Unplanned garbage disposal contributes towards country’s bankruptcy

Tuesday, 3 September 2019 00:00 -     - {{hitsCtrl.values.hits}}

When Meethotamulla collapsed, garbage collection in Colombo came to a stand-still, and without a dumping ground was forced to use several locations, but people nearby protested. Finally, Sri Lanka Land Reclamation and Development Corporation agreed to allocate 5 acres at Kerawalapitiya for dumping garbage – Pic by Shehan Gunasekara

 

For decades, disposal of collected garbage in Colombo and large cities was a serious problem. The garbage were dumped into marshes or depressions in the ground. With the passage of years, garbage dumps turned into mountains, expanding closer to nearby slums occupied by the poor. Slum dwellers collected items as plastics, iron etc. from garbage, which could be re-sold, making a living from garbage. Although the garbage was smelly, with flies, birds, rats and others feeding on it, the poor neighbors had little choice.

 

Garbage problem

Decades ago, the Colombo Municipal Council’s garbage was burned in a number of incinerators. However, the incinerators could only handle a limited quantity, and being unable to handle increasing quantities, the excess had to be dumped into low-lying grounds. Eventually the incinerators had to be discontinued, due to public protests on pollution. 

When Kolonnawa garbage dump, the largest in Colombo city, became full, dumping moved beyond the Colombo municipal limits into Meethotamulla. Over the past years, residents of Meethotamulla and Kolonnawa took to the streets against the Colombo municipality, demanding the removal of garbage. In addition, Kesbewa Urban Council maintains a garbage mountain at Karadiyana near Boralesgamuwa, accepting garbage from other nearby councils as well. Karadiyana had a program to convert garbage into compost, but compost usage is not promoted by the Government. Other cities, too, have their own dumping grounds. As a solution, consultants from other countries proposed the burning of garbage for power generation, as practiced in their countries.

 

Korean proposal

In 2012, a Korean company proposed upgrading the Karadiyana garbage dumping ground to establish a power generation plant using garbage. The plant, costing $ 250 million, was expected to use 1,000 tons of garbage a day, and generate 40 MW of power to the national grid, and CEB had agreed to purchase the power. But the project was not implemented.

Nearly 10 years ago, the company Western Power, a unit of Aitken Spence, was given a license to establish a power generation plant running on waste. But various parties challenged the award in Court, and although the Supreme Court permitted continuation of the contract, various problems disrupted the project.

 

Collapse of Meethotamulla

The Government’s attitude towards garbage disposal took a new turn when the Meethotamulla garbage mountain collapsed, killing 31 people. The collapse damaged or destroyed 145 houses, resulting in the displacement of 625 people from 180 families.

The garbage dump occupied 21 acres and was expected to be filled up to a height of 30 m, but at the point of collapse, fill-height had reached 48.5m. Due to limited acreage, the operators of the waste dump were forced to go higher, resulting in the land-slide.

 

Better side of collapse

With the collapse of the Meethotamulla garbage mountain, the Government panicked and the UDA called for international bids for waste disposal for Colombo and others. In response, the UDA received 121 bids, including 19 from international bidders. But only 7 were considered as comprehensive for waste processing: three proposals for Colombo and four for Gampaha.

Of the above, a proposal from Western Power Company was accepted for Meethotamulla. The second, also a PPP with a Korean company, K.C.H.T Jang, expected to invest $ 95 million to install a processing plant, consuming 630 tons of unsorted waste. The third company, Fairway, proposed a similar plant in Karadiyana near Boralesgamuwa. Each proposal expected to generate 10MW of electricity, and the CEB agreed to pay Rs. 23.10 for a unit of electricity.

But after negotiations and based on recommendations, the Cabinet accepted the revised purchase price of Rs. 35.10 per unit for the generated power. The UDA, which facilitated the contractor selection, agreed to supervise the construction of plants and be responsible to the provincial authorities. All plants were expected to be completed within a two-year period.

 

Western Power Company

The project by Western Power Company, a fully-owned subsidiary of Aitken Spence PLC, was to construct an incineration plant in Kerawalapitiya, Muthurajawela, to process 700 tons of waste daily generated from CMC. The project, with an investment of $ 98 million as a PPP, expected to add 10 MW of electricity to the national grid by 2020. The foundation stone for the project was laid by President Maithripala Sirisena, in the presence of Minister Patali Champika Ranawaka.

The project from Western Power was initially proposed in 2009 to be set up at Meethotamulla landfill, but never got off the ground. The current project would occupy 10 acres from Kerawalapitiya in Muthurajawela.

 

Korean company K.C.H.T. Jang

Korean company K.C.H.T. Jang proposed to invest $ 95 million or Rs. 27 billion to set up the second plant again in Muthurajawela to process up to 630 MT of unsorted waste from Colombo and Gampaha, adding another 10MW to the grid. This power plant, too, will be constructed in affiliation with Aitkin Spence. Construction of the facility began on 10 August 2017, with an estimated completion date in mid-2019.

 

Karadiyana plant by Fairway

Another PPP agreement was signed with Fairway Holdings for a waste treatment plant in Karadiyana, where 500 MT of waste will be processed into energy. The project commenced in August 2017. The project, with an investment of $ 91 million, will also add 10 MW of electricity to the national grid. The Government will buy power generated from the plants at a tariff of Rs. 35.10 per unit, more later.

 

Waste-to-power plant in Kandy

In addition, the Cabinet of Ministers had approved a proposal by CEB to accept proposals by Solventer Ltd, AC&RF Engineering Ltd, and Recycle Energy Ltd, setting up a garbage processing facility in Gohagoda in Kandy. CEB is to pay Rs. 35.10 per kWHr for power generated, the same rate as agreed earlier to Colombo projects.

 

Finnish group to transform garbage to energy

A proposal not considered in 2017, due to bureaucratic lethargy was Fortum Oy of Finland. The company returned to Sri Lanka in February 2019, with a proposal to establish a plant generating 10 MW of electric energy with garbage, and met the President with their local representative Endeavour Energy Corporation Ltd Chairman Kumar Perumal.

Fortum Oy, responsible for 60% of the renewable energy in the whole of Europe, were expecting to invest $ 300 million for a plant in Mirigama in a 30-acre land. The Company aims to expand operations to generate 250 MW electricity, becoming the largest waste treatment plant in Asia, using 3,500 tons of solid waste and solar energy, consuming waste produced in the entire Western Province.

 

Take-over by Megapolis Ministry

Although three contracts were awarded by the UDA, garbage disposal was taken over by the Ministry of Megapolis in July 2017. Minister Patali Champika Ranawaka informed the press that the President assigned him the responsibility of removing the garbage from the capital city.

 

Garbage disposal after Meethotamulla collapse

When Meethotamulla collapsed, garbage collection in Colombo came to a stand-still, and without a dumping ground was forced to use several locations, but people nearby protested. Finally, Sri Lanka Land Reclamation and Development Corporation agreed to allocate 5 acres at Kerawalapitiya for dumping garbage, but at a cost of Rs. 630 million per year. CMC agreed to this as an alternative until the commissioning of waste-to-energy projects. By then the CMC has already spent Rs. 256 million for dumping waste in different places since the Meethotamulla disaster. But in two years, the facility was full, and moving to Aruwakkalu became urgent.

 

Garbage to Aruwakkalu   

The Government proposed the Aruwakkalu sanitary landfill as a long-term option to dispose garbage on a 45-acre site, where limestone has been quarried by the former Cement Corporation and subsequently by Holcim. The excavation resulted in huge pits during decades of extraction of limestone for the Puttalam cement factory, and abandoned afterwards. When the proposal was made in 2017 April, the location was expected to be ready by March 2020, at a cost of Rs. 14 billion. But the commencement was delayed due to protests.

To receive garbage, the Government bulldozed the bottoms of pits and levelled the area, laid a layer of sand, and topped with a 1.5 mm thick polythene. According to the EIA, garbage can be loaded on top of polythene for 10 years. Over the polythene, a thick layer of garbage would be deposited, followed by a thin layer of earth and the process would continue until reaching the top, and topped with a thick layer of earth.

 

Railway transport

A total of 1,200 tons of solid waste is expected to be transported daily by train from the Transfer Station near Kelaniya to the landfill at Aruwakkalu, 160 km away. The transport of compressed garbage blocks would be achieved by two trains daily. According to the Railway Department, the cost of transporting garbage is about Rs. 4 million per day.

The railway transport of garbage requires four railway engines, 34 carriages, and 94 wagons. The Cabinet approved the purchase of four engines from Dongfang Electric International Corporation of China, at a cost of $ 8.27 million. In addition, purchase of balance equipment too has been awarded, but the costs are not known.

Above is only the capital cost of the basic proposal; transport from the collecting towns to the transfer station, from Aruwakkalu to the dumping location, and the operations cost of the system would be additional.

 

Transfer station

The garbage transfer station is expected to convert received garbage into compressed blocks, reducing the volume for convenience of transport, in addition to an unloading facility at Arukkawalu. The transfer station is currently being built on an 8.4 acre property by the railway line, close to Wanawasala railway station near Kelaniya.

Although the World Bank agreed to fund the Project, the MOMWD dumped the World Bank funding, and handed over the contract to China Harbour Engineering Company for $100.9 million, supposed to be based on tenders called, and the agreement was signed in December 2017. However, the losing bidder Kolon-Hansel-KECC, a South Korean joint venture questioned CHEC’s eligibility to carry out such a project, as the bidder should have landfill design experience. It’s a known fact that CHEC, a subsidiary of China Communications Constructions Company, is the developer of Port City.

 

Road transport of garbage

With the filling up of SLLRDC’s grounds in Kerawalapitiya, the Megapolis Ministry was forced to transport loose garbage on trucks by road to Aruwakkalu, and the transport began in July 2019. It was reported that each truck was paid Rs. 100,000 for a trip. But the transport of garbage met with opposition from locals and the Wanathavilluwa Pradeshiya Sabha.

While villages are concerned of garbage affecting their health, Wanathavilluwa PS demanded Rs. 3 million per day, as compensation for damages to roads under their control. The Governor of Western Province was agreeable to pay Rs. 2.5 million a day. But the Megapolis Ministry went before courts, and the Court declared transport should be allowed without any payment.

Although the transport commenced, locals opposed the decision by throwing stones on the trucks, and some were damaged. Finally, armed police escorts had to be given to trucks.

 

Stoppage of Karadiyana project

Karadiyana Waste Management Project by Fairway Holdings was expected to accept a limited quantity of garbage by July 2019, according to the program provided, and the full 500 tons/day by November 2019.

The developer obtained a loan of $ 6.7 million from the World Bank through the Bank’s private financing arm, the International Finance Corporation. To get WB acceptance, the project had to meet the most stringent environmental, social, and health requirements. The Karadiyana project was to have the most advanced waste processing technology, with integrated biological and thermo-physical treatment. It is recognised as a landmark project, even cited in international industry publications.

But the project got suspended due to issues raised by the CEB, followed by the Ministry of Finance, and the Ministry of Power & Renewable Energy, and the Treasury. At stoppage, the developer had spent a sum of Rs. 1,312 million on the project over engineering design, site preparation, advance payments, and civil works (completing 90% of the piling work), but was forced to stop work and demobilise from the site.

The company is still waiting for the Ministry of Power & Renewable Energy to act on the Cabinet decision, requesting the CEB to sign the PPA with Fairway Waste Management. Currently, the project is at a standstill.

 

No more garbage power generation

In August 2019, Megapolis and Western Development Ministry Secretary Nihal Rupasinghe stated that a number of projects were given a Cabinet green light shortly after the Meethotamulla disaster, to convert waste into energy. But the Government had subsequently realised that this resulted in higher generation costs, which would have to be shouldered by the Government, and as such the Cabinet decided to not approve any future waste-to-energy projects.

According to Secretary Rupasinghe, the CEB acquires a unit of electricity at an average cost of Rs. 22, while the waste-to-energy plants would sell power at Rs. 35.10. The Government has to incur an additional cost of about Rs. 3,000 to produce electricity from a ton of waste. However, the Secretary failed to mention the future of projects that were already awarded by the Cabinet.

 

Cost of garbage transport to Aruwakkalu

The construction cost of the transfer station is $ 100.9 million or Rs. 18.16 billion. The running cost of the plant would be extra. The transport of compressed garbage from Transfer Station at Kelaniya to Aruwakkkalu uses four trains, requiring 4 engines, 34 carriages, and 94 wagons. The Cabinet approved the purchase of four railway engines at $ 8.27 million or Rs. 1.49 billion and balance equipment too had been awarded. Garbage delivered needs to be off-loaded, transported, and buried in the appropriate manner. According to the Railway Department, the cost of transporting garbage is about Rs. 4 million per day, amounting to Rs. 1.46 billion a year.

 

Discussion

Electricity generated by waste-to-energy projects were to be purchased by the CEB at Rs. 35.10 a unit. CEB claims the average purchase cost is Rs. 22, and that they are unable to pay a higher price. A fair statement, considering the CEB is running at a massive loss.

According to Secretary Rupasinghe, generating power from garbage incurs an additional cost of Rs. 3,000 for a ton of waste. Thus with 1,500 tons a day, the additional daily cost would be Rs. 4.5 million or Rs. 1.64 billion a year. But the railway’s cost of garbage transport alone is Rs. 4 million a day, or Rs. 1.46 billion a year, making railway transport costs alone only slightly lower than additional cost of garbage power.

In addition, the capital costs of the transfer station amounts to $100.9 million or Rs. 18.1 billion, and the railway engines $ 8.27 million or Rs. 1.49 billion, totalling Rs. 19.59 billion plus cost of carriages, acquired through a Chinese loan, needing payment with interest.

The cost difference of Rs. 13.10 per unit could be absorbed by local authorities, as well as partly by the Government. If Secretary Rupasinghe took pains to discuss the matter with the respective parties, an agreement would have been possible, and the three contractors would have proceeded as agreed.

The Karadiyana project was expected to commence operations by July 2019, and other two contractors in 2020; three projects consuming 1,500 tons of garbage, or practically the entire garbage output from Colombo and suburbs, making the transfer station and railway equipment unnecessary, and saving foreign loans.

Garbage disposal could be achieved by converting sorted vegetable matter to compost, as done in Karadiyana, and unsorted and plastics etc. being burnt for power generation. Regions producing over 500 tons can have power generation units, and lesser areas can convert garbage to compost, especially near agricultural areas and plastics could be buried.

With the current impasse, contractors would wait for a government change, hoping intelligence would make a comeback. If not, especially Fairway Holdings, having spent a total of Rs. 1,312 million, would be forced to seek justice from Courts. When foundation stones were laid by the President, can the Government claim the agreements are not acceptable? The CEB refusing to agree on an electricity purchase price is the Government’s responsibility.

The Courts would be certain to award substantial sums, considering the expenditure undergone by each contractor, accrued interest with additional interest until liabilities are settled. A few days ago, the Daily FT editorial highlighted massive sums of money the Government needs to settle; with the current financial mess, these payables too will add on.  

The entire garbage output in the Western Province could have been converted into electricity under contracts already awarded, commencing immediately without further government investments, making the transfer station and railway equipment redundant. The cost difference of produced electricity could be absorbed by the local authorities and the Government. Now, the loans and interest need to be settled, creating additional burdens to a country already struggling to survive. A few weeks ago, Minister Patali Champika Ranawaka stated, “If Sri Lanka cannot repay the loans obtained, it would become a bankrupt country.” Wasn’t the Minister aware of his own contribution?

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