Outsourcing of Solid Waste Management Services in other

Outsourcing of Solid Waste Management Services in other Cities of Punjab LAHORE WASTE MANAGEMENT COMPANY

Decisions of meeting on 23 -07 -2013 1. S&GAD may place the services of competent officers at the disposal of Board of Directors of newly established solid waste management companies within week’s time 2. LWMC to arrange a one day training workshop for BOD members/district representatives 3. LG&CD department to seek legal opinion of Law Department on SECP rules about nomination of public representatives in companies

2. One day training for Districts Training was organized on 31 -07 -2013 and following topics were covered: 1. Registration of Companies & Regulators 2. Introduction to Services & Assets Management Agreement & its executions 3. Change Management (Human Resource) 4. Financial Management Challenges (Financial Oversight & reporting) 5. Outsourcing arrangements of the Solid Waste Management System 6. Early Actions List of Participants

One day training for Districts 40 days Plan 90 days Plan

3. LG&CD department to seek legal opinion of Law Department on SECP rules about nomination of public representatives in companies Law department has indicated that LWMC and other waste companies formed in other cities are not public sector companies and therefore SECP rules regarding nomination of public representatives in companies is not applicable

Key Milestones • Services and Assets Management Agreement (SAAMA) Status – Not signed in any district • Identification of landfill site and improvement of existing dumpsites – Status – land identified in all districts • Opening of Bank account and transfer of funds to companies Status – accounts not opened & funds yet to be transferred Letter of support from FD

Prequalification of firms • RFP( International) advertised on 22 nd July 2013 Submission Date was 22 August , 2013. • Pre-qualification Criteria • Business experience and certification (25 marks) • Personnel capabilities (20 marks) • Equipment & machinery (30 marks) • Financial capability (25 marks) • Total Qualifying Marks = 60% Criteria encourage local contractors for bidding, the marks were allocated proportionate to capabilities

Firms Pre –Qualified Name of Firms/ Cities/ Marks Obtained FSD GJW MUL RWP SKT BHWL Result M/s. Albayrak 100 100 100 Qualified M/s. Ozpak 100 100 100 Qualified M/s. Cevre 98 98 100 Qualified M/s. GHS N/A 51. 5 N/A 62 62 Qualified in SKT, BHWL) 30 30 39 39 Disqualified M/s. Waste Buster 1. 2. For small cities ( Sialkot, Bahawalpur) For large cities ( Faisalabad, Gujranwala, Rawalpindi, Multan)

Time lines for Bidding process Sr. No Activity Time Line Activity Days 1 Preparation of Prequalification Documents & Submission to the Companies for Approval of BODs Jul 20, 2013 02 2 Publication of Pre-qualification Advertisement in Local & International Newspapers and PPRA Web Jul 22, 2013 02 3 Approval of prequalified documents by the Respective BODs July 26, 2013 05 4 Issuance of Prequalification Documents to Potential Applicants/Bidders Jul 27, 2013 02 5 Submission of Technical Proposals by Potential Bidders and Opening of Technical Proposals Aug 22, 2013 25 6 Technical Evaluation by LWMC(Consultant) Aug 30, 2013 08 7 Submission to the Respective Companies for BODs Approval Sep 03, 2013 03 8 Preparation of Bid Documents & Submission to Companies for BODs Approval Sep 06, 2013 03 9 Invitation to Bid to Prequalified Bidders Sep 10, 2013 04 Remarks Issued for FSD, SKT

Cont’d. . . Sr. No Activity Time Line Activity Days Remarks 10 Issuance of Bid Documents to Prequalified Bidders Sep 12, 2013 02 Being issued as per approvals received from respective BODs 11 Pre-Bid Meeting Sep 15, 2013 03 Expected on Sep 25, 2013 12 Submission of Financial Proposals & Opening Sep 21, 2013 06 Sep 30, 2013 13 Financial Evaluation by LWMC Sep 24, 2013 03 Oct 04, 2013 14 Appraisal by Finance Department Sep 26, 2013 01 Oct 07, 2013 15 Final Negotiation by the Committee Sep 28, 2013 05 Oct 08, 2013 14 Approval of Financial Bid by Respective BODs Oct 03, 2013 05 Oct 12, 2013 15 Award and Signing of Contract 7 th Oct, 2013 - Oct 14, 2013

§ BID SECURITY The amount of Bid Security for Large city Local Rs 100 Million International USD 1 Million The amount of Bid Security for Small city (Bahawalpur & Sialkot) Local Rs 50 Million International USD 0. 5 Million • PERFORMANCE SECURITY 10 % of Contract Price in form of Bank Guarantee for 7 Years.

• SUB CONTRACTING Contractor may execute subcontract for services up to 30% of total services. • PENALTIES The amount of penalty to be imposed during one month shall not, in any case, exceed 15 % of the monthly progress payment. (Details of Penalties) (Key Performance Indicators)

• i) Price Escalation The amounts payable to the Contractor on price escalation will be as per the formula Pn = A + b Ln + c Fn Lo Fo where, “Pn” is the Price Adjustment factor. “n” (excluding Fixed Cost, Reimbursable Cost and Provisional Sums). “A” is a constant or the Non-Adjustable Portion of the Price Adjustment Factor to be specified, representing the Non. Adjustable Portion of the Contract Price. “b, c, are Coefficients or weightages of the order of 0. xx “Lo, Fo, are the Base Date Indices for the Labor and Fuel are adjustable elements.

1. Posting of focal persons S&GAD posted following six focal persons in all six districts vide SI. 2 -2/2013 © Dtd 03 -08 -2013. • EDO (F&P), Sialkot, Mr. Nadim Sarwar • EDO (F&P), Gujranwala, Tariq Mahmood • EDO (F&P), Rawalpindi, Muhammad Ali Randhawa • EDO (CD), Multan, Asif Ali Farrukh • EDO (MS), Faisalabad, Adbul Waheeh Hamayun • EDO (F&P), Bhawalpur, Sakhawat Ali Khan

Firms Pre –Qualified i. M/s. Ozkartallar Insaat Sanayi Ve Ticaret Limited Sirketi ( six cities) ii. M/s. Albayrak Turizm Seyahat Ve Ticaret A. S. Turkey, Pakistan Branch Office (all six cities) iii. M/s. CEVRE Insaat Temizlik Tic Ltd Sti (all six cities) iv. M/s Ghulam Hussain & sons Ltd. , ( Skt. & Bhw) v. M/s Waste Busters Consortium with Conpro (Applied but rejected )

Penalty Mechanism and Monitoring of Contractors • Robust penalty mechanism on the basis of experience of Lahore model – Vehicle Tracking & Monitoring System – Android Based Monitoring – Complaint Re-dressal System (CRS)

Time lines for Bidding process Sr. No Activity Time Line Activity Days 1 Preparation of Prequalification Documents & Submission to the Companies for Approval of BODs Jul 20, 2013 02 2 Publication of Pre-qualification Advertisement in Local & International Newspapers and PPRA Web Jul 22, 2013 02 3 Approval of prequalified documents by the Respective BODs July 26, 2013 05 4 Issuance of Prequalification Documents to Potential Applicants/Bidders Jul 27, 2013 02 5 Submission of Technical Proposals by Potential Bidders and Opening of Technical Proposals Aug 22, 2013 25 6 Technical Evaluation by LWMC(Consultant) Aug 30, 2013 08 7 Submission to the Respective Companies for BODs Approval Sep 03, 2013 03 8 Preparation of Bid Documents & Submission to Companies for BODs Approval Sep 06, 2013 03 9 Invitation to Bid to Prequalified Bidders Sep 10, 2013 04

Cont’d. . . Sr. No Activity Time Line Activity Days 10 Issuance of Bid Documents to Prequalified Bidders Sep 12, 2013 02 11 Pre-Bid Meeting Sep 15, 2013 03 12 Submission of Financial Proposals & Opening Sep 21, 2013 06 13 Financial Evaluation by LWMC Sep 24, 2013 03 14 Appraisal by Finance Department Sep 26, 2013 01 15 Final Negotiation by the Committee Sep 28, 2013 05 14 Approval of Financial Bid by Respective BODs Oct 03, 2013 05 15 Award and Signing of Contract 7 th Oct, 2013 -

Outsourcing of SWM services in Faisalabad LAHORE WASTE MANAGEMENT COMPANY

Waste Generation Statistics No. of UCs POPULATION in 2013 (Million) WASTE GENERATION (TONS / DAY) Faisalabad 113 2. 90 1622 Gujranwala 64 1. 58 887 Rawalpindi 62 1. 46 818 Multan 61 1. 23 947 Sialkot 16 0. 52 265 Bhawalpur 18 0. 70 350 Murree 01 0. 08 32 TOTAL 335 8. 47 4921 CITY

Scope of New SWM contract • • • Manual sweeping in streets; Vacuum sweeping on major roads; Mechanized Washing; Door-to Door Waste Collection; Container based Waste Collection; and Transportation of MSW to the Disposal Site

Scope of Residual Functions of CDGs • Monitoring of MSW Collection and Transportation Contract as per agreed KPIs; • Enactment and Enforcement of relevant laws; • De-silting of roadside waste water open drains; and • Levying of charges and fees.

Penalty Mechanism and Monitoring of Contractors • Robust penalty mechanism on the basis of experience of Lahore model – Vehicle Trip Counting System (VTCS) – Vehicle Tracking & Monitoring System (VTMS) – Android Based Monitoring – Complaint Re-dressal System (CRS)

Bidding Documents • Instruction to Bidders • General Conditions of the contract • Technical Specifications – Tentative Pre – bid conference on 20 th September 2013 – Deadline for submission of bid by firms is 30 th September 2013

Design Parameters Sr. Activity Standard No. 1 Container for 0. 8 m 3 volumetric container, and 5 m 3 waste storage container 2 3 4 5 Door-to-door waste collection Mechanical Sweeping Waste Transportation Sweeping Standard 2 Mini dumpers for each UC One mechanical sweeper for 40 km road length each day. At least 3 trips per vehicle to WTS/dumpsite 1 sanitary worker for 800 persons

Design Parameters continued Sr. Activity No. 6. Wheelie Bins Standard 1 Wheelie per worker four plastic liner bags to be fixed in wheelie bins daily. For 6 month @ 3 bags/week 7. Collection bags 9. Support Vehicles Loader, Dumper, Front End Loader, Water Bowzer and Washing Machines as container washing vehicle etc. Transfer Station Near workshop Halaal Road 10.

City will be taken over in Four distinct phases Phase A is the first area that needs to be started in the first two (02) months after the site Commencement Period from delivery. The following time the Date of delivery of Site to lines shall have to be adhered the Contractor with for start of various phases. Phases A Within Two (02) Months B Within Four (04) Months C Within Six (06) Months D Within Eight (08) Months

Man power requirement Sr. No. Position Workers Provided by Employer Additional Workers Required Total Required Workers 1 LOADER OPERATOR - 9 9 2 MOTOR VEHICLE INSPECTOR - 5 5 3 SANITARY INSPECTOR 56 - 56 4 SANITARY SUPERVISOR 30 82 112 5 DRIVER 27 423 450 6 WORKER 72 771 843 7 HAND SWEEPER 2, 790 841 3, 631 2, 975 2, 131 5, 106 TOTAL

Vehicles arrangements • The contractor shall supply the vehicles and equipment required for the Phase: A within first two (02) months. However the remaining phases shall be started within the specified timelines and all four phases shall be completed within eight (08) months from the date of delivery of site to the contractor.

Service Delivery Indicators Activity / Baseline Indicators Household level No area coverage of SWM served services through under DTD door-to-door collection (DTD) collection Collection efficiency (Waste transported per month i. e. amount reaching to final disposal site) 55% 2014 30% Target 2015 40% 2016 50% 85% 90%

Service Delivery Indicators continued Activity / Indicators Mechanical Sweeping Coverage Mechanical Washing coverage Baseline 60 km Target 2014 2015 240 km Increase according to infrastructure improvement 2016 Increase according to infrastructure improvement No such Development of schedule for weekly activity in washing activity at predefined roads practice and locations of public interest. 3 teams

Vehicle and Machinery Sr. # 1 2 3 4 5 6 7 8 No of Available VAHICLE Vehicles with CDG 7 m 3 Compressed garbage truck 2 axle 26 7 m 3 Compressed garbage truck 2 axle (local) 22 13 m 3 Compressed garbage truck 2 axle 20 Water bouzer (local) 8 3 Sweeper 6 m 3 8 hauler dumper (40 ton) 13 7* Container washer 1 washing vehicle 8 m 3 (per day) 3 * Based on volumetric capacity (dumpers 16 )

Vehicle and Machinery continued 9 DUMPER (10 Ton) 14 Available with CDG 8 10 11 12 13 14 15 16 LOADER (per hour) FRONT END LOADER CHAIN BULLDOZER ARM ROLL TRUCK 5 m 3 (LOCAL) Compactor 25 m^3 Mini Dumper (LOCAL) CAR 1000 CC (LOCAL) 9 2 0 9 9 249 5 5 Total 398 Vehicles No of Vehicles 23

Rough Cost Estimates • MAIN FEATURES : – – – – Project Life: Financial Modeling : % Equity: Return On Equity (Roe): Annual Cost Of Project (with Tax): Total cost of the project (with tax): Monthly cost the project (with tax): 7 YEARS ROE MODEL 40% 20% $13. 3 MILLION $93. 2 MILLION $ 1. 1 million

Rough Cost Estimates continued • Annual Activity wise Rough cost estimates : 1. 2. 3. 4. SOLID WASTE COLLECTION: MECHANICAL SWEEPING: MECHANICAL WASHING: MANUAL SWEEPING: TOTAL: US $ 10. 15 MILLION US $ 0. 496 MILLION US $ 0. 169 MILLION US $ 2. 503 MILLION US $ 13. 3 MILLION

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