Outsourcing of Solid Waste Management Services in other

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

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)

• Price Escalation The amounts payable to the Contractor on price escalation will be as per the formula i) 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.

ii) Coefficients: A = 0. 70 b = 0. 10 Labor c = 0. 20 Fuel iii) Base and Current Dates Prices and Source of Prices The prices of elements subject to Price Adjustment shall be to the extent possible as given in the Statistical Bulletins published by the Federal Bureau of Statistics (FBS), Statistical Division Government of Pakistan. Statutory notifications and official price from public sector organizations, where available, may be used at the option of the Employer. The source for prices of High Speed Diesel (HSD) shall be either be Statistical Bulletins or Pakistan State Oil (PSO).

• MOBILIZATION ADVANCE (Option 1) An amount up to 10% of the contractor value shall be granted as an advance in two equal installments, upon request of the applicant, before starting the work and after signing the Contract. This advance payment shall be deducted, from monthly performance payments of the Applicant in 24 installments, within 36 months period from commencement of work subject to Bank guarantee letter from schedule Bank of Pakistan. (Option 2) Mobilization advance shall be payable for meeting local duties & taxes and will be payable on phase wise arrival of imported machinery in Pakistan. Mobilization advance shall not exceed 15% of initial investment amount (pertaining only to imported vehicles and other imported equipment) as per the signed contract. This advance payment shall be deducted, from monthly performance payments of the Applicant in 24 installments, within 36 months period from commencement of work subject to Bank guarantee letter from schedule Bank of Pakistan.

Outsourcing of SWM services in Bahawalpur 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 Bahawalpur 18 0. 51 314 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 to be used in conjunction with 7, 13 and 25 cubic meter compactors 2 Door-to-door 2 Mini dumpers for each UC waste collection 3 Mechanical One mechanical sweeper for 40 km road Sweeping length each day. 4 Waste At least 3 trips per vehicle to WTS/dumpsite Transportation 5 Sweeping 1 sanitary worker for 800 persons Standard

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

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 delivery. Phase A Commencement Period from the Date of delivery of Site to the Contractor Within Two (02) Months

Man power requirement Sr. No. Position Workers Provided by Employer Additional Workers Required Total Required Workers 1 LOADER OPERATOR - - - 2 MOTOR VEHICLE INSPECTOR - 3 3 3 SANITARY INSPECTOR 8 0 8 4 SANITARY SUPERVISOR 16 - 16 5 DRIVER - 101 6 WORKER 105 86 191 7 HAND SWEEPER 476 164 640 605 354 959 TOTAL

Vehicles arrangements • The contractor shall supply the vehicles and equipment required for the Phase: A within first two (02) months.

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 0 km Target 2014 2015 40 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. # VAHICLE No of Vehicles 1 2 3 4 5 6 7 8 9 10 11 12 13 14 7 m 3 Compressed garbage truck 2 axle 13 m 3 Compressed garbage truck 2 axle Water bouzer (local) Sweeper 6 m 3 Container washer Washing vehicle 8 m 3 (per day) DUMPER (10 Ton) LOADER (per hour) FRONT END LOADER CHAIN BULLDOZER ARM ROLL TRUCK 5 m 3 (LOCAL) Compactor 25 m^3 Mini Dumper (1 cubic meter) CAR 1000 CC (LOCAL) Total 8 6 1 2 1 1 03 9 2 0 2 2 40 5 82

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: US $ 10. 15 MILLION MECHANICAL SWEEPING: US $ 0. 496 MILLION MECHANICAL WASHING: US $ 0. 169 MILLION MANUAL SWEEPING: US $ 2. 503 MILLION TOTAL: US $ 13. 3 MILLION

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