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Public-Private Partnerships for Solid Waste Management Services

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DOI: 10.1007/s00267-002-2715-6 · Source: PubMed

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 DOI: 10.1007/s00267-002-2715-6

Public–Private Partnerships for Solid Waste

Management Services
M. MASSOUD1 improve MSW management performance with privately owned
M. EL-FADEL* enterprises often outperforming publicly owned ones. In Leba-
Department of Civil and Environmental Engineering non, several municipalities are transforming waste management
American University of Beirut services from a public service publicly provided into a public ser-
PO Box 11-0236, Bliss Street vice privately contracted. In this context, a regulated private mar-
Beirut, Lebanon ket for MSW management services is essential. The present
study examines a recent experience of the private sector partici-
ABSTRACT / The increasing cost of municipal solid waste pation in MSW management in the Greater Beirut Area. The re-
(MSW) management has led local governments in numerous sults of a field survey concerning public perception of solid waste
countries to examine if this service is best provided by the public management are presented. Analysis of alternatives for private
sector or can better be provided by the private sector. Public– sector involvement in waste management is considered and
private partnerships have emerged as a promising alternative to management approaches are outlined.

Public–private partnerships (PPPs) can be defined overall public welfare and any resident can enjoy the
as the transfer and control of a good or a service benefit of the service without diminishing the benefit to
currently provided by the public sector, either in whole anyone else. Generally, it is not feasible to exclude from
or in part, to the private sector. It involves a wide range service those who do not pay since public cleanliness
of private sector participation in public services and and safe waste disposal are essential to public health
serves as a potential strategic management tool and environmental protection. Being nonexclusive,
(Hutchinson 1996, Donaldson and Wagle 1995, US nonrivaled, and essential renders MSW management a
EPA 1999). The increased interest in PPPs can be at- public service for which the local government is typi-
tributed to: (1) improved performance of the public cally responsible. This does not mean that local govern-
sector by employing innovative operation and mainte- ment has to accomplish the task entirely. It is important
nance methods; (2) reduced and stabilized costs of to note that privatizing some aspects of MSW services
providing services by ensuring that work activities are does not take away the need for local government to be
performed by the most productive and cost effective fully responsible for these services. In this context, a
means; (3) improved environmental protection by number of financial and nonfinancial factors should be
dedicating highly skilled personnel to ensure effi- addressed in developing policies and strategic plans for
cient operation and compliance with environmental private sector participation in MSW services. These in-
requirements; and (4) access to private capital for clude but are not limited to: cost recovery, finance,
infrastructure investment by broadening and deep- economies of scale, cost, efficiency and public account-
ening the supply of domestic and international cap- ability, institutional management, and legislation.
ital (Walters 1989, Van De Walle 1989, Ramanadham
The application of PPPs as a management tool re-
1991, Sabra 1994, Jefrey 1996, Shami 1998, US EPA
quires active and continuous examination of rendered
1998).
services to determine whether they are more appropri-
Municipal solid waste (MSW) management is a non-
ately and effectively performed by the private sector.
exclusive and nonrivaled service, that is, once it is pro-
The present study assesses the experience encountered
vided to some portion of the community, it benefits the
to date with private sector participation in MSW man-
agement in the Greater Beirut Area (GBA). In addition
KEY WORDS: Solid waste management; Public–private partnership; to the evaluation of the MSW system and financial
Lebanon
performance, the public perception about services ren-
1 dered by the private sector is also examined using a
Current address: Environmental Health Department, Faculty of
Health Sciences, American University of Beirut, Beirut, Lebanon. structured field survey. The study concludes with an
*Author to whom correspondence should be addressed; email: analysis of alternatives for private sector involvement in
[email protected] waste management.

Environmental Management Vol. 30, No. 5, pp. 621– 630 © 2002 Springer-Verlag New York Inc.
622 M. Massoud and M. El-Fadel

The Lebanon Context

The ever-increasing amount of solid waste genera-
tion has created disposal problems for many develop-
ing countries, and Lebanon is no exception. Refuse
generation continues to increase with population and
economic growth rendering waste management as one
of a host of challenging development-related issues that
the government is facing. Historically, refuse collection
and disposal has always been the responsibility of mu-
nicipalities. As is the case in many developing countries,
most public enterprises in Lebanon are run with inad-
equate attention to profitability, cost control, or effi-
ciency. The municipalities in particular are wasteful in
their use of capital and labor, and this in turn leads to
inefficient performance or even failure to meet the Figure 1. Basic components of MSW in GBA before and
goals. They are generally characterized by operating during the war.
deficits, causing a drain on public budgets, and over-
staffing, in many cases with relatives and others who
lack skills and have little concern and real incentives for tracted to manage MSW generated in the GBA, includ-
efficient management. In addition to the lack of finan- ing collection and street sweeping as well as the man-
cial resources, municipalities in Lebanon suffer from a agement and operation of two processing plants, a
lack of a qualified and motivated human resource base composting facility, and two controlled landfills (El-
that can efficiently implement local development Fadel and Khoury 2001). The management of the GBA
projects and use modern municipal planning and man- waste represents a prototype of the comprehensive na-
agement tools. tional plan and consists of several components as de-
Following nearly two decades of civil unrest, the picted in Figure 2.
municipalities have emerged weak administratively and
financially, and refuse collection equipment was either Public–Private Partnership Experience
damaged or had deteriorated due to aging and lack of
maintenance. Consequently, the municipalities were Organizational Framework
unable to continue providing a much-needed service, At present, direct responsibility for MSW manage-
and until recently slow burning and uncontrolled ment in the GBA lies with the Council of Development
dumping on hillsides and seashores have been the com- and Reconstruction (CDR), and to a lesser extent, the
mon methods practiced for solid waste disposal in Leb- Ministry of Environment (MoE), and the Ministry of
anon, resulting in serious land, sea, and air pollution Municipal and Rural Affairs (MMRA). As for the mu-
problems. In the capital Beirut, most of the refuse was nicipalities, their role is restricted to overseeing the
dumped in the sea, together with rubble and rocks, work of the private company contracted for solid waste
thereby encroaching on the seafront. Figure 1 depicts management services. Moreover, they are still respon-
the basic components of MSW in the GBA before and sible for refuse collection from public gardens, coasts,
during the war. Similar examples of serious adverse slaughterhouses, watercourses, and public and private
environmental impacts were encountered in almost ev- obsolete lands. In its effort to ensure proper develop-
ery coastal city due to a general lack of an integrated ment and operation, CDR designated an independent
solid waste management (ISWM) policy in the country. consulting company (LACECO) to provide technical
Official and public concerns about MSW has peaked assistance to the Government through the supervision
in recent years, bringing about the closure of existing of the operator’s activities primarily the operation of
dumpsites and a great need to identify alternative meth- the processing plants, compost facility, and landfills
ods for the disposal of refuse, particularly from the (Figure 3).
GBA, where land is scarce and prohibitively expensive.
Under these conditions, the Lebanese government em- Assessment of Solid Waste Collection and Transport
barked on developing a national policy and manage- For many years, the sight of scattered, misdisposed,
ment plan to find a solution for the management of and illegally dumped MSW was a common occurrence.
MSW. For this purpose, a private company was con- The causes for this problem can be attributed primarily
 Public–Private Partnerships for Waste Management 623

Figure 2. Basic components of solid waste management in the GBA.

Figure 3. Organizational framework of solid waste management in the GBA.

to 15 years of civil unrest and the inefficiency of mu- emergency investment program focusing on urgent re-
nicipality employees. The end of the civil unrest and pairs and rehabilitation throughout the system. Collec-
the semiprivatization of waste collection and transport tion, street cleaning, and transport of raw municipal
activities marked the beginning of the improvement. waste recorded by far the most significant improvement
Since its inception, the private contractor (Sukleen) to date. Before the period of civil unrest (1975–1990),
has made impressive progress in strengthening its op- refuse was collected once a day from each house. Dur-
erating efficiency. It has improved both collection and ing the war, solid waste collection equipment was either
sweeping significantly. Its first step was to implement an damaged or deteriorated due to aging and lack of
624 M. Massoud and M. El-Fadel

Table 1. Summary of public vs private solid waste often very difficult to control continuously, occasional
collection odor events are inevitable. Even when these parameters
Criteria Publica Privateb are well controlled, odor emissions will be reduced but
not completely eliminated. The poor quality of com-
Population (000s) 939 1,286 post was due primarily to lack of space or system over-
Waste generated (tons/yr) 239,761 347,349
Frequency of collection/ 0–1 2–3
load in addition to the inefficient separation process of
day glass, plastics, and metals from the raw material at the
Collection method House-to-house Curbside compost site. The presence of glass particles in the final
Number of trucks 32 78 product decreased its marketability. Corrective mea-
Number of trucks/100,000 3.4 6.1 sures undertaken included the installation of a biofilter
persons
for odor control and decreasing intake, as the facility is
a
Before and during the war. being used beyond design capacity. While the odor
b
After the war. problem has been minimized, the compost quality
needs more improvement for farmers to be satisfied
and, more importantly, the market for the compost
maintenance. At the end of the civil unrest, authorities material generated remains weak.
were therefore unable to collect the refuse generated in
urban areas where the population had grown accus- System Performance Evaluation
tomed to taking their own waste in plastic bags and The persistence of operational difficulties since the
dumping it by the side of the road. Waste was collected initiation of the emergency plan for solid-waste man-
daily when possible. Cleaning activities were mostly re- agement in the GBA warrants an evaluation of the
stricted to roadside cleaning along main roads due to appropriateness of its various components. As the sys-
lack of resources. Small roads were occasionally tem operates now, more than 90% of the total waste
cleaned. Table 1 presents a summary of public (before generated in the GBA has ultimately been disposed of
and during the war) versus private (after the war) solid at the landfill, calling into question the purpose of the
waste collection. sorting–processing– composting facilities as well as the
recycling program. Apparently, the market demand for
Assessment of Waste Treatment and Disposal compost and recyclable materials may be either less
In contrast, sorting and processing facilities experi- than the generation rate or is not economically com-
enced several problems in their initial stages, such as petitive. Lack of marketing plans for the final compost
lack of space, line overload, high organic content in product, poor accounting practices that neglect exter-
end product, and odors, to name a few. These prob- nalities affecting the economics of composting, such as
lems are not unusual at the onset of operations and can reduced soil erosion and avoided disposal costs, poor
be eliminated or minimized by increasing space and integration with the agricultural community, and min-
capacity handling, decreasing the waste flow rate into imal land requirements are additional constraints on
the process lines, ensuring even waste distribution into compost applicability and marketability. Thus, whether
process lines to allow adequate time for the separation viewed as a hierarchy or as complementary compo-
of bulky and recyclable items, increasing the number of nents, the current waste management activities, partic-
hand pickers along the different stages of the process ularly recycling and composting, have not measured up
line, implementing proper equipment maintenance, favorably with the steps outlined in an ISWM system.
and spraying odorants. Efforts to streamline facility Neither does the waste management system have an
operations are in progress and many of the problems adequate education program that explains the costs of
have been remedied. However, the continuous increase each component in the system or the benefits that can
in the wastestream is increasing the operational stress at be derived by recycling, reusing, and source reduction.
these facilities, which will not be able to accommodate Moreover, the difficulty associated with locating and
future waste generation rates without increased capac- approving a suitable site for landfilling will only in-
ity. crease with time, which dictates the adoption of policies
Initially, the composting process suffered from sig- that will minimize the amount of waste that should be
nificant odor emission problems and poor-quality com- disposed of in a landfill. Recycling and composting can
post product. Odor emissions can be attributed to waste form a basic step in the right direction depending on
composition (low C/N ratio), poor temperature con- the implementation and the market demand for the
trol, excessive moisture, low oxygen content, and poor end product. Successful waste minimization through
mixing. Considering that some of these parameters are recycling, for instance, starts at the source. For this
 Public–Private Partnerships for Waste Management 625

purpose, while education and awareness programs have Table 2. Cost of MSW management services in Beirut
been commonly reported in academic media as influ- Population (000s)a 1,286
encing factors, it is more likely to succeed when cou- Generation rate (kg/capita/day)b 0.74
pled with the creation of individual monetary incen- Waste generated (tons/yr)c 347,349
tives and a marketplace. Total cost (collection and sweeping 20,575,000
Similarly, composting, in all its possible methods, in US$)c
Cost per capita (US$/yr) 16
requires special systematic maintenance and monitor- Cost per ton (US$/yr) 59
ing skills, analytical characterization technology, and a Low income countryd
market for the end product. While technical skills and Cost per capita (US$/yr) 3.6–7.2
technology are becoming more available in Lebanon Cost per ton (US$/yr) 45–90
(or can be imported), a market for the end product of Middle income countryd
Cost per capita (US$/yr) 10.8–25.2
composting has not been clearly defined. More impor- Cost per ton (US$/yr) 90–210
tantly, the location of a compost facility plays an impor-
a
tant role in the decision on whether to construct such ERM (1995).
b
a facility. For instance, it is highly undesirable to locate Ayoub and others (1996).
c
a compost facility near densely populated urban areas El-Jor (2000).
d
and far from areas where the end product will ulti- UNEP (1996).

mately be used. In this respect, the present sorting–

processing– composting facilities are located in the im-
mediate vicinity of highly populated and residential of weight collected, with an approximate cost of
areas. While it is acceptable (with reservations) to lo- US$16/capita/y, which is consistent with average costs
cate a sorting–processing facility in such areas, it is in low- and middle-income countries (Table 2).
certainly not recommended to operate an open-system
composting facility in such proximity to residential ar-
Field Surveys
eas due primarily to potential odor nuisances that can-
not be completely eliminated even in the presence of As is the case in many developing countries, data on
odor control equipment. Indeed, operations at the solid waste management in Lebanon is generally lim-
present composting facility started only on a temporary ited. Therefore, field surveys were adopted to comple-
basis until a more suitable location was identified, ment available published data. Interviews were con-
which did not happen. Therefore, other waste minimi- ducted with responsible authorities outlined in the
zation alternatives such as properly managed and well- organizational framework (Figure 1). Interviewed indi-
controlled incineration must be considered despite the viduals (a total of nine) represented a cross section of
legacy of uncontrolled incineration practices in Leba- key decision-makers or influential stakeholders in the
non that has apparently resulted in the elimination of solid waste sector. The questions were designed partic-
this option in the first place. ularly to address the feasibility of PPPs for MSW man-
While this option does not completely eliminate the agement. Questions emphasized the level of satisfaction
need for a landfill because of ash generation, it mini- with current services compared to those previously pro-
mizes the amount of end waste that should be disposed vided by the municipalities, present and past expenses,
of in a landfill and hence the need for land is kept at a attitude with regards to the partnership experience,
minimal level that can indeed be sustainable in the barriers, and advantages and disadvantages of the pri-
long term. Such a plan is being practiced in many vate sector participation.
developed countries, especially where land is scarce or In addition, a field survey was conducted in an at-
prohibitively expensive. The limited amount of suitable tempt to evaluate the public perception of MSW man-
land available in Lebanon for landfilling, particularly agement services and the level of satisfaction with the
along the coastal region, creates the necessity for con- quality of current services. Screening interviews with a
sidering the incineration alternative. It is certainly not small sample preceded the survey to define appropriate
sustainable to continue with the same policy of locating questions and issues that are potentially important to
new landfills in the future (El-Fadel and Chahine residents. Then, a more comprehensive survey ques-
1999). tionnaire was developed and distributed to nongovern-
While performance quality is a key factor when eval- mental organizations (NGOs) and individuals in the
uating public versus private solid waste services, cost is Beirut area. Individuals were selected randomly to in-
equally important. The duration of a collection con- dicate their opinion about the quality of solid waste
tract is five years, and the contractor is paid on the basis collection and treatment, to compare between current
626 M. Massoud and M. El-Fadel

Table 3. Summary of conducted interviews Table 4. Summary of survey results

Frequency Percentage Frequency Percentage
Private contractor compared to Collection method
municipalities Excellent 156 33.1
Private contractor better 8 89 Good 193 40.9
Municipalities better 1 11 Satisfactory 95 20.5
Similar 0 0 Unsatisfactory 26 5.5
No opinion 0 0 Ideal method of collection
PPP of solid waste collection Municipality 179 38.1
Successful 7 78 Private company 253 53.8
Unsuccessful 1 11 No opinion 38 8.1
No opinion 1 11 Knowledge of solid waste treatment
PPP of other sectors Yes (aware) 158 33.6
Yes 8 89 No (not aware) 312 66.4
No 1 11 Treatment and disposal method
No opinion 0 0 Excellent 57 12.1
Cost per ton before and during the war Good 97 20.6
No response 9 100 Satisfactory 93 19.8
Barriers to PPP Unsatisfactory 41 8.7
Political 9 100 No opinion 182 38.7
Absence of a capital market 7 78 Private contractor compared to
Well-developed infrastructure 7 78 municipalities
Advantages of PPP Private contractor better 179 38.0
Attract capital 7 78 Municipalities better 161 34.3
Improve management 7 78 Similar 120 22.5
Improve economic performance 6 67 No opinion 10 2.2
Introduce competition 5 56 PPP of solid waste collection
Disadvantages of PPP Successful 365 77.7
Employee lay off 9 100 Unsuccessful 87 18.5
Monopoly 9 100 No opinion 18 3.8
PPP of other sectors
Yes 279 59.4
No 157 33.4
No opinion 34 7.2
services and those previously offered by municipalities,
and to indicate whether they consider the PPP a suc-
cessful experience. A total of 500 questionnaires were
distributed, of which 470 were completed and re- economic performance, relieve the enterprise from po-
turned. The collected data were coded systematically litical interference, and introduce competition and ef-
and analyzed following a univariate statistical analysis, ficiency.
which comprises frequency distribution and percent- In contrast, opponents of the PPP believe that it is
ages using the Statistical Package for Social Sciences more important to establish capital markets and im-
(SPSS). prove the performance of the public sector. In addi-
tion, they consider PPPs to have a negative impact on
Official Perception employees and that a monopoly may arise through the
Most interviewed officials (eight of nine) agreed that ultimate transfer of ownership from the public to the
the private sector participation in MSW management private sector. Advocates of a partial PPP believe that it
gives the impression of efficiency and thoroughness, is an optimal compromise solution since the participa-
and in spite of problems associated with the introduc- tion of the public as well as the private sectors is antic-
tion of a new service, waste is being removed and streets ipated. Note that most officials stressed that at present
are clean. Regarding PPPs in general, opinions varied there are political barriers against privatization in ad-
among those who view the process as an effective solu- dition to the absence of a capital market and a well-
tion, those who consider it not necessary, and those developed infrastructure. Table 3 presents a summary
who prefer a joint venture. Advocates of a PPP consider of the interviews conducted.
it the most efficient and economical solution since the
private sector is more innovative. Moreover, they em- Public Perception
phasized that PPPs will attract capital and improve man- Generally, surveyed individuals are aware that a pri-
agement. They also consider it as a tool to improve vate company is responsible for solid waste collection in
 Public–Private Partnerships for Waste Management 627

Table 5. Respondents’ problems regarding refuse collection by the private sector

Percentage
Complaint Respondents (N) of total
Containers without lid and not in proper places 251 53.4
Foreign employees 268 57.0
Monopoly 102 21.7
Traffic problems, especially in the morning 122 26.0
High price (increase in taxes) 95 19.4
PPP is pushing down sorting and recycling 73 15.5
No quality control and equity in service 71 15.1
No collection from houses 112 23.8
Wrong timing 145 30.9
Process of emptying containers is noisy 45 9.6
Smell and cleanliness of containers 98 20.6
Containers occupy space (less parking space in the neighborhood) 94 20.0
No problems 69 14.7

the GBA and most of them consider the collection sufficient authority, adequate financing, efficient oper-
method satisfactory to excellent and better than those ating ability, and have the flexibility to adapt to meet
previously provided by the municipalities. The majority changing conditions. Within this framework, there are
perceives the PPP as successful and recommends simi- several public and private sector ownership and opera-
lar initiatives in other sectors (Table 4). The main tion options that can be implemented. However, cer-
complaints that were put forth by respondents about tain MSW management activities lend themselves well
the current solid waste management system are sum- to being completely privatized, while in other cases a
marized in Table 5 (Massoud 2000). Evidently, com- sound practice will almost always involve government
plaints were limited to collection services because the control and operation.
general public is exposed primarily to this activity. Very Considering that most of the MSW management
little is indicated about the final treatment and disposal expenditure is for collection (up to 75%) (Tchobano-
of the waste, which is not surprising given that the latter glous and others 1993), this should be the first service
activities are confined to smaller areas with minimal to examine for private sector participation arrange-
population exposure to actual processes. ments that could reduce costs through improved effi-
ciency. Moreover, because solid waste disposal and
transfer systems are more capital intensive than collec-
Analysis of Private Sector Participation
tion and sweeping systems, these could be examined for
Alternatives private sector participation as well, particularly a par-
Limited financial resources and the absence of in- ticipation that could provide investment. In this con-
centives to encourage high performance productivity text, contracting, franchising and concessions have
translate into services that are often not as efficient as been commonly practical in MSW (Cointreau-Levine
they could be. Therefore, whether to adopt a PPP for a 1994). Accordingly, contracting and franchising are
specific aspect or portions of the public service, the examined as potential management alternatives for
government needs to weigh various risks and examine solid waste collection whereas concession arrange-
several criteria that deal with many market and humans ments, which involve build, operate, and own (BOO)
factors that affect the ability of the private and public and build, operation, own, and transfer (BOOT), are
sectors to perform efficiently and effectively. The de- considered for waste treatment and disposal facilities.
sired efficiency of a PPP will materialize only in situa- Table 6 summarizes the advantages and disadvantages
tions where competition, performance monitoring, and to a municipality of such MSW management practices.
accountability exist. Predatory pricing, collusion, car- The greatest opportunity to involve the private sec-
tels, unsafe labor practices, hidden subsidies, unneces- tor lies in having firms provide collection service under
sary costs, and excessive risks are possible factors that contract with local municipalities. It is feasible for local
are not unusual, particularly in developing countries. firms with modest financial resources to enter into the
As such, it becomes important that a solid waste man- business of solid waste collection. Contracting is a via-
agement system be established within the appropriate ble means of securing service as long as it is possible to
regulatory framework. The system must be backed by adequately describe outputs anticipated from the con-
628 M. Massoud and M. El-Fadel

Table 6. Advantages and disadvantages to municipality of various MSW management alternatives

Advantages Disadvantages
Municipality (public ownership and operation)
Less complicated financing Assumes entire financial risk
Control of system Assumes entire environmental risk
Potential for income from tipping fees Personnel efficiency may be lower than private
companies
Retention of ownership of equipment and facilities Capital expenditures may take longer to
when debt is paid process
Money for solid waste services stays in the region System may be susceptible to political
interference and short term benefits
MSW collection alternatives
Contracting
Can take advantage of private sector experience Assumes entire financial risk
and efficiency in operation
Retains some control over system Assumes most of the environmental risk
Retain ownership of equipment and facilities when Must manage the contract
debt is paid
Necessary administrative oversight and
enforcement
Likely to result in the lowest collection cost Contractor fee is often collected from residents
Franchise
The government does not have to raise money to Some residents will object to changing service
pay the private company providers
Administrative involvement is minimized Private company may want the government or
municipality to bear some risk for bad
accounts
Will result in lower costs for residents Will not result in the lowest collection costs
MSW treatment and disposal facilities management alternatives
BOO concession
No up front capital costs to municipality, less, Financial rewards occur to private owner, solid
strain on the municipal budget waste is a cost without potential for
generating income, and tax dollars leave
region
Financial risk assumed by private owner Must share the environmental risks
Private owner remains committed because of Must manage contract, financial difficulties and
financial investment contract problems may hinder service
Can take advantage of private sector experience Once a municipality is out of the solid waste
and efficiency in operation business it may be difficult to get back which
weakens negotiating position in the future
More flexibility in establishing management Do not own facility or equipment after debt is
structure paid
Less susceptible to political interference Loss of control over system
BOOT concession
Retain some control over system Will lose some control over system
Private sector finance facilities Ownership will eventually be transferred over
to the government
Outline the final condition in which the facilities Requires meticulously developed specifications
must be presented to the local government at
the time of ownership transfer

tract. In contracting, the private firms are paid by local establishment that receives private services. Thus, pri-
municipalities from general revenues or through vate firms must individually bear the cost of billing and
money raised by direct user charges. Moreover, the collecting user charges, which is estimated at 10% of
service bill is typically part of a combined bill for a the total cost of service to the consumer. It is one of the
number of services such as water, electricity, and tele- reasons why franchise does not usually result in the
phone. same low cost as contracting. Apart from the concern of
On the other hand, in a franchise system, private potential corruption in granting a franchise, it is more
firms collect user charges from each household and popular in large cities. Contracting appears to be a
 Public–Private Partnerships for Waste Management 629

more feasible option for Lebanon, considering that it are no long-term impacts from any wrong-doing of the
results in the lowest collection cost, is a common prac- private firm. Concession agreements provide a reason-
tice in many communities, and a good model already able option for waste treatment and disposal facilities.
exists. Moreover, contracting can be a good way to However, it would be desirable for analysts, policy-mak-
obtain services needed for a limited period of time, ers, and practitioners to evaluate the environmental
acquiring specialized skills not available in the munici- obligations to be met by privatized enterprises, establish
pal pool of employees, or as a way of introducing com- detailed impacts of monitoring plans of PPPs, develop
petition into the governmental services arena. It may performance indicators, and conduct a cost– benefit
also help to reveal inefficiencies of the government analysis to assess the difference between the various
monopoly. An additional reasons to begin involving forms of PPPs and define the least expensive and most
private companies through contracting is that there are effective option. A legal framework, allowing the wid-
no long-term impacts from any wrong-doing of the ening of ownership, preventing its concentration, and
private firm. encouraging competition, must be devised. In this con-
Regarding waste treatment and disposal facilities, text, competitive tendering and complete transparency
concession agreements provide a reasonable option. particularly with regards to financial accountability are
BOOT arrangements provide means of having the pri- essential elements.
vate sector finance facilities whose ownership will even-
tually be transferred to the government. More impor-
tantly, these agreements outline the regular Acknowledgments
maintenance requirements that the private sector must
Special thanks are extended to the United States
provide to the facilities, as well as the final condition in
Agency for International Development for its support
which the facilities must be preserved at the time of
to the Environmental Engineering and Science pro-
ownership transfer to the local government. Without
grams at the American University of Beirut.
such specifications, it is anticipated that the facility
would have a planned obsolescence matching the
schedule for transfer.
Literature Cited
A BOO agreement also provides means of financing
major investment projects; however, the private partner Ayoub, G., A. Acra, R. Abdallah, and F. Merhebi. 1996. Fun-
does not eventually transfer ownership of facilities to damental Aspects of Municipal Refuse Generated in Beirut
and Tripoli. Technical Report, Department of Civil and
the government. Completely getting out of the owner-
Environmental Engineering, American University of Beirut.
ship and operation of solid waste services and facilities
Cointreau-Levine, S. 1994. Private sector participation in mu-
may reduce or eliminate the possibilities of getting back nicipal solid waste services in developing countries. UNDP/
into the business if a municipality would want to at UNCHS/World Bank, Urban Management Program.
some time in the future (i.e., no staff, no equipment, Donaldson, D., and D. Wagle. 1995. Privatization: Principles
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