevant Appendix.
GROUP A: WB (IWMF). ALL THE RECOMMENDATIONS WITHIN THIS GROUP RELATE TO THE
WB (IWMF) (APPENDIX AA WITH VARIOUS APPENDICES COVERING ELEMENTS OF AN
IWMF):
1.
2.
3.
4.
Council should not consider further capital investments to develop more MRFs
beyond ARTS and Kraaifontein as there is adequate existing capacity and
opportunities for expansion at these facilities in the short-term and in the longer term
privately owned MRFs will accommodate growth and the City should consider
expansion and upgrades of these facilities using PPPs as these present opportunities
to divert more waste.
The future planned IWMF must be established, with City engaging with the private
sector, in response to growth of waste generation in these catchment areas, namely
Helderberg IWMF and Tygerberg IWMF (foreseeable future).
Subject to further knowledge gained from the operating of ARTS and the newly
commissioned Kraaifontein MRF’s, Council should consider longer-term PPP
contracts for the operation of these facilities in future in order to reduce costs.
Recommendation is based on projected co-mingled waste diversion rates. (Refer to
Appendix BB and Appendix F)
Waste-to-Energy and/ or Energy-from-Waste facilities should be set up in the City
(subject to further detailed technical investigation and land becoming available in
order to determine the preferred technology and most suitable location) and Council
should consider a RFI and RFP to identify the most suitable service provider, noting a
high-level analysis suggests that an anaerobic-digestion (AD) process situated at
ARTS holds advantages in terms of transportation costs of raw materials (i.e. organic
wastes such as food wastes), proximity to existing electricity infrastructure and areas
xlii
5.
6.
7.
8.
9.
10.
11.
of power demand and proximity to waste water treatment facilities where technical
synergies may be considered and ARTS could be one of the sites for the City to
commence with. (Refer to Appendix G, Appendix O and Appendix P) An alternative
site is the Tygerberg IWMF. The timing of a Waste-to-Energy and/or Energy-fromWaste facilities should however be in response to when legislation demands dictate
and support such a facility i.e. banning of organics (part or in whole) to landfill.
Eco-industrial parks should initially be established at ARTS and Kraaifontein IWMF,
and these must be phased-in and any proposed PPPs with the Private Sector should
incorporate economic opportunities for local communities. The development of such
facilities should be driven by the private sector and supported by the City by providing
suitable land and by facilitating the provision of recyclable materials. An initial facility
is recommended for the Kraaifontein IWMF, which is situated within an industrial
node and where land is available close to developing communities. (Refer to
Appendix H)
The SWMD should consider consolidating the planning, specification and
standardisation of drop-off facilities under one Branch. (Refer to Appendix I)
Road transfer from RTS to landfill should be a SWMD function and not be outsourced
(and to be phased-in) in order to reduce operating costs and achieve greater
technical compatibility and interface with RTS plant. (Refer to Appendix J)
To address the informal sector, the City should consider appropriate structures and
grassroots economic opportunities strategies with the waste and private sector in
association with the Socio-economic Development Department (e.g. communitybased co-operatives, stokvels, and others);
Council must develop a strategy for hazardous waste disposal taking into account the
limited lifespan of the existing private facility and take into account the draft Waste
Classification and Management Regulations, noting the proposed future scrapping of
H:h classification low hazardous waste disposal sites and H:H classification (to be
replaced by a single hazardous classification disposal facility for hazardous wastes)
and the banning of liquid waste co-disposal at landfills, recommended in the 2010
National Draft Waste Classification and Management Regulations, as well as the
limited lifespan of the privately-owned and operated Vissershok H:H hazardous
waste facility places the City at risk in terms of future hazardous waste disposal. The
inclusion of a hazardous waste disposal facility (dedicated cells) at the future
Regional Landfill and/ or cells operated separately by a private operator should be
considered by Council. (Refer to Appendix K)
The WB (IWMF) ASD must be established as a cost centre (referred to as a
“department” in MSA) under the Disposal Branch and must be combined with a
service delivery agreement (SDA) with any other institution, entity (which could be in
the form of a PPP) or person legally competent to operate a business activity.
The components of the WB (IWMF) must be established according to the MSA
service delivery mechanisms as illustrated in Table f.
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Table f
MSA Service Delivery Mechanisms: WB (IWMF) ASD
Group A: WB (IWMF) ASD
ASD
Additional and optimisation of Materials Recovery Facilities Material Recovery Facility
SDA / PPP
Waste Reception (revenue
management)
Department
Refuse Transfer Station (RTS)
Department
Transfer of
Waste from RTS
to Landfill
Integrated waste management facilities and appropriate
technologies, noting changes in materials handling
MSA Mechanism
By Rail
SDA
By Road
Department/ SDA
Material Recovery Facility (MRF)
SDA / PPP
Waste Processing Facility i.e.
alternative technologies (e.g. AD
plant, Waste-to-Energy / Energyfrom-Waste, etc.)
SDA / PPP
Resource Centre / Eco-Industrial
Park
SDA / PPP
Builders’ Rubble
Management
Collection and
Storage
Department/ SDA
Processing
SDA / PPP
Drop-off Facility
Department/SDA
Landfill Disposal Facility
Department
GROUP B: SEPARATION AND COLLECTION OF RECYCLABLES (APPENDIX M, APPENDIX BB)
1.
2.
The collections of co-mingled recyclables separated at source from households
should be linked to the operation of the existing Council-owned MRFs, and the
existing contract should be reviewed prior to it’s expiration to allow and facilitate a
more efficient longer term funding and operating model. This may achieve higher
participation levels by households and increased diversion of recyclables but it
should also be noted that participation is based on household behaviour.
New legislation has been released (National Domestic Waste Collection Standards)
which support separation at source, particularly domestic waste, and Council must
drive education and awareness to inform the waste generators on how to manage
their separated waste. One alternative is for kerbside collection or making drop-offs
available to the public.
xliv
3.
4.
5.
The Think Twice Campaign (currently still part of a pilot roll out) should be extended
to viable areas and formally made part of the Solid Waste Operations, based on
participation rates through piloting these options before full implementation to
increase the efficiency of the overall recyclables processing system (MRFs) (“Viable”
means areas that prove to be generating a reasonable amount of recyclables in
return for the investment by the City. The new National Domestic Waste Collection
Standard supports such an initiative.) Alternatively/ in-addition, the City is to ensure
Drop Offs are managed to receive public-delivered recyclables where a collection
service is not offered.
The separation and collection of recyclables ASD must be established according to
the MSA service delivery mechanisms as illustrated in Table g.
Information on source separation must be refined through the current Think Twice
pilot campaigns.
Table g
MSA Service Delivery Mechanisms: Separation and Collection ASD
Group B: Separation and Collection ASD
Separation at source and separate co-mingled waste
recyclables collection service
ASD
MSA Mechanism
Dry Waste (Recyclables)
Collection service
SDA
To be developed
To be developed
between Council
and Private Sector
Separate waste stream – area cleaning and education
To be developed
campaign (refer to Appendix N)
Department/ SDA
Informal areas separation at source
GROUP C: SEWAGE SLUDGE (APPENDIX O)
1.
Appropriate systems need to be established to exploit synergies between SWMD and
the Waste Water Branch (of the Water and Sanitation Department) and City Parks in
terms of waste minimisation and Waste-to-Energy and/ or Energy-from-Waste
opportunities. Wastewater Department is already looking at alternative options for
disposal of sludge and discussions between the Departments within the Utilities
Services, at least, must be undertaken as a matter of urgency.
GROUP D: COMPOSTING AND ORGANIC WASTE (APPENDIX P, APPENDIX Q, APPENDIX CC)
1.
2.
The Radnor facility should be sold/transferred when the PPP is implemented, should
Council find no alternative use for the site.
Council should consider the implementation of a future green waste collection service
to enhance diversion from landfill and to meet the 10-year target (50% diversion of
greens) set out in the Draft Waste Classification and Waste Management
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3.
4.
Regulations , and which should be linked to any composting and chipping contract
and/or any Waste-to-Energy and/ or Energy-from-Waste facilities.
The mechanisms for collecting greens needs to be investigated in further detail
noting the synergies with organic waste diversion
Council should consider the cost-benefit of reducing collection costs by promoting
and home composting.
GROUP E: LANDFILL GAS (APPENDIX R)
1.
Council must continue to explore landfill gas-to-energy options with respect to
existing operating and closed landfills and implement these as soon as possible to
extract financial benefits.
GROUP F: MANAGEMENT OF BUILDERS’ RUBBLE AND INERT WASTE MATERIALS
(APPENDIX S, APPENDIX DD)
1.
2.
3.
The contracts for the crushing and sale of builders’ rubble must be reviewed for
purposes of improving the quality of the crushed material and the regulations and
tariffs with regard to builders’ rubble must be amended accordingly. This is a costeffective, sustainable, mechanism for improved waste diversion from landfill. Council
must implement a policy to enforce the use of the above within the City and with
external parties, accompanied by appropriate engineering specifications linked to
type of application.
Council should establish (or be involved in co-ordinating the establishment) of
guidelines for the suitable use of crushed rubble versus quality of the crushed rubble,
coupled with the compilation of the policy and regulations to direct the re-use of
crushed rubble.
The SWMD should instil mechanisms e.g. the use of tariffs, to support and improve
the quality of crushed material for re-use, in addition Council must create an
awareness of its intentions with the above quality-goal and re-use goal of crushed
builders’ rubble, with those who are potential users of the end product and those
supplying the raw materials (rubble.) This should be done through campaigns and at
the crushing facilities, together with any other means available to Council. The one
goal of this initiative is to get those who deliver contaminated builders’ rubble, to start
planning their Works (where possible) to supply clean builders’ rubble to the crushing
sites.
GROUP G: HOUSEHOLD HAZARDOUS WASTE (APPENDIX T, APPENDIX EE)
1.
Council must establish HHW facilities at 6 existing drop-offs, of which 3 (Athlone,
Kraaifontein and Coastal Park) should receive all types of household hazardous
waste (excluding medical waste) and 3 to receive e-waste, CFLs and batteries
(locations should be near residential areas, still to be determined.
xlvi
2.
3.
The receipt and temporary storage component of HHW service should be an internal
“department” function, with the necessary skill and capacity at the temporary storage
location/s, and the bulk transfer and disposal component of HHW service should be
contracted out in the form of a SDA as illustrated in Table h. New legislation has
been released (National Domestic Waste Collection Standards) which support
facilities being developed at Drop Offs for “non-mainstream” waste such as HHW.
All HHW facilities to be under the control of the Disposal Branch.
Table h
MSA Service Delivery Mechanisms: Household Hazardous Waste ASD
Group F: HHW
Household Hazardous Waste (HHW)
ASD
HHW
Management
MSA Mechanism
Receipt and
Temporary Storage
Department/ SDA
Bulk Transfer and
Disposal
SDA / PPP
KEY RECOMMENDATIONS: OTHER
1.
2.
3.
4.
5.
6.
Council SWMD Planning Branch should continue to monitor sector waste
management plans (refer to Appendix C) to promote extended producer responsibility
(EPR). Council must furthermore monitor Integrated Industry Waste Management
Plans which are currently being compiled. Industry will be responsible for levies and
the management of levies (DEA, Waste Act Road Show, 2010). Council should, once
these Plans are formulated, investigate the opportunity of financial and/ or industry
support to initiatives by Council, to divert waste from landfill.
The SWMD should reduce interdependency on rates funding in the medium- to longterm, implement activity-based costing in its environment and finally not be recharged for other departments’ overheads, where no value or services are rendered.
Detailed internal service level agreements, driven by activity based costing, and with
clear deliverables and costs should be drafted and agreed to and these should be
accepted by the SWMD only if they directly relate to or drive the services or costs of
the SWMD and its services These costs should be ringfenced to ensure that it is
aligned to the operations and business of the SWMD.
The Technical Services Branch needs to establish a dedicated unit to provide an
asset management service for fixed plant and equipment.
SWMD must finalise its Fleet Management System Plan, as part of the Integrated
Asset Management Plan, and implement a vehicle replacement plan to ensure
adequate vehicle availability as well as compliance with fleet legal requirements in
terms of the Administrative Adjudication of the Road Traffic Offences (AARTO) (refer
to Appendix Y).
Service Delivery Agreements and tender documents must include and enhance local
economic and job creation opportunities.
xlvii
7.
8.
9.
10.
11.
12.
13.
Service Delivery Agreements and tender documents must also include penalty and
termination clauses to protect Council’s rights.
Council’s Socio-economic Development Department, assisted by the SWMD, the
private waste industry, and various provincial and national government should use
community-based co-operatives and other existing grass-root organisations to
facilitate, communicate, educate, and create awareness of waste-minimisation
initiatives to create job opportunities.
Consideration should be given to undertake focused public stakeholder/ community
engagement across the different sectors and regions and these should be
incorporated within the Utility Services Directorate and the existing sub-council
structures.
To improve communication and integration within the SWMD, the staff sub-committee
established for this project should be continued and improved upon beyond the
scope of this project.
Council should use the existing bylaws to enforce and divert or ban certain waste
types, as dictated by legislation and in response to this report.
Council should explore multi-jurisdictional entity opportunities with regards to regional
landfill sites and waste beneficiation, in particular with neighbouring municipalities,
noting that this cannot be done without national and/ or provincial involvement.
Council needs to establish policies in specific Departments that relate to the handling,
disposal and re-use of waste in their operations, and amend it’s Procurement Policies
to include green procurement principles and to use materials with recycled content
(where possible) in order to support the local recycling industry and create a demand
for these products, leading by example. Internal initiatives should rely on accessing
and procuring recyclates internally as a potential cost saving measure.
In conclusion, it must be emphasised that the Council is legally required to minimise waste
and maximise diversion from landfill, and that this function, if developed and retained
internally, will be costly and will be prohibitive unless the City considers external alternate
service delivery and funding mechanisms.
Should the City resolve to implement the above ASD’s, structures and policy
recommendations, as outlined in this report, the City should note that a significant proportion
of the investments, skills and capacity required for the ASDs can emanate from external
service providers (private sector partners). These investments may however only realise
returns in the long term or be attractive to investors if the City considers as an example long
term concessions to attract investments. This will ensure rates and tariffs are smoothed out
over the longer term rather than creating tariff “spikes” with shorter investment timelines. The
City should note that longer timelines also commit the City for a longer period but that these
can be mitigated if properly negotiated and that it is only through these large scale
interventions and negotiations that long lasting direct and indirect jobs can be created and
sustained in the City (economies of scale).
However, the success of these interventions will only materialise if the City uses the various
tools and mechanisms at its disposal (tariffs, bylaws, assets, etc.) for this purpose, coupled
with external support, risk taking and funding.
xlviii
Finally, the City should be mindful that not all key Industry Waste Management Plans have
been finalised and that these will have an impact on the configuration and/or mechanism/s
adopted by the City and that the City (as the Enabler), through its Integrated Development
Planning processes should give effect to job creation opportunities, and economic and
industry development through the initiatives and recommendations emanating from this
assessment.
xlix