The project worked actively to get all key local stakeholders involved in developing the MRF concept. The chosen sites are clearly lower income areas where existing waste management services can be improved, and where economic opportunities and improvement in community livelihood is required. Over the course of the project and with input from the various stakeholders involved the form of the MRF PPP was generated.
The main mechanism created for operationalising the MRF facility is a non-profit company with mixed board representation (including government representatives and others). This company is intended to organize collection, further separation of waste, and subsequent sale of the waste either in raw, bulk form or after various levels of processing. These sales are expected in the long run to finance the operation of the MRF. All capital financing and the land required for the MRF is provided by the government.
The approach taken and the company structure created is a quite complex approach to PPPs. In particular, the company established is strongly associated with the local government, which in addition to providing all financing is effectively carrying most of the risk. It is not easily apparent what role is expected from private parties who are not providing financing, face any competitive threat and have unclear responsibilities. By creating such a close and blended arrangement it is also unclear how the local government will play a regulating role to ensure the MRF is operated effectively and in the best interests of the urban poor.
While this arrangement for building and operating an MRF may have some advantages, for the MRF to gain the potential benefits that PPPs can bring a better structuring of roles, risk allocations, incentives, responsibilities (including financing and regulation), and use of competitive forces is needed.