embedding and scaling an innovative presented by ppp model ... · customers to establish commercial...

Embedding and scaling an innovative PPP model for citywide services in Dhaka, Bangladesh

Presented by

Habibur Rahman &

Cameron Dobbie

WSUP | Water & Sanitation for the Urban Poor

Urban Sanitation in Bangladesh

‒ Bangladesh is one of the most densely

populated countries in the world

‒ Almost no OD but only 60% of pop. use an

improved sanitation facility

‒ Very little sewerage in in Dhaka

‒ 69% of human waste in Dhaka is discharged

directly into surface drains

‒ Households, businesses and institutions rely

on OSS (mainly pits and septic tanks)

‒ Traditional pit emptiers provide emptying

services - a high proportion of which

discharge directly to the open environment


Opportunities and Challenges: Flow of Human Waste in Dhaka

safe transport through sewers

unsafe transport through leaking sewers

safe transport by vacuum tanker

unsafe manual emptying by sweepers

connected to surface drains11% 9% 1% 9% 69% 1%

safely disposed or treated3%

not effectively treated or safely disposed

97%

not effectively treated9%


Launching & Embedding an Urban Sanitation PPP The Building Blocks

‒ Clarity of public sector mandates

‒ Legal and regulatory framework for involvement of the private sector

‒ Well-defined division of roles and responsibilities embedded in precise contract

terms

‒ Enabling environment for private sector engagement / investment

‒ Transparency in procurement


Launching & Embedding an Urban Sanitation PPP The Model

DISPOSAL

LESSEE: PRIVATE OPERATOR Safe emptying service

provided by private sector Min % of low-income

customers

LEASE AGREEMENT

LESSOR: PUBLIC AUTHORITY Lease of vehicle reduces up

front risk Licence to dump

Customers: Low-income

High-income

Institution


Launching & Embedding an Urban Sanitation PPP The Intervention

‒ Safe, affordable

& mechanical

emptying

service

‒ PPP

arrangement

with well-defined

roles &

responsibilities


SWEEP in Dhaka: Business Performance

$-5.000

$-4.000

$-3.000

$-2.000

$-1.000

$-

$1.000

$2.000

$3.000

$4.000

$5.000

$6.000

Ap

r 1

5

Mai

15

Jun

15

Jul 1

5

Au

g 1

5

Sep

15

Okt

15

No

v 1

5

Dez

15

Jan

16

Feb

16

Mrz

16

Ap

r 1

6

Mai

16

Jun

16

Jul 1

6

Au

g 1

6

Sep

16

Okt

16

No

v 1

6

Dez

16

Jan

17

Feb

17

Mrz

17

Ap

r 1

7

Mai

17

Jun

17

Jul 1

7

Au

g 1

7

Sep

17

Okt

17

No

v 1

7

Dez

17

Jan

18

Feb

18

Mrz

18

Ap

r 1

8

Mai

18

Jun

18

Jul 1

8

Au

g 1

8

Sep

18

Okt

18

No

v 1

8

Dez

18

Jan

19

USD

Month

Gulshan Clean & Care- Top Level Data (Lifetime)

Revenue Cost Profit


SWEEP in Dhaka: Business Performance Key characteristics of the model & performance over 45 months

1. Focus on medium and large

customers to establish commercial

viability

2. Differential pricing model to

facilitate service offering to low-

income customers

3. Clause introduced mid-2017

mandating GCC to ensure 30% of

customers are lower-income

4. Entrepreneurs have flexibility to

set price and respond to the

market accordingly

11,122m3 FS

safely managed

257,011

customers served

US $ 112,064

revenue earned

US $ 20,121

profit generated


Scaling the Model & Enterprise DevelopmentEngaging the Private Sector

‒ Harnessing

commercial expertise

‒ De-risking entry

‒ Generating competition

‒ Stakeholder

management

‒ Considering new types

of model

Dhaka

16mpopulation

Annual Market

Size: US $ 17m

Sewerage Coverage:

20%


Scaling: Managing price across market segments Average monthly price per m3 sludge emptied in different market segments

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

18,00

Sep16

Okt16

Nov16

Dez16

Jan17

Feb17

Mrz17

Apr17

Mai17

Jun17

Jul17

Aug17

Sep17

Okt17

Nov17

Dez17

Jan18

Feb18

Mrz18

Apr18

Mai18

Jun18

Jul18

Aug18

Sep18

Okt18

Nov18

Dez18

Jan19

USD

MONTH

Gulshan Clean & Care Average monthly price per m3 sludge emptied

AV Price p/m3 INST AV Price p/m3 HIC AV Price p/m3 LIC


Scaling: Managing price across market segments Average monthly price per m3 sludge emptied in different market segments

0,00

2,00

4,00

6,00

8,00

10,00

12,00

14,00

16,00

18,00

Sep16

Okt16

Nov16

Dez16

Jan17

Feb17

Mrz17

Apr17

Mai17

Jun17

Jul17

Aug17

Sep17

Okt17

Nov17

Dez17

Jan18

Feb18

Mrz18

Apr18

Mai18

Jun18

Jul18

Aug18

Sep18

Okt18

Nov18

Dez18

Jan19

USD

MONTH

Gulshan Clean & Care Average monthly price per m3 sludge emptied

AV Price p/m3 INST AV Price p/m3 HIC AV Price p/m3 LIC

Linear (AV Price p/m3 INST) Linear (AV Price p/m3 HIC) Linear (AV Price p/m3 LIC)


Enterprise DevelopmentWhere can we assist to build capacity?

‒ Utilisation within portfolios

‒ Segment targeting

‒ Service differentiation

‒ Training and technical

support

‒ Financing for expansion


Summary & Conclusions

The SWEEP model has been successfully embedded through…

- well-defined division of public and private sector roles and responsibilities

- focus on medium and large customers to establish commercial viability

- differential pricing model and contractual requirement to serve LICs

…there are considerable opportunities and challenges for scaling…

- with 69% of human waste entering surface drains

- as the business continues to mature and capacity is increased

… and new frontiers which must be further explored…

- to consider new financing mechanisms

- to activate further the FSM institutional and regulatory framework

embedding and scaling an innovative presented by ppp model ... · customers to establish commercial...

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