public - private partnerships and solid waste management infrastructure

04/08/23 1

PPPs & SOLID WASTE MANAGEMENT

INFRASTRUCTUREAntonis Mavropoulos, CEO EPEM SA

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Presentation outline

1. The problem

2. Key factors affecting PPPs in SWM

3. Changes in project preparation (design, risks, feasibility)

4. Case study

5. Conclusions

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The view

PPPs are long term relations - emphasis at results

Private sector income is linked with specific targets

Payback is gradual, year by year

SWM services have a public character

One option not a necessity

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The problem

To deliver WM infrastructure To ensure the service for certain years To achieve specific recycling targets To interact with market conditions and

other uncertainties

5

Project cycle

6

PPP as a WM tool

7

Key factors

1. Major EU financial tool

2. SWM treatment requirements: Directive 99/31

Difficulties for countries depended on landfills

Lack of public funds

3. The nature of SWM treatment facilities (technologies, complexity, industry dependence)

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4. The status of managing bodies

5. Increase in WM costs

6. Legal gaps and problems

7. Need for a new public role: from control of

procedures to control of the results

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Key factors Effect

1. EU policy Positive

2. Availability of public money Positive

3. SWM treatment requirements Positive

4. SWM treatment facilities nature Positive

5. Managing bodies status Negative

6. Increase in WM costs Negative

7. Legal problems - gaps Negative

8. Public role Negative

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SWM treatment needs (Greece)

1,95

1,3

1,1

1,9

2,7

0,9

0,5 1 1,5 2 2,5 3

2010

2013

2020

Max.BMW to landfilled (mt) Min. BMW to be diverted (mt)

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A new approach to design

Check the overall feasibility Emphasis to results – not to technical

design Risk Distribution

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Feasibility

Define the problem

Alternative funding

Affordability

What is the public input?

What is the added value of PPP;

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Case Study: WMR

300,000 citizens 120,000 tons of mixed MSW Lignite mines and power plants -

Extensive lignite excavations Regional SL at old lignite mine Well established WMA

(DIADYMA S.A) First (and sole) Regional SL in Greece -20 y life expectancy

Separate Collection of Packaging Waste underway

DIADYMA S.A wishes to incorporate waste treatment – preferably a

simple and modular technology

WtE is favoured (energy easily marketable)

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Project formulationDesign Built Operate Rehab.

9 Transfer stations

1 SW treatment unit

1 landfill

1 closure – rehab.

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Technologies - results

3 million tons of waste 25 years Residue < 65% by weight Recycling: according EU targets MBT – RDF Anaerobic digestion

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Cost barrier – landfill dependence

COUNTRY COST (€/TN)

AUSTRIA 50-150

BELGIUM 116

DENMARK 110

FINLAND 30-121

GERMANY 123

GREECE 8-35

IRELAND 120-240

ITALY 90-110

LUXEMBURG 50

NETHERLAND 58

PORTUGAL 26

SPAIN 12

SWEDEN 70-90

UK 21

COUNTRY COST (€/TN

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WMR case

LANDFILL: 13 Euros/tn

TRANSFER ST.: 15 Euros/tn

GDP / capita: 13.500 Euros/y

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Total expenses: 267 m. Euros25 YEARS EXPENSES

38,000,000.00

69,632,714.15

159,286,532.17

59.68%

26.09%

14.24%

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

INVESTMENT LANDFILL -TREATMENT

TRANSFER STATIONOPERATION

OPERATION LANDFILL -TREATMENT

EU

RO

S

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

% E

XP

EN

SE

S

0.89%

0.65%

1.67%

1.37%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

ACHAIA WMR

% G

DP

/ C

AP

ITA

CURRENT % GDP PROJECTED % GDP

96

180

88

185

0

50

100

150

200

EU

RO

S/T

N

ACHAIA WMR

TOTAL WM COST EUROS/TN PROJECTED WM COST

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Final modeling

WESTERN MACEDONIA PPP MODEL

0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00

12,000,000.00

14,000,000.00

16,000,000.00

YEARS

EU

RO

S

WMA INCOME (euro/year) AVAILABILITY PAYMENTS (euros/year)

GATE FEES COMPOSITION

30.00

40.00

50.00

60.00

70.00

80.00

90.00

WMR CONTRIBUTION GOVERNMENT CONTRIBUTION

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Emphasis to results

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Risk allocationRisk transfer and allocation

Risk

Public Private Shared

1.1 Cost and Timing of planning determination

1.2 Cost of compliance with planning conditions

2.1 Time and cost over-run

2.2 Remedy of defects

2.3 Site conditions

2.4 Compliance with technical specification

2.5 Variations (required by the Council after design fixed)

3.1 Obtaining the necessary licences and consents

3.2 Compliance with environmental regulations, and discharges to air, water and land

3.3 Compliance with and availability to perform service contract

3.4 Lifecycle replacement cost estimation and differential inflation

3.5 Operating cost estimation and differential inflation

4.1 Proposed facilities (or service provider revisions)

4.2 Benefits from pursuing alternative technology on agreement with the Council

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EU funds and PPP: why EU funds?

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Why PPP?

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The concept

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Key issues for success

• Build local capacity to develop technical specifications and to tender competitively.

• Create a level playing field by means of a regulatory framework.

• Specify worker safety and environmental requirements.

• Provide mechanisms to assure flow control.

• Define sanctions and enforcement mechanisms that discourage non-performance.

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• Prepare for agreements that are long enough to allow full depreciation of investment.

• Prepare agreements that are large enough in scope to allow economies of scale.

• Include price indexing to allow adequate cash flow and continuous profitability.

• Include public consensus in all key decisions.

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• Quantify outputs to enable comparative performance monitoring.

• Enlist public cooperation.

• License and control all private sector involvement.

• Monitor performance to compare service providers.