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KARACHI, Jan 11: A final agreement to privatise and hand over the city’s solid waste management to a Chinese firm for a period of 20 years was signed here on Friday night.

The agreement was signed in the presence of City Nazim Mustafa Kamal by Executive District Officer (Municipal Services) Masood Alam and Managing Director of Shanghai Shen Gong Environmental Protection Company Limited Qian Yu Lin at a simple ceremony held at a local hotel.

The city government and the Chinese firm had inked a letter of intent (LoI) in this regard in November.

The Chinese firm would be responsible for door-to-door collection of solid waste from all areas of the city and its disposal on designated landfill sites from now onward. The city government and towns’ staff and machinery relating to solid waste management will be at the disposal of the foreign company which will be responsible for their salaries and benefits under the agreement.

The company will invest $250 million to upgrade the existing landfill site, establish its offices, eight garbage transfer stations and one more landfill site in the suburbs of Karachi. The system is stipulated to be up and running by March.

Under the agreement, the city government will pay $20 per tonne to the Chinese company for lifting and disposal of domestic waste, hospital hazards and other chemical waste in a way that there be no threat to the environment.

Officials said about 8,000 tonnes of solid waste was being generated in the metropolis for which the city government would be paying around $160,000 to the firm daily. The officials claimed that the city government and the 18 towns were spending around Rs3 billion annually on the lifting and disposal of solid waste but the situation on the ground was not satisfactory as only half of the total waste was being disposed at the landfill site. Now the estimated amount to be paid to the Chinese firm would be Rs3.5 billion every year.

Municipal tax

Well-placed sources told Dawn that the city government was going to impose a municipal tax across the city through which it would charge Rs25 per month for the lifting of garbage from each house. Sources explained that the revenue to be generated through the municipal tax would help the city government meet the cost to be paid to the Chinese firm.

At present, most of the 178 union councils were charging Rs50 from each house in the head of garbage collection.

According to the agreement, the Chinese company would generate money through waste recycling project and it would give 15 per cent of the total revenue generated in this head to the city government.

The Chinese firm will also install a waste energy plant at a later stage to generate 560 megawatts electricity. Under the agreement, it will sell power to the Karachi Electric Supply Corporation and the city government will get 15 per cent of the total income.

Sources believed that the privatisation of the solid waste management would bring uniformity in the process as currently the city government and the towns were separately doing the job.

Earlier, five firms had shown their interest in managing the city’s solid waste and the city government had received the highest bid of $64 per tonne. However, the Chinese firm offered the lowest rate of $20 per tonne.