Topic 3: Engaging the private sector in FSM

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  • VandanaNath
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Topic 3: Engaging the private sector in FSM

Dear all,

its my pleasure to introduce to you the third topic of the online discussion about Faecal Sludge Management: Engaging the private sector in FSM

We created a small video for you about this weeks discussion:


I am Vandana from India Sanitation Coalition (ISC). My colleagues and I will lead this weeks discussion. ISC was formed with the objective of bringing all stakeholders in the sanitation field onto one platform where they can share information, learn from others, partner and collaborate. Today, the ISC has NGOs, donors, corporates, foundations, trusts and government as partners, working together to create a larger impact, rather than each one working in their vertical.
ISC follows the approach of Build, Use, Maintain and Treat. As partners come together to support the country’s Swachh Bharat (Clean India) Mission, it’s important for all to understand what the essential good practices for each of the four phases are. These need to be part of the project design for all sanitation related interventions.

In India we have a huge problem with managing our waste, especially solid waste like faecal sludge. According to a WaterAid Study, only 30% of sewerage in India is treated, everything else flows untreated in out rivers and lakes and contaminates our water, which then leads to environmental and health issues like increased diarrhoea risks. Therefore, India is working towards a Swachh Bharat until 2019.
There is an urgent need to develop FSTP operating models and monitoring protocols across all states in India.
Different states like Rajasthan have issued guidelines on how to treat faecal waste properly and held workshops about it. Now it is time to implement those strategies.
ISC believes that a 'Clean India' can only be achieved with engagemend of various partners like private corporation.

In early January, we had an "Insights" panel discussion in Jaipur, Rajasthan, were we discussed if it is time to consider Fecal Sludge and Septage Management (FSSM) as an effective and long-term solution in the sanitation value chain? We attached the output of this event here:
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Some key points were:
  • Challenges in capacity building from stakeholders
  • Technologies and Practises
  • FSSM financing
  • How to create an enabling environment to support sustainable sanitation solutions
We are happy to engage you further around this discussion and encourage you to post your comments about above mentioned points and our event output here in the forum!

Warm Regards,
Vandana
Vandana Nath, PMP
Program Manager
Taskforce on Identification and Dissemination of Best Practices
India Sanitation Coalition Secretariat
New Delhi – 110001

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  • Marijn Zandee
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Re: Engaging the private sector in FSM

Dear Vandana,

Going on the assumption that we would be looking at a (semi) centralized system for (peri) urban sanitation.

I think it is useful to break up the issue of FSM in to two components, conveyance and treatment.

Conveyance can once again be split into two different options, sewer systems and truck based systems. Sewer based systems are expensive, and part of public infra structure. As such, I think these systems should be designed and implemented by government agencies (though private sector companies will be hired to build the infra structure). PPPs will be difficult here, as there is no easy way for private companies to charge users for the service, like there is, for example, with toll roads. Truck based conveyance systems could very well be a place where private entrepreneurs can play a role. If there are sufficient companies in the market to avoid monopolies/oligopolies, it could be an efficient solution. I will come back to what I see as factors stopping entrepreneurs from entering the business later.

Semi (centralized) treatment is in my opinion a different story. The more centralized a system is, the less likely there will be a competitive market. If treatment is done by a private entity, there is a risk that you end up with a monopolist providing an essential service paid for with public funds. To me, the experience in Europe with privatizations since the 1990s suggests that this is a worst of both worlds scenario. There are, however, also good reasons to work with a private sector entity, provided contractual arrangements and oversight is strong. Private companies may have know-how that the local public sector does not have, and they may be able to steer clear of political interference better. Perhaps the best solution is to put treatment systems in a private company that has a cooperative structure, and a limit on how much profit can be paid back to investors? The advantage of a cooperative is that voting rights are equally divided among share holders. Shares could be held by the local authorities, investors in the treatment plant(s) and a few civil society bodies. Under such an arrangement, all would have an equal vote independent of how much capital they bring.

As far as private sector engagement in all this, I think there are a few issues that may hold them back:

1. They can only join if there is a profit to be made. Therefore, there will always need to be some form of public financing. Whether that is through the local tax system, or through user fees directly collected by the private sector entity.
2. They will need to invest. As investments will take a lot of time to be earned back (10-20 years?) it is very important for the government to make a credible long-term commitment. This means enacting legal frameworks, and enforcing them. The somewhat poor track record in this respect in the developing world is likely to be a big hurdle.
3. They may not have access to finance at a reasonable rate. Again, long-term government commitment will help convince financiers here. Further, a system of soft-loans could be considered. Provided the government can efficiently manage them.

PS, we are trying to also have a discussion on a wider framework in which all of this may happen in this thread:
forum.susana.org/component/kunena/167-ma...-and-comments-wanted

Regards
Marijn
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  • Vishwanath
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Re: Engaging the private sector in FSM

In my experience the private sector is very much engaged in the provision of sanitation services and systems only to a very great extent it is the informal sector and to some extent the formal sector.

Right from the digging of pits for toilets, making precast rings to line the pits, the cover slab, the construction of the toilets themselves , the making of Honeysuckers , offering the services of Honeysuckers to empty pits , taking the sludge to farmers fields , composting the sludge and reusing the waste is all done by the informal sector....in large parts of Karnataka state.
Engaging with the informal sector , improving and assisting in developing better systems and building correctly, ensuring the composting is done correctly require much less time but can be very effective.
Also the use of the Sanitation Safety Plan is a good tool to minimize risks - both health and environmental- that may occur due to lack of knoledge and the right framework for the informal sector to work in.
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Vishwanath
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  • shaji
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Re: Engaging the private sector in FSM

Dear Vandana,


Awareness among the stakeholders is very low. Even thought the government is taking initiatives on sanitation at the national or state level, the technical expertise and resources for implementation of the same is lacking at the district level. Clear cut jurisdiction is also absent.

As Vishwanth rightly pointed out that informal sector is involved in FS containment and disposal. In most of the semi-urban areas FS disposal is still manual even though there are legislations against manual scavenging of night soil. As there is stigma attached to FS handling, people are not coming foward to take up the handling activities. Many a times because of the improper planning/ layout of the buildings, pit empty becomes difficult. Training need to be given to local entrepreneurs on the latest technology on FS collection.


Marijn approach on (Semi)centralised system for (Peri) urban sanitation is also interesting. Construction of of small to medium scale treatment facilities near the semi urban setup with production of value added products under PPP will help in improving the sanitation facility.Local expertised should also developed in repairing vacuum trucks. Awareness needs to be brought into the farming community, about the demerits of using untreated FS as fertiliser substitute. They should be informed about the advantages of using fertiliser produced from stabilied FS.
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  • VandanaNath
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Re: Engaging the private sector in FSM

We second your opinion Marijn! Thanks for sharing your insights from international prospective on the models that worked.
You rightly pointed out that implementing a PPP model in this arena is challenging. However, both nationally and internationally we see a lot of potential for the private sector engagement (e.g. Senegal Model). This largely would succeed only when they see potential business models.
We do understand that the gestation period for an investment is longer. We do feel that rather than individual investments, a corpus created by multiple corporate might help in increasing the investment and thus would help in reducing the gestation period. ROI then would be faster.
What is missing was an enabling environment. The ISC and the NFSSM alliance is working together on creating this. We would like to hear your thoughts on how to replicate working models in a country like India.
Vandana Nath, PMP
Program Manager
Taskforce on Identification and Dissemination of Best Practices
India Sanitation Coalition Secretariat
New Delhi – 110001
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Re: Engaging the private sector in FSM

True that the informal sector is playing a vital role. This definitely is a positive sign! There is demand, money, expertise, capacity, i.e all the key ingredients. So what are the obstacles in converting the existing engagement to a formal engagement? How should we address the knowledge gap you pointed out? How can we as a coalition address this?
Vandana Nath, PMP
Program Manager
Taskforce on Identification and Dissemination of Best Practices
India Sanitation Coalition Secretariat
New Delhi – 110001
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Re: Engaging the private sector in FSM

A point well raised about Manual Scavengers that are still engaged in the sector, despite the legislation against it. There is a potential of capacitating these scavengers to become entrepreneurs, say in conveyance(as opined by Marijn). Also, it is crucial to ensure that they should handle FS will all the safety parameters in place.
Vandana Nath, PMP
Program Manager
Taskforce on Identification and Dissemination of Best Practices
India Sanitation Coalition Secretariat
New Delhi – 110001
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  • Kulwant
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Re: Engaging the private sector in FSM

Dear Marijn,

You have mentioned that perhaps the best solution is to put treatment systems in a private company that has a cooperative structure, and a limit on how much profit can be paid back to investors? The advantage of a cooperative is that voting rights are equally divided among share holders. Shares could be held by the local authorities, investors in the treatment plant(s) and a few civil society bodies. Under such an arrangement, all would have an equal vote independent of how much capital they bring.

Do you have any successful cases for reference? Theoretically, the suggested cooperative framework seems very good but without the presence of strong urban local bodies and responsible civil society partners, there is a risk of such a cooperative not succeeding to achieve the desired objectives.

Kulwant Singh

Gurgaon

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  • raviv1971
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Re: Engaging the private sector in FSM

Vandana,

This might be a bit long and I thank you in advance for your patience. Isolating Fecal Sludge from its carrier, which is water, is really not going to help the solve the issue of containing and eliminating fecal pollution. We are dealing with more than diarrhea here, Anti Mircobial Resistance (AMR) due to fecal pollution is a battle which the super-bugs are winning against humanity and we are facing that threat in a real world, read here

www.livemint.com/Science/TKBCVpppaqI6P1h...-dangerous-micr.html


Drawing analogies from securing our energy by embracing renewable energy, therefore reducing our dependence on imported oil , which also improved our Balance of Payments, we should be looking at water security and food security through the same lens. There is nothing more embarassing than importing food into an erstwhile agrarian economy. Our priorities in India must be towards securing water for agriculture, drinking and industry, in that order, to be able to have an independent and sustainable future for our future generations.

Where private sector has been hugely involved and successful to a large extent, has been industry and they are getting innovative about water productivity and re-use and recycle since the industry operates for an economically motivated outcome ie.profits. I am not getting into the debate around is water and human need or a human right and I have no opinion on it either. All I know is everyone needs water for survival including fauna and flora. Industry see water as a direct/indirect input resource to their manufacturing process are and able to cost for the lack of it, and therefore find ways and means of making it affordable and secure by recycling something which is readily available within their premises ie wastewater they generate, thereby solving for two issues, water security and minimal discharge and therefore pollution.

If we look at the projected demand for the world in 2030 based on current precipitation and consumption patterns, we are staring at a 40% deficit. Most of this deficit, unfortunately has to do with agriculture and drinking water. Specifically with reference to our country, India, indiscriminate and often abusive usage of our water resources combined with increasing urbanisation is making things worse for us.

Peri-urban areas are devoid to a great extent of piped water supply and sewer networks, so water becomes that much more precious and dearer when trucked or transported from a distance. Add to this the menace of disposing off the wastewater in an exponentially impure form than when received, into the closest water bodies thus destroying the entire eco-system making per-urban areas the perils of development. Out of sight - out of mind corollary is at play here when the citizens fail understand that the operator whom they employ to transport the fecal sludge to the nearest pumping station often dumps their waste into the very water body which potentially supplies them with fresh water. Besides those valid observations that have been covered in the other comments above, I would like to draw our attention to some issues which can be solved through an inclusive approach of all stake-holders.

We can combat the problem using a three pronged strategy where institutions like ISC along with like minded partners can bring about the change.

a. Let us start thinking about water-less toilets for the future thereby potentially saving 25%-30% of the water demand. Processing FS on site and turning it into a usage by-product is something we should accept and adopt.If you look at the real use of water in FSM, it is nothing but a transporter of human solid waste, and we spend about 90% of energy and resources in recovering this water to the initial state it was in.R&D and technology interventions from the private sector could help here.

b. Mandate dual plumbing in all projects ( residential, commercial, healthcare and other institutional projects like educational institutions etc ) where water demand is greater than a specified quantity, let us use what is drafted in the Model Building Bye Laws eg 10000 liters per day. The private sector can come in to build capacity and not just assets, the problem today with most decentralised on site sanitation systems is that there is not enough knowledge around operating these systems to the efficiency they were designed for.... and therefore any onsite sanitation solution becomes a monument to maintain rather than a solution to sustain. Challenge the private sector to get creative around Sanitation As A Service.

c. Scale things up, a housing society if looked at in isolation might perceive things as expensive and therefore would tend to lean dependency on the Government. A group of housing societies from the local community, might have a louder voice and therefore be heard sooner than an individual society, knowing thy neighbors helps. It is a lesson the fury of Nature has taught people in this country with every disaster related to Climate Change.

Whilst the Governments in our States and Country are trying to do their best, we still do not have robust processes and systems in place for faster execution. The pace of growth and lifestyle development is at an order of magnitude higher than the pace of infrastructure development and one really cannot predict when they will catch up, therefore the best way to sustain things is to scale it to an extent where it makes sense for all. Supply side management and Demand side management have to be deployed parallelly, LEED certifications and GRIHA certified products should be incentivised appropriately. Lifestyle choices should be driven by environment more than experience.

Water Exchanges can be set up in peri-urban neighborhoods and all the treated wastewater and treated / dried sludge free of pathogens, left over from various buildings could be sold out/ auctioned to those in need of it eg to the farmers to be used as water for agriculture and organic fertiliser for food production, there have been demonstrated models of this reuse around the world which the private sector can introduce in INDIA with the help of advocacy efforts from members of ISC.

Last but not the least and I saved this for the last because of the importance it deserves to be mentioned separately, "if we do not measure it, we do not mean it". Anything which is not measured cannot be controlled, so is the case with water, if we do not measure the amount of water we consume and the wastewater we generate, we cannot get efficient about them either. We will always be stuck with the NIMBY concept which leads to general apathy and degradation of societal responsibility and social ethics.

Measurement in terms of quality and quantity under the framework of an enforceable environment will drive compliance and when penalties are levied to offenders. The private sector will be able to then participate more to sustain and drive compliance. Until and unless measurement and enforcement are not mandated there is no incentive for anybody and mainly the private sector to step in and improve the efficiencies and empower sstakeholders.

Again, thank you for your patience. Warm regards
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  • Marijn Zandee
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Re: Engaging the private sector in FSM

Dear Kulwant,

I don't have an example from the sanitation sector at hand. However, here in Kathmandu a public bus utility has very successfully been revived under this model.

I fully agree, without good people and (local) government leadership, it will be extremely hard to make progress. What I like about the idea of a cooperative structure, is that it has the potential to make a company/utility more resistant against (not immune from) political interference. The latter, often in the form of granting jobs to political supporters without the necessary knowledge or commitment is often an issue in developing nations.

At the end of the day there is no solution that will work every time in every setting. The "road blocks" to progress are likely to be different in different countries, or even states in federated countries. It takes a very thorough and honest assessment of what the biggest hurdles (and opportunities) are in a setting to develop the strongest possible institutional and legal framework.
Marijn Zandee

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Re: Engaging the private sector in FSM

Dear Vananda,

Thanks for your active moderation, which is helping this thread forwards.

I am not sure I fully agree here:

We do understand that the gestation period for an investment is longer. We do feel that rather than individual investments, a corpus created by multiple corporate might help in increasing the investment and thus would help in reducing the gestation period. ROI then would be faster.


In my view, a corpus (conglomerate?) of companies would be able to spread risk, as their individual investment would be lower. However, since they also have to share the revenues, I don't think their ROI will be any bigger or faster. Unless there are significant improvements in cost effectiveness when working at larger scales.

The Senegal example is interesting. It seems their main success is in water supply (for which people may be more willing to pay than for the waste water bit). It is also interesting to note how in the early stages some large french water companies stepped in as partners. I am sure this is not entirely uncontroversial, but seems to have worked very well in this case. It would be interesting to know more in detail why these companies felt that the government had sufficient long-term commitment to make the risks acceptable.

Regards

Marijn
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  • magdalenabauer
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Re: Engaging the private sector in FSM

Dear all,

this is a very interesting discussion with lots of important insights. I think we can take many arguments forward for upcoming events like FSM4 as well as our synthesis document!

On behalf of the SuSanA Indian Chapter and ISC I am happy to share another video from ISC about FSM in India and corporate engagement. Shipra Saxena also addressed some issues.

Please watch here:


Thank you
Maggie
on behalf of the SuSanA Indian Chapter
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