Algeria - Municipal Waste Management Project

Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB290 Project Name ALGERIA- MUNICIPAL WASTE MANAGEMENT PROJ Region MIDDLE EAST AND NORTH AFRICA Sector Solid waste management (100%) Project ID P077753 Borrower(s) GOVERNEMENT OF ALGERIA Implementing Agency Environment Category [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [X] S 1 [ ] S 2 [ ] S 3 [ ] S F [ ] TBD (to be determined) Date PID Prepared September 4, 2003 Estimated Date of Appraisal Authorization June 15, 2004 Estimated Date of Board Approval September 23, 2004 1. About 8.5 million tons of municipal wastes are generated in Algeria every year, more than 90 percent of which originating in the northern part of the country 1 . Municipalities are responsible for waste management collection. However, most of the waste is presently disposed of in open dumps (a recent survey conducted by the Ministry of Land Use Planning and Environment showed that there are 2,100 illegal dumps nationwide , 360 of which are located in the 40 most important cities). The Bank estimated that total expenditures of about US$300 to 400 million per year are required for proper treatment and disposal of municipal waste in Algeria 2 . Currently, about half of that amount is actually budgeted by the Government for municipal waste management, but almost exclusively for waste collection. 2. The adverse effects of inappropriate management of municipal waste in Algeria are the following: \01fi Public health impacts: The population is facing serious health hazards. There have been reported outbreaks of plague in Oran due to the combined effects of lack of: waste treatment, fresh water, and waste collection and disposal capacity. Emission into the atmosphere of noxious gases and fumes from smoldering landfills has reportedly generated respiratory diseases (Oued Smar landfill near Algiers). Inappropriate handling of waste by municipal staff and illegal scavengers has also led to skin diseases and other ailments. \01fi Environmental degradation: Contamination of surface and groundwater due to improper landfill design and operation as well as illegal dumping of waste in wadis and forests have been reported. \01fi Economic inefficiencies: The monetary impacts of inappropriate waste management are difficult to assess 3 . In particular, the costs associated to health impacts and 1 The population is distributed as follows; coastal zone (4% of total area) 67%, high plains (9% of the total area) 23%, Sahara desert (87% of the total area) 10%. 2 These costs are estimated on an average cost obtained from similar countries and the higher figure takes into account the extra funding necessary to replace municipal waste equipment destroyed by terrorist attacks during the mid-90s. These costs also take into account the amortization of the cost of equipment and vehicles. 3 One particular inefficiency is illustrated by the fact that out of a total of about 4,100 vehicles for waste handling (267 compacting trucks, 3,833 vehicles of different types and makes) about 50 % are non-operational due to poor maintenance and inappropriate overall management. Page 2 environmental degradation are almost impossible to estimate but definitely constitute externalities that impose a heavy burden on the economy. A conservative estimate based on investment and operation costs for upgrading waste management to an appropriate level corresponds to 0.13% of GDP 4 (about US$52 million per year), which is commensurate with the figures mentioned in section 1 above. 3. Given the severity and magnitude of municipal waste management issues, the Government now considers solid waste management as one of the most important development priorities for the country, and has, consequently, taken several measures to address this situation. 4. The Government started by enacting a new Waste Management Law in December 2001, then proceeded with the preparation of municipal waste management master plans and implementation of emergency measures (replacement of waste collection equipment, preparation of sanitary landfills) in the 40 largest municipalities . The Budget law for 2002 nearly doubled the level of the waste user charges applied to households, retail stores, and small industries. The Government extended the institutional setup through the establishment of a parastatal agency in charge of promoting integrated solid waste management and providing assistance to municipalities in that respect. The Government also subsequently prepared an Operational Strategy for municipal waste management in order to correct the dysfunctions of the priority program (2001-2003) mentioned above. This strategy recognizes the necessity to introduce an integrated waste management approach inclusive of all the steps of the waste cycle, with a clear focus on capacity strengthening at the municipal level in order to introduce better technical and financial management practices, improved cost recovery, public awareness, and community participation, as well as promotion of waste recycling and valorization. Moreover, the Government has started to reach out to the donor/financiers community for support and assistance. 5. However, despite considerable efforts on the policy front there remain several key elements of the Operational Strategy that have not yet been adequately addressed by the Government: \01fi Linking safe disposal infrastructure construction with financially sustainable solid waste collection systems; \01fi Creating incentives for SWM collection organizations to undertake their tasks in a professional manner. 6. These difficulties, which are common to all developing countries, are traceable to lack of incentives in municipal organizations to perform their traditional role of managing conservancy services effectively. Alternative strategies are being tested in other parts of the world involving output-based aid approaches, use of public disclosure mechanisms, creating environments for promoting accountable private sector participation etc. The potential of utilizing these alternative options depends on the extent to which the policy framework encourages user cost recovery (for all private good aspects) and sharing of costs between the national government, municipalities and communities (for the public good aspects). There is considerable global experience of what works and what doesn't work in this regard. 7. In the Algeria context there are additional important obstacles impeding private sector participation , such as low economic strength and viability of municipalities, weak local private company ability to respond to tenders, absence of incentive instruments, risk of expensive contracts and monopolies of public sector entities, and lack of clarity in the bidding procedures for waste services contracts. Other serious obstacles include the lack of recognition of the 4 Comparable to the situation in Tunisia, Lebanon and Syria, but lower than Egypt, Jordan, and Morocco which range from 0.2 to 0.5 % of GDP. Page 3 informal sector, inadequate community awareness and inappropriate technical means which impedes waste segregation at the source. 8. Considering the need to address the above issues in a cost-effective, environmentally and socially acceptable as well as technically sound manner, the Government has expressed interest in Bank assistance in order to establish the basis of an integrated waste management 5 system that could be replicated at the municipality level throughout the country. This request is consistent with the MENA Regional Strategy in general and the Country Assistance Strategy (CAS) for Algeria in particular, which calls for improvement of public service delivery. The issue of solid waste management improvement was specifically targeted in the CAS. This operation is also in line with Millennium Development Goal # 7, which calls for integrating environment into policies, programs and projects and reversing environmental degradation. 9. Considering experience gained by the Bank in municipal waste management projects and the availability of a wide array of tools it has developed for that purpose, it is proposed that the Bank provides assistance through a project aimed at supporting the efforts of the Algerian authorities in implementing the operational strategy mentioned above. This assistance could be structured around a technical and institutional support component, and an investment component in at least two pilot municipalities , using an integrated waste management approach as mentioned above. 2. Proposed project development objective(s) 10. The overall goal of the proposed project is to contribute to the improvement of the urban environment in selected municipalities through the introduction of integrated and sustainable municipal waste management systems . 11. The specific development objective of the project is the establishment of an integrated waste management system in at least two pilot municipalities in Algeria . 12. The following indicators, that will be monitored by an independent entity for benchmarking purposes, are proposed to follow up PDO progress: \01\02 Number of people benefiting from integrated waste management as a percentage of total population \01\02 Number of people in poor areas benefiting from integrated waste management and as a percentage of total population \01\02 Quantity of waste properly treated and/or disposed of in sanitary landfills and as a percentage of total production \01\02 Level of cost recovery (user charge collection efficiency) \01\02 Percentage of waste managed by the private sector (collection, transportation/transfer and discharge/treatment) \01\02 Reduction of number of complaints from users. 3. Preliminary project description 13. The project will include two separate components: An institutional and regulatory strengthening component: The objective of this component is to strengthen the managerial, technical and financial capacity of entities responsible for solid waste management at the national level and in selected municipalities. This 5 Integrated waste management is defined as a process using a wide array of tools for managing waste from their generation to their treatment and disposal, with due consideration to detailed planning, appropriate municipality management capacity, cost recovery, private sector participation and community participation. Page 4 component will include; (i) consultant services to prepare the development and implementation of integrated waste management plans that focuses on creating appropriate institutional incentives for sustainable service provisioning; (ii) training programs in all aspects of integrated waste management; (iii) design and implementation of a communication strategy that enhances public disclosure of information on solid waste and sanitation issues among municipalities and residents; and (iv) provision of office equipment, vehicles and equipment to conducting training and awareness campaigns, only after demonstrable improvements in the urban environment have been independently validated. Pilot investments at the municipal level: The objective of this component is to demonstrate the application of integrated waste management in at least selected municipalities 6 based on criteria to be developed during project preparation. These investments will include; (i) purchase of equipment for collection, transport, transfer and treatment of municipal solid waste, (ii) civil works for the establishment of sanitary landfills and/or rehabilitation of dump sites; (iii) financing of operation and maintenance costs for an interim period in order to attract the private sector in landfill operations; (iv) financing output-based aid operation in poor and destitute areas, and (v) financing engineering and TA services for the supervision of implementation of the integrated waste management systems and for the establishment of a cost recovery system. 14. The Borrower will be the Ministry of Finance and the Implementing Agency could be either the Ministry of Interior and Local Government (MILG) (which could in turn devolve some responsibility to participating wilayas) or the Ministry of Land Use Planning and Environment (MLUPE) subject to confirmation during project preparation. It is expected that the Ministry of Finance will provide the funds through grants to the participating wilayas. The Bank has proposed to the Algerian Government that the two pilot municipalities of Annaba (northeastern part of Algeria) and Tlemcen (western part of Algeria) be considered as potential candidates in view of their readiness to implement integrated waste management, the availability of public land for sanitary landfills, and the severity of the municipal waste management problems. 1. Safeguard policies that might apply [Guideline: Refer to section 5 of the PCN. Which safeguard policies might apply to the project and in what ways? What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?] The project is classified as an Environmental Category A project in accordance with O.P. 4.01. An environmental and social assessment will be conducted during project preparation. 2. Tentative financing Source: ($m.) BORROWER 10 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 25 LOCAL SOURCES OF BORROWING COUNTRY 0 Total 35 3. Contact point Contact: Hocine Chalal Title: Sr Environmental Spec. Tel: (202) 458-2153 6 Here, municipality should be understood as a main municipality and the surrounding smaller municipalities engaged in an inter-municipal arrangement. Page 5 Fax: Email: hchalal@worldbank.org