Business Models in Practice | WASH waste blog series 4

This blog is the fourth of a series of blogs on waste management and the intersection of fecal and solid waste – both the challenges and opportunities. Based on learning experiences worldwide, solid waste management (SWM) and fecal sludge management (FSM) are closely linked. This blog series aims to demonstrate the opportunities for integrating FSM and SWM to improve how our world operates and creating financial value from these value chains. The blogs are a collaboration by Kim Worsham (FLUSH), Cuthbert A. Onikute (DalO Systems formerly Déchets a l’Or), Priska Prasetya, Sophie van den Berg and Verele de Vreede (WASTE), and Eline Bakker (LinkedIn).

 Note: The WASH sector is the segment of the international development sector focused on water service delivery, (sanitation and) fecal waste management, and personal hygiene – hence the acronym WASH.

 

The previous blog post in this series focused on the business model for integrating FSM and SWM; this blog post will look at the operations of an integrated fecal sludge & solid waste business. An operational model describes the day-to-day workings of a business and is often more detailed in that sense than a business model. Not only is it possible to integrate these two business operations, but an integrated model can be successful, given the modality of fecal and solid waste collection. This post aims to highlight the potential benefits of incorporating SWM operators as part of the broader WASH strategy and increase rates of proper disposal of both solid waste and fecal sludge. This blog is based on experiences and insights from Cuthbert A. Onikute  and WASTE Foundation.

Separated Operations by Definition

Before we dig into what the integration of operations could look like, we acknowledge that a key bottleneck to integration will be that municipal departments for solid waste and wastewater/fecal waste/sanitation are likely to be different departments which likely rarely (or never) interact. The same level of interaction – or lack thereof – will probably also be found at state and national level. What also doesn’t help is the confusion around what sanitation includes. To many of us, including authorities, the Sanitation Department handles solid waste and street cleanliness, while the niche WASH sector uses a very narrow definition for sanitation, and one that does not include solid waste. In the words of WHO, sanitation also refers to the maintenance of hygienic conditions, through services such as garbage collection and wastewater disposal.  This broader definition of sanitation is  testament that departments dealing maintenance of hygienic conditions should integrate and at minimum talk to each other. So how do we do that? How do we integrate SWM and FSM operations?

We believe that getting these departments to talk, align practices and possibly unite is a worthwhile investment that leads to operational efficiency and greater health and environmental benefits.

Integrating Operational Waste Models

In Blog 3, we talk about different business models, including municipal contracts or service level agreements.  Agreements where a municipal authority contracts a solid waste operator (SWO) by directly paying them, or the SWOs are expected to collect their fees directly from their customers are common. Regulation of the actual functioning of the SWOs depends on the governance strength of the municipality. A municipality may contract or permit a fecal waste operator (FWO) in similar fashions. However, the FWOs have an additional challenge as they need to identify customers and track demand. Unlike SWOs who interact with their customers at least once a week and in some countries even daily. FWOs interact with their customers only when their pit is full, which can be once every two to three years.

Trajectory of solid waste and pit latrine contents
Integration of collection and transport

The challenge and main distinction between the two operations starts with frequency of service. The figure above  highlights the similarities, and clearly shows why we believe integration on the collection part is possible. A fortunate overlap is that the problem faced by FWOs in monitoring and communicating with customers could be solved by waste operators who for several reasons already interact with those same customers. Many waste operators and municipalities spend a significant amount of time and resources on awareness creation: reminding customers of the need for separation of waste. Contamination or mixing of waste streams is a constant battle for SWM and FSM systems. The fact that SWOs have regular contact with this customer base, opens up opportunities to manage and maintain dialogue and discussions around fecal waste services.

Integration of treatment and reuse

In short it can be stated that fecal sludge treatment profits more from including organic solid waste than organic solid waste needs fecal sludge.

Co-treatment of organic solid waste with fecal sludge is especially interesting to FWOs: organic solid waste can contribute to improved treatment mechanisms. A good example is that the use of black soldier flies for treating fecal sludge get hugely better results when the  black soldier flies feed off of a mixture of organic material with one-third or less fecal sludge (Sarpong et al., 2019). The same is the case when using fecal sludge for biogas production,, adding organic waste, gets the anaerobic process running with higher turn out of energy. (Resource recovery from waste.)

For SWOs, the interest in co-treatment with fecal sludge is slightly less, as adding fecal sludge to operations is perceived to add a layer of complexity (think regulations, hygiene and reuse). That said, but in case of composting, adding fecal waste gives a  co-compost product that is rich in nitrogen and phosphorus and a really good fertilizer and soil conditioner. Thus the end product is more interesting for the market and has a higher value than common compost.

There are examples of functioning co-treatment systems in low-middle income countries from India to Bangladesh, Ghana, Kenya, South Africa and Haiti.

Co-compost final product Nilgris (c) Lauren Pope, WASTE (2019)
An example from Ooty, India:

Co-composting (Waste-for-agriculture): Under the Securing Water for Food (SWFF) programme, WASTE Foundation has implemented an innovation linking the sanitation-water-agriculture nexus by producing and applying co-compost for vegetables cultivation in the Nilgiris over the course of three years (2017-2020). This co-compost is produced by women self-help groups through mixing domestic organic waste with dried faecal sludge. The co-compost sites are owned by local governments.  98% of farmers have experienced improved survival rate of crops and are able to improve their profit by 142% by reducing their expenses with reduced chemical fertiliser and improved revenue with higher yield and market price.

As for how to integrate the two sectors on treatment level depends on what is present in the city.  Existing FS treatment facilities, if well constructed and managed, already have implemented processes and procedures to minimize risk from fecal sludge. (Fecal sludge can contain pathogens from a sick person that could re-infect for example). It may be seemingly easier to add-on organic waste to the production chain. However, the controls for minimizing risk from fecal sludge are not superior or overly technical and focus on minimizing contact between plant operator and the fecal waste.

Integration allows for increased value of the final product. For energy generation, co-treatment allows for higher energy output (e.g. biogas, briquettes) and for fertilizers and animal protein, co-treatment raises the nutritional content.

Recyclables such as metal and plastic won from the separation process, could bring additional revenue depending on local market conditions and availability of buyers.

Members of a women farmers self-help group (SHG) supported under the Securing Water for Food (SWFF) programme, 2019. (c) WASTE.
Integration in disposal

When using organics in the treatment of fecal sludge, whether in co-composting, biogas production or other treatments, the amount of organics ending up on the disposal site will diminish. Any waste diverted from final disposal extends the lifespan of the final disposal site.  – in the end saving money for the governmental entity responsible for the disposal site or landfill.

At the same time, mechanisms might be needed to ensure safe disposal at local treatment facility. In Balikpapan, Indonesia, each pit emptying service provided to households receives a unique barcode scanned again at the treatment plant to ensure safe delivery. In Devanahalli, India, desludging trucks are equipped with GPS and cameras to monitor safe delivery. GPS and cameras on solid waste trucks are common practice in some countries as well – often used to capture the evidence of contamination and additional charges for removal of goods and materials banned from disposal in the regular waste collection stream.

Integration and governance

The successful integration of a FSM and SWM operation might be easiest to accomplish under a structured partnership with the local municipality. Businesses can also work with municipalities to receive operating cost contributions from municipal taxes. In Kushtia, Bangladesh, the municipality raised taxes to cover the cost of fecal sludge collection and treatment, and is considering further increasing and linking it with the monthly water bill. There are other examples where municipal contribution to a waste business came as a zero-cost contract to use a plot of land for operations for a number of years (often 10+ years). The co-treatment plant in Devanahalli, India has an interesting diversified revenue portfolio, generating revenue from: municipal (property) taxes, tipping fees, advertising and sale of compost. Interestingly, in both Kushtia and Devanahalli, the local Solid Waste Departments prepare the organic solid waste, and provide this to the co-treatment plant at no cost. While free compost might be perceived as a zero-cost win, it also often means that agreements over delivery and quality of organic material is not standardized and yet can have significant consequences on the nutritional value and quality of the final compost. In actual fact, not integrating the cost of organic material is an error in the business model that could threaten the overall financial sustainability of the business. We discourage non-binding service level agreements.

There are many arrangements for integration possible, including a single waste service operator that manages both solid and fecal waste services. For this kind of responsibility, it is necessary for  the local government to have a clear sanitation (FS and SW) plan mapped out and the service level agreements need to be clear on the integration of the two activities. The communication around sanitation & hygiene and waste segregation would fall under one department, which could create more consistency in the output of the local government.

Integration and clients

When working with Déchets a l’Or, Ayo had clients who wanted to empty their septic system but had no disposal option asking him: “Why won’t you take it? Waste is waste.”

For the clients that might seem so, but the collecting business knows that the collection methods and disposal methods differ largely. Customers do not understand collecting fecal waste when a business is only equipped for solid waste. Without the right equipment, SWOs would struggle to load waste onto a garbage truck, transport, and dispose of it.

For the sake of the clients, the goal of the integration of services would be for streamlined service and increased efficiency. As long as the day to day operations work, i.e. the different streams of waste are serviced and customer engagement aspects are seamlessly working together, it doesn’t matter how many companies are working together to make that work behind the scenes. Blog 3 aims to demonstrate the many different business models for this type of circular economy.

However, such a contract can also be complex and the leading contracted company could make use of a customer relations management (CRM) system to support customers with waste collection services and pit latrine emptying all in one.

Take for example, Déchets a l’Or. The founder of Déchets a l’Or, Ayo, created DalO Systems to address the lack of a CRM system by SWOs in Kankan, Guinea, and Kudoti in South Africa. Initially, Ayo founded Déchets a l’Or to address solid waste collection challenges in secondary cities of West Africa. SWOs such as like Déchets a l’Or created in cities with limited municipal support or engagement need to identify customers, which typically means they have to visit households and businesses and ask if they are interested in waste collection services. This step is time and labour intensive.

In 2016, Ayo started working on a project with a software developer to manage better customer payments, which led to the creation of DalO Systems; since then, DalO Systems has become Ayo’s full-time focus to create value for SWOs struggling with CRM. DalO systems aim to reduce the amount of time needed to go from initial contact with a potential customer to provide services.

Using a platform like DalO Systems, SWO agents can visit potential customers, gather household information, and localize them to their smaller accepted area. In some countries, this may be the sector in a neighborhood, while in others it may just be a neighborhood. Lastly, the agent drops a GPS pin where the household is. This data gives the SWO a detailed, organized map of all the households within a given area. This map also shows SWOs households that are ready to pay for services, interested in services but are not yet ready to commit to them, and those who are not interested. With one outreach, an SWO builds a map of customers for both solid or fecal waste collection and a map of potential customers for future outreach, removing what was previously a black box of information hindering communications between agents, collectors, and customers.

A CRM system also makes payment tracking much easier, which would really help SWOs in many LMICs that are still transitioning to mobile money payments for services. Easily tracking payments would let SWOs create prepayment programs for households who wish to pay in installments for fecal waste removal and as part of the regular payment for solid waste removal. An additional benefit of this customer database could be as a tool for the local municipality to understand their residential clusters and inform decisions on the placement of waste transfer stations or potential support provided to waste operators.

Operating Challenges

Emptying pit latrines, is often seen as a household or house owner responsibility and there are challenges around getting governments to invest in infrastructure to manage fecal waste. If the fecal sludge does not end up dumped somewhere, it often ends up in waste water treatment plants which were not designed to treat this matter. However more and more examples can be found, where governments recognize that  unmanaged fecal waste poses a major threat to public health,  and are making outstanding investments. Fecal waste treatment plants are rapidly  being scaled in many countries, with 400 under construction in India, and 30 in Uganda (Eawag, 2019).

On the other hand, solid waste has benefited from the fact that it is grossly visible and the problems from unmanaged waste are obvious, from floods caused by clogged storm drains, and unpleasantries like vermin and rats in the city limits. It is very prominent when it piles up on street corners, river banks or other vacant spaces in an under-serviced city. As such, funding has generally been made available for the government to manage solid waste. That said, funding has generally focused on urban areas as solid waste has long been seen as an issue limited to urban and peri-urban areas. Due to the use and consumption of plastic, however, this notion has changed, and rural environments now also demand effective waste collection (Africa Waste Management Outlook, 2018). Again, it is more likely that rural governments receive funding for solid waste services than for fecal waste.

To make the integration from the municipal level obtainable, it might be beneficial that municipal departments such as Health and Water Resources, who already understand the public health threat that untreated sewage in the environment presents, support the integration of SWM & FSM on an operational level.

 

Concluding remarks

Based on the above mentioned practical learning experiences, it is found that SWM and FSM can be closely linked with each other. A well-integrated FSM and SWM improves the overall operational efficiency and financial sustainability of both the FSM and SWM chain. The better the segregation and collection of solid waste, the higher quality and quantity of faecal sludge and solid waste-based products that can be generated (compost, co-compost, biogas, briquettes and segregated plastics for recycling).

Such circular economy model of sanitation and solid waste advances cross-sectoral impacts such as integrated soil fertility management, climate mitigation (incl. carbon sequestration in soil, creating alternative energy source) and adaptation measures (incl. improved soil water holding capacity, less reliance to centralised energy source such as fossil fuel).

Further reading

This particular series of blogs on integration of SWM and sanitation can be found here:

Blog 1: We Have a (Waste) Problem

Blog 2: Separation is Waste’s Achilles’ Heel

Blog 3: The Circular Economy Business Model

Blog 4: The Business Model in Practice

Blog 5: Increasing Integrated WASH Waste Impact: Putting It To Practice

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