06/03/08 1

PPPs & SOLID WASTE

MANAGEMENT
INFRASTRUCTURE
Antonis Mavropoulos, CEO EPEM SA
 Presentation outline

1. The problem
2. Key factors affecting PPPs in SWM
3. Changes in project preparation (design,
risks, feasibility)
4. Case study
5. Conclusions

2
 The view

 PPPs are long term relations - emphasis at results

 Private sector income is linked with specific targets

 Payback is gradual, year by year

 SWM services have a public character

 One option not a necessity

3
 The problem

 To deliver WM infrastructure
 To ensure the service for certain years
 To achieve specific recycling targets
 To interact with market conditions and
other uncertainties

4
Project cycle

5
PPP as a WM tool

6
 Key factors

1. Major EU financial tool

2. SWM treatment requirements:
 Directive 99/31
 Difficulties for countries depended on landfills
 Lack of public funds
 The nature of SWM treatment facilities
(technologies, complexity, industry dependence)

7
1. The status of managing bodies
2. Increase in WM costs
3. Legal gaps and problems
4. Need for a new public role: from control of
procedures to control of the results

8
Key factors Effect
1. EU policy Positive

2. Availability of public money Positive

3. SWM treatment requirements Positive

4. SWM treatment facilities nature Positive

5. Managing bodies status Negative

6. Increase in WM costs Negative

7. Legal problems - gaps Negative

8. Public role Negative

9
 SWM treatment needs (Greece)

2,7
2020
0,9

1,9
2013
1,3

1,1
2010
1,95

0,5 1 1,5 2 2,5 3

Max.BMW to landfilled (mt) Min. BMW to be diverted (mt)

10
 A new approach to design

 Check the overall feasibility

 Emphasis to results – not to technical
design
 Risk Distribution

11
 Feasibility

 Define the problem

 Alternative funding

 Affordability

 What is the public input?

 What is the added value of PPP;

12
 Case Study: WMR
 300,000 citizens
 120,000 tons of mixed MSW
 Lignite mines and power plants -
Extensive lignite excavations
 Regional SL at old lignite mine
 Well established WMA
(DIADYMA S.A)
 First (and sole) Regional SL in Greece -20 y life expectancy

 Separate Collection of Packaging Waste underway

 DIADYMA S.A wishes to incorporate waste treatment – preferably a

simple and modular technology
 WtE is favoured (energy easily marketable)
13
 Project formulation
Design Built Operate Rehab.

9 Transfer
stations
1 SW
treatment
unit
1 landfill

1 closure –
rehab.
14
 Technologies - results
 3 million tons of waste
 25 years
 Residue < 65% by weight
 Recycling: according EU targets
 MBT – RDF
 Anaerobic digestion

15
 Cost barrier – landfill
dependence
COUNTRY COST (€/TN) COUNTRY COST (€/TN

AUSTRIA 50-150 ITALY 90-110

BELGIUM 116 LUXEMBURG 50

DENMARK 110 NETHERLAND 58

FINLAND 30-121 PORTUGAL 26

GERMANY 123 SPAIN 12

GREECE 8-35 SWEDEN 70-90

IRELAND 120-240 UK 21
16
 WMR case

 LANDFILL: 13 Euros/tn

 TRANSFER ST.: 15 Euros/tn

 GDP / capita: 13.500 Euros/y

17
 Total expenses: 267 m. Euros
25 YEARS EXPENSES

180,000,000 1.80% 1.67% 70.00%

159,286,532.17
160,000,000 1.60%
60.00% 1.37%
1.40%
% GDP / CAPITA

140,000,000 59.68%
1.20% 50.00%

% EXPENSES
120,000,000
1.00% 0.89%
180
EUROS

100,000,000 40.00% 185

0.80% 0.65%
80,000,000 69,632,714.15 30.00%
0.60% 200
60,000,000
0.40% 26.09% 20.00%
38,000,000.00
40,000,000 0.20% 96 88
150
EUROS/TN

10.00%
20,000,000 0.00% 14.24%

0 100 ACHAIA WMR

0.00%

INVESTMENT LANDFILL - TRANSFER STATION OPERATION LANDFILL -

TREATMENT CURRENT
OPERATION % GDP PROJECTED
TREATMENT % GDP
50

0
ACHAIA WMR

TOTAL WM COST EUROS/TN PROJECTED WM COST

18
 Final modeling
GATE FEES COMPOSITION

90.00
WESTERN MACEDONIA PPP MODEL

80.00
16,000,000.00
14,000,000.00
70.00
12,000,000.00
10,000,000.00 60.00
EUROS

8,000,000.00
50.00
6,000,000.00
4,000,000.00 40.00

2,000,000.00
0.00 30.00
20 1

20 2
3

4
17 15

1 8 16

19 7
20 2018

20 019

20 20

20 1

20 2
23

4
26025

27 26

28 7

29 8
20 029

20 030

20 31

20 2

20 2 3
4

5
01

1
1501

1601

20 202

03

3403
20 201

02

2502

20 202

3503
1420

20 20

20

2320

2420

0
2 0 20

2 0 20

3320
132

2
20 2

222

20 2

20 2

2
312

20 2
11

12

20

21

30

32
20

20

20

WMR CONTRIBUTION GOVERNMENT CONTRIBUTION

YEARS

WMA INCOME (euro/year) AVAILABILITY PAYMENTS (euros/year)

19
Emphasis to results

20
21
 Risk allocation
Risk transfer and allocation
Risk

Public Private Shared

1.1 Cost and Timing of planning determination 

1.2 Cost of compliance with planning conditions 

2.1 Time and cost over-run 

2.2 Remedy of defects 

2.3 Site conditions 

2.4 Compliance with technical specification 

2.5 Variations (required by the Council after design 

fixed)
3.1 Obtaining the necessary licences and 
consents
3.2 Compliance with environmental regulations, 
and discharges to air, water and land
3.3 Compliance with and availability to perform 
service contract
3.4 Lifecycle replacement cost estimation and 
differential inflation
3.5 Operating cost estimation and differential 
inflation 22
EU funds and PPP: why EU funds?

23
Why PPP?

24
The concept

25
 Key issues for success
• Build local capacity to develop technical
specifications and to tender competitively.
• Create a level playing field by means of a
regulatory framework.
• Specify worker safety and environmental
requirements.
• Provide mechanisms to assure flow control.
• Define sanctions and enforcement mechanisms
that discourage non-performance.
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• Prepare for agreements that are
long enough to allow full
depreciation of investment.
• Prepare agreements that are large
enough in scope to allow economies
of scale.
• Include price indexing to allow
adequate cash flow and continuous
profitability.
• Include public consensus in all key
decisions. 27
• Quantify outputs to enable
comparative performance
monitoring.
• Enlist public cooperation.
• License and control all private
sector involvement.
• Monitor performance to compare
service providers.
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