When municipal corporations engage a service provider, the expectations of officials and citizens are very high. But over time, a gap emerges between what is expected and what the provider can deliver. This mismatch is what introduces mistrust in the mindsets of government bodies towards outsourcing services like solid waste management (SWM) to private players.
Not anymore. The combination of manpower and tech management expertise in the coming together of Sumeet Group Enterprises India and global environmental services giant Urbaser SA from Spain has emerged as a solution that addresses the waste management concerns of municipal corporations.
Mahmood Sait, CEO, Urbaser Sumeet and Summit Salunke, Vice Chairman, Sumeet Group Enterprises India narrate the story of their partnership, and how their venture collects and manages the solid waste of over half of India’s sixth most populous city — Chennai.
Unique corporation approach and tender
To begin with, the Greater Chennai Corporation (GCC) appointed a professional consultant with a waste management industry background to understand the then-state of SWM in Chennai, and design a tender document accordingly. Initially, GCC wanted to privatise this service in seven out of its 15 zones within city limits.
The tender it floated specified that while the service provider would have to invest in its own equipment and be responsible for managing manpower on an end-to-end model, service payments would be made based on fulfilling Key Performance Indicators (KPIs). 50% of the contract fee would be paid on fixed-pay model and 50% would be paid on variable pay model, depending upon evaluation of KPIs by an independent engineer appointed by GCC.
“It is very risky for anyone to bid for such a tender, but if you are a good performer, you are willing to take a risk”, said Sait. Until this, no Urbaser project in over 41 other countries was KPI-linked, but Urbaser Sumeet went ahead and took the plunge.
A slew of challenges
The project was awarded to them in December 2019; readers are well-versed with the national and global events that followed. First, the Supreme Court ruled in favour of enforcing the BS VI emission standard for automobiles, higher than the BS IV standard (both are unit emission norms that set the maximum permissible levels for pollutants that an automotive exhaust can emit). Said Sait: “We used this as an opportunity to introduce only BS VI norms-fulfilling waste collection and transport vehicles, a first for a solid waste management project in India.”
Sait was born and raised in Chennai, and had returned to India after almost three decades of experience working in a senior management position in a Middle East-based leading waste management company. While walking around the streets of the city, he noted the challenges presented by its proximity to the sea. The bins in use then were made from inferior material which broke easily; they decided to import all RC bins, even at a premium cost.
And then, the pandemic struck. The nation went into lockdown. Even the Spanish team had to rush back to Spain.
Should the project launch be delayed?
Since the project was massive, GCC and Urbaser Sumeet had agreed to launch it on a zone-by-zone basis. The launch dates decided were from October 1st to December 31st 2020. They did not deviate by a single day.
A whopping 11,000 blue-collar workers and 1,000 white-collar staff had to be recruited. This is where the Sumeet Group, with 35,000 workforce on its payroll across India, leveraged its experience.
Said Salunke: “As soon as flights resumed, I took the first one from Pune to Chennai and became the first man on the ground for manpower recruitment. We began with a team of just two members. Because of Covid restrictions, we could not hold job fairs for applicants. Instead, we followed all lockdown restrictions and safety measures, and set up tents at empty playgrounds to expedite the hiring process. Over 40,000 people applied, and the process had three levels: enrollment, medical check-up and training. This was arguably one of the largest manpower mobilisations during the pandemic, anywhere in the world.”
Tech for transparency
“To help us perform better on the KPIs, our tech team has integrated various solutions into our operating model; data from these is monitored in real-time at our state-of-the-art command-and-control centre set up in Alandur, Chennai”, shared Salunke.
The tender itself required tech integration, which manifests in the following ways:
- GPS: To track the battery-operated vehicles, and show that each vehicle is visiting each designated location
- RFID: To monitor the entry and exit of waste collection vehicles
- RFID stickers on bins: To demonstrate that a certain number of bins is being emptied every day
- Cameras: Since some people throw their garbage at the garbage disposal area rather than in it, waste tends to accumulate around it. Bin clearance should be accompanied by clearance of the surrounding area. Cameras on compactor trucks record the state of the area after waste collection.
In short, GPS records the time the truck arrives, RFID confirms that the bin has been emptied and the camera footage proves that there is no leftover garbage around the bin.
Sait said, “While discussing financials with GCC, we went beyond what was required of us in terms of tech investment. If the budget for software was x, we invested 5x.”
Protecting its people
“Our business is based on people, who work for us day and night. We have instilled such values in our people that even when they have found valuables in waste, these have been returned to the owners immediately. This is part of our company culture”, said Salunke.
All Urbaser Sumeet employees are kitted out with trousers and shirts that have reflectors embedded in them, to promote worker safety. Over 30% of the staff works in the night shift, and these reflectors alert others to their presence in the darkness.
A legacy in the making
Municipal corporations seeking to outsource solid waste management tend to have separate tenders for related parts of the waste management chain. One company wins the contract for manpower, another for waste transport and so on. In this model, each company is paid to perform a service rather than to deliver results, and will often try to cut corners. For example, waste collected from the main road will be transported only as far as the back streets, and dumped.
Under the new model, Urbaser Sumeet is responsible for every aspect of waste management. From road sweeping to litter picking, garbage collection to transport, it assumes responsibility for everything.
“Instead of trying to save money by handing out related responsibilities to multiple contractors working without cohesion, corporations will find that this unified model under one contractor is actually more affordable and will lead to cost savings”, said Sait.
Salunke explained: “Earlier, all players were following the typical tipping fee model. Going forward, our KPI-linked model will be the benchmark in the industry.”
What lies ahead?
With this one project, Urbaser Sumeet has become the second-largest waste management company in India. It is now in discussions with various other corporations across the country and is also looking to expand into ancillary waste management processes like waste treatment and waste-to-energy plants.
“One man’s trash is another man’s asset”, stated Sait. “We want to see how we can reduce the amount of trash being deposited in landfills.” The calorific value of waste varies according to the proportions of wet and dry waste, and moisture variations due to season change. By analysing the quality of the waste it collects, the company is poised to maximise its energy potential in the future.
In the spirit of the Make in India mission, the promoters of the company have also signed an agreement for a joint venture with European environmental products manufacturer ELKOPLAST to set up a manufacturing facility in India.
Salunke disclosed: “We have achieved INR 550 Cr annual revenue from the project, and will add another INR 100 Cr annually in one or two years, as new zones will also be also outsourced and integrated in this project.”
Sait signed off with pride: “If you visit Chennai now, you will realise the work we have done; we have brought a change in this city.”