Washington, USA, September 16, 2021 (Sint Maarten)

Aim Texas Consultants have been prepared and submit to the World Bank Financial Framework for sustainable operations of solid waste in Sint Maarten, and a DBO contract in accordance with FIDIC GOLD BOOK for Design, Build and Operate the Pond Island Landfill. The studies have been approved by the World Bank and Government of Sint Maarten.

The main objectives of the Financial Framework are:

• Establish a waste fee framework for providing sufficient fund for cost recovery of SWM services in the City in order to eliminate the government subsidy gradually,

• Outline the ways on how to achieve this objective, securing the cost recovery with increasing the efficiency of waste fee collection, and

• Show the diversion of the funds collected according to the differentiation the services, mainly among the collection / transport and disposal/treatment services.

This report examined various options/models for a financially sustainable solid waste management service provision and proposed suitable cost recovery mechanisms, taking reference to other countries with similar context, approaches, and levels of sector development.

Aim Texas consultants performed the followings within Financial Framework:

• Conduct necessary financial analysis of the existing and proposed waste management system (including collection, transportation, recycling, sorting, composting, landfilling, and other means of treatment and resource recovery including mass-burn incineration) to the best of their ability and knowledge.

• Review and estimate the capital requirements for any existing plus new waste management facilities as projected or proposed by earlier studies carried out by this TA.

• Adjust any previously developed projections of operating and maintenance (O&M) costs for the first seven years (2020 to 2026) of the operation of the proposed waste management system with any new procedures, facilities, and equipment as appropriate.

• Assess the feasibility of the various models (i.e. “contract model”, “franchise model” and variations and combination of these models for private sector involvement) concerning their practical application in Sint Maarten.

• Assess the costs, revenue potential, risk transfer, equity, community relations, positive and negative externalities in terms of advantages and disadvantages within the Sint Maarten context, including households and businesses as two major client groups and all collection modalities.

• Review and update cost projections already made.

• Review the implications and feasibility of introducing a combination of sector cost recovery schemes that could include national government subsidies, user charges, local taxes and fees for different parts of the solid waste operations.

• Propose various cost recovery schemes in the Financial Framework, together with the corresponding tariff structures for solid waste fees to be collected from residents, commercial and industrial establishments, budget institutions and tipping fees.

• Develop and analyze the options for the billing and collection of these taxes and fees in relation to household disposable income in Sint Maarten.

• Propose the modifications required to the current Financial Management system operated by VROMI to integrate proposed billing and collection mechanisms and waste management data to be available from the new weighbridge and proposed facilities to be installed (MRF and mass burn incinerator).

• Recommend alternative funding sources and financing mechanisms to cover potential shortfalls and provide temporary subsidies. Such financing may include but not be limited to loans, grants, external development assistance, etc.

Analyze the scenarios and associated costs and benefits for setting tariffs in the short-term  (0-7 years) and medium-term (7-10 years) and long-term (10-15 years) to achieve incremental financial sustainability of solid waste management in the city and develop the roadmap to achieve it.