Scaling an innovative PPP model for FSM services in three cities in Bangladesh

3 Role of FSM Actors in Sanitation » 3 Asia and the Pacific

Speaker: Habibur Rahman

Summary – for publication in conference brochure:

Half the population of Bangladesh now lives in urban areas, with the vast majority depending on on-site sanitation (OSS) systems. Historically, there has been a near total lack of formal, safe FSM services to these areas. In response, WSUP has introduced 3 city authorities to SWEEP, a PPP model for faecal waste collection services. SWEEP has now established itself as a profitable and growing business, serving 1.52 million residents, while maintaining 30% of the customer base as low income through an internal cross-subsidy approach. However, sustained growth of the business model is dependent on reforms to the wider regulatory environment. 

Introduction, methods, results and discussion:

Dhaka is one of the world’s megacities, with a population of 15 million people. 20% of Dhaka residents are connected to the centralised sewer network provided by Dhaka Water Supply and Sewerage Authority (DWASA), with the remainder dependent on largely unsafe and unhygienic OSS services, generally provided by informal pit-emptier groups.

Chattogram is the second largest city in Bangladesh with the country’s biggest seaport. There is no sewer line, and the city authority struggles to provide safe emptying service to its 3 million residents and existing businesses. This huge population again relies on traditional pit-emptier groups, who typically provide unsafe emptying services. Rangpur is a smaller city, with around 1 million residents and less business concentration; however, it accommodates service-related commuters from nearby districts through the week. Like Chattogram, the city has no lined sewer, and the full population depends on OSS solutions.

The total lack of formal FSM services means that in all 3 cities, a huge volume of faecal sludge is finally destined for disposal to surrounding waterbodies without receiving any treatment, posing a huge threat to public health and existing biodiversity. A Shit Flow Diagram made in 2014 shows that only 0.3% of the total faecal waste of Dhaka is disposed of safely.

In response to this challenge, WSUP has introduced SWEEP, a PPP based mechanized pit-emptying and transportation business model. DWASA adopted SWEEP in 2015, with Chattogram City Corporation replicating the model in 2017, and Rangpur City Corporation (RpCC) in 2018. Currently, 1 private operator, GCC, provides services in Dhaka in partnership with DWASA; 2 private operators (CSS & FAS) provide services in Chattogram; and 1 private operator is partnered with RpCC in Rangpur (RpCC is also rendering the same service from their conservancy wing).

All the private operators are linked with the city authorities under the same broad PPP arrangement, though minor adaptations were made to the model based on potential business scope in the individual cities. Under the lease-based agreement, the private operator pays an amount every month aligning with the vacuum tankers’ depreciation cost.


Importantly, the guarantee of public sector support offered by the PPP is leveraged to incentivise equitable service delivery. The private operator is required to maintain 30% of the customer base from low-income communities (LICs). Affordability is promoted through a progressive tariff system and internal cross-subsidy model, with lower tariffs for LIC residents relative to high-income and institutional customers. 

As of June 2020, the SWEEP model has collectively served 1.52 million people across the 3 cities, safely disposing of 17,596 m3 faecal sludge. The model has generated USD 237,567 total revenue and USD 54,271 total profit for the private operator. To continue the profit stream and to enlarge the market size in the focus cities, WSUP and public and private partners are now developing specialized marketing approaches focused on institutional customers and LIC residents.    

Conclusions and implications:

The overwhelming use of OSS in Dhaka, Chattogram and Rangpur implies high demand for FSM services, yet the gap between market potential and effective demand is considerable. Marketing campaigns for SWEEP have increased customers, but the widespread practice of connecting pits and septic tanks to open drains represents a fundamental market failure. In order to develop a viable market for formal FSM services in the long term, the public sector must make a concerted effort to improve regulation and initiate effective enforcement. WSUP and other sector actors are therefore working to support the implementation of new national Institutional and Regulatory Framework for FSM.

SWEEP Operators benefit from a reduced lease monthly lease fee, as per the agreement with the city authority. This is a major factor behind SWEEP’s profitability. However, the current leasing arrangement may not be conducive to further scale-up – the reduced fee could lower incentives to invest private resources into SWEEP. Conversely, raising the fee could erode profit margins. Reducing the cost of vacuum tankers could alleviate this issue: lowering import tax could be a valuable next step, particularly if matched by an increase in City Authority’s  capacity to procure and lease tankers to other commercial operators.

Relevant references:

Ross et al (2014) Fecal Sludge Management: Diagnostics for Service Delivery in Urban Areas: Case study in Dhaka
Bangladesh. WSP
World Bank.
WSUP (2017) From pilot project to emerging sanitation service: Scaling up an innovative Public Private Partnership for citywide faecal waste collection in Dhaka.
WSUP (2018) Incentivising the private sector to target low-income customers.

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