Private sector participation in municipal solid waste services in developing countries. Vol. 1: The formal sector

Municipal solid waste management is an essential public service which benefits all urban residents. Even those who do not pay must be included since public cleanliness and safe waste disposal are essential to public health and environment protection. Although solid waste management is a public good for which local or metropolitan governments are responsible, the private sector may have a role in accomplishing the task of solid waste service delivery. This discussion paper analyses the participation of the formal private sector in the delivery of municipal solid waste services in developing countries and recommends a decision-making framework. It poses the questions of whether and how to involve the formal private sector as a means of enhancing efficiency and mobilizing private investment. Factors in deciding whether to have private sector participation include cost recovery, efficiency, public accountability, management, finance, economies of scale, legislation, institutions, and cost. Cost factors should be analysed for different components of solid waste service - collection, cleansing, disposal, and transfer. Methods of private sector participation common to solid waste management such as contracting, concession, franchise, and open competition are discussed with emphasis on the roles and responsibilities of local government in each case. The paper summarizes decision-making criteria for private sector participation and recommends steps for proceeding toward incremental involvement of the private sector in solid waste service delivery.