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Market News

 December 17, 2009
Solid Waste Management in the Gulf Region - Challenges & Opportunities

 By Vivek Gautam, Sr. Research Analyst, South Asia & Middle East, Environmental & Building Technologies Practice

PRESENT SCENARIO

Scientific management of solid waste is a grave challenge faced by most modern societies. In the gulf region, where most countries have highest per capita waste generation across the world, the scale of the challenge faced by civic authorities is even bigger. Fast-paced industrial growth, recent construction boom, increasing population & rapid urbanization, and vastly improved lifestyle & unsustainable consumption pattern have all contributed to this burgeoning waste problem. Preliminary estimates put the total volume of solid waste generated in the GCC region at around 120 million tons per year. A huge proportion of this is expected to be the waste generated from construction and demolition activities; municipal waste is the second largest waste category by source.

In December 1997, GCC countries adopted a uniform waste management system and a monitoring mechanism for waste production, collection, sorting, treatment and disposal. Most of the waste management regulations and strategies adopted are based on universally accepted scientific approach enumerated in Integrated Waste Management Hierarchy. However, the hurdle lies in effective implementation.

A look at the composition of Municipal Solid Waste in these countries suggests that it is largely decomposable and recyclable. However, at present waste disposal into landfills remains the widely practiced method. In countries such as Kuwait and Bahrain where limited land is available, this doesn't seem to be most prudent option. There is need to encourage composting, recycling and incineration of waste in the region. Also the pace of waste management infrastructure development has been lagging the rate at which per capita waste generation has gone up.

In the present scenario, GCC Waste management sector faces some challenges. At the same time this also indicates the vast scope for improvement in existing setup and practices followed in the sector. Private players can leverage their technical know-how and experience for significant value addition across the waste management value chain. Some of the challenges and opportunities presented by the sector are as follows.

CHALLENGES

Weak Waste Collection, Transportation and Handling Infrastructure: In most GCC countries the existing waste handling capacity is insufficient. There is need to streamline the waste collection and transportation operations as intermingling of hazardous waste and municipal waste is not uncommon. In addition, the efficiency of the sorting process needs to be improved. Presently recyclable recovery rate is low. Further, in the absence of local recycling facilities, there is no alternative except to dump the otherwise recyclable material at Landfills.

Waste Recycling is Expensive: Though recent years have seen an increase in the number of waste recycling facilities the economics of recycling is still not very favorable. In many cases recycling waste is expensive compared to buying the product. Government support in terms of cheaper land for landfills, subsidies is often necessary for commercial viability.

Under Developed Market for Recycled Products: Insufficient demand for recycled products in the local market is another reason, which has hampered the growth of the waste recycling industry. There are a few units engaged in recycling waste paper, paperboard and plastics. Much of the recycled products are then exported to markets like India, Pakistan and other Southeast Asian countries.

OPPORTUNITIES

In last few years, planning authorities have awarded a number of contracts to the private sector for setting up and operating Integrated Waste Management Facilities or waste recycling units. However, opportunities in the sector are still largely untapped.

Waste Collection and Transportation Services: A number of private players are active in the waste collection and transportation market. At present around 70 percent of the total waste in Dubai is collected by private sector. There is good growth potential for such services in the market. The recent acquisition of Sharjah-based Al Ghadeer Waste Collections Company (GWC) by Averda is indicative of the strong growth prospects market participants perceive in the regional market.

Management of Landfill Operations: At present municipalities manage the majority of the landfills; however, it is likely that new facilities would be built under BOOT or BOT contracts. In fact, Singapore-based Keppel Corporation is setting up an integrated waste management facility in Qatar. Once the facility is operational, the company will also be responsible for its operations and maintenance for 20 years.

Waste Recycling: Recycling of waste paper, paper board, metals and glass is already practiced in GCC albeit at very small scale. Currently around 88 percent of the total waste generated in Dubai sent to landfills, which is high as per international standards. With only 12 percent of the total waste being recycled (Data for Dubai) recycling is set to increase. As waste management practices become more efficient across the region, waste recycling is likely to be more attractive commercially.

Waste to energy opportunity: Planning authorities across the region are contemplating setting up waste to energy facilities. The market for such technologies is likely to see rapid growth over next few years. Dubai municipality has planned a waste to energy plant with capacity of 6000t/d.

Equipment Suppliers: Increased focus on waste management represents a growing market for suppliers of compactor trucks, garbage bins, incinerators and other auxiliary equipment.

CONCLUSION

As GCC countries work towards the implementation of next generation waste management practices to address challenges of global warming, environmental preservation and sustainability, the waste management market is set to enter an exciting phase.

ADDITIONAL INFORMATION

Frost & Sullivan is coming up with a comprehensive research service about this sector with a view to capture future trends. The study will also encompass market growth drivers and restraints along with the challenges market participants are likely to face in this region.

Source: www.frost.com