Cost Benefit Analysis for Landfill

Operations and Regional Waste Transfer, Hauling and Disposal

1. SUMMARY

The Bulgarian Technical Twinning Program was implemented in the municipalities of Elhovo, Toundzha and Bolyarovo. The partnership between the Bulgarian and the American municipalities included technical cooperation in solid waste management. The project was divided in two sub - projects :

The main goals of the program include:

1. the implementation of separation of organic waste from solid waste to reduce the overall volume of household waste that needs to be disposed of at a landfill.

2. the use of cost-benefit analysis to evaluate the costs and benefits of a waste collection transfer and hauling alternatives.

3. the use of cost benefit analysis to evaluate the costs of construction and operation of a new solid waste landfill at the village of Dobrich , municipality of Elhovo .

4. Develop an integrated waste management strategy that could serve as a regional model for the partner municipalities, and perhaps be transferable as a model for other BG regions with similar settlement and waste generation patterns.

2. PROBLEM STATEMENT

Municipality of Elhovo s greatest environmental problem is the existence of an unregulated solid waste landfill , as well as the presence of a large number of illegal dumps and the pollution of agricultural land with solid and other waste .

The existing solid waste landfill has been in operation since 1976 . Located only 450 meters to the west from the city, it is out of capacity and doesn t meet current national regulatory requirements.

Waste collection and disposal services are available only in the city of Elhovo . Due to this, the waste in the other communities within the municipality is disposed at illegal dumps. Organic waste accounts for almost 80% of the waste flow in these communities.

In order to reduce the quantity of waste disposed, it was necessary to separate the solid from the organic waste. Organic waste was then to be utilized by field composting.

Cost - benefit analysis is a management tool that can be used to identify and quantify all of the costs and benefits of a proposed project, in order to determine if the project is worthwhile and/or financially feasible. Various alternative courses of action can be evaluated as alternatives to identify their relative costs and benefits. Spreadsheets easily facilitate this methodology and make it easy to employ. In this case study, cost/benefit analysis was used to identify all of the various operating costs of the Dobrch landfill proposal, in order to prepare the municipality for the true costs of operating such a facility, before a decision is made to proceed. A spreadsheet was prepared that itemized all of the various cost categories, and the total operating costs that the municipality would have to finance if the construction is approved and financed by the Federal government, and a decision is made to proceed.

In regard to waste transfer and hauling options, the methodology was used to identify several realistic alternatives, and to then systematically quantify and compare the costs of implementing each of the alternatives. A preferred alternative was identified by the working group, based on the use of this methodology to systematically compare the realistic costs and benefits of each of four alternatives.

The combined revenues generated by the waste collection fees in Elhovo, Toundzha and Bolyarovo proved to be insufficient for the funding of waste collection and disposal activities. All communities within the municipality of Toundzha , the villages in the municipality of Elhovo and many of the communities in the municipality of Bolyarovo are currently excluded from the waste collection and disposal system.

The proposed construction of a new solid waste landfill at the village of Dobrich , municipality of Elhovo , required an analysis of funding that would be needed to set up and operate a hauling and transfer system to deliver the waste, collected at each village compost site containers or transfer station, to a landfill for disposal. Several options were reviewed, using legislative norms as a basis for the calculation of waste generated. The following options were explored :

1. Transfer station with 20 m 3 hauling truck

2. Transfer station with 8 m 3 hauling truck

3. Hauling containers on a flatbed truck

4. Dumping containers with a packer truck .

A cost - benefit analysis was also conducted for the proposed solid waste landfill at Dobrich , in order to get a better idea of the required waste collection fee increase that would be needed for ongoing operation of the facility once it is constructed .

3. PROJECT DESCRIPTION

To conduct the cost - benefit analysis of the proposed landfill at Dobrich , data from the existing landfill at Gorna Malina , Sofia Region , was used . The reasoning was the Gorna Malina landfill is almost identical to the proposed one at Dobrich. The calculations included staff salaries and benefits, fuel and lubricants, equipment depreciation, external services and benefits.

Landfill soil reclamation costs were added to the landfill operating costs. The total annual operating costs were calculated at BGN 103 488 лв. This amount did not include BGN 50,000 annualized reclamation payment, 1,000 annualized operating permit payment, BGN 50,000 for lease of equipment. When these costs were added, the annual operating costs increased to BGN 204 488 лв. Finally, two other amounts were added: the BGN 120,000 currently paid by the Municipality to the waste collection company, and the BGN 90,000 portion of the waste collection fee revenue currently used to finance other activities.

Based on the above , it was established that the waste collection fees for the municipality of Elhovo would have to be increased by about 100% , just to finance the operating costs of the new landfill .

The analysis of the collection, transfer and hauling options was based on cost estimates for vehicles, fuel, maintenance, containers and transport services, should this activity be contracted out , or privatized .

The analysis established the following :

1. The use of a transfer station and 20 м3 hauling truck would cost BGN 293 560 annually .

2. The use of a transfer station and 8 м3 hauling truck would cost BGN 264 960 annually .

3. Hauling containers on a flatbed truck BGN 145 200 лв.

4. Dumping containers with a packer truck BGN 84 800 , due to lower transportation costs .

The key participants in the analysis included environmental experts from the three Bulgarian municipalities , the American experts , financial specialists and other municipal employees .

4. IMPLEMENTATION TIMELINE

1. Select villages with equipment available - March, 2003

2. Place individual solid waste containers at each composting site - April, 2003

3. Form composting rows at sites in the villages selected - April, 2003

4. Provide row turning - October, 2003

5. Develop an information brochure - End of April, 2003

6. Print and disseminate the brochure - End of May, 2003

7. Develop a written package of basic information - End of March, 2003

8. Provide technical assistance and consultations ( mainly by Internet ) - Ongoing

9. Apply the project evaluation methodology - September 2003 - April 2004

5. SOLUTIONS OVERVIEW

Based on the analysis, the working group made a decision to use packer trucks for future waste collection activities, as well as to increase the waste collection fee by 100% when the proposed landfill at Dobrich becomes operational. The cost of the packer truck system for transport & hauling to a disposal site could be split by the three municipalities based on the percentage of population served. Aside from being the lowest cost, this option provided the most flexibility. Since there are no fixed assets involved (ie. Development of transfer stations)the system can be tailored, by changing the daily collection routes, to work whether the disposal site for hauling is the existing landfill in Elhovo, the Dobrich landfill if/ when it is built, or the landfill at Hadjidimitrovo.

Municipality of Elhovo s intention is to use some of the revenues generated by the municipalities of Toundzha and Bolyarovo to cover the operating costs of the new landfill.

The analysis and the assistance rendered by the American partners resulted in improving municipal employees skills in conducting cost - benefit analyses , and understanding the true costs of setting up and operating the waste management system .

6. BENEFITS

1. Solid waste is being separated from organic waste at composting sites .

2. Each municipality will have functioning composting sites.

3. The amount of waste for disposal can be reduced by approximately 80%.

4. The municipal administration developed the capacity to perform cost benefit analysis, and improved its project development knowledge and skills.

5.The municipalities have a waste management strategy that can be implemented in phases over time, for all 54 villages within the study area. The system can be developed incrementally as more and more villages develop compost sites with waste containers for separated solid waste. The solid waste will be transported to an approved, environmentally safe landfill. The cost/benefit evaluation looked at the cost of building out the system to include all of the villages in the study area. Realistic costs for setting up and operating a viable system were developed. The municipalities can now start a dialogue with Federal and EU officials to identify any funding sources that can help with implementation of the system.

6.The underlying goals this evaluation include:

Preventing groundwater contamination

Using only approved, environmentally safe landfills for waste disposal

Compliance with Bulgarian legislation regarding waste management and the environment

Compliance with EU guidelines for waste management planning and implementation

All of these goals will be met if funding is committed and the system is implemented.

7. CONCLUSION

For the Municipality of Elhovo the pilot program was a success . All projects goals were achieved:

1. There are three functioning composting sites

2. Solid waste is being separated from organic waste at the composting sites

3. Usable compost is available

4. Cost-benefit analysis was conducted for the development of an overall waste collection and disposal system transfer and hauling alternatives, and a new regional landfill .

Other communities within the municipality are to be included in the composting system. Funding sources will be sought for the purchase of new solid waste containers needed to expand the composting system in other communities.

Public Education & Enforcement will be needed to increase public participation in the pilot villages, and to expand the system over time to all of the villages, and eliminating illegal dump sites. As with the experience of the American experts in their communities, change takes time, and public education must be an ongoing process. Enforcement will also be needed to prevent illegal dumping, and to support the build out of the system throughout the study area.