First Draft 4/20/2013

Evaluation of AIF-NIDAAN Project “Strengthening Livelihoods of Rag pickers and Sweepers”

Submitted to:

The American India Foundation

By: Self-Reliant Initiatives through Joint Action

New Delhi

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Executive Summary

SwachhDhara is an institution of Ragpickers and Sweepers promoted by Nidaan with the support of America India Foundation. The intervention is now close to 3 years old and hence the need for a review of its achievements and challenges faced during the period for renewal of support as well as to upscale the project in Patna and try similar projects in other urban areas of the country.

Current Status: The intervention though started before it received support from AIF, has been able to see tremendous growth during the project period. There has been 20 times increase in membership or enrolment of Safai Mitras, 12 times increase in coverage of units from where it collects garbage and an astounding 80 times increase in revenue. In the meantime SwachhDhara has been able to undertake bulk work from the Patna Municipal Corporation (PMC).

Findings: Given the context in which SwachhDhara operates in a city and state, both unfairly infamous for chaos, the intervention is fairly impressive. One can clearly sense the difference it has been able to create in the neighbourhoods it operates in and importantly in the life of its members or Safai Mitras, who led an unenviable life as rag-pickers and sweepers before.

There is perceptible change in life and livelihoods of these men and women, who come from Musahar caste, one of the lowest in social and economic hierarchy of the state. The income has almost doubled, but more importantly there has been reduction in the vulnerability associated with the profession, which is highly unorganised and informal. SwachhDhara has been able to provide dignity to the profession and have raised aspirations of the members.

Financially, without taking into account the capital invested in creating good will among the communities and organisational capability in the years prior to the project, the intervention has turned into black and made profit in the 3rd year.

However, SwachhDhara has faced challenges in registering the intervention as a separate entity. Though it is early years, there are issues when the governance and internal locus of control aspects are looked into. Most members and staff see Nidaan and Mr. Arbind as owners of the intervention rather than as a promoter. As of now, the decision making rests with the executive. Yet, there seems to be a genuine desire in the promoter and the executive to hand over the reins to the members.

The way ahead: Having created aspiration in the lives of the rag pickers & sweepers and now being seen as one of the few model experiments to decentralise urban waste management, SwachhDhara has to stand up to its initial achievement and sustain it. There are many challenges in this, the prominent ones being –

i. In absence of a clear policy, the intervention is dependent on PMC and the bureaucrat heading it, more so because it does not control the entire value chain of the work (user fee collection) which generates positive margin. In spite of being the 2nd player after PMC, it treats just 5% of the waste generated.

ii. Despite growing at a high rate for the last 3 years, it is still not able to provide employment to more than 1000 members of the segment who are part of Nidaan’s other intervention and another 2000 who are out of the fold. This can only happen once the intervention consolidates its current business and expands into other functions in the domain as well as wards in the city.

iii. Does SwachhDhara want to be seen as only collector of garbage or something more? There has to be an image makeover for providing hygiene and sanitation services to all its client groups. Many possibilities open up once it is decided to go beyond garbage collection – cleaning and pest control, house management, complete responsibility of premises, or corporate linkages etc.

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1. Introduction

Nidaan as an organisation has its roots in Aditi, an established organisation working on developmental issues in Bihar. Nidaan was started by Sh. Arvind as part of decentralization strategy of Aditi. One of the raison’d’etre of Nidaan is to organize the informal sector workers. Nidaan began to organize these workers from 1996 to give voice and visibility to them. It organized them into Self-Help Groups (SHGs), Co-operatives, Community Based Organizations (CBOs) and Trade Unions.

Nidaan takes up the issues of legal rights of the poor workers in informal economy like non payment of wages, issue of licenses and identity cards, enforcement of labour laws etc. To this end, Nidaan has tied up with teams of lawyers and has established linkages with concerned departments. Policy Advocacy has been one of the mainstays. Nidaan played crucial role in adoption of National Policy for Urban Street Vendors by Government of India in January 2004. The process also led to formation of a national level organization of street vendors called NASVI and Nidaan continues to provide leadership to NASVI.

The organisation has facilitated promotion of workers owned and controlled co-operatives of street vendors like utensil vendors to home based jute and appliqué workers. 13 collective enterprises have been facilitated so far. As a strategy to enrich the impact of its interventions, Nidaan made saving, credit and insurance services available to the members through Financial Institutions and the Government. Nidaan’s focus is also on education and better health of the target group and their children. Child care is promoted through running of 10 creches and creation of model areas.

Registered under Societies Registration Act 1860 and FCRA, Nidaan presently works in six districts of Bihar at the grass root level in both urban and rural areas. Nidaan started working on organizing ragpickers, albeit on a lesser scale before the AIF support that started in 2004 for a period of 3 years.

1.1 Objectives of Nidaan-AIF project

Nidaan-AIF project on strengthening livelihoods of ragpickers and sweepers have following objectives:

1. To strengthen the livelihood of rag pickers and sweepers to access financial resources for them to set up enterprises and restoring their dignity.

2. To enhance and enable them to become economically self reliant as an integral part of overall improvement in their status.

3. To increase participation of women in their homes in matters of expenditure on children’s education, marriage and other social obligations.

4. To establish institutions owned and controlled by rag pickers and sweepers and to advocate and provide legal aid.

5. To promote and popularize social security among the member and their children.

This brief study is being done as part of end of Project Evaluation of Nidaan-AIF project on strengthening livelihoods of ragpickers and sweepers. AIF would like to explore the possibility of replication of the project in other cities of the country. Before that, AIF is assessing the achievements of the project as also the processes and factors that led to it so that the same could be factored in the design of future projects. Conversely, idea is also to capture what could not be achieved so that appropriate strategies could be devised and made a part of the replication.

1.2 Current status of the Project

Nidaan started with promotion of the SHGs by organizing the Ragpickers and Sweepers. So far, it has promoted 100 SHGs as promised in the proposal. These SHGs have been accessing micro-financial services like small loans, micro-insurance etc in various scale

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through the credit co-operative called ‘Sanchay’, another institution promoted by Nidaan. Of the 1500 members, who are part of SHGs promoted under this project, 1000 are members in Sanchay. Therefore, most SHG members have access to a host of financial products.

Simultaneously ‘SwachhDhara’, an exclusive organisation of Sweepers and Ragpickers has been promoted. The philosophy behind promotion of SwachhDhara is that unless the informal workers are organized it would be difficult to improve their livelihoods in any significant manner. The members of SwachhDhara are called Safai Mitras.

SwachhDhara has evolved into an institution providing waste management services to its clients, including households, restaurants and institutions. It has ventured into production of vermin compost and taken up non-farm activities like bamboo products, additional sources of revenue for the members.

Looking from the perspective of the project, the members of SwachhDhara benefit not only through the membership, which provides regular employment, but also from membership of SHGs and Sanchay from where they access financial services. Nidaan has other ongoing projects relating to health and education from which also the members benefit.

In terms of numbers, the membership has gown from 6 to 387 in 4 years. The Safai Mitras are mostly from Musahir caste, who come under Scheduled Caste. 121 out of the 387 are women.

Table 1: Growth in Membership

Safai Mitras in SwachhDhara

2004 2005 2006 2007 % change

(2007/2006) Division/Revenue Stream M F Total M F Total M F Total User Fee Collection 40 5 45 87 43 130 118% 760% 189%

PMC 187 93 280 174 71 245 -7% -24% -13%

Vermi Compost 4 2 6 3 5 8 -25% 150% 33%

Paper Recycling 1 1 2 2 2 4 100% 100% 100%

Total 6 20 232 101 333 266 121 387 15% 20% 16%

The work of SwachhDhara can be divided into 4 streams depending on its revenue. It charges a user fee to HHs, Institutions, and Hotels/ Restaurants from where it picks up the waste. Then PMC has subcontracted SwachhDhara to carry out the cleaning and waste collection in 2 wards. The other two streams of Vermin Compost and Paper recycling are by products of its wet waste treatment. From Table 1 it is seen that while there has been 3 fold increase in the members engaged in User Fee based collection, the same has decreased by 13% in case of PMC work.

Table 2: Coverage over the years

Coverage in User Fee Collection

2004 2005 2006 2007

Units 3900 14800 22380 48000

Hotels 1 2 2 4

Institutions 5 11 18 22

As seen from table 2, SwachhDhara now covers 48000 Units (basically HHs and small shops, the number would be more as apartment complexes are counted as 1 HH), up more than 12 times than 3900 in 2004. But the coverage of Hotels and Institutions is lesser and grown much slower.

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2. Findings

The intervention aims to restore the dignity of ragpickers and sweepers by strengthening their livelihoods and enabling them to access financial resources for them to set up enterprises. This is partly reflected in the title chosen for the project.

2.1 Access to financial services:

During the project period, 100 SHGs comprising members from the ragpickers and sweeper communities have been formed. These SHGs meet regularly to do their savings and act as a platform to access other financial services like credit and micro-insurance. So far, the average cumulative loan size is Rs. 2660/- per member as calculated from the loan data of 75 SHGs. In addition, 169 members have taken loans directly from Sanchay. In most cases, however so far, loan requirements are met out of SHG savings. All members of the SHGs have been secured by way of flexi-insurance policies wherein the members can opt to choose a policy suiting their income and chances of vulnerability. For example, the members can opt for a single person insurance cover or a cover for both the husband and wife. Basic premium of a single person works out to Rs. 125/- per year which covers illness, normal death, accidental death, death of the spouse in accident, damage to property, and loss in employment. With some more premium members can take additional covers like partial disability and/or total disability. Thus, the policies are designed to suit different vulnerabilities that a typical urban informal worker might succumb to.

2.2 Assured income

When asked what they liked most about SwachhDhara, the members talked about a regular assured income, in unison. Before SwachhDhara, the ragpickers were not sure of their earnings even as they would toil the day around collecting garbage. During the rainy season situation would be worse since rag picking is not possible. However, now the Safai Mitras are assured of a regular income. Perhaps this seems to be one of the most important benefits that the members perceive about the programme.

2.3 Increased income

There is a palpable increase in the incomes of the Safai Mitras. Under SwachhDhara, a ragpicker is assured of Rs. 1500/- a month for a six day/week service rendered. The day for Safai Mitra starts at 6 AM and in most cases they are free to go home by 2 to 2:30 PM. Earlier while a ragpicker would toil the whole day round to earn Rs. 30-50 per day, the same ragpicker earns anywhere between Rs. 70-90 per day. Out of this, there is a fixed income of about Rs. 50 per day from the regular employment in SwachhDhara while the rest [upto Rs. 40/-] comes from saleable scrap obtained from the garbage collected from the homes.

Sweepers, who are females mostly, are required to sweep the commons – roadsides mostly. In their case their average salary is Rs. 2100 per month which is higher than the rag pickers. However, they do not earn from the scrap since they do not collect garbage from homes.

2.4 Restored Dignity

Improving the dignity of Rag pickers and sweepers is one of the project objectives. Interactions with the Safai Mitras revealed about this aspect in many different ways. What became abundantly clear is that the Ragpickers and Sweepers, who otherwise come from the lowest rungs of social hierarchy, are now a respected lot. There are many signs of them being given lot more respect than before. Earlier, the Safai Mitras used to be branded thieves and were looked down upon, with many of them being abused and beaten up on the slightest pretext. Today, the situation is way different. When we tried to explore this dimension, the Safai Mitras beamed with a lot of pride. Some of them are called by name now and are being let inside the complexes and the homes. Many of them remembered being called by ‘re’ [a disrespectful term in Hindi] earlier but no longer now.

2.5 Effect of Dress – Recognised identity

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Every Safai Mitra has been provided a dress including a cap, gloves, and boots. When asked what SwachhDhara meant to them many of them toasted their caps in the air clearly signalling a sense of pride in their belonging to SwachhDhara. This is also an indicator of the dignity in own eyes. Other than this, the Safai Mitras knew of the importance of wearing the dress from the health point of view. Admittedly, the act of collecting filth is no longer a sore as it could be earlier, though in certain cases with gloves there was some inconvenience in manual operations. However the benefits both physical and perceived far outweigh small inconveniences.

2.6 Children’s education

In an absolute sense, there seemed to be general increase in awareness about Safai Mitras educating their children. Almost all the Safai Mitras who have children are sending them to the schools while others have plans to send them to the schools. While exploring what more did they expect from Nidaan, a group of Safai Mitras clearly demanded a school for their locality so that their children need not have to go far.

However, whether an increased awareness about educating their children in the schools is attributable to Nidaan-AIF project is doubtable. Nidaan has several health and education interventions and Nidaan employees generally seemed to link their beneficiaries [of whatever project] to the Government/Non-Government/their own health and education facilities, if available. Therefore, it is difficult to say whether Nidaan-AIF beneficiaries [Safai Mitras] have a better sense of educating their children as compared to the beneficiaries of other programs. However, the Safai Mitras themselves agreed that they are far more aware about educating their children than they could ever be, if they were to remain as general Rag Pickers.

2.7 Incidence of diseases

We tried to explore whether there was a reduction in the incidence of diseases because of improvement in general conditions of work. Safai Mitras accepted that earlier, they would have to stroll around the city picking rags and would often pick diseases like diarrhea, fever etc in the process. This is now reduced as the work conditions are better. With a dress to wear, boots, mouth cover and hand gloves, the chances of catching such diseases is reduced. However, there was no other significant change in the pattern of diseases.

Another dimension of health that Sweepers accepted was that they take a regular bath now which was rare earlier.

2.8 Institutional strength

A good part of the evaluation was utilized in finding how SwachhDhara fared as an institution. Some of the parameters of Institutional robustness are discussed below:

a. Centrality potential: Assuming Solid Waste Management by providing sanitation services to the clients is the economic domain of SwachhDhara; there seem to be two large players. One obviously is Patna Municipal Corporation [PMC] and the other is SwachhDhara. In terms of total work volume, PMC is much ahead of SwachhDhara. This can be gauged from the fact that SwachhDhara works in just 11 wards out a total of 72 [earlier 57] wards. Even in these wards not all the responsibilities are with SwachhDhara. Out of these 11 wards, in 2 wards, SwachhDhara has taken some roles from PMC. These include sweeping of roads, open drainage cleaning, disposal at final dumping site. In all the 11 wards however, SwachhDhara is unique in providing ‘individualized’ garbage collection services, not done by PMC.

We can look at two dimensions of domain centrality; one is current active membership of SwachhDhara to the potential membership and presence of SwachhDhara in the total domain economy. Nidaan had estimated that there are a total of 3000 ragpickers in Patna which could be brought into the fold of SwachhDhara. So far, there are only 387 active members. Therefore, centrality potential of SwachhDhara is high. Secondly,

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SwachhDhara is providing unique services which no other provider is into. With the Government and the Municipality slowly shifting to a privatized model of hygiene services, there is a huge potential within the strict domain of PMC itself.

We rate the centrality potential of SwachhDhara high which is one of potential critical factors of Institutional robustness.

b. Member Centrality: Member centrality is undoubtedly high and in fact seems to be the most positive of all the dimensions of institutional sustainability. We tried to find out the importance of SwachhDhara in the lives of members. The following table shows broadly the share enjoyed by SwachhDhara within the household economies of the members:

Table 3: Comparison of total income of Households to the income from SwachhDhara

Name Total Monthly HH income

Total monthly income from SwachhDhara

% of Swachh Dhara/Total HH income

1 Sanju 4000 1500 38%

2 Kalawati 4500 1500 33%

3 Sanju 3500 2000 57%

4 Fulo 4000 2000 50%

5 Poonam 4000 2000 50%

6 Masudan 3400 2500 74%

7 Bhola 2300 2300 100%

8 Ramesh 2100 2100 100%

9 Raju 2300 2300 100%

10 Jogan 2300 2300 100%

11 Sabhapati 2500 2500 100%

12 Jaiprakash 7450 2300 31%

Total 42350 25300 60%

Source: personal interview

From the table, it is evident that in certain cases the members completely depend upon SwachhDhara. In the least case members depend to the extent of 31-33% which is also substantial considering poor absolute incomes in the households. The average is 60% which is pretty high. Another interesting insight is that where there are women Safai Mitras, the member centrality reduces. This is because of the fact that husbands in these cases have an additional income from some other sources which reduces the level of dependency of these households on SwachhDhara. The implication is that while, SwachhDhara need not worry on increasing the member centrality and hence member stakes in the collective, it may well nigh maintain the ratio by matching economic returns to the members as compared to the alternate sources of incomes. Since, the members of SwachhDhara are chosen from the ragpickers community, this may not be difficult.

c. Patronage centrality: We rate SwachhDhara very high on patronage centrality. Ragpcikers and Sweepers who are the members of SwachhDhara are solely providing their services to the collective. Therefore, in so far as, the services related to sanitation etc are concerned, SwachhDhara is the only channel through which members’ services are routed. Implication of this is increased stakes of the members in the collective.

d. Distinctive competitive advantage: One clear distinctive feature of SwachhDhara as perceived by the members is assured returns for the services rendered. In fact, no other

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feature of the collective matches this advantage. Other distinctive and yet important features are the enabling services provided [though not strictly by SwachhDhara] by Nidaan. By seeking memberships in the SHGs and Sanchay members are able to access a host of financial services like different types of loans and insurance covers. Nidaan has taken proactive steps in raising awareness about social security products like insurance without which theses products would not take off.

Other interventions of Nidaan like that on AIDS, education and health are no less important for members of SwachhDhara. All the linkages provided by Nidaan seem to be creating a uniquely enabling environment and it is perceived to be as such by the members of SwachhDhara.

SwachhDhara as a business organisation also has some competitive advantages. SwachhDhara has taken an extra step to reach out to the customer and has given personalized services to the clients. No other institution, including PMC could do it. Another competitive advantage is their accessibility. Therefore, we look at SwachhDhara distinctively placed in view of the bouquet of services being made available to the members which leads to increased member patronage.

e. Operating systems: The diagram below is the management structure of SwachhDhara:

Day to day management of SwachhDhara is looked after by a Coordinator. Geographically, business of SwachhDhara is distributed into wards. Currently, SwachhDhara is working in 11 wards. All the wards are managed by Ward in-charges. Currently there are 15 Ward In-charges. A ward has a number of Community Organizers. Community Organizers are the frontline management staffs who are responsible for micro-management of operations. Their responsibilities include checking attendance of Safai Mitras, work division, deputing the Safai Mitras, acting on customer feedback and crisis management.

Safai Mitras are both at the bottom and the top of the pyramid. At the bottom, they are like workmen, the actual doers of SwachhDhara’s work. There is general division of Safai Mitras according to gender. The males are into door to door garbage collection, transportation and disposal of garbage while the females are into sweeping of roads.

All the Safai Mitras are given a dress to wear for ease of operations, protection against road accidents, and also for a certain identity. The dress has helped the Safai Mitras relate themselves to a certain common organisation.

Coordinator

Ward In-charge Ward In-charge

Ward In-charge

Community

organizers

Community

organizers

Community

organizers

Community

organizers

organizers

SM SM

SM

SM

SM

SM

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Day for a typical Safai Mitras begins at 6 AM when they assemble for attendance at their respective wards. From about 8 till 2.30 PM they would have finished their respective works. It is time to return by 2.30 to 3 PM. Generally, there are no cases of absence. In case of wilful absence or late attendance, the concerned Safai Mitra is asked to leave on the recommendation of Community Organiser and Ward In-charge. There has been only one such case so far.

There is a weekly meeting of Ward in-charges and the Community Organizers on Saturday. This is primarily a planning cum review meeting. In addition, there is a monthly meeting of the Safai Mitras also. This is on the date of salary disbursement.

f. Governance structure: We found a weak Governance structure so far as SwachhDhara as an institution is concerned. There is a Managing Committee that has representation of Safai Mitras from different wards. They meet monthly. However, we did not find many Safai Mitras, including some women members of the Committee, having adequate knowledge of what goes on in such meetings. Some of them did not even know what this Committee was about.

There is a Board of Directors which is the apex body for taking decisions. So far, the body has not been constituted through elections. The 7 members Board have 4 Safai Mitras. There is no adequate representation of Safai Mitras in their own organisation. Consequently, there are some wards which are under represented or not represented at all.

There is also the issue of membership of rag pickers who though are members but are not Safai Mitras. There are some 1000 odd members of SwachhDhara but there are only 387 active members. What kind of stakes will they have in SwachhDhara is a question.

What has changed?

When asked what has changed in the lives of Safai Mitras, the stakeholders including the Safai Mitras themselves, the Ward In-charges and the Community organizers had the following to say:

1. Garbage collectors have changed to organized household garbage collectors

2. Quality of service provided has led to respect for the ragpickers community

3. Visibility of rag pickers has increased and they are beginning to appear in the public consciousness.

4. Sweepers and ragpickers take regular bath now and their children study.

5. There is increased assured income.

6. Mahajan [money lender] talks politely now and is eager to give loans. Relationship with him has improved.

7. A break from dast [loose motions], loo, ulti [diarrhea and vomiting]

8. No longer branded as thieves and no more scolding.

9. Easy access to the households. Some even allow in.

10. Even municipality does not get a regular income like us.

11. Pehle haalat kharab, ab meet murga [Earlier we could not make both end meet, now we gorge on chicken curries]

12. Public bahut khush hai [Our clients are happy with us].

13. Ganda chunane se achha hai [better than dirt and slime]

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When asked about the meetings and what happened in the meetings, the Board members did not seem to remember, barring one member.

g. Internality of locus of control: The question of who takes the decisions or how the key members involve themselves in the decisions partly derives the answer from the issues discussed in the Governance Structure. Clearly the locus of control is outside of the members’ periphery. When asked who owns SwachhDhara, most of the members barring one thought Arvindji [the CEO of Nidaan] was the owner. Some others thought that Ratnishji [Co-ordinator of AIF-Nidaan Ragpickers’ project] is the owner. A few answered that Nidaan is the owner. Females were completely unaware about the SwachhDhara as an institution that they owned. The best answer came from a lady who showed her cap [with SwachhDhara written on it]. Members who knew the word SwachhDhara seemed to relate to it in the manner they related to Nidaan or people from Nidaan, but the idea of ownership was clearly missing.

This, if continued may not be in the long-term interest of the member owned organisation like SwachhDhara. However, whether the project timeframe could have permitted Nidaan to focus on core Institution building activities is a question.

h. Critical linkages: Nidaan has been strategic in building critical linkages for SwachhDhara. First critical linkage seems to be the relationship with the PMC and the Government. The relationship with the Government institutions has given SwachhDhara, not only the business which is important for revenue generation, but more importantly credibility in the eyes of general public. There are other institutional linkages which are also critical like the Department of mines, Coca Cola, National Institute of Technology.

2.9 Financial strength

Financial data of SwachhDhara as a separate intervention for two years’ [2005-06 and 2006-07] is available. In addition, some expenditure, booked to the grant and not the intervention, have also been added to the data available -

a. Salaries and travel of the Co-ordinator and the Accountant for two years

b. Depreciation on reducing balance basis at 15% p.a.

c. Interest on a pro rata basis for 8 months for the financial year 2005-06 on the Vehicles and Push carts purchased on finance [these appear in Nidaan’s financial statements] for use in SwachhDhara operations. The interest has been charged at simple rate of interest at 15% p.a.

d. For the Financial Year 2006-07, further interest has been charged on an average basis for half a year [in absence of real information and assuming there were regular EMIs paid] at the same rate on the outstanding loan balance.

2.9.1 Revenue Growth

SwachhDhara’s revenue in 2007 has grown by more than 80 times over 2004. This has been possible mostly due to undertaking PMC’s work in 2 wards, as the user fee collection over the same period has just grown by 30 times. There also has been contribution by vermin composting and paper recycling.

However, just considering the last 2 years, it is the revenue from user fee collection which has grown the most, better then the other 3 components. This has resulted in Contract fee from PMC which accounted for 75.7% of the total revenue in 2005-06 reduced to 60.4% in 2006-07. User fee collection or revenues from the households, shops and institutions is the core business for SwachhDhara even though it contributes to 37.5% to the total revenue. The share of this segment has gone up by about 15% from the last year which is a good sign.

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There is a high level of dependency on PMC for revenues. Nevertheless, PMC has provided scale to the business in the formative years. Other point of note in the revenue segment is low contribution of recycled paper and vermin compost as of now, a total of 2.1% in 2006-07, a tad higher than the previous year.

Table 4: Revenue of SwachhDhara

Revenue (In Rs.) Growth (times) Proportion

(%) Revenue/ Safai Mitra Division/ Revenue Stream 2004 2005 2006 2007

2007/ 2004

2007/ 2006 2006 2007 2004 2005 2006 2007

HH 105980 321000 791158 3577718 33.8 4.5

Hotels 3000 3800 8900 20000 6.7 2.2

Institutions 12000 35000 52880 70000 5.8 1.3

User Fee Collection 120980 359800 852938 3667718 30.3 4.3 22.8 37.5 18954 28213

PMC 0 0 2835000 5902200 2.1 75.7 60.4 10125 24091 Vermi Compost 0 0 54212 195175 3.6 1.4 2.0 9035 24397 Paper Recycling 0 0 4750 14378 3.0 0.1 0.1 2375 3595

TOTAL 120980 359800 3746900 9779471 80.8 2.6 20163 17990 11252 25270

Fig 1: Revenue Streams

Overall the productivity per Safai Mtra has increased from Rs. 20163 to Rs. 25270 in 4 years. However the same had decreased in the interim years due to the expansion in membership. Over the last 2 years, there is an increase by 125% in overall per member revenue. The user fee segment provides the highest productivity.

Table 5: Ward Wise Collection in Mar 07

Ward 15 31 32 23 24 17 12 53

No. of HHs 4000 1500 2000 600 450 1500 510 1000

No. of Safai Mitra 35 18 25 8 6 15 8 15

Collection / Safai Mitra (Rs.) 3300 1800 1600 2200 2200 2100 2000 2150

Monthly Collection (Rs.) 115500 30000 40000 18000 13500 31500 16000 32250

Yearly Collection 1386000 360000 480000 216000 162000 378000 192000 387000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 Year

Pro

po

rtion

Use Fee Collection Vermicompost PMC Recycled Paper

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Fig 2: Ward wise User Fee Collection of Revenue

Maximum revenue is generated from ward no. 15. Of the data available for 8 wards [SwachhDhara works in 11 wards, for 3 wards the work is negligible and the data for the same is not available], ward 15 contributes 39% to the total revenue. Top two performing wards [15 & 32] together contribute 52% to the total revenue generation. Bottom three wards [ward nos. 12, 24 and 23] contribute only 16% to the total revenue. Number of HHs households per Safai Mitra ranges from an average of 64 to 115 in these wards.

SwachhDhara has a fairly diversified revenue portfolio with four types of revenue streams. Diversified portfolio provides a hedge against the business risk even though it is not conspicuous at this stage since at least two revenue streams [vermicomposting and recycled plastic] are insignificant.

2.9.2 Funds mobilization

During the course of 2 years SwachhDhara has not obtained any loan from anywhere. The assets [Vehicles and Push Carts] have been bought through the books of Nidaan. There is a grant of 6 lacs provided by the AIF which has been treated as share capital for the purpose of analysis. The vehicles taken on loan by Nidaan have also been treated as loan obtained by SwachhDhara. At the end of 2006-07, there is net outstanding loan amount of 18.20 lacs. One point to be noted is that the actual payment of principal and the interest on account of Vehicle finance has been made by Nidaan and the same is not charged to SwachhDhara revenues even though, interest payments have been taken into account in the analysis. If actual payment of principal [as actually paid by Nidaan which to the extent of over 18 lacs] was to be made by SwachhDhara, the organisation would have faced cash flow problems. The situation is better assuming the principal amount of vehicle is grant financed, which is actually the case.

SwachhDhara has not mobilized any equity from members thereby involving no financial stakes of the members in the organisation.

2.9.3 Cost Analysis

Total costs [excluding interest] form 102% and 90% of the total revenue for the FY 2005-06 and 2006-07. If interest is charged [it has been charged notionally, as explained before], the figures come to 113% and 96% respectively. Salaries and travel constitute 69.5% and 68.8% of the total cost in the same years. As can be observed, there is a slight increase in the salary and travel percentage to the total cost during FY 2006-07. Next, most significant cost item is hiring charges which forms 7.8% of the total cost in the FY 2006-07, up from 4.6% in the FY 2005-06.

2.9.4 Assets and Liabilities

15 39%

31 10%

32 13%

23 6%

24 5%

17 11%

12 5%

53 11%

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Deployment of assets is close to 90% in the fixed assets for both the years. However, productivity because of long-term fixed assets [like vehicles and push carts] is likely to be very high for the business operations of SwachhDhara. Therefore, a high percentage can be justified to an extent. This is also shown by the Return on Assets ration which is 12% in the FY 2006-07, even though the same was in negative in previous year due to lower revenues and negative profits. Maintaining the same pace of growth, the return on assets is further likely to increase on the same assets. Size of the balance sheet looks bigger because of the notional entry of assets purchased. Ratio of total external liabilities to the total assets is 85% in the FY 2006-07 which is very high and is clearly unsustainable. Similarly, debt equity ratio is 520% which is amazingly high. These figures seem to be obviously distorted because of grant financed capital assets by Nidaan and therefore may not have much meaning now but SwachhDhara may like to take note of this since this may make raising future loans from the Financial Institutions difficult.

Liquidity position of SwachhDhara is not good. The current ratio of the organisation is 0.3 and 0.6 in the FY 06-07 and FY 05-06 respectively. Even though the ratios would differ from sector to sector, such low ratios clearly show the illiquid position of the organisation.

As stated, fixed assets form a sizable chunk of the asset side and it would be interesting to look at the leverage ratio of the asset. Asset turnover ratio for the FY 2006-7 is 2.98 which looks good.

2.9.5 Profitability and Sustainability

There is a marked increase in the net profit of SwachhDhara. From losses of Rs. 4.8 lacs, the organisation recovered to achieving profit of Rs. 4.38 lacks in the FY 2006-07. Profitability of a member owned organisation may have to be looked at differently than a typical business organisation. In a producer-member owned organisation the factor payments need to be made to the producers/members for the goods provided or the services rendered. The organisation may choose to make higher payments to the members and thus show better profits or make lower payments, show better profits and distribute dividends which in effect may amount to the same. Therefore, so long as the members continue to get better returns as compared to the market after covering all the costs, the financial sustainability of the institution is not a question.

SwachhDhara has shown good profits in the 2nd year after paying satisfactory salaries to the members. Gross and operating profit margins are 38% and 10%. The large difference is explained due to large depreciation. The net profit margin, however, is low at 4% only which is due to high interest payments [these payments have been notionally accounted in accordance with the actual payment made by Nidaan to the financier].

Earning per share [assuming a share of face value Rs. 10/-] for the FY 06-07 is Rs. 7.30 and therefore return on equity is 73%.

In sum, SwachhDhara seem to be doing well on making profits. Situation of liquidity, however, needs attention.

3. Issues and Challenges

In the context of the internal and external environment where SwachhDhara operates, this is a fairly impressive intervention. For an outsider from another city, it is discernible that the areas or wards where the intervention operates are cleaner than a usual city area. It is also to the credit of the intervention that even within Patna, one can clearly see the difference among the wards where the intervention operates and where it does not.

This is especially commendable when the city was under one of the worst spells of monsoon for decades and many areas were water logged. Though this itself is a huge positive outcome and could be the best indicator of success, is this what the intervention wanted to achieve in the first place?

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The primary issue is that of livelihoods of the rag pickers and sweepers; and an institutional form which is able to address their issues. The intervention is also one of a few experiments which are being watched with keen interest as this could be a model worth replicable for waste management in other cities of the country.

As discussed in the earlier chapter, many issues concerning livelihoods have been dealt over the period of the project. But there are a few issues that need attention for the intervention to scale up and become truly a model worth replication. Given that the work is about 5 years old and the intervention just 3 years, this is the appropriate time to address them and scale it up.

3.1 Expansion vs. Consolidation

From the data available over 4 years – 2004 through 2007 – there has been high growth in members covered, HH reached, and revenue from operations. Looking at the last two years of 2006 and 2007, where as the growth of other indicators maintained its fast pace, the growth in number of members has slowed down in comparison. This in some sense is obvious as it is difficult to sustain the high growth rates and there has to be consolidation in some sphere – in this case getting enough work for its members.

SwachhDhara has under its fold 387 Safai Mitras from the estimated 3000 in Patna city (12.8%). Though to the credit of Nidaan, about 1500 of 3000 are members in one programme or other. This is an additional challenge in itself as SwachhDhara has not been able to absorb all it members of the category from other programme into the intervention.

In spite of the high growth rates and some consolidation in the last year, what is it that SwachhDhara has to focus on in the next couple of years – expansion or consolidation, especially with regards to its membership? This is a classic chicken and egg problem, since the institution will also have to look at its financial and operational sustainability. Membership cannot be increased without increase in coverage. This is not going to be easy given that even with the current number of members, there is scope for increasing capacity to service the number of clients.

3.2 Business Risk

It is estimated that total garbage collection in Patna come to about 600 MT/ Day and out of that about 30 MT is treated by SwachhDhara. Though SwachhDhara is the number two player after PMC in terms of waste treatment, it handles only 5% of the total garbage. This is a small % of garbage to make a difference in the city or the business.

2/3rd of SwachhDhara’s revenue and Safai Mitras’ employment is dependent on PMC, which makes the business more risky! In absence of clear policy on outsourcing garbage collection work, the business is virtually dependent on PMC or the Bureaucrat heading it for survival.

What makes it more complicated is that the User Fee Collection from where the revenue is increasing at a faster pace, SwachhDhara does not control the complete value chain and is dependent on PMC for treating the solid waste disposal while it is constrained to treat wet garbage due to lack of availability of land. So all the good work done by SwachhDhara provides less than optimum result.

Another point worth noting here is that from the accounts available, SwachhDhara does not seem to be making money out of work it does for PMC, though it does give scale to the institution. So there needs to be negotiation for increasing the rates after doing a more detailed costing.

3.3 Increase in Revenue per Safai Mitra

There has been increase in income of the Safai Mitras with SwachhDhara. However, it is the assurance and stability in income of the members which is crucial. But there is scope for increasing income of the members as well as providing additional services to the clients. This is possible only when there is increase in revenue per Safai Mitra.

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As observed earlier the average annual revenue per member currently is Rs. 25270, out of which user fee collection gives the highest value/ member (Rs. 28213) higher than that from PMC (Rs. 24091). Though both have increased over previous year, there seems to be still more scope of increasing the same. As can be seen from the figures on ward wise collection, while ward no. 15 gives a collection of Rs. 3300/ Month/ Safai Mitra, all the other wards return with much lower collection figure and ward 32 gives the lowest return of Rs. 1600. Additionally taking an average collection of Rs. 30/ unit (in fact it is higher) per month, the average number of units handled per member comes to about 80, which is lower by about 50% then the optimum possible of 120 units as admitted by the members themselves.

Similarly though there has been an increase in coverage of the institutions/ hotels by SwachhDhara, the number as well as revenue is too low (2.4% of User Fee Revenue in 2007) to be considered significant. Obviously there is tremendous scope for improvement in revenue from this segment. Over the years, the growth in numbers of hotels and institutions served has been the slowest.

The few clients that the review team met were pretty happy with the service and wanted additional service like picking up waste twice a day (where and when the volume is high, especially the restaurants or fast food joints).

Apart from increasing there numbers, the institutional clients are willing to pay higher fees for additional service, which might be difficult in the case of HHs. The additional service could be pick up during the evening hours, or taking up the whole sanitation work of a campus. Common sense also says that per unit expenditure in serving the institutional clients will be lower implying higher margins.

The revenue from by-products of waste disposal, vermin compost and recycled paper is currently pretty low (2.1% of total). Thought there is potential of increased revenue and margin from the products, there is too much uncertainty here. With regard to the composting, land availability in appropriate place (near where wet waste is collected) is the bottleneck. How will Swachh deal with the situation?

In case of recycled paper, marketing is an issue as there are numerous players in the market and the product also has its own challenge.

3.4 Relationship Management with Clients

The interaction with clients reveals that most are satisfied with the services of SwachhDhara. However there are some common complaints. One of them is that the Safai Mitras are not regular. The service is such that people notice and complain if the Safai Mitra does not turn up even once in a month and the clients become demanding since it is a paid service to a private agency. Additionally some complainants observe that while garbage was collected across the road, it was not collected from them. The other issue related to this is that garbage is not collected on Sundays. Is there a way to sort this out?

When a Safai Mitra is not able to come for work for some days, currently it is informally taken care of by his or her friends. While this deals with the situation on an informal or adhoc basis, this is not an institutional solution. SwachhDhara had tried the slack Safai Mitra concept in a smaller scale earlier. There needs to be a relook at the concept again in a more systemic manner. Also the way the collection is done can be rearranged so that subscribing neighbourhoods are not left out.

Though not serious and noticeable at the moment, relationship management with clients will become an issue once the intervention scales up its operations. Since relationship management is increasingly becoming a specialised skill, all the members and staff needs to be trained in the same and staff at every level has to interact with the clients at some periodic level.

As mentioned earlier, the institutional clients will be too happy to pay higher fees for additional service as well as relationship management.

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The current client complaint system works on a mix of formal and informal basis much dependent on the person concerned, which will need to be moved toward more formal side as operations scales up.

3.5 MIS – Safai Mitra

The information system of SwachhDhara is being developed and at a preliminary stage. As of now SwachhDhara does not have quick information processing system for certain simple and minimum requirements. E.g. there is no consolidated database on the profile of Safai Mitras. There are many possibilities once the database is in place – for accessing schemes or for advocacy.

With introduction of the card system, now it is much easier to track the client payment system, which is still to be perfected.

How does SwachhDhara keep track of complaints in absence of an MIS?

3.6 Standardisation

Until now SwachhDhara has grown at a high rate. Admittedly the base has been relatively low. So the systems are evolving and the operation system much more personalised. But as it grows and now that it is at the throes of crossing Rs. 1 Crore turnover an annum, standardisation needs to be built into the operation structure. Following are the area where standardisation needs to be given urgent attention –

3.6.1 Membership – Who, How, Close or Expand!

Until now membership has been expanded at the behest of the executives, by screening the applicants. As the organisation becomes more member oriented, aspects such as when to take new members, who will be taken and how will they be chosen, needs to be standardised.

3.6.2 Fees

The standard fee for HH is Rs. 30/ month. Still there is an element of flexibility as some HHs give less amount and it is accepted. This will be difficult to continue as operations expand for the negative effect it might have on other clients. But at the same time, clients might like to give garbage at a lesser frequency than once every day – say once in 2 days, or 3 days. Same thing applies for the institutional clients.

So is there a way how the fess are standardised and there is some differential even among the HHs? Can it be based on volumes and/ or proportion of wet and dry waste?

3.6.3 Performance Management – Promotion, Increments – Periodical or Volume

The compensation raise of the members is periodical and also based on number of users handled. But this might also have to be standardised once there is increase in coverage and member orientation. Parameters like volume handled, segregation of waste (in wet and dry), and complaints received from the clients could be added in making performance management more transparent.

The above applies to the staff as well.

3.6.4 Skills Enhancement & Rotation – Repercussion

There has been till now one case where a daughter of Safai Mitra has become a staff in the organisation. But the challenge is how do the Safai Mitras themselves become staff or/ and handle the operations?

It could start with skill enhancement and then handling higher level of responsibilities. Human tendency is to aspire for higher roles once she is in a formal set up. But there is very little skill differential one can have with the current level of activities of the organisation unless work on vermin composting and paper recycling scales up. Even then it will difficult to

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meet aspirations of the members. So what are the other activities, but related that can be taken up?

3.7 Institutional

In the current institutional structure there is a strong Executive influence. The perception among the Safai Mitras and the staff is that Nidaan is the owner of the institution where as the intention of Nidaan is to promote and not own SwachhDhara. However, it is clear that there is an intention of the Executive to handover SwachhDhara by building capacity of primary stakeholders, the Safai Mitras.

Curiously Swachh Dhara does not have much of a brand recall among the clients and crucially among many of the Safai Mitras themselves. This needs to be paid urgent attention.

There are certain issues that need to be dealt once SwachhDhara becomes registered as a company. Apart from the usual operational and financial autonomy it will have to deal as an institution even with the interventions promoted by Nidaan. E.g. it will be better placed to bargaining for credit/ insurance services and get better rates.

3.8 Vision – Hygiene for All from Garbage Collection

The current emphasis of SwachhDhara is Garbage Collection and its Disposal. While this is a laudable service, the vision looks a bit narrow. Isn’t the bigger intention ‘Hygiene for All’ and that is what it is working for by securing the livelihoods of Rag Pickers and Sweepers. Providing Hygiene is a noble service and in no way less crucial than the curative health care system which gets so much importance and publicity.

May be the above is in the minds of the promoter but is not articulated as such and definitely not by the members and the staff. How do we inculcate this vision?

3.9 Diversifying activities within the Segment

This has been hinted that the larger goal is to be one stop institution for providing all hygiene services to HHs as well as institutions. There are many possibilities once SwachhDhara decides this. There is a high possibility that this will increase the self esteem of the members, provide comprehensive sanitation solutions to clients and bring in the required revenue and margin.

The multiple services could be cleaning houses or institutions (Fans, Lights, toilets, etc. at some periodicity). Another value added service could be cleaning pests from the HHs. These services could be on the lines of AMC (Annual Maintenance Contract).

The institution can be a dependable supplier of house managers to HHs, which could open up employment opportunities for the spouses.

Value additions can be built into the user fee clients like providing initial containers for segregating waste or even a packet of vermin compost. What could be a better achievement for the intervention than when the creator of garbage becomes its ultimate user?

There is increasing possibilities of tie ups with corporate like Tetrapack, which collects the disposed tetrapacks through rag pickers and sends it to paper mills, who in turn need fibre for papers. Amul, Dabur, and Parle also plan similar intervention.

SwachhDhara can buy the solid waste collected by the Safai Mitras and eliminate one level of middleman and make it a source of revenue.

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Annexure # 1: Profit and Loss Statement of SwachhDhara

FY 07 FY 07 FY 06 FY 06

Gross Revenues

Use Fee Collection 3667718 37.5% 852938 22.8%

Vermin compost Sale 195175 2.0% 54212 1.4%

PMC Contract Fee 5902200 60.4% 2835000 75.7%

Sale of Recycled Paper 14378 0.1% 4750 0.1%

Other income [interest] 370 0.0% 120 0.0%

Total Revenue 9779841 100% 3747020 100.0%

Expenditure

Salaries and Travel of Co-

ordinator 165720 1.9% 151200 4.0%

Other Salaries and Travel 5934438 67.6% 2465591 64.8%

Travel and Conveyance 10448 0.1% 7945 0.2%

Vehicle repair 110023 1.3% 13168 0.3%

Thela Repair 45176 0.5% 10981 0.3%

Hire Charges 682500 7.8% 175623 4.6%

Depreciation and impairment 579503 6.6% 422762 11.1%

Cleaning Expenses 331842 3.8% 172183 4.5%

Fuel Expenses 823749 9.4% 284419 7.5%

Vermicompost Expenses 18981 0.2% 15881 0.4%

Recycle Paper Expenses 9647 0.1% 161 0.0%

Printing and Stationery 7141 0.1% 35980 0.9%

Office Expenses 21218 0.2% 13521 0.4%

Road Tax 0 0.0% 26011 0.7%

Misc. Expenses 28694 0.3% 8625 0.2%

Bank Charges 11 0.0% 155 0.0%

Postage and telephone 10794 0.0% 0.0%

Total Expenditure 8779885.16 100.0% 3804206 100.0%

Profit Before Interest and Tax

999955.84 -57186

Interest 561929 6.0% 422761.6 10.00%

Profit Before Tax 438027 -479947.6

Gross Margin 3668865 1122164

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Annexure # 2: Balance Sheet of SwachhDhara Sources of Funds As on March 31, 2007 As on March 31, 2006

Equity

Shareholders Funds 0 0

Convertible grant 600000 300000

Long term Liability

Tata Motors 1687800 2784600

From others 132250 1820050 903090 3687690

Current Liabilities and Provisions

Expenses Payable 0 195538

Salary and Travel payable 316920 151200

Interest Payable 984691 1301611 422762 769500

Retained Earnings

Profit and Loss account -479947.6 -479947.6

438027 -41921

Total 3679740 4277242

Use of Funds

Fixed Assets

Vehicles 3676379.4 4084866

Pushcarts and tools 186975 142750

Gross Block 3863354.4 4227616

Depreciation 579503.16 422761.6

Net Block 3283851.24 3804854

Current Assets/Loans

and Advances

Security Deposit 5000 5000

Advance to Staff 0 14410

Bailey Road Super Service Station 0 36809

Advance to Others 28350 28350

Earnest Money Deposit 70875.00 70875

Receivable from PMC 283500 387725 283500 438944

Cash & Bank Balances

Cash in hand 177 1371

In Saving Bank Account with

Canara Bank Account No. 5166 2608 22073

UTI Account No.-142016078 5379 8164 10000 33444

Total 3679740 4277242

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Annexure # 3: Swachh Dhara – Analysis of critical financial ratios

2006-07 2005-06

1 Current Ratio Current Assets 0.3 0.6

Current Liabilities

2 Average Collection Period Accounts Receivable days 11 28

Average Sales/day

3 Fixed Asset Turnover Ratio Sales times 2.98 0.98

Total Fixed Assets

4 Debt Ratio Total Liabilities times 0.85 1.04

Total Assets

5 Interest Coverage Ratio EBIT times 1.78 -0.14

Interest

6 Gross Profit Margin Gross Profit 38% 30%

Sales

7 Operating Profit Margin Operating Profit 10% -2%

Sales

8 Net Profit Margin Net Profit 4% -13%

Sales

9 Earning Per Share Net Profit Rs. 7.30 -16.00

No. of Shares

10 Return on Assets Net Profit 12% -11%

Total Assets

11 Return on Equity Net Profit 73% -160%

Common Stock