Mexico - Solid Waste Management Pilot Project

 Solid waste management pilot project Report No: ; Type: Report/Evaluation Memorandum ; Country: Mexico; Region: Latin America And Caribbean; Sector: Urban Environment; Major Sector: Urban Development; ProjectID: P007628 Mexico: Solid Waste Management Pilot Project (Loan 2669-ME) The Implementation Completion Report (ICR) on the Mexico Solid Waste Management Pilot Project (Loan 2669- ME, approved in FY87), prepared by the Latin America and Caribbean Regional Office, was reviewed by the Operations Evaluation Department (OED). The loan of US$25.0 million, was closed on June 30, 1995, with a one year delay. Final disbursement took place on October 11, 1995, at which time a balance of US$7.3 million was canceled. The final project cost was US$48.04 million (US$1.96 million below the Staff Appraisal Report estimate of US$50.0 million). The borrower provided comments on the ICR. This was the first stand-alone project dealing with urban solid waste disposal across Mexico. The project objectives were: (i) to test and evaluate alternative ways to improve subsector services, reduce public health risks, and improve environmental conditions while promoting cost savings through the implementation of pilot and demonstration projects in solid waste disposal; and (ii) to help develop national and local policies, management capabilities, and cost recovery systems for solid waste recovery. These objectives were to be met through the implementation of pilot projects in eight preselected cities, which accounted for two thirds of the loan; they were to focus on establishing: (a) repair and maintenance facilities; (b) low cost collection systems for marginal zones; (c) industrial waste disposal sites, sanitary landfills and transfer stations; and (d) public education programs. The remaining third of the loan was to be used to finance (i) a series of studies related to solving fundamental problems in the country's solid waste management programs; (ii) technical assistance to strengthen the national institution, Secretaria de Desarrollo Urbano y Ecologico (SEDUE); and (iii) to prepare pre-feasibility studies for further projects. The project was to provide directed credit to municipalities through Mexico's urban infrastructure Bank (BANOBRAS), an approach which had met with some success in the water sector. The project did not significantly improve the operations of the solid waste subsector, nor did it develop replicable models for solid waste management or cost recovery. Only two of the eight original municipalities ended up participating in the project. Fourteen subprojects were financed, ten of which included the construction of sanitary landfills. Of these ten only three operated effectively. Investments were often piecemeal, leaving critical parts of the system unimplemented. These subprojects met with little or no success in supporting sustainable investments in municipal solid waste services mainly because of insufficient technical and managerial capacity in solid waste operations and the failure to develop the necessary conditions to encourage private sector participation. Solid waste collection improved in the 14 cities ultimately affected by the pilot; its transfer and disposal improved significantly in only three cases, and costs were recovered in only one case. There was some limited success at the institutional level. Seven studies were completed under the project. These studies helped to define appropriate subsector policies and to prepare full-scale integrated solid waste management plans, which were supported by a follow-up Bank project (Loan 3752- ME, approved in June 1994). There was, however, no significant progress in the development of a framework for adequate regulations and enforcement at the federal or state levels. Public education campaigns generated neighborhood clean-ups. The communities' clearing of clandestine dumps and littered streets led to small cost-savings but these improvements are likely to be transitory. Only about two percent of Mexico's solid waste was disposed of properly in 1994 and the pilot project did not demonstrate a replicable way of radically increasing that figure. OED rates the project's outcome as unsatisfactory, its sustainability as unlikely, its institutional development impact as negligible, and Bank performance as marginally unsatisfactory. These ratings are consistent with those in the ICR, with the exception of Bank performance, which the ICR rated as satisfactory. Project performance might have improved had the Bank allowed supervision missions sufficient time in the field to further develop working relationships with clients at the local level and help manage the project risks. The major lesson of this project relates to the problems associated with using national programs to facilitate municipal service upgrading and urban environmental protection projects that need to be implemented by local authorities. To be successful, a project must first reconcile the different interests and strategic approaches of federal agencies and local authorities. A second lesson is that the approach of implementing a large number of pilot projects, with an objective of determining which work best and which need modifications, requires the formulation of alternative modes to be tested against an a priori model. The pilot projects in this loan neither developed a model and then tested it, nor demonstrated an existing model. The ICR is of good quality. Arrangements for future operations were left to the Second Solid Waste Management Project which, because of the 1994 economic crisis, is suffering problems very similar to those of the pilot. The project may be audited at a later date.