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Description

The ISWM project was envisioned by the Ministry of Local Development (MoLD) to manage the municipal solid waste of Kathmandu Valley through a Public Private Partnership (PPP) approach. The project was brought under the ambit of the Investment Board after the enactment of the Investment Board Act 2011. 

The project envisions to replace the present practice of solid waste management- street sweeping, collection and disposal by a resource oriented and sustainable practice of Reduce, Reuse and Recycle.

Salient Features

Investment Size (Approx)

USD 100 Million

Bidders selected for DPR preparation

Package 1:
Nepwaste Pvt Ltd (JV of Compunication Oy and The Organic Village in association with Poyry and Biotse)

Package 2 & 3:
Clean Valley Company Pvt Ltd ( JV of BVG , Greenfield Waste Management Company and Kryss International)

PPP Model

Build, Operate, Own and Transfer

GoN Partner

Ministry of Urban Development (MoUD)
Ministry of Federal Affairs and Local Development (MoFALD)
Solid Waste Management Technical Support Centre (SWMTSC)

Location

Package 1:
Kathmandu Metro and 13 VDC's

Package 2:
Lalitpur Sub-Metro, Kirtipur Municipality and 9 VDC's

Package 3:
Bhaktapur Municipality, Madhyapur Thimi Municipality and 7 VDC's

Expected Benefits

Cleanliness and sustainability
Involvement of private sector is expected to promote scientific and environment friendly practices.  This leads to better health and sanitation.

Resource generation
Converting waste into compost or other forms of energy, such as bio gas or electricity, promotes minimal residual waste and generates valuable resources currently in high demand within Nepal.

Reduction in government burden
Inviting private sector to invest will not only allow the government to share the investment burden but also ensure smooth operation and maintainence activities over time. e.g. the recurrent expenditure of KMC for managing solid waste annually alone is around Rs 600 Million.  In general, municipalities in Nepal spend $ /ton in managning solid waste (ADB, 2013), an average of 9.22% of their annual budget.

Efficiency and productivity
Private sector participation is expected to increase efficiency of waste collection and processing reducing the burden on landfill sites and other land resources.

Range of desirable outputs
The project offers the prospect to process waste into a range of products necessary for Nepal, such as electricity, biogas/diesel and fertilizers. Electricity generated by the product can be used for internal consumption or can be sold to the concerned government authority.

 

Milestones

IBN Project Cycle

Phases of Project

Challenges

  • Weak design of procurement process
  • Changes in local governance structure e.g. new municipalities in Kathmandu Valley
  • Piece meal contracts/initiations from municipalities.
  • Low project financial viability. Experiences worldwide suggest that, even with private participation, governments may still need to provide financial support, in the form of viability gap funding.
  • Changes in expectation of  both GoN and private sector from the project.

 

Way Forward

  • Gear up for negotiation of concession agreement if Detailed Project Report (DPR) submitted by selected bidders in acceptable to GoN.
  • Complete the procurement process

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Nepal Investment Summit 2017