Business analysis of fecal sludge management

Emptying truck Phnom Penh, Cambodia. Photo from publication.

This study was initiated and funded by the Bill & Melinda Gates Foundation to map the urban sanitation situation and assesses business and operating models for fecal sludge management in 30 cities across 10 countries in Africa and Asia, specifically focussing on the extraction and transportation market segments. The study was carried out in Burkina Faso, Ethiopia, Kenya, Nigeria and Senegal in Africa and Bangladesh, Cambodia, India, Malaysia and Viet Nam in South/Southeast Asia.

Using a common analytical framework, teams of local consultants in each of the ten countries gathered users’ perspectives through 13,000 household surveys and the collected data on the financial and business models of 150 emptying service providers. This report presents the comparative analysis based on these data from those surveys.

A majority of households (5.6 million households) in the 30 cities use on-site sanitation facilities. Households spend only a small percentage of their income, on average less 4%, on emptying services. About one third of surveyed households (2 million households) rely on manual emptying for sludge management.

The total available market for emptying services across the 10 cities is an estimated US$ 134 million.

Some regional trends were seen in the business operations between Africa and Asia:

• average truck capacity in Asia is just over 3 cubic metres and in Africa around 10 cubic metres – tracking the differing average pit volumes (2 cubic metres in Asia vs. 7 cubic metres in Africa)
• age of emptying trucks in Africa is 15 to over 30 years and in Asia between 5 to 10 years
• local assembly of trucks in done in Asia, while businesses in Africa import second hand trucks
• the cost of the trucks is three times higher in Africa than in Asia
• in Asia the operating expenses per truck are about US$ 11,000 and three times that much in Africa
• African businesses spend 76% of their expenses on variable charges such as fuel and maintenance, while their Asian counterparts spend most of their expenses (62%) on fixed costs – mainly staff salaries
• the single largest component of operating costs in Africa is fuel, making up 40% of expenses.
• the annual profit per truck in Africa is US$ 12,000 and is twice that seen in Asia, due to the higher empting fee charged (US$ 60 vs. US$ 28 in Asia) and the larger number of trips per day per truck in Africa.

A general finding was that the size of the fleet was the only factor that had a clear and strong correlation to profitability of the business – two or more trucks were needed to become profitable. There was also a lack of support systems necessary to create sustainable and profitable businesses.

The report presents several recommendations to realise the potential of the US$ 134 million market for emptying services, including:

• supporting the scaling of the single truck operators to become mid to large sized operations;
• better access to finance
• introducing transfer stations to save fuel costs and increasing truck efficiency
• regulating scheduled desludging
• local manufacture or assembly of trucks, especially in Africa
• a more effective supply chain for spare parts
• constructing safe dumping sites for sludge and sludge treatment plants
• enabling sludge reuse

Chowdhry, S. and Kone, D., 2012. Business analysis of fecal sludge management : emptying and transportation services in Africa and Asia. Seattle, WA, USA: Bill and Melinda Gates Foundation. 116 p.; 47 fig.; 22 tab. With bibliography  p. 115-116
Available at: <http://www.washdoc.info/docsearch/title/179741>

The business of the honey-suckers in Bengaluru (India)

A new IRC paper explores some contributions being made by honey-sucker tanker operators — that renders a small-scale sanitation service informally and within the private sector — on waste (faecal) extraction and, in some cases, reuse. Operating outside the legal framework of waste management, this paper provides preliminary insight into the limitations and potentials of the ‘honey-sucker business’ as a sanitation service model, based on selected experiences in Bengaluru (India).

Through semi-structured interviews and the application of Osterwalder and Pigneur’s (2010) business model building blocks tool, this paper reveals that:

1. a two-sided business model is being employed by the business (benefiting both septic tank/ pit owners and farmers);
2. positive outcomes of sludge reuse in farms seem to outweigh negative outcomes; and
3. the honey-sucker business seems to be a financially viable sanitation service model (especially amongst middle-class households with no piped connections).

As an exploratory study, the authors of the paper encourage further research into aspects that interlink with the honey-sucker business to achieve greater clarity on its positive contributions to society, and its prospects of scaling up and replication across different contexts.

Kvarnström, E. et. al., 2012. The business of the honey-suckers in Bengaluru (India): the potentials and limitations of commercial faecal sludge recycling – an explorative study. (Occasional Paper 48) [online] The Hague: IRC International Water and Sanitation Centre. 59 p. : 2 boxes, 2 fig., 5 tab. 39 ref. Available at: <http://www.irc.nl/op48>

Related materials

• A feature story entitled “Productive sanitation – the honey suckers of Bengaluru”, based on the case study, was published in the July 2012 issue of New Agriculturist at
• A presentation on the honey-suckers by Vishwanath Srikantaiah is available on Slideshare.
• IRC’s Joep Verhagen presented the honey-sucker case study during an IRC webinar organised on 2 May 2012. His original presentation is also available on Slideshare.

Arrangements and cost of providing support to rural water service providers

Smits, S. … [et al.] (2011). Arrangements and cost of providing support to rural water service providers. (WASHCost working paper ;  no. 5). The Hague, The Netherlands, IRC International Water and Sanitation Centre.  42 p. :  1 fig., 16 tab.  37 ref.
Download full paper

This joint WASHCost and Triple-S paper is about the costs of providing direct and indirect support to rural water service provision. It provides an overview of the features such support entails, how those features can be organised, what they cost and how they can be financed. It also provides recommendations to countries for strengthening support. The paper is based on a desk review of existing literature from seven countries and an analysis of primary cost data collected by the WASHCost project in Andhra Pradesh (India), Mozambique and Ghana in 2010 and 2011.

Ladders for assessing and costing water service delivery – 2nd edition

Moriarty, P. … [et al.] (2011). Ladders for assessing and costing water service delivery. (WASHCost working paper; no. 2). 2nd ed. The Hague, The Netherlands, IRC International Water and Sanitation Centre. iv, 19 p. : 5 fig., 5 tab. 14 ref.
Download full paper

This working paper introduces the concept of service levels, grouped as sequential rungs on a ladder, as a way of differentiating between broad and recognisable types (levels) of service. By developing this metaphor, a structure is provided to analyse the data being collected in different countries and settings, not just in terms of the technologies being used, but in terms of the domestic water services being received. The paper introduces water service levels and explains how these can be used as integral components of an analytical tool for applied research or benchmarking. It is best read together with Working Paper 3: Assessing sanitation service levels. Both papers are aimed at providing a framework for data analysis of life-cycle costs. This second edition reflects the experiences of applying this methodology in Burkina Faso, Ghana, Mozambique and India (Andhra Pradesh).

Assessing sanitation service levels – 2nd edition

Potter, A.; Klutse, A.; Snehalatha, M.; Batchelor, C.; Uandela, A.; Naafs, A.; Fonseca, C.; Moriarty, P. (2011). Assessing sanitation service levels. (WASHCost working paper; no. 3). 2nd ed. The Hague, The Netherlands, IRC International Water and Sanitation Centre. 27 p. : 16 fig. 12 ref.
Download full paper

Conventional sanitation ladders rank sanitation in increasing complexity of technological options. However, sanitation improvement is not as straightforward as the concept of “a ladder” with incremental improvements, might suggest. For example, from the user perspective, a VIP toilet may in some circumstances be a better option than a septic tank system. There is a wide gap between technologies and service provision, especially when O&M considerations are taken into account. This working paper from IRC’s WASHCost project sets out a common framework to analyse and compare sanitation cost data being collected across different country contexts (Burkina Faso, Ghana, Mozambique, India) with different service delivery norms and standards. It represents a fundamental shift away from the focus on capital investment costs, to the costs of sustainable sanitation services.

Managing water locally : an essential dimension of community water development

Bunclark, L., Carter, R., Casey, V., Day, St J., and Guthrie, D. (2011). Managing water locally : an essential dimension of community water development. London, UK, Institution of Civil Engineers; Oxford, UK, Oxfam GB and London, UK, WaterAid. 95 p. : boxes, fig., tab. Includes glossary. 48 ref.
Oxfam Online ISBN 978-1-78077-011-6
Download full publication [2 MB]

Based on experiences from three continents, this publication provides practical guidelines for water sector practitioners, policy-makers and donors on Community-Based Water Resource Management (CBWRM).

Supporting rural water supply: moving towards a service delivery approach

Lockwood, H. and Smits, S. (2011). Supporting rural water supply : moving towards a service delivery approach. London, UK, Practical Action and The Hague, The Netherlands, IRC International Water and Sanitation Centre. xii, 187 p. : 11 boxes, 13 fig., 14 tab. Includes references, glossary and index.
Download full publication and supporting country studies
Order hard copy (price: £13.46)

Collectively, billions of dollars have been invested in the provision of rural water supply systems in developing countries over the past three decades. Although progress is being made and rates of coverage are increasing, users often find that, once installed, water supply systems are poorly maintained and eventually break down, leaving them with an unreliable and disrupted water supply.

Supporting Rural Water Supply takes a critical look and asks why we have been unable to provide a sustainable water service to rural people for so long? What are the critical success factors in the areas where there has been good progress? How can we support the adoption of a service delivery approach to rural water supply – one that moves beyond implementing infrastructure projects to delivering a reliable and indefinite service?

This book brings together findings from 13 country studies which were carried out as part of a global learning initiative – Sustainable Services at Scale, or Triple-S. It offers insights into ways countries and individual organisations can move towards a service delivery approach step by step and is a valuable resource for professionals in government departments, NGOs, development banks, and donor agencies who are interested in improving the design and implementation of rural water supply programmes and the benefits from investments. (publisher’s abstract).

Read the summaries or full reports for Benin, Burkina Faso, Colombia, Ethiopia, Ghana, Honduras, India, Mozambique, South Africa, Sri Lanka, Thailand, USA, and Uganda.

The results from the Triple-S 13-country study were discussed and reviewed at a joint event organised on 27 September 2011 by the World Bank and USAID. Video, presentations and background documents available at: https://water.worldbank.org/water/node/84057

India – A decade of the Total Sanitation Campaign

 Water and Sanitation Programme (WSP) – South Asia (2011).  A decade of the total sanitation campaign : rapid assessment of processes and outcomes. New Delhi, India, Water and sanitation programme (WSP) – South Asia
Vol. 1 : main report. 80 p.; ill.; 10 boxes; 56 fig.; 7 tab.; photogr. 17 ref.
Vol. 2 : annexes. 83 p.; 37 annexes (= 37 tab.)

The Total Sanitation Campaign (TSC) of the government of India has been in operation for over a decade (1999 to date), and the Nirmal Gram Puraskar, a fiscal incentive programme that rewards local governments (Green Panchayats) that achieve total sanitation, has completed five years (2005 to date). The country has made significant progress in terms of coverage and outcomes. However, these achievements have been concentrated in a few states while others continue to lag significantly behind.

This report analyses primary and secondary data on the TSC to arrive at an understanding of the processes, outputs and outcomes at a national level and across the states; this is compared with the inputs which have gone into the programme. These indicators are then compared individually and in combination to benchmark the states, to understand the relative performance of the states. This benchmarking, based on a combination of eight indicators, is undertaken for both states and districts across the country. The analysis is also useful in tracking the efficiency of the states in terms of time taken to achieve total sanitation (rate of acceleration of the programme) and the financial expenditure on achieving outcomes. It, then, extrapolates, based on current achievements, to understand when the various states would achieve the ultimate objective of full coverage. [authors abstract]

Download volume 1 and volume 2

Access to water, women’s work and child outcomes

Koolwal, G. and Van de Walle, D. (2010). Access to water, women’s work and child outcomes. (Policy research working paper ; WPS 5302). Washington, DC, USA, World Bank. 39 p. : 9 tab. 46 ref.
Download full paper

Poor rural women in the developing world spend considerable time collecting water. How then do they respond to improved access to water infrastructure? Does it increase their participation in income earning market-based activities? Does it improve the health and education outcomes of their children? To help address these questions, a new approach for dealing with the endogeneity of infrastructure placement in cross-sectional surveys is proposed and implemented using data for nine developing countries [Madagascar, Malawi, Rwanda and Uganda ; India, Nepal and Pakistan ; Morocco ; and Yemen]. The paper does not find that access to water comes with greater off-farm work for women, although in countries where substantial gender gaps in schooling exist, both boys’ and girls’ enrollments improve with better access to water. There are also some signs of impacts on child health as measured by anthropometric z-scores.

** 95/96

The above figure, based on Koolwal, G. and Van de Walle, D. (2010), was included in a presentation by Jaehyang So (2010), “How can the G20 best support economic development through Infrastructure?”

Corresponding author: Dominique van de Walle, World Bank, USA, dvandewalle [at] worldbank.org

Toolkit for Public Private Partnership in Urban Water Supply for the State of Maharashtra

CRISIL (2009). Toolkit for public private partnership in urban water supply for the state of Maharashtra. (Knowledge series / GOI-ADB PPP Initiative. Water). Manila, Philippines, GOI-ADB PPP Initiative Mainstreaming PPPs in India, Asian Development Bank. 213 p. : 11 fig., 11 tab.
Download full document [PDF file]

Public Private Partnership (PPP) solutions for Maharashtra’s urban water supply sector are being developed under the Mainstreaming PPPs in India Initiative. This toolkit is expected to assist the relevant public entities in the state of Maharashtra for developing PPP-based projects in the water supply and sanitation sector.

Related web site: Mainstreaming PPPs in India