One option is Waste-to-Energy (WTE), which converts appropriate waste streams into usable energy while reducing the volume of waste requiring final disposal.
WTE is recognized under Philippine law. The Ecological Solid Waste Management Act includes resource recovery and WTE generation among the environmentally sound techniques that may be considered in solid waste management.
The Renewable Energy Act also encourages the adoption of WTE technologies, subject to applicable environmental laws and standards.
Who can undertake WTE projects?
Local government units (LGUs), which bear primary responsibility for solid waste management, may develop WTE projects. Other government entities with appropriate mandates may also participate.
In Metro Manila, this may involve the Metropolitan Manila Development Authority (MMDA) working with the concerned LGUs. A WTE facility need not be limited to a single city.
Several LGUs may cooperate and aggregate their waste volumes, potentially improving a project's technical and financial viability.
The Department of Energy (DOE) and the Department of Public Works and Highways (DPWH) may also pursue WTE projects, subject to their respective mandates.
How can WTE projects be implemented?
Implementation pathways
There are at least two ways to implement WTE projects.
First, the government may undertake the project itself using public funds. It may procure the necessary works, goods, equipment and services under applicable government procurement laws.
The government finances the project and generally retains the financing, construction, operational, technological and performance risks, although specific risks may be contractually allocated to suppliers and contractors.
Second, the government may pursue a public-private partnership (PPP) under the PPP Code, Republic Act No. 11966, and its Implementing Rules and Regulations (IRR).
The IRR expressly covers environmental and solid waste management facilities, as well as power generation, renewable energy and other energy-related facilities. Under a properly structured PPP, the private partner may finance, design, construct, operate and maintain the facility, with risks allocated to the party best able to manage them.
For projects involving two or more LGUs or government agencies, the PPP Code provides options for project approval.
In both cases, any private-sector entity engaged as a partner or service provider must have the requisite track record and experience in waste-to-energy projects.
Tariff setting
A critical issue is tariff setting. A WTE project may involve tipping or waste-processing fees, electricity revenues, government payments or a combination of these.
Under the PPP Code framework, applicable tariffs and their adjustment mechanisms should be transparent and predictable and incorporated into the PPP structure. Regulatory bodies must consider service quality, performance indicators, fairness, the public interest and the private partner's reasonable rate of return.
The choice, therefore, is not simply WTE or no WTE. The government must first determine the appropriate delivery mode: public procurement or PPP.
The ultimate tests should be affordability, environmental sustainability, value for money, proper risk allocation and, most importantly, the public interest. —Ed: Corrie S. Narisma
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