Cost-Effectiveness of Decentralized Solid Waste Management Method as Compared to the Centralized Method Implemented Through Urban Local Government in Tirunelveli City, Tamil Nadu, India

Abstract

Objective:

To compare the cost-effectiveness of a newly introduced decentralized method with the existing centralized solid waste management (SWM) method in 2019 in Tirunelveli City, Tamil Nadu, India.

Materials and Methods:

A cross-sectional study was undertaken to compare the costs for the two SWM methods using the bottom-up approach. We ascertained cost centers for the collection, transportation, and processing of solid waste for the two methods. We reviewed the records and collected data to estimate the costs and outputs (waste processed per capita) of the two SWM methods using data abstraction forms for each identified cost center. We calculated the cost and outcome of both methods and the incremental cost-effectiveness ratio (ICER).

Results:

The total cost for the decentralized method was ₹121 million (USD 1.72 million), and that of the centralized method was ₹222 million (USD 3.15 million). The cost per capita of SWM in one year was lesser for the decentralized (₹526) as compared to the centralized method (₹612). The cost per metric tonne (MT) of SWM in decentralized and centralized methods was ₹5595 and ₹4683, respectively. The ICER lies in the right lower quadrant (ICER: 1.2375), indicating that the decentralized method was cost-effective.

Conclusion:

Solid waste processing by the decentralized method is cost-effective as compared to the centralized processing method in terms of waste processed per capita. We recommend the civic bodies to adopt the decentralized method with sufficient allocation of resources for efficient SWM. Furthermore, this will not only reduce greenhouse gas emissions but also have a positive impact on climate change mitigation.

INTRODUCTION

Solid waste management (SWM) is a global concern that affects everyone in the world. According to World Bank estimates, 2.24 billion tonnes of solid waste were generated worldwide in 2020. The increasing quantity of waste and its complexity with the economy poses a serious risk to ecosystems and public health.[1,2] The Sustainable Development Goals indicator 12.5 highlights the importance of SWM and recycling, aiming to substantially reduce solid waste generation.[3] India is one of the top countries in generating municipal solid waste (MSW) due to rapid economic growth and urbanization. Annually, more than 60 million tonnes of waste are produced by India, with the majority being solid waste, plastic waste, and e-waste.[4] In India, 0.145 million MT of waste are generated daily,[5] and the per capita solid waste has also increased from 118.7 g/day in 2015–2016 to 119.1 g/day in 2020–2021.[6] Urban India faces challenges such as increasing population, inadequate collection and transportation, not adopting appropriate methods, lack of skilled human resources, and lack of funds for effective management of solid wastes.[7] Considering growing challenges, India launched the largest sanitation initiative called the Swachh Bharat Mission (SBM), with one of its objectives being to ensure door-to-door garbage collection and proper municipal waste disposal in India.[8]

In India, most states initiated decentralized SWM, which requires investments in various sectors to provide sustainable service.[9] Centralized and decentralized methods are commonly practiced in India. The centralized method uses a centralized processing center to collect, transport, and process the wastes, whereas the decentralized method uses micro composting centers (MCC).[10] In the state of Tamil Nadu, only around two-thirds of the waste is collected, of which less than one-fifth is processed scientifically, and the remaining are dumped in the open.[11] According to guidelines by the state Commissionerate of municipal administration in Tamil Nadu, solid waste segregation at the household level and processing through a decentralized method are mandated by the Solid Waste Rules (management and handling), 2016.[12]

Tirunelveli, the capital city of Tirunelveli district, Tamil Nadu, India, initiated solid waste processing using a decentralized method and established 39 MCCs.[13] A comprehensive assessment was necessary to determine their processing efficiency, other consequences, and regular functioning. Therefore, systematic estimation of costs incurred and the outputs are helpful for decision-makers. Such estimation might be useful to compare the effectiveness of the two methods. If new decentralized methods are found to be of lower cost and involve fewer human resources, it will support waste managers for optimal decision-making in other Indian settings.[14] In India, no costing studies on different SWM methods from the bottom-up approach have been done so far. In this context, we compared the costs and outputs of decentralized and centralized methods of SWM and determined the cost-effectiveness of decentralized processing methods compared to the centralized method of SWM in Tirunelveli, Tamil Nadu, India, in 2019.

METHODS

We adhered to Comprehensive Health Economic Evaluation Reporting Standards (CHEERS) guidelines for this study.[15]

Study design

Cross-sectional study

Study setting

Tirunelveli City is the administrative headquarters of Tirunelveli district in Tamil Nadu. The wastes are collected, transported, and processed in one centralized compost center and 39 MCCs located in various places of the city [Table 1]. The city generates 170 MT of solid waste daily, of which 130 are biodegradable. Almost one-third of the households in the city are equipped with MCC facilities for processing solid waste. In addition to MCCs, pit processing, bio-digesters, and home composting methods are also used.

Table 1.

Summary of cost centers and major cost drivers for two types of solid waste processing methods

Cost center	Categories	Major cost drivers
		Fixed cost	Variable cost
(1) Collection	Human	Salary	Allowances
(2) Transportation	Vehicles	Capital	Maintenance
	Equipment	Capital	Maintenance
(3) Processing/disposal	Biodegradable waste
	Land	Cost	–
	Human	Salary	Allowances
	Building	Construction	Maintenance
	Equipment	Capital	Maintenance
	Nonbiodegradable waste (recyclable)
	Land	Cost	–
	Human	–	Allowances
	Building	Capital	–
	Transport	–	Cost
	Mixed (nonrecyclable) waste	Land for dumping	Maintenance (contingency)

Target units

We conducted the study at the solid waste processing centers, which process the generated biodegradable and nonbiodegradable wastes in 55 city wards.

Study perspective

We estimated the costs and outputs of the two waste processing methods from the perspective of the local urban government.

Operational definitions

• Cost center: A function within an organization that does not directly add to the profit but still costs the organization money to operate.

• Cost drivers: A unit of the function that causes a change in the function’s cost.

• Decentralized method: Collection, transportation, and processing or disposal of solid wastes in MCCs.

• Centralized method: Collection, transportation, and processing or disposal of solid waste in a centralized processing center.

Inclusion and exclusion criteria

We included all the centralized and decentralized (MCCs) operation methods and excluded other solid waste processing methods.

Analytical time horizon

We analyzed the cost and outputs of the decentralized and centralized method of processing biodegradable waste for a period of one year, from January to December 2019. We chose this time horizon because the decentralized processing interventions were started in 2017, and a yearlong phase would have been required to attain its full capacity and for the availability of records, which would reinforce the better quality of data obtained.

Discount rate

We applied a 3% discount rate for all the equipment used in SWM and vehicles used for transporting the solid wastes to adjust the cost to their present value (for the 2019 rate).

Currency, price date, and conversion

We measured and reported all the costs in INR for the year 2019.

Assumptions

We assumed all cost centers in both methods function regularly during the reference period. We further assumed that the records on inputs for collection, transportation, and processing of biodegradable waste, including the human workforce in every available center, are actuals for the reference period.

Data collection

We interviewed four sanitary workers, two sanitary inspectors, two sanitary supervisors, and four drivers to assess the human resource and maintenance costs. We interviewed eight residents from the corporation to estimate the land cost. We collected data on inputs for cost centers such as the human resources salary and purchase value of vehicles, equipment, and land by reviewing records using data abstraction forms at the study units. We interviewed various categories of workers involved in waste collection, transportation, and processing to collect information required to arrive at an apportioning factor for a shared cost estimate. We also interviewed residents adjacent to the processing centers to arrive at the average rental price of the land and the building in the corresponding localities.

Data analysis

We summated costs incurred for all the cost centers during the reference period. After apportioning the total salary, we summated the human resources involved in the two methods. We calculated the cost per capita for processing total solid waste as the ratio of the total cost incurred for processing solid waste in two methods and the total population covered under the two methods. We also calculated the costs per capita for the two methods separately using the costs incurred under each method and the population covered under the corresponding method. We calculated the cost per metric tonne of waste processed and the cost per kg of waste processed for the two methods separately using the cost incurred and waste processed under the corresponding method. We also calculated the cost per capita and cost per metric tonne of waste processed for biodegradable, nonbiodegradable, and mixed waste in decentralized and centralized methods. We calculated ICER as the ratio of the difference between the costs incurred for collection, transportation, and processing of solid waste by centralized processing and MCC to the difference between the quantity of waste processed under the two methods.

Uncertainty analysis

We performed a one-way sensitivity analysis by changing ± 20% in each of the input costs of cost drivers at a time and studied the change in the outcome.

RESULTS

The overall costs incurred for processing solid waste was ₹343 million (USD 4.87 million), of which ₹121.1 million (USD 1.72 million) and ₹222 million (USD 3.15 million) were incurred by the decentralized and centralized methods, respectively. The cost incurred for salary and human resources in decentralized and centralized methods was ₹85.7 million (USD 1.22 million) and ₹160.4 million (USD 2.2 million), respectively. The costs incurred for equipment in the decentralized and centralized methods were ₹2.9 million (USD 0.04 million) and ₹7.1 million (USD 0.10 million), respectively. The costs incurred for collection in the decentralized method was ₹88.7 million (USD 1.26 million), whereas it was ₹167 million (USD 2.38 million) for the centralized method [Table 2].

Table 2.

Cost estimation of cost centers in collection and transportation of solid wastes for centralized and decentralized method of processing in Tirunelveli City Municipal Corporation, Tamil Nadu, Jan–Dec 2019

Category	Estimated cost (in Indian National Rupees – INR ₹) (in millions)
	Total cost	Centralized processing method	Micro composting center
Collection
Human resources – salary
Sanitary officer	2.6	1.8	0.8
Sanitary inspector	4.2	2.9	1.3
Sanitary supervisor	4.6	3.2	1.4
Sanitary workers – regular	133.8	89.9	44.0
Sanitary workers – contract	93.8	57.9	35.9
SBM animators	3.3	2.3	1.0
Allowances	3.9	2.4	1.5
Subtotal	246.1	160.4	85.7
Equipment
Tricycle capital	1.6	1.6	0.0
Maintenance	0.2	0.2	0.0
Battery-operated vehicle capital	1.1	0.2	0.9
Maintenance	0.1	0.0	0.1
Dumper bins capital	1.6	1.4	0.2
Maintenance	0.2	0.1	0.0
Compactor bins capital	1.2	1.1	0.2
Maintenance	0.1	0.1	0.0
Personal protective equipment	3.1	1.9	1.3
Tools for collection	0.9	0.6	0.3
Subtotal	10.1	7.1	2.9
Transportation
Salary
Drivers	24.4	22.2	2.2
Vehicles capital	2.0	1.8	0.3
Maintenance	0.2	0.2	0.0
Fuel	20.9	20.1	0.8
Subtotal	47.5	44.2	3.3
Collection total	303.6	211.7	91.9

The cost centers were land and building, sanitary workers, equipment, electricity, and personal protective equipment. The cost incurred for processing in the decentralized and centralized methods was ₹29 million (USD 0.41 million) and ₹9.5 million (USD 0.13 million), respectively. Among the cost centers for solid waste collection, 88% of the cost is incurred for the salary of human resources [Table 3]. We estimated the outcome of solid waste processing in terms of the quantity of waste processed during the year 2019. The total quantity of solid waste collected and generated in the decentralized method was 21,176 MT, and it was 47,889 MT in the centralized method [Table 4]. The cost per capita of solid waste processed in one year was ₹526 for the decentralized method and ₹612 for the centralized method. In the decentralized method, the cost per metric tonne of SWM was at ₹5595; for the centralized method, it was ₹4683 [Table 5]. We plotted the ICER value in the Cost-Effective Analysis plane (CEA) for waste processed per capita as against the cost incurred. The ICER lies in the right lower quadrant (ICER 1.2375), which indicates that the decentralized method was cost-effective [Figure 1].

Table 3.

Cost estimation of cost centers in processing of solid wastes through centralized and decentralized method of processing in Tirunelveli City Municipal Corporation, Tamil Nadu, Jan–Dec 2019

Category	Estimated cost (in Indian National Rupees – INR ₹) (in millions)
	Total cost	Centralized processing method	Micro composting center
Processing
Biodegradable waste
Land cost	3.5	0.3	3.2
Building cost	2.1	0.2	1.9
Sanitary workers salary	25.3	6.8	18.5
Sanitary equipment	1.2	0.5	0.7
Electricity	2.4	0.2	2.2
Shredder	1.6	0.2	1.5
Personal protective equipment	1.0	0.8	0.2
E solution/jaggery/curd	1.5	0.6	0.9
Subtotal	38.5	9.5	29.0
Nonbiodegradable waste
Land cost	0.1	0.1	0.0
Mixed waste
Land cost	0.6	0.6	0.1
Miscellaneous	0.2	0.1	0.0
Subtotal	0.8	0.8	0.1
Processing total	39.3	10.3	29.1
Total (collection + processing)	343.0	222.0	121.1

Table 4.

Estimation of the outcome of SWM through centralized and decentralized method of processing in Tirunelveli City Municipal Corporation, Tamil Nadu, Jan–Dec 2019

Category of solid waste processed (Jan–Dec 2019)	Solid waste collected and processed (in MT)
	Total	Centralized processing method	Micro composting center
Biodegradable	33,150	18,675	14,475
Nonbiodegradable (recyclable)	20,443	16,212	4230
Nonbiodegradable (nonrecyclable)	5110	4053	1057
Mixed	10,359	8947	1412
Total	69,065	47,889	21,176

Table 5.

Estimation of unit cost of solid waste processing through the centralized and decentralized method of processing in Tirunelveli City Municipal Corporation, Tamil Nadu, Jan–Dec 2019

Category	Numerator/Denominator	₹	Average unit cost (in INR)
Cost per capita	Total cost for processing solid waste through the two methods	343,009,000	668
	Total population covered through the two methods	513,487
	Total cost for processing of solid waste through decentralized method	121,088,000	526
	Total population covered under decentralized method	230,205
	Total cost for processing of solid waste through centralized method	222,021,000	612
	Total population covered under centralized method	362,779
Cost per metric tonne	Total cost for processing solid waste through the two methods	343,009,000	4963 (4966)
	Total quantity of solid waste processed through the two methods	69,065
	Total cost for processing of solid waste through decentralized method	121,088,000	5595 (5718)
	Total quantity of solid waste processed through decentralized method	21,176
	Total cost for processing of solid waste through centralized method	222,021,000	4683 (4636)
	Total quantity of solid waste processed through centralized method	47,889

Figure 1.

ICER of decentralized processing compared to centralized processing of solid wastes in Tirunelveli City Municipal Corporation, Tail Nadu, India, Jan–Dec 2019

DISCUSSION

We documented the costs and outputs of both SWM methods and determined the cost-effectiveness of the decentralized method in the city of Tirunelveli. We identified that the costs for the decentralized method were less compared to the centralized method. The majority of the amount in both methods was incurred for salary and transportation. In our study, we identified that the cost of a decentralized method was cost-effective. The same is reiterated in the document released by the Indian Ministry of Housing and Urban Affairs, which mentioned that the decentralized waste management systems reduce the cost incurred for the SWM process by reducing the transportation cost.[8] The studies from India reported that the decentralized method was cost-effective due to the shorter distance of transport and low treatment cost.[16,17] and was supposed to be adopted in the city to manage solid waste efficiently.[18] India’s planning body in 2014 recommended a decentralized approach as it was appropriate for the segregation, transportation, and preprocessing of solid waste and would minimize the cost of SWM and problems of public health issues.[19] The decentralized method could solve problems such as processing and treating huge amounts of waste collected in India.[20] The Indian National Action Plan for Municipal Solid Waste Management recommended decentralized or regional facilities for treating such waste.[21] The Citizen Consumer and Civic Action Group (CAG) recommended the decentralized waste management system for Tamil Nadu and reported that this would be a profitable method.[22] The Paris Agreement, called the International Treaty on Climate Change, globally highlights the importance of greenhouse emissions and their impact on climate change. The documents indicate that an effective SWM could reduce greenhouse emissions globally, which will be used for sustainable development. The prevention and reduction of solid waste is the best management option for climate change mitigation and reducing greenhouse gas emissions.[23] Apart from the initiatives of the Government of India, it is also essential to discuss the responsibilities of the citizens. Recent evidence suggests that citizen engagement is crucial for effective SWM. Hence, involving citizens as stakeholders and educating them[24] through proper channels for proper segregation, disposal, and recycling would have a positive impact on effective management.

Our study indicates that the processing cost was higher in the decentralized method due to the workers’ salary, electricity, land, and building costs. In fact, a study highlighted that the total cost of processing solid waste through the decentralized method was higher.[25] The reports of the Indian government noted that the urban local bodies spend between ₹500 to 1500 per tonne on SWM, of which 60–70% is spent on collection alone, 20–30% on transportation, and <5% on treatment and disposal which is essential to prevent environmental pollution.[26] On the other hand, per capita cost was higher in the centralized method, whereas the total metric tonne costs were higher in the decentralized method. In addition to that, land, human resources, buildings, and equipment may further increase the cost. A study done in Delhi estimated ₹642/t for collection, ₹240/t for transportation, and ₹ 24.5/t for disposal. The same study reported that the municipality spends approximately ₹50–250 per capita per year for SWM.[27] Another study mentioned that the per capita expenditure on SWM was 295 in Chennai, 431 in Delhi, and 428 in Mumbai.[28] The annual report on SWM indicates the implementation of a decentralized standalone SWM model in many states in India.[6]

Study limitations include miscellaneous expenses of a few study units that cannot be retrieved. However, it may not distort the cost estimation by even 1%. Another limitation is that for allocating costs between collection and transportation among a few inputs, we took a proxy indicator of the proportion of waste processed, which may not distort the estimated cost by more than 1%. In conclusion, solid waste processing by the decentralized method is cost-effective as compared to the centralized processing method in terms of waste processed per capita. Hence, adopting the decentralized method would reduce transportation and storage costs and enhance environmental cleanliness. We recommended the optimal allocation of funds for the decentralized method in annual budgeting for improved solid-waste processing.

Ethical approval

The authors obtained approval from the Institute Human Ethics Committee of ICMR-NIE, Chennai, Tamil Nadu.

Financial support and sponsorship

Nil.

Conflicts of interest

There are no conflicts of interest.