Waste Concern Turning A Problem Into A Resource

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CASE STUDY SERIES ON SOCIAL ENTREPRENEURSHIP
Waste Concern: Turning a Problem into a

Resource
Waste is merely raw material in the wrong place,
journalist Frederick A. Talbot, Millions from Waste, 1920.
In late September 2005, co-founders of Waste Concern, Iftekhar Enayetullah
and Abu Hasnat Md. Maqsood Sinha, were looking at a pile of waste at the
Matuail landfill site on the outskirts of Dhaka, Bangladesh. For ten years,
Waste Concern had followed a decentralized composting model whereby
each composting site was a small-scale operation processing three tons of
organic waste per day. However, the Matuail site was different from past
models as it would be a dual-purpose operation consisting of a gas recovery
site and a 700-ton per day composting plant. Under the United Nations
Clean Development Mechanism (CDM), the project would be eligible to earn
tradable certificates for US$11 per ton of reduced methane gas, making it
the first in the world to garner credits through composting waste.1
While Enayetullah and Sinha were elated at the recent approval from
the United Nations to build the site, they still had to overcome one key
hurdle getting approval from the Dhaka City Corporation (DCC) for access
to the land and waste. Enayetullah and Sinha believed there were three
alternatives: 1) follow through with the original plan whereby DCC would
1 MOU signed by Waste Concern and WWR, www.wasteconcern.org, September 2004, Accessed December 28, 2005.
This case was prepared by Jordan Mitchell, Research Assistant, under the supervision of Professor
Johanna Mair, and in collaboration with the Schwab Foundation for Social Entrepreneurship, as
the basis for class discussion rather than to illustrate either effective or ineffective handling of an
administrative situation. October 2006.
This case study has been written with the financial support of EABIS.
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Last edited: 7/31/07
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Waste Concern: Turning a Problem into a Resource
supply both the land and waste; 2) purchase the land for the composting site and rely
on the DCC for a waste supply; or, 3) purchase the land and take on the responsibility
of waste collection themselves. While each option had its benefits and drawbacks,
Enayetullah and Sinha were weighing up the financial, social and environmental
aspects. A number of questions were at the fore: How could they benefit from
transferring the learning between small-scale and large-scale operations? How should
they organize themselves to best support the new initiative? How could they manage
the relationship with the DCC, their international partners, and the citizens of Dhaka?
Bangladesh
Located between India and Burma, Bangladesh had a land area of 144,000 square
kilometers and a population of over 144 million people.2 The country had the ninth
largest population in the world with one of the highest population densities at
1,000 people per square kilometer. Population in urban areas such as the nations
capital, Dhaka, exceeded 18,000 people per square kilometer in some areas. The city
was home to 11.3 million people, making it the eleventh largest city in the world.
Dhaka was expected to grow to 21.1 million people by 2015.3 It was estimated that
approximately 25 percent of the countrys population lived in an urban area. This was
expected to increase to 40 percent within 20 years.
Total GDP was estimated at U$299.9 billion and GDP per capita was ranked 175th out
of 232 countries.4 Approximately half of the population lived below the poverty line.
Observers cited the central impediments to growth as: extreme monsoons and cyclones
creating climatic instability, poor transportation and communication infrastructure,
insufficient energy sources and inefficient government. See Exhibit 1 for a map and
more facts about the country.
Agriculture in Bangladesh
63 percent of the labor force was employed in the agricultural sector compared to
11 percent in industry and 26 percent in services. The primary agricultural products
were rice, jute, tea, wheat, sugarcane, potatoes, tobacco, spices and fruit.
Only 17 percent of the countrys soil was suitable for growing crops. Soil fertility was
not only affected by improper waste management, but also through the use of
4 million tons of chemical fertilizer per year, which hardened the soil and dried the
moisture from the earth. Soil fertility was critical to the governments plan to increase
crop output to ensure foodstuffs for the countrys growing population.
2 CIA World Factbook, Bangladesh, www.cia.gov/cia/publications/factbook/geos, Accessed February 1, 2006.

3 Saarc Workshop on Solid Waste Management, Country Paper Bangladesh, Department of Environment, Waste Concern, October
2004, p. 3.
4 CIA World Factbook, Bangladesh, www.cia.gov/cia/publications/factbook/geos, Accessed February 1, 2006.
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Waste Management in Bangladeshs Capital Dhaka

The government-run Dhaka City Corporation (DCC) was responsible for all local
governmental policy and management within the Dhaka metropolitan area, which
covered 360 square kilometers and included six million residents of Dhaka megacitys
11.3 million. Each day, these six million residents generated about 3,500 tons of waste.5
This compared to over 17,000 tons per day of waste generated throughout the country.6
In Dhaka, approximately 70 to 80 percent of the waste was organic and the remainder
was paper, plastic, glass and other man-made materials.
Nationally, the country did not have a consistent waste recycling program and waste was
disposed of in nearly any area on the streets, in pits, in front of peoples homes or in
the best case, in large cement containers. Large deposits of waste exposed the population
to over 40 diseases.7 It created insufferable odor and seeped into the land affecting soil
fertility and ground water. During the monsoon season, waste was carried by extreme
floods into the city. Mosquitoes and flies reproduced in waste and carried diseases to
humans and other animals. In addition to the extreme health hazards, the physical mass
of waste caused traffic problems on roads. Large deposits of waste also emitted harmful
greenhouse gases (GHG) 8 into the atmosphere. It was estimated that Dhaka had an
emission potential of 0.76 million tons of CO2 gas per year.9 See Exhibit 2 for photos of
Dhakas waste challenges.
Waste Collection
The DCC was responsible for collecting all solid waste. However, due to its human,
technological and financial resources, the DCC collected only 37 percent of all solid
waste, even though it spent 50 percent of its operating budget on solid waste
management. All waste collected by the DCC was piled into trucks and disposed of in
low-lying areas outside of the city district. Observers believed that the collection
process was inefficient given that the waste was handled four to five times before
being disposed of. The cost of collecting one ton of waste by the DCC was estimated at
670 BDT (US$11.26). The cost of the entire waste management process (from collection
through to landfill operation) by the DCC was estimated at 2,045 BDT (US$38) per ton.
The price of collecting waste was exacerbated by many dwellers habits of leaving their
waste in front of their homes instead of taking it to designated concrete containers for
pickup.
In addition to the DCC, individuals known as Tokais or informal waste collectors,
sought plastic, glass or paper and attempted to sell the waste to recycling factories for
cash. Approximately 120,000 people were involved in informal waste collection and
5 Community based decentralized composting in Dhaka, Presentation by Waste Concern, Dhaka, September 13-17, 2004, slide 6.
6 Ibid., slide 5.
7 Ibid.
8 Greenhouse gases included carbon dioxide, methane, nitrous oxide, hydroflurocarbons, perfluorocarbons and sulfur hexafluoride. They
prevented heat from escaping from the atmosphere and thus contributed to a greenhouse effect by warming the earths surface.
9 Enayetullah et al, 2004.
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collected about 15 percent of the inorganic waste. Also, small companies had begun
offering services for house-to-house collection in exchange for money, which was
more prevalent in affluent areas of the city.
Waste Disposal
The Matuail landfill was the only official dumping site in the DCC district, which
would be completely exhausted by the end of 2006. With strains on the land due to
overpopulation, it was unlikely that another official dumping site would be opened.
This led the DCC and other waste collectors to dump residuals in any available area.
History of Waste Concern

While conducting postgraduate research in early 1994, A. H. Md. Maqsood Sinha and
Iftekhar Enayetullah had the idea of launching a non-governmental (NGO) research
organization aimed at improving the environment by encouraging waste recycling in
Bangladesh. Sinha, an architect and urban planner, met Enayetullah, a professional
civil engineer and urban planner, while both were postgraduate students. As part of
their postgraduate research, Enayetullah and Sinha set up a model of waste
management whereby solid waste was collected and composted. The compost would
then be used as a substitute for chemical fertilizer. The pair believed that the concept
could be put into practice and sought support from different governmental agencies
offering consultancy services for free. However, governmental officials did not support
the project and Enayetullah and Sinha decided to establish their own NGO in 1995 in
order to launch the first pilot project. The aim of the organization was to promote the
idea of converting waste into a resource. The first project was directed at: developing
a low-cost technique for [the] composting of municipal solid waste. 10 Enayetullah
commented:
In 1994, we tried hard to convince different government agencies to initiate the
project by offering free consultancy services but they were all skeptical We believe
that waste should be considered as a resource, rather than just a problem and it can
be managed in a decentralized manner with public-private-community partnership.
Thats why in 1995, we took the alternative course of demonstration of our model
to convince different social groups.11
Besides the skepticism in the government, Sinha and Enayetullah faced other barriers.
They did not have access to appropriate waste treatment technology nor did they have
any land to launch their pilot project. The lack of knowledge of waste recycling
combined with no official policy or framework further complicated their attempts to
get the project off the ground. The pair sought seed money and financing, but were
unsuccessful for one year in garnering support. Eventually, they convinced the Lions
10 Christian Zurbrgg; Drescher, Silke; Rytz, Isabelle; Sinha, A.H.Md. Maqsood; and Enayetullah, Iftekhar, Decentralised composting in
Bangladesh, a win-win situation for all stakeholders, El Sevier, June 16, 2004.
11 Presentation by Waste Concern, Dhaka, September 13-17, 2004, slides 13-14.
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Club Dhaka North to donate 1,000 square meters of land in the area of Mirpur for a
three-month period. Sinha reflected, The Lions Club was very hesitant to give us land,
because they were very afraid of creating a lot of odor.
After getting the project operational in less than three months, Sinha and Enayetullah
demonstrated that the odor from the site was not problematic. The Lions Club gave
them permission to continue housing the project on Lions Club land. They used
the project as a demonstration site and showed it extensively to individuals from
government, private companies and the community. Sinha and Enayetullah estimated
that the Mirpur project alone reduced the cost of the DCC by $15,085 annually.12 This
represented an 80 percent reduction in per ton management costs for waste for the
DCC in the project area of Waste Concern.
In 2000, Sinha and Enayetullah set up a for-profit consultancy arm of Waste Concern,
allowing them to generate revenues to fund Waste Concerns not-for-profit research
and development division. As of the fall of 2005, this dual structure was still in place.
See Exhibit 3 for the pairs CVs.
The Waste Concern Model of Decentralized Composting

Waste Concerns model integrated house-to-house waste collection, composting and
marketing the compost as a fertilizer. The operation revolved around a small-scale,
decentralized composting plant each plant was set up to process three tons of waste
per day.
Depending on the income level, households paid BDT 10 to 20 (US$0.17 to US$0.34) to
Waste Concern per month. Waste was collected by one to three Waste Concern
employees who rode on rickshaws with 1.18 cubic meter capacity. Each rickshaw
served between 300 and 400 households and the revenue from households paid for the
salaries of the collectors. For each three-ton plant, there were 20 workers: nine workers
for house-to-house collection and eleven people at the plant, including the plant
manager.
After the waste was collected, the rickshaw driver and collectors took the waste to the
composting site. All waste was sorted and all recyclable products like glass, plastic and
metals were separated and stored in a separate area. Three tons of organic waste
yielded 750 kg of compost per day. The process of converting organic waste to saleable
compost took 55 days: 40 days to produce the compost and 15 days for the compost to
mature.
Waste Concern used the Indonesian Composting Method all waste was piled in large
heaps on top of a wooden structure and was turned every four to five days. The waste
piles were under a covered shed, which protected the compost workers from the sun
and rain. In order to turn solid waste to compost a temperature of between 55 and
65 degrees Celsius was optimum. Workers used long bamboo sticks to turn over the
12 Christian Zurbrgg; Drescher, Silke; Rytz, Isabelle; Sinha, A.H.Md. Maqsood; and Enayetullah, Iftekhar, Decentralised composting in
Bangladesh, a win-win situation for all stakeholders, El Sevier, June 16, 2004.

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waste. Workers also watered the waste heaps, which gave the bacteria a new food
source.13 Exhibit 4 shows the process and pictures of the operation.
Once the compost had matured, it was sold to MAP Agro for BDT 2.5 (US$0.04) per kg.
MAP Agro then enriched the compost and sold it through its parent companys
(ALPHA Agro) extensive distribution network at prices from BDT 6 (US$0.10) to BDT
12 (US$0.20).
Revenues were split at 30 percent from house-to-house collection and 70 percent
through the sale of composted materials.14 Waste Concerns operating costs comprised
raw materials used in composting, the salaries of the workers (both the waste collectors
and the plant staff) and utilities. Each three-ton plant brought in total revenues of
approximately BDT 741,000 (US$12,449) and spent approximately BDT 551,200
(US$9,260) per year. All surpluses were used to fund compost testing at the
governments laboratory (US$2,500 per year). The remainder was invested back into
the site to maintain the building and supply uniforms for the workers.
The fixed costs for establishing a new three-ton plant were BDT 1,008,000 (US$16,934).
This included: the construction costs of the sorting platform, the composting shed with
drainage, an office, a toilet and a storage area for the recovered recyclable products.
Waste Concern relied solely on the donation of land from third parties and did not
include the value of land in its fixed costs. Each plant offered a payback in 23 months.
Exhibit 5 shows the key revenues and costs of a three-ton plant.
The Replication of the Decentralized Small-Scale Model

In 1997, the Regional Urban Development Office-South Asia agreed to offer support
and further test the model by scaling up the activity of Waste Concern in Dhaka.
A year later, the Ministry of Environment and Forest of the Government of Bangladesh
under the Sustainable Environmental Management Program supported by the United
Nations Development Program (UNDP) requested that Waste Concern roll out the
model to five communities within Dhaka. The DCC and Public Works Department
however did not come forth with land, which led Sinha and Enayetullah to more
demonstrations. Finally, the DCC and Public Works provided suitable land plots. Sinha
talked about the obstacles:
The single biggest obstacle for the model of community based decentralized
composting project was availability of land in the city for such facilities. Publicprivate-community partnership and the concept of the 4 Rs (reduce, reuse, recycle
and recovery of waste) were absent in Bangladesh before our intervention.15
In 1999, Waste Concern began talking to the countrys pre-eminent fertilizer supplier,
MAP Agro (a sister concern of ALPHA Agro), to purchase the organic fertilizer being
13 A.H.Md. Maqsood Sinha and Enayetullah, Iftekhar, Community Based Decentralized Composting, Urban Management Programme
for Asia and the Pacific, 1999, pp. 8-9.
14 Lisa Hiller, Cash for Trash in Bangladesh, Choices, August 2002, p. 12.
15 A.H.Md. Maqsood Sinha and Enayetullah, Iftekhar, Teams Entry to the Fast 50 Social Entrepreneurs, Fast Company, 2002.
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produced at Waste Concerns composting plants. Initially, MAP Agro was uncertain
that local farmers would adopt organic fertilizer as part of their growing techniques.
Waste Concern convinced MAP Agro by comparing the superior quality of crops grown
with organic fertilizer in place of chemical fertilizer. Eventually, MAP Agro agreed to
purchase all of Waste Concerns organic compost output and was the first in the
country to begin marketing organic compost.
In 2000, Waste Concern successfully rolled out the decentralized model to five
communities in Dhaka city. With greater visibility, representatives from other
Bangladeshi cities approached Waste Concern to see if the same concept could be
rolled out to more sites. Enayetullah stated:
We thought originally that we would be able to roll out the decentralized model
and replicate it ourselves to other sites. But, it was not possible to do from a
manpower perspective. If we had tried to do it all ourselves, it would have resulted
in major delays in implementing it. With these types of projects the major barrier is
the financing. We realized that if we could get the financing then we could supply
the technology.
In looking for financing, Waste Concern approached several international banks and
other international organizations. However, Waste Concern was unable to secure funds.
International banks were concerned that the organization in its not-for-profit structure
would not be able to pay back the bank loan. Development organizations supported
similar projects but for piloting purposes only. This led Waste Concern to look for other
sources of funding. After several presentations from Waste Concern and multiple levels
of approval, the Department of Public Health Engineering of the Government of
Bangladesh secured funding from UNICEF and replicated the Waste Concern model
in 14 locations in 2002.16 In 2004, another 20 sites were approved to be implemented
throughout Bangladesh. All projects were organized as a three-way partnership: Waste
Concern supplied the technology and know-how; the Bangladeshi government, UNICEF,
CIDA (Canadian International Development Agency), and SDC (Sustainable Development
Commission) funded the initiative; and, the private sector marketed the final composted
fertilizer.
Sinha and Enayetullah dedicated 50 percent of their time to research and development
activities under the not-for-profit arm of Waste Concern. The other 50 percent was
directed at the for-profit waste consultancy. Enayetullah stated: We use the
consultancy to generate revenues to fund the not-for-profit research and development
arm.
By 2005, the government of Bangladesh actively encouraged farmers to increase their
utilization of organic compost. Compost was cheaper than chemical fertilizer and most
agreed that it produced superior crops. The acceptance of organic fertilizer encouraged
three other companies to include organic fertilizers as part of their product portfolios.
As of 2005, MAP Agro was the market leader followed by Northern Agro, Faruk
Fertilizer and Fuvid Agro Ltd. Enayetullah stated: The demand for organic fertilizer is
16 Community based decentralized composting in Dhaka, Presentation by Waste Concern, Dhaka, September 13-17, 2004, slide 70.

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growing and theres currently a problem with supply. Now, with four companies all
offering organic fertilizers, this is good for fair competition.
Waste Concerns model was recognized internationally as an efficient and costeffective way of using waste. The model was being replicated in Vietnam and Sri
Lanka. It was also lauded for providing employment for unskilled laborers. Sinha and
Enayetullah were honored by becoming Ashoka Fellows in 2000, and won numerous
awards such as the United Nations Poverty Eradication Award in 2002, the Fast
Company Champions of Innovation in 2002, the Technology for Humanity from the
U.S. Tech Museum in 2003, and Outstanding Social Entrepreneurs from the Schwab
Foundation of Switzerland in 2003.
CDM Proposal for Landfill Gas Extraction Site at Matuail, Dhaka

Throughout 2003, Sinha and Enayetullah had the idea of increasing the scale of the
three-ton composting plant. As Enayetullah stated:
Small is beautiful, but you need to have scale. The small-scale decentralized threeton composting plant is great for small and medium sized cities. However, in Dhaka,
its probably best to have a larger centralized composting site. And, with a larger
site, you have a real opportunity with tradable certificates. Without trading
certificates, the opportunity of creating a centralized 700-ton per day composting
site would not be feasible. Also, with large centralized sites, you can transfer the
learning to smaller decentralized locations.
Waste Concern submitted a proposal to the United Nations, which would allow the
organization to earn tradable certificates called Certified Emission Reductions (CERs).
Under the program known as the Clean Development Mechanism (CDM), nations were
able to buy and sell CERs to hit their specific Kyoto Protocol emission reduction targets.17
Sinha and Enayetullahs idea was to use the existing landfill site in Matuail an area
seven kilometers from Dhaka to recover methane gas from the 5-metre high landfill
pile. They also wanted to use the land to build a large-scale centralized composting
plant.
In 2004, the Waste Concern team began conversations with the Dutch company World
Wide Recycling BV (WWR) to jointly develop the landfill gas recovery site. WWR was
a for-profit company that acted as an investor and operator by partnering with private
and public enterprises in the creation of decentralized recycling centers. (See Exhibit 6
for more information). In September 2004, WWR and Waste Concern signed a
memorandum of understanding to form a special purpose company and put forward
a proposal for consideration by the United Nations CDM Executive Board. WWR would
provide all of the financing and Waste Concern would supply the local knowledge and
technology and seek Bangladeshi government approval. Both parties would engineer
17 The Kyoto Protocol is an international agreement that called for 39 developed countries to reduce greenhouse gases by 5.2 percent
over 1990 levels. CERs were one mechanism developed by the Kyoto Protocol.
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the site and make the landfill site operational. The organizations would be able to sell
the CERs for US$11 per ton of reduced methane gas.
During 2005, both organizations met extensively with United Nations representatives,
foreign and local government officials, academics, engineers, waste experts, electricity
operators and local residents. In making their presentations to various stakeholders, the
team presented the following benefits:
Environmental capture 50 percent of the landfill gas emitted from the

Matuail waste disposal site, which would reduce greenhouse gases and reduce
the risk of onsite fires;
Economic foreign capital inflow from WWR and potentially other sources;
and,
Social improved health conditions due to the reduction of gases and the
creation of jobs for local residents.18
On September 17, 2005, the landfill gas recovery project and the composting plant
were accepted by the United Nations CDM initiative.
Operations
The site would have two main areas: the landfill gas recovery area and the composting
area.
Landfill Gas Recovery In the landfill recovery zone, methane gas emitted naturally
from the decomposing landfill, would be captured and turned into electricity through a
gas-powered engine. The electricity would then be used by local power utilities. The
teams planned to reshape the current landfill and introduce proper land filling
techniques with daily cover of waste as well as leachate collection and treatment
facility to reduce ground water pollution. These actions were aimed at extending the
sites lifetime to 2021. The site would require extraction equipment including vertical
wells, piping, a condensate separator and compressors. The gas utilization equipment
included a flare, dedicated gas-engines, an electric generator and an electric grid
connection.19
In the first seven-year crediting period, WWR and Waste Concern predicted that the
project would recover 50 percent of the methane gas. This would allow them to convert
566,000 tons of CO2 equivalents (methane gas) from the landfill gas recovery project
alone). 20 The site would have an electricity production capacity of three to six
megawatts (MW). In the first year, the site would produce 6,625 MW hours increasing
to over 16,000 MW hours by 2010. Exhibit 7 shows a diagram and more details of
the project.
18 Clean Development Mechanism Project Design Document Form, UNFCCC, unfccc.org, Version 2, July 1, 2004, Accessed January 22,
2006, pp. 2-3.
19 Ibid., pp. 5-6.
20 Ibid., p. 2.

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Composting The composting plant would also be designed to reduce methane gas by
avoiding waste landfilling and performing aerobic composting. Waste Concern and
WWR developed a new methodology to calculate the reduction of methane emission by
composting which was approved by the UNFCCC (United Nations Framework
Convention on Climate Change). The compost would be turned into organic fertilizer
and made available for sale to the countrys four fertilizer companies. The composting
plant was significantly different to Waste Concerns small-scale plants. Whereas Waste
Concerns smaller plants processed three tons of solid waste per day, the proposed site
at Matuail would process 700 tons of solid waste per day. It was estimated that
624,813 tons of CO2 equivalents would be reduced by composting 700 tons/day of
solid waste in the composting plant.
Finances
The total investment to get the project operational was US$10 million. Approximately
US$4.9 million was for the establishment of the composting area and US $3.5 million
for the gas extraction and electricity generation portion of the project. Using a
12 percent discount rate to reflect commercial lending fees in Bangladesh, the team
had calculated that the gas extraction portion of the site would create a negative net
present value of US$-4.2 million over 15 years without CERs. However, with CERs, the
project would produce a positive net present value. Under this scenario, revenues
would be generated from the sale of electricity only.
WWR would contribute the financing for both projects. Both sides were seeking
additional funding in the form of a grant or long-term loan from the Netherlands
Development Finance Company (FMO), which was a special bank set up in 1970 by the
Dutch government for the purpose of assisting developing countries. FMO carefully
scrutinized projects to ensure they fell under strict guidelines such as public-private
involvement, corporate governance, environmental details and social policies. The FMO
offered a grant to a maximum of 45 percent of the project on a maximum project cost
of 45 million (US$54 million).21
Seeking Approval from the DCC and Potential Options

Even though Waste Concern had been given the green light by the CDM Board of the
Government of Bangladesh in 2004 (see Exhibit 8 for a copy of the approval letter),
they were still waiting for approval from the municipal DCC. The DCC owned and
operated the Matuail landfill site. Enayetullah commented:
We were authorized to go ahead with the project from the national government,
but then the municipality did not give their authorization. They were a little
concerned that they were handing over control of the landfill site to us. That was
the point where we said, maybe we can separate the landfill site from the
21 Clean Development Mechanism Project Design Document Form, UNFCCC, unfccc.org, Version 2, July 1, 2004, Accessed January 22,
2006, p. 6.
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composting activity and change our approach. Its not necessary to keep the
landfill and composting site together. We would just have to think of another plan.
Enayetullah and Sinha had made the decision to continue seeking approval from the
DCC for the landfill recovery site since they needed an established landfill site with a
minimum of five to eight meters of waste in order to capture sufficient gas.
The major question was what should be done with the composting site. Enayetullah
and Sinha believed there were three central options:
1. Continue with the original plan whereby DCC would supply the land and the
waste for the composting site;
2. Waste Concern would purchase the land for the composting site and the DCC
would supply the waste; or,
3. Waste Concern would purchase the land for the composting site and look after
the collection of waste.
Option 1: DCC to Supply the Land and Waste

Under this option, the DCC would supply both the land and waste for the composting
site. WWR and Waste Concern would be responsible for designing, constructing and
operating the site. The fixed cost of constructing the composting site was estimated at
US$4.9 million and annual operating costs were projected to be US$1.22 million.
Revenues from the sale of compost were predicted to be US$3.11 million per year and
the sale of tradable certificates would bring in US$560,000 per year. In exchange for
using the DCCs land and waste, Waste Concern would pay a 20 percent royalty fee on
the overall revenues of the composting site per year.
Enayetullah and Sinha predicted a delay to the project of seven to twelve months
before receiving approval from the DCC. In addition, Enayetullah and Sinha were
uncertain of changes to the contract in the future.
Option 2: Purchase the Land for Composting and DCC to Supply the Waste
The second option was to purchase a plot of land for the composting site but use the
waste collected by the DCC. Enayetullah and Sinha estimated that the cost of a suitable
piece of land would be US$514,000. The fixed cost of constructing the site, the annual
operating costs and all revenues would be the same as in the first option. Waste
Concern would pay 10 percent of all the revenues to the DCC in exchange for
supplying the waste.
Option 3: Purchase the Land and Collect the Waste

Under the third option, Waste Concern would collect the waste directly from
individuals at pre-determined quantities, qualities and in accordance with a pick-up
schedule. Owning the land and collecting the waste would alleviate any royalty

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payments to the DCC. Enayetullah and Sinha estimated waste collection would cost an
additional US$780,000 per year beyond the annual operating costs of $1.22 million for
the site. All other fixed costs and revenues would be the same as the other options.
The Decision
Enayetullah and Sinha thought about what had been achieved in ten years. Their list of
achievements was long through their efforts of setting up numerous decentralized
composting sites, they had successfully achieved one of their key goals of turning
waste into a resource. This, in turn, had improved soil quality, created employment,
enhanced social standards, reduced sickness and disease, attracted international
acclaim, spurred foreign investment and saved money for government bodies like the
DCC and the Bangladesh Ministry of Environment.
Now they were embarking on a major project that involved several international
stakeholders and millions of U.S. dollars of investment. They had several
considerations: Which option for the centralized composting site would be the best for
the future of Waste Concern? How could learning be exchanged between the
centralized and decentralized composting models? What structure would be the most
appropriate for Waste Concern? How should Waste Concern include all of the
stakeholders in the impending change?
12
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of Navarra
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Exhibit 1
Information About Bangladesh
People
Population
Age structure
0-14 years old
15-64 years old
+65 years old
Median age
Population growth %
Economic
GDP
GDP growth rate
GDP/capita
GDP by sector
Agriculture
Industry
Services
Inflation
Unemployment
Public debt as % of GDP
144,319,628
33.1%
63.5%
3.4%
21.87
2.1%
299.9 billion
5.2%
2100
20.5%
26.7%
52.8%
6.7%
2.5%
46.1%
Industry
Agricultural products
Industries
Rice, jute, tea, wheat, sugarcane, potatoes, tobacco

Cotton textiles, jute, garments, tea processing, newsprint,
cement, chemical fertilizer, light engineering, sugar
Industrial product growth rate

Electricity production
Oil production
Oil consumption
Natural gas - production
6.7%
17.42 billion kWh
6,825 bbl/day
84,000 bbl/day
9.9 billion cu m
Current account balance

Exports
Exports partners
Imports partners
-591 million
$9.372 billion
US 22.4%, Germany 14.5%, UK 11.2%, France 6.9%,
Italy 4%, India 15.1%, China 12.5%, Singapore 7.5%,
Kuwait 5.5%, Japan 5.3%, Hong Kong 4.5%
Taka (BDT)
64.26
Currency
F/X rate to US$
F/X rate to euro
in US$ except where otherwise noted.

Source: CIA World Fact Book, www.cia.gov, Accessed 1 February 2006.

to 12/20/2013,
in the course:
IESE Business
School-University
of Navarra
13
DG-1502-E
Exhibit 2
Photos of Dhakas Waste Problem
Source: Company documents.
14
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of Navarra
DG-1502-E
Exhibit 3
CVs of Co-Founders
IFTEKHAR ENAYETULLAH
Date of Birth: August 18, 1967
Education
Masters Degree in Urban and Regional Planning with specialization in urban waste and
environmental management from Bangladesh University of Engineering and Technology
(BUET), Dhaka.
Experience
Co-founder and Director of Waste Concern conceptualized, designed and

implemented the community-based decentralized composting model, using publicprivate-community partnerships approach
Member of the Institution of Engineers Bangladesh (IEB), Bangladesh Institute of

Planners (BIP) and Building Partnership Development for Water and Sanitation
of United Kingdom
Founding member of WasteNet in Bangladesh
Editor of a quarterly newsletter on waste management and recycling in Bangladesh
Served as a Member of the Expert Committee on Clinical Waste Management

constituted by the Government of Bangladesh
More than forty publications to his credit, including scientific papers, articles, fact
sheets, manuals, reports, recycling and urban environmental management
A professional civil engineer and urban planner by training
Awards and Recognition
Outstanding Social Entrepreneur by the Schwab Foundation of Switzerland for the

year 2003
Tech Museum Awards 2003. Selected as Tech Laureate by the Tech Museum of USA for
developing technology benefiting humanity
Outstanding Engineers Award 2003 from the Institution of Engineers, Bangladesh

(IEB).
Professional Excellence Award 2003 as an engineer from the Daily Star a prominent
newspaper of Bangladesh
United Nations Poverty Eradication Award 2002 from entire Asia and the Pacific region
Fast Company magazines first ever Fast 50 fifty champions of innovation for the
year 2002
Elected as an Ashoka Fellow in Ashoka Innovators for the Public of USA in 2000

to 12/20/2013,
in the course:
IESE Business
School-University
of Navarra
15
DG-1502-E
Exhibit 3 (continued)
ABU HASNAT MD. MAQSOOD SINHA
Date of Birth: April 4, 1963
Education
Masters Degree in Urban and Regional Planning with specialization in environment, urban
waste management and recycling from Asian Institute of Technology (AIT), Bangkok, Thailand
Experience
Co-founder and Director of Waste Concern conceptualized, designed and

implemented the community-based decentralized composting model, using publicprivate-community partnerships approach
Member of the Institution of Engineers Bangladesh (IEB), Bangladesh Institute of

Planners (BIP) and Building Partnership Development for Water and Sanitation of
United Kingdom
Founding member of WasteNet in Bangladesh
Editor of a quarterly newsletter on waste management and recycling in Bangladesh
Member of the Local Consultative Group (LCG), an environmental subgroup in the field
of waste and solid waste management and environment
Served as a Member of the Expert Committee on Clinical Waste Management

constituted by the Government of Bangladesh
More than forty publications to his credit, including scientific papers, articles, fact
sheets, manuals, reports, recycling and urban environmental management
An urban planner and architect by profession
Awards and Recognition
Outstanding Social Entrepreneur by the Schwab Foundation of Switzerland for the

year 2003
Tech Museum Awards 2003. Selected as Tech Laureate by the Tech Museum of USA for
developing technology benefiting humanity.
Outstanding Engineers Award 2003 from the Institution of Engineers, Bangladesh (IEB).
Professional Excellence Award 2003 as an engineer from the Daily Star a prominent
newspaper of Bangladesh
United Nations Poverty Eradication Award 2002 from entire Asia and the Pacific region
Fast Company magazines first ever Fast 50 fifty champions of innovation for the
year 2002
Elected as an Ashoka Fellow in Ashoka Innovators for the Public of USA in 2000
16
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of Navarra
DG-1502-E
Exhibit 4
Composting Process
Composting
Additives
Waste Collection
Recyclables 6%
Sorting
Piling
Sawdust / Bokashi
Rejects 14%
Local
Market
Transport
to
Dumpsite
Screening Residue
Composting
Water
Maturing
Screening
Composting
Bagging
Selling
Marketing
Private Sector
distributes
compost to the
farmers

to 12/20/2013,
in the course:
IESE Business
School-University
of Navarra
17
DG-1502-E
Exhibit 4 (continued)
Digital Representation of Decentralized Composting Site
Collection
Composting
Sorting
Composting (Turning)
Piling
Bagging
18
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DG-1502-E
Exhibit 5
Revenues and Costs of a Composting Plant
Annual Financials of a Typical 3-ton Plant

BDT
US$
59.524
141,000
600,000
741,000
2,369
10,080
12,449
96,000
1,613
Salaries
Waste Collectors Salaries
Composting Plant Workers Salaries
Plant Manager
Total Salaries
141,000
132,000
78,000
351,000
2,369
2,218
1,310
5,897
Electricity, Water and Maintenance
104,220
1,751
Total Costs
551,220
9,260
Total Surplus/(Deficit)
189,780
3,188
F/X Rate
Revenue from House-to-House Collection
Revenue from Sale of Compost
Total Revenue
Total Costs
Raw Materials
Major Assumptions for 3 ton/Day Plant

Land Required / Plant (Katha)
Fixed Cost / Plant *
Operating Cost / Plant **
Total Laborers for Composting Only/ Plant ***
Total Labourers (Including Collectors)
Compost Produced (Daily) (kg)
Expected Revenue from Sale of Compost ****
Pay Back Period (Months)
7
1,008,000
300,000
4
20
750
600,000
23
16,934
5,040
10,080
* Without Land Cost/Rent.

** Operating Cost Excludes Cost-Neutral Collectors and Raw Material Costs.
*** Laborers Required for Composting Purpose Only.
**** From 1 Ton of Organic Waste 250 kg of Fine Compost Can Be Produced.

to 12/20/2013,
in the course:
IESE Business
School-University
of Navarra
19
DG-1502-E
Exhibit 6
Information on World Wide Recycling BV (WWR) - Excerpts from Brochure
World Wide Recycling BV (WWR) is a company that aims to introduce the Recycling Centre
Concept worldwide, with an emphasis on Latin America, South-east Asia and former Eastern
Europe. The company is owned by Mr. Jan Boone, founder and main shareholder of VAR BV.
Conditions for Success

WWR is convinced that a Public Private Partnership is the most suitable model for operating a
recycling centre. After all, waste treatment is a public task that can executed more efficiently
and at lower cost in cooperation with private entities. There are many definitions of a PPP. The
one that fits the WWR concept best is:
an institutional relationship between the public sector and members of the private-for-profit
and/or the private-not-for-profit sector, in which the various public and private actors
participate in defining the objectives, the methods and the implementation of an agreement of
cooperation.
Investor and Operator

WWRs objective is to participate as an investor as well as an operator. Through the use of its
resources, WWR can financially engineer projects, thus underlining its commitment. At the
same time, WWR can warrant the performance of the operation by acting as an operator in
the project.
The Recycling Centre Concept

The Principle
A recycling centre is a landfill in combination with several recycling installations, each tuned
to recover a specific fraction of the incoming waste. Various separate installations can be
applied, depending on specific needs and circumstances. In developing a recycling centre, a
modular approach is obvious: with reference to local circumstances the recycling centre may
start with a single installation, after which the concept may be developed in full over a period
of years.
The Set-up: Decentralized

WWR strongly advocates a decentralized set-up, with recycling centres located close to waste
producing sources. In this set-up transportation of waste is being minimized. The Recycling
Centre Concept warrants a working method that keeps the inconvenience of smell, visual
distraction and attracted animals to a minimum. For the implementation of new projects, high
standards will be applied. A new recycling centre can easily be built near an existing landfill,
extending its lifetime and improving the environmental and social situation.
Source: World Wide Recycling, www.wwrgroup.com, PDF Brochure, Accessed. February 6, 2006.
20
IESE Business
of Navarra
DG-1502-E
Exhibit 7
Diagram of Landfill Area
Waste production
(households,
Industry, etc.)
Waste collection,
sorting,
transportation
Landfill
Source: Project Design Document Form, Proposal to CDM, p. 14.
Landfill gas
production
Flaring
Electricity
production
On site use
of electricity
Electricity
from grid
Electricity
To grid
End use
Boundary limit
Details of CDM Project

Emission reductions in first crediting period
Net electricity delivered to
grid by combusting
extracted methane in gas
engines
MWh
Year
2006
2007
2008
2009
2010
CERs (net) related to

prevented electricity
generation in the grid
(elsewhere)
tons (1000 kg)
6625
13976
14723
15492
16284
4185
8829
9301
9787
10287
Proposal to CDM, p. 31.

to 12/20/2013,
in the course:
IESE Business
School-University
of Navarra
21
DG-1502-E
Exhibit 8
Letter of Approval from the Government of Bangladesh
22
IESE Business
of Navarra

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CASE STUDY SERIES ON SOCIAL ENTREPRENEURSHIP

Waste Concern: Turning a Problem into a

Waste Concern: Turning a Problem into a Resource

2 CIA World Factbook, Bangladesh, www.cia.gov/cia/publications/factbook/geos, Accessed February 1, 2006.

Waste Concern: Turning a Problem into a Resource

Waste Management in Bangladeshs Capital Dhaka

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

History of Waste Concern

Waste Concern: Turning a Problem into a Resource

The Waste Concern Model of Decentralized Composting

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

The Replication of the Decentralized Small-Scale Model

Waste Concern: Turning a Problem into a Resource

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

CDM Proposal for Landfill Gas Extraction Site at Matuail, Dhaka

Waste Concern: Turning a Problem into a Resource

Environmental capture 50 percent of the landfill gas emitted from the

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

Seeking Approval from the DCC and Potential Options

Waste Concern: Turning a Problem into a Resource

Option 1: DCC to Supply the Land and Waste

Option 3: Purchase the Land and Collect the Waste

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

Waste Concern: Turning a Problem into a Resource

Rice, jute, tea, wheat, sugarcane, potatoes, tobacco

Industrial product growth rate

Current account balance

in US$ except where otherwise noted.

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

Source: Company documents.

Waste Concern: Turning a Problem into a Resource

Co-founder and Director of Waste Concern conceptualized, designed and

Member of the Institution of Engineers Bangladesh (IEB), Bangladesh Institute of

Founding member of WasteNet in Bangladesh

Editor of a quarterly newsletter on waste management and recycling in Bangladesh

Served as a Member of the Expert Committee on Clinical Waste Management

A professional civil engineer and urban planner by training

Awards and Recognition

Outstanding Social Entrepreneur by the Schwab Foundation of Switzerland for the

Outstanding Engineers Award 2003 from the Institution of Engineers, Bangladesh

Source: Company documents.

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource

Co-founder and Director of Waste Concern conceptualized, designed and

Member of the Institution of Engineers Bangladesh (IEB), Bangladesh Institute of

Founding member of WasteNet in Bangladesh

Editor of a quarterly newsletter on waste management and recycling in Bangladesh

Served as a Member of the Expert Committee on Clinical Waste Management

An urban planner and architect by profession

Awards and Recognition

Outstanding Social Entrepreneur by the Schwab Foundation of Switzerland for the

Source: Company documents.

Waste Concern: Turning a Problem into a Resource

Source: Company documents.

This document is authorized for use by Tim Chai, from 8/27/2013

Waste Concern: Turning a Problem into a Resource