Municipal Programme for Solid Waste Management in Bosnia and Herzegovina Programme Document

1 of16 November 2009 Municipal Programme for Solid Waste Management in Bosnia and Herzegovina Programme Document 1. INTRODUCTION The Swedish International Development Cooperation Agency (Sida) will support a four and a half year programme in BiH, with the purpose to facilitate development of a well functioning solid waste management system. The programme design as presented in this document may be revised and amended if deemed necessary. The programme will aim at improving quality and availability of solid waste service, utilizing the economic potential of the sector and reducing environmental and health concerns. It will help Bosnia and Herzegovina in fulfilling future candidacy requirements for the EU membership. The programme will consist of a combination of capacity building and investment support. It will comprise the following three components: 1) State and entity level capacity building and nation-wide public awareness campaign. 2) Municipal capacity building and investment support 3) Inter-municipal and regional capacity building and investment support Implementation will mainly take place on the municipal level, and the municipalities shall be assisted in upgrading their human and technical capacity. Inter-municipal cooperation and regional landfills shall be supported through capacity building and limited investments. The state and entity level will also be targeted for important programme activities and take part in capacity building. Participation of and guidance from all stakeholders will be ensured through their formal participation in advisory boards. It is envisaged that the state Ministry of Foreign Trade and Economic Relations (MOFTER) will be responsible for coordinating the programme on behalf of Bosnia and Herzegovina. The implementation of the programme will be divided into two phases, with a mid-term evaluation after the first phase. The first phase will mainly focus on the state and entity level and the municipalities of the Zenica and Bijeljina landfill regions. Limited support can be provided also to other municipalities and regions, if it is considered to be crucial for establishment of additional regional landfills

2 of16 and the possibility to engage them in the second phase of the Sida-financed programme. The programme will utilise experiences from, and bring value-added to, other economic and social development projects, as well as link to Sida engagements on the municipal level in BiH (e.g. Governance Accountability Project/GAP 1 ; Local Environmental Action Plans/LEAP 2 ; North-East Regional Development Association/NERDA 3, civil society, justice, public administration reforms and economic development). Special cooperation is envisaged with the World Bank as the main actor in the solid waste sector 4. The programme planning and implementation will be managed by a procured team of experienced international and local consultants with relevant know-how and experience, hereinafter called the Consultant. The main role of the Consultant is to provide support to local stakeholders in implementing various activities resulting in better solid waste management. Implementation will hence be carried out by the local stakeholders, but with guidance and hands-on support from the Consultant. The Consultant s role will be to strengthen the sense of ownership and responsibility, to function as facilitator and adviser to the clients when analysing problems, defining targets and necessary changes. A keystone in the adopted National waste management strategy of BiH 5 is to construct approximately 16 regional sanitary landfills 6, mainly based on World Bank financing and local co-funding. The landfills will be used for disposal of solid waste being delivered to the sites by the municipalities, as substitutes for the numerous existing open waste dumps which negatively affect environment and health. According to state laws the use of open dumps should have been terminated by January 2008, but compliance with this deadline has not been enforced. The solution with regional landfills is based on regional utility companies, established as shareholding partnerships or other forms of agreement with municipalities. This represents a new form of regional cooperation between municipalities, which so far is limited to landfill ownership and operation. Municipalities are legally responsible for waste collection and other issues of waste management. The efficiency of municipal services will consequently affect the utilisation and operation of regional landfills. Many municipalities lack adequate technical resources for waste handling, and are often financially and institutionally weak. There is also great need for human resource development within the sector. 1 http://www.bihgap.ba 2 http://www.rec.org.ba/webengleski/liseeinfoeng.htm 3 http://www.credo.ba/indexe.php 4http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=362026&menuPK=3620 58&Projectid=P107998 5 Bosnia and Herzegovina, National Strategy for Solid Waste Management, August 2000. 6 The regions are not formal administrative units.

3 of16 Financial constraints relate to the generally weak economic situation, which affect household incomes and consequently state and municipal tax revenues. BiH is still a low-income transition country with high unemployment rates. The affordability of households to pay fees for waste collection and other utility costs will have to be considered when raising tariffs to improve cost-coverage rates. 2. OVERALL GOALS The programme shall meet the following goals: i. Enhanced know-how and commitment at the state and entity level as regards policy issues and incorporation of EC guidelines into strategic planning, legislation and concrete measures in solid waste management, for future compliance with EC regulations. ii. iii. iv. Improved legislative and institutional framework on solid waste management in compliance with the orientation and guidelines of the national solid waste strategy on the state, entity and municipal level. Strengthened local governance, accountability and political commitment as regards solid waste management in participating municipalities. Increased public awareness and civil sector participation in developing sustainable waste management solutions based on tariff-financed municipal services and household responsibilities for waste handling and disposal. v. Concrete measures taken towards developing customer-oriented and costefficient municipal waste management services, based on efficient organisation and management, efficient use of technical and financial resources, clear responsibilities and recognition of environmental, social, sanitary and economic principles. vi. vii. viii. ix. Mobilised domestic and international financial resources and co-financing that supports implementation of investments, in compliance with cost-bearing principles and eligibility criteria. Value-added to the World Bank financed programme through increased capacity of municipalities and regional utility companies. Improved coordination and cooperation between municipalities in participating regions, with the purpose to develop more economic solutions not only regarding construction and utilisation of sanitary landfills but also on issues such as waste collection, transportation, recycling, hazardous waste and procurement. Use of participating municipalities as role models for other municipalities by promoting replication of the programme, as well as promoting innovations that lead to cost-saving and improved efficiency.

4 of16 3. OBJECTIVES AND EXPECTED RESULTS All inputs and activities shall comply with the overall goals of the programme. They shall be result-oriented, produce concrete and tangible outputs and generate measurable results as defined in these terms of reference. The following list of operational objectives and targeted results can serve as guidance for definition of quantitative or qualitative performance indicators of programme achievements. A. State and entity level Commitment of decision makers to take concrete action to develop sustainable waste management systems in BiH, after taking part in capacity building. Policy and legislative changes which will enhance responsibility, improve compliance with the legislation and initiate concrete action on the municipal level. Concrete measures taken that will improve enforcement of laws and regulations on waste handling. Prepared priority list and timetable for compliance with various EC directives on solid waste management. Increased public awareness and acceptance of the need for improved waste collection and sanitary disposal, separation, recycling and willingness-to-pay customer tariffs, by implementing a national awareness campaign. Concrete measures taken to mobilise financial resources and develop plans for replication and development of municipal waste management in other landfill regions, based on knowledge sharing from the Sida-financed programme. Policy changes and plans in place to implement feasible solutions of various methods to utilise energy contents of solid waste, recycle specific materials and compost organic content currently disposed as mixed waste on dumps and landfills. B. Municipal level a. Waste management system Waste management services organised, with clear and transparent rules regarding responsibilities, principles for tariff setting, budget allocations, decision-making, investment prioritisation, relations to private sector, customer orientation and other key issues.

5 of16 Improved service level, quantified as well as experienced (based on customer reviews), of household waste collection, transportation and disposal at the regional sanitary landfill. Investments procured and implemented based on economic and financial justification, competitive bidding and co-financing, utilising procedures and tools as developed by the programme. Rules introduced and indicators defined for identification and quantification of direct and indirect costs related to waste management. Improved cost-efficiency and cost-coverage of waste management, in order to provide sustainable services. Improved transparency and accountability of waste management, in order to justify services and charges. Revised tariff structure and adopted time-plan for increasing tariffs towards stepwise achievement of cost-coverage. Mitigation measures introduced and social support plans developed with targeted support to the poorest as compensation for raising tariffs above their affordability limit. Increased payment collection rate. Concrete measures taken to enforce compliance with national and local laws and regulations on solid waste handling and disposal. Adopted policy and action plan for separation and utilisation of recyclable materials (e.g. metals, PET plastics and paper). b. Municipal waste collection Improved collection services in terms of frequency, numbers of household customers (households and number of people) and waste collection area. Increased waste collection rate, i.e. the portion of produced household waste being collected. Conditions affecting the rate should be identified (e.g. increased collection frequency, enforcement of illegal dumping, separation and recycling of materials at household level, etc). c. Waste production, separation and recycling Reduced waste amount produced, total and per household, in the collection area. The produced amount is usually estimated from samples and it is necessary to identify conditions that affect the amount per household (e.g. consumption patterns) or the total amount (e.g. the area for collection services). Increased separation and utilisation of materials from household waste to be recycled, composted or utilised in other forms.

6 of16 d. Waste disposal Ensured fulfilment of obligations and commitments as defined in the service agreement with the regional landfill utility company. Improved transportation of waste to the regional landfill. Reduced illegal dumping, i.e. waste currently being disposed illegally (e.g. at open dumps), instead of being transported and disposed at the regional sanitary landfill. Prepared and adopted a realistic action plan, timetable, cost estimates and financing options for closure and rehabilitation of remaining open dumps. Adopted policy regarding incineration of infectious and other hazardous waste. e. Public participation and municipal cooperation Improved channels of public participation and verified ability to influence and communicate with the municipal waste management organisation. Concrete actions taken towards inter-municipal cooperation on waste management, including areas beyond partnership for regional landfills. 4. ORGANISATIONAL SET-UP The programme partners that shall assume roles and responsibilities in this programme are: Sida, the relevant institutions of Bosnia and Herzegovina at state, entity and municipal level, the utility companies at regional and municipal level, and the consultant. 4.1. Sida Sweden, represented by the Swedish International Development Cooperation Agency (Sida), will enter into a specific agreement with MOFTER on this programme. Sida will also contract the consultancy company selected through open tender, and enter into individual Agreements on Investment with each municipality/regional partner. The Embassy of Sweden in Sarajevo will act on behalf of Sida and be responsible for the programme follow-up, budgetary matters, responding to requests for no objection, approving work plans and reports and other issues. 4.2. State and Entity level The Ministry of Foreign Trade and Economic Relations (MOFTER) will represent Bosnia and Herzegovina and coordinate programme activities together with the Ministry of Environment and Tourism (FMET) in the Federation BiH and the Ministry of Physical Planning, Construction and Ecology (MPPCE) in Republika

7 of16 Srpska (RS). Other relevant ministries may also be engaged in the programme, e.g. the Ministry for Local Self-Governance and the Ministry of Finance in RS. It is envisaged that MOFTER, FMET and MPPCE will make the following undertakings: Facilitate access to and cooperation with relevant ministries and authorities at the state, entity, canton and municipal level. Assume responsibility for implementation of the awareness campaign and ensure adequate administration and internal control of the Swedish resources. Ensure that the Swedish contribution for implementation of the awareness campaign is used exclusively for agreed purposes. Ensure access to relevant documents and other information for the programme partners. 4.3. Consultant The Consultant (a core team of international and local consultants) will be contracted by Sida to provide services for a period of four and a half year, divided into two phases and the second phase subject to the results of a mid-term assessment of the programme results after the first phase. The Consultant is expected to implement a broad strategy of building capacities for efficient solid waste management, such as improved organisation, better planning and justification of investments, improved procurement and access to finance, introduction of software tools and information systems. Capacity building shall be implemented simultaneously with concrete material improvements on the ground, implemented by the local partners. The technical and material assistance of the programme shall result in an incremental reform process toward more effective solid waste management over the medium term. As part of the tender application the Consultant will submit a Programme Proposal and suggest participatory approach, methods, activities, inputs, target levels, relevant measurable performance indicators of the programme activities, and strategy for results sustainability. The local programme partners, experts and Sida staff will take part in the tender evaluation. During the Inception and Review Phase of six months the Consultant shall verify the ambitions set in the Programme Proposal and elaborate on the activities. During the implementation of the programme the Consultant shall apply proposed methods to the current situation, and in later stages quantify achievements of the programme activities. Achievements made should be specified for the state, entity and municipal level. 4.4. Programme Advisory Board (PAB) An advisory board will be set up for the programme. The main role of the PAB will be to suggest actions and make recommendations with regards to the Programme s budget and activities The PAB s suggested actions and recommendations is subject to Sida s no objection. Thus the board does not have the mandate to take decisions or in other ways act on behalf of Sida.

8 of16 PAB will serve as forum for coordination between the programme partners, where issues of joint interest such as priorities, time plan, budget, mix of capacity building and investments, problems and bottlenecks, compliance with the Programme s conditions and covenants, reports and achievements of expected results will be addressed. PAB will meet on a regular basis, at a minimum twice a year, and when so required for special reasons. Meetings can be initiated by Sida, the ministry representatives or the Consultant. The meetings will be organised by the Consultant, who will also prepare minutes of meetings for distribution to PAB members. Participation in the PAB will comprise representatives from the following partners: Ministry representative from MOFTER (suggested chairman) Ministry representatives from FBiH and RS Representative of the Embassy of Sweden in Sarajevo Sida s monitoring consultant World Bank representative Representative of the Consultant The associations of municipalities in FBiH and RS Other partners yet to be defined (e.g. national NGOs) 4.5. Regions In the first phase the municipalities from the Zenica and Bijeljina regional landfill regions will be considered, both of which are part of the World Bank s first stage sanitary landfill credit programme in BiH. Prerequisites in these regions are considered suitable for bringing value-added to the World Bank programme, by supporting municipalities in their responsibility for solid waste collection and disposal. The scope of the second programme phase will be defined after the mid-term evaluation. The programme is expected to engage in two or three additional regions in the second phase. The programme envisages limited financial support at the regional level. It can also be used in other regions besides Zenica and Bijeljina, if it is considered by the Programme Advisory Board to be crucial for the establishment of additional regional landfills and the possibility to engage more regions in the second phase of the Sida-financed programme. 4.6. Regional Boards (RB) A regional board will be established in each region. The purpose is to serve as a forum for municipal coordination and cooperation beyond the establishment and ownership of the regional sanitary landfill. This forum will also enable the Consultant to explain and discuss the goals and priorities of the programme and to access information. Participants in the board could be representatives of: Participating municipalities (Mayor s office and municipal administration) Municipal department or utility responsible for waste management

9 of16 Municipal department responsible for financial matters Regional utility landfill company Other partners 4.7. Municipal level Most programme activities will be carried out on the municipal level in the participating landfill regions. With the support of the Consultant, the municipalities will make plans for solid waste improvements that are justified as crucial for meeting the goal of improving economic, environmental, sanitary and social conditions. The plans, anticipated to include a package of capacity building and physical investments, for each municipality will be discussed at the PAB, and are subject to Sida no objection. Joint projects beneficial for a few municipalities are also possible (e.g. collection points or transfer stations). Sida will sign an agreement for each municipality participating in the Programme. Responsibilities of the municipalities with regard to the programme are expected to be: To ensure allocation of adequate human, technical and financial resources for implementation To authorise participation staff to prioritise project work in relation to daily duties To ensure participatory and transparent process To assume ownership of programme activities and utilise the Consultant as adviser and facilitator To set concrete objectives and implement concrete actions to meet expected results To bear full responsibility for implementation of Sida contribution to investments, To safeguard the sustainability of the created improvements In the Zenica region in FBiH all existing eight municipalities (Zenica, Zepce, Vitez, Novi Travnik, Travnik, Busovaca, Zavidovici and Visoko) have signed the inter-municipal agreement for construction and operation of the regional sanitary landfill Moscanica. However, three municipalities (Vitez, Novi Travnik and Zavidovici ) have not yet signed a service agreement contract with the landfill public utility company. In the Bijeljina region in RS all five municipalities (Bijeljina, Ugljevik, Lopare, Teocak and Celic) own and utilise the regional sanitary landfill. 4.8. Municipal Project Teams A project team will be set up in each municipality by the Consultant, the Mayor s office and the management of the municipal administration, consisting of representatives from the municipal utility, various municipal departments (i.e. not only technical handling of waste collection but also financial/treasury issues and other concerned areas) and representatives of local NGOs.

10 of16 The members of the municipal project teams should be given a clear mandate from their highest superiors to ensure sufficient availability and participation and avoid conflict with other duties and short-term priorities of their line management. 4.9. Monitoring consultant Sida will engage an independent consultant who will monitor programme progress and its compliance with goals, milestones and covenants. The monitoring consultant will work throughout the implementation period and participate in selected PAB and other meetings, access reports and other channels of information. 5. SCOPE OF WORK a) Inception and Review Phase (6 months) The Inception and Review Phase will focus on mobilisation of resources, formation of organisation, confirmation of commitments and compliance with covenants, capacity building for decision makers, review of the suggested awareness campaign, implementation of a baseline study and needs assessment of the current waste management situation, verification of performance indicators and deliverables, identification of necessary changes (gaps) and preparation of a Work plan for capacity building and investment support. All relevant programme partners shall be involved and contribute to implementation of the following preparatory activities, initiated and facilitated by the Consultant: Establishment of the Programme Advisory Board (PAB), the Regional Boards (RBs) in Zenica and Bijeljina, and project teams in participating municipalities. Establishment of routines for administration and reporting to Sida and the PAB. Verification of ownership and responsibilities of each programme partner (state, entities and municipalities) and their compliance with programme goals, objectives and covenants. Confirmation on allocation of human, financial and technical resources and authorisation from the programme partners. Confirmation of common perception of the result-oriented approach and the concept of capacity building, where the role of the Consultant is to advise and support the local partners as owners in performing identified activities. Review of the current legislation and identification of changes that will have to be made to ensure future compliance with EC directives and/or to reach other objectives. Review of systems, resources and necessary changes for enforcement of laws on waste management, including inspections, reporting, penalties, etc.

11 of16 Preparation of a baseline study of current status and the needs assessment of waste management issues on the state, entity and municipal level from environmental, economic, financial, social, sanitary, technical, legislative, managerial and human resource points of view. Capacity building and/or study trip for decision makers and management on issues such as policy and local governance, legislative and tariff issues, private/public relations, service outsourcing, energy recovery from waste, separation at source and recycling of different materials, and regulation and handling of infectious and other hazardous waste. A possible study trip can also be arranged during the Implementation Phase and target an appropriate EU member country. Review of the scope, content, budget, target groups and expected results of the suggested awareness campaign to be organised and implemented on the state and entity level Liaison with the World Bank to discuss and define activities which can provide value-added to municipalities engaged in the Bank s credit programmes and other donor supported activities. Such activities can, for example, comprise Environmental Impact Assessments (EIAs) of regional landfill projects in other regions. Establish contact with the Agency for Statistics of Bosnia and Herzegovina and explore potential correlations with this programme. Inter-municipal coordination and cooperation and support with ideas and bench-marking on how to develop concrete areas of common interest beyond landfill services in the participating regions. Definition of operational objectives, activities and expected results based on gap analysis, LFA technique or similar methods. Performance indicators relating to these targets should be defined. Adoption of targets and objectives by the stakeholders. Design of the eligibility criteria for investments. Identification and justification of investments from environmental, economic, financial, social, and sanitary points of view and with consideration of budget resources. Application of EIA criteria. b) Implementation Phase 1 (18 months) The implementation phase will adopt a result-oriented approach for all activities, based on the Consultant s recommendations, stakeholder priorities and decisions, PAB s review and Sida s no objection. The activities shall be in line with general goals, objectives and targeted results as outlined in this document. The following list merely underlines some basic issues:

12 of16 The work will address the reform process in the entire chain of waste management services and address prioritised needs and changes in order to meet defined objectives and generate expected results. This includes waste collection, separation, reduction of waste volumes per household, reduction of organic content, efficient transportation to transfer stations and sanitary landfill, recycling of materials, energy recovery, cost-coverage through tariffs, efficient payment collection, awareness creation, and measures for collection and handling of infectious and other hazardous waste. One part of the work will be linked to identification, analysis, justification, and preparation of investment proposals. The Consultant will support the clients with capacity building and development of procedures and utilisation of software tools for investment analysis. Co-financing of investment projects will be subject to proper analysis and justification in accordance with criteria for eligibility. Capacity building is linked to preparations and implementation of investments, including tendering and procurement procedures. The investment projects will serve as examples for other municipalities. Activities, investments and development plans of the municipalities shall correspond to the needs and affordability of its customers. Gender, minority issues, social, political, ethnic, religious or cultural aspects will be measured among other important performance indicators. Sida s investment support shall in principle be complemented with local contribution. The Consultant will support the municipalities in analysing and justifying investment alternatives. Sida s grants can, for example, help to soften loan/credit conditions. Other sources of finance could be local budgets, World Bank, EIB, EBRD, EU funding, etc. Municipalities as project owners will prepare tender documents. The Consultant will review them, ensure compliance with national procurement laws, supervise and support the tendering process, evaluations and contract signing, recommend Sida to make transfers (to the stakeholder s designated account), monitor payments and delivery of equipment and implementation, and sub-contract an annual external audit of transactions related to procurements. Investments and procurement of equipment should only be made in investment packages for each municipality, in order to reduce the number of tender documents and disbursements. The programme shall also promote inter-municipal procurement cooperation. Together with the local stakeholder the consultant shall plan and prepare for selection of new regions for the second phase. The programme is envisaged as an integrated and comprehensive long-term approach, and the transition from phase one to phase two shall be as smooth as possible. At the beginning of the

13 of16 second phase and after a positive mid-term review, Sida will formally confirm the selected regions and planned approach. Phase 2 (30 months) The scope and orientation of the second phase will be subject to the experiences of the first phase. It is expected that municipalities in two to three new regions will be supported. It remains to be seen if the work also will continue with the partners from the first phase. 6. COVENANTS The following covenants are applied for Sida s financial support to the programme partners: 1) Commitment on ownership: A prerequisite for efficient capacity building and improvement of municipal solid waste management system is that the project partners (stakeholders) commit to the programme scope and the ambition to generate concrete outputs and results. The programme should not be consultant- or donor-driven. 2) Commitment on allocation of resources: Implementation of capacity building implies that the consultant will support and guide the local client, who will take a leading role in implementing agreed actions. Commitment on state, entity and municipal level to allocate human and financial resources for the project teamwork with the consultant, to an extent to be defined during the Inception and Review Phase, is therefore a key covenant. 3) Confirmation of local co-financing: Conditions (apart from other criteria for eligibility and justification) for utilising financial support from Sida for investment items are: a) Co-financing with local means (from the budget or credits); b) The Sida-financed support shall represent additional funding and not a substitute for state or local allocations that otherwise would have taken place. Compliance with these conditions shall be confirmed by participating municipalities and other partners. Co-financing shall be specified, whether it is based on cash or in-kind contribution. 4) Awareness and participation: Commitment and concrete action on the state, entity and municipality level to promote awareness, public participation and dialogue with civil society organisations (NGOs). 5) Municipal cooperation: Commitment by participating municipalities to engage in municipal coordination and cooperation by establishing regional boards which will meet and discuss joint waste management issues on a regular basis.

14 of16 6) Tariff increases and cost-coverage: Improvement of waste management services to comply with EC regulations (which is a national target) will depend on cost-coverage based on tariffs (at a point in time to be defined). Total costs include operating, maintenance and capital costs. This issue will depend on political leadership and require clear commitment to be confirmed by the mayors of participating municipalities, including policy regarding lowincome groups with limited affordability. 7) Advisory Board: Formation of a Programme Advisory Board (PAB) consisting of representatives from the state level, two entities, the World Bank, Sida and Sida s monitoring consultant, the Consultant, NGOs and the two associations of municipalities. 8) Compliance with procurement regulation: All procurement of equipment and services shall comply with the Law on Public Procurement of Bosnia and Herzegovina. 7 9) Recognition of basic principles: Programme partners (state, entities and municipalities) shall recognise the rights and entitlements, obligations and responsibilities of all consumers in order to provide adequate and equal access of services to all customers. Activities, investments and development plans of the municipalities shall correspond to the needs and affordability of its customers. Social, political, ethnic, religious or cultural aspects must not affect provision of waste management services or implementation of the programme. 7. BUDGET AND TIME SCHEDULE The total Sida budget for the four and a half year programme is SEK 100 million, whereof approximately 45 million is available for the first two years. The budget for capacity building and implementation costs is SEK 25 million, for municipal investments SEK 64 million, for regional investments SEK 2 million, for co-financing of a national awareness campaign SEK 3 million, and for contingencies and monitoring SEK 6 million. The presented budget items outline Sida s support for the four and a half year period. The total budget will obviously also include local co-funding from budget allocations and in-kind contributions, credits from international banks and possible grants from, for example, EU facilities (IPA) and bilateral donors. The relation between capacity building and investment support can differ between the two phases. Disbursements from the programme budget will be subject to Sida s approval and no objection to: 7 http://www.javnenabavke.gov.ba/home/index.php?option=com_content&task=section&id=4&itemid=26

15 of16 The Consultant s work plans and progress reports, The Consultant s invoices, Local partners proposal and the Consultant s recommendations on coinvestment, Local partners requests for disbursements. Disbursements for the awareness campaign and investment support will be made directly to the local stakeholder-designated bank account. The disbursements will be based on the Consultant s justification and recommendations to Sida and on reviews by the PAB. The annual breakdown of the budgetary means from Sida is given a preliminary estimate as follows (changes can be made): 2010 (12 months): 21 MSEK 2011 (12 months): 28 MSEK 2012 (12 months): 26 MSEK 2013 (12 months): 25 MSEK Consultancy services include all activities in connection with capacity building on the state, entity, regional and municipal level. They also include preparatory studies and analyses, e.g. the baseline study and needs assessment, review of the suggested awareness campaign, preparation of a Work Plan and all other tasks identified in this document. The investment support will mainly be allocated to municipal projects. Intermunicipal (intra-regional) investments may be included in this category, if properly justified and approved in accordance with goals, objectives and targeted results. The expected costs are mainly construction or purchase of solid waste units, transport and other equipment, software, etc. The regional investment support may, to a limited extent, be used to support for example, Environmental Impact Assessments (EIA) or Social Impact Assessments (SIA) in connection with additional landfill projects or other projects of a regional nature. The mentioned contingency will be used, subject to Sida approval, for budget adjustments in the inception phase but it is not foreseen to be used for adjustment of TA. Phase 1 will be implemented over a period of two years, including an Inception and Review Phase of six months. The implementation and results of Phase 1 will be subject to a mid-term evaluation by Sida and followed by Phase 2, provided the evaluation is positive. The starting point is planned to be November 2009.

16 of16 8. REPORTING AND AUDIT Specific reporting requirements will be stipulated in legally binding documents that Sweden/Sida intends to sign with all programme partners8. All narrative and financial reports shall be submitted to the Consultant. The Consultant will be responsible to distribute the reports, initiate discussion about these reports at meetings of the relevant boards, collect board s meeting minutes and recommendations, and forward to Sida together with the report. Sida is responsible for approving the reports. The narrative reports shall be analytical in their nature and highlight any deviations from the agreed programme frame. The financial reports shall be based on the statement of accounts and cover revenue and expenditure as compared to budget for the entire operation including all sources of financing. The Consultant will, on behalf of Sida, be responsible that the entire programme, including investments and awareness campaign, is audited annually. The audit shall be carried out by an external, independent and qualified auditor. The terms of reference for the audit and the selection of auditor shall be approved by Sida. The Consultant is responsible that the audit report 9 and management response letters are submitted to Sida in time and with agreed content. All programme partners will assume responsibilities for the audit of the funds that they are responsible for : Ensure that the financial reports are delivered in time and accordance with the agreed quality standard. Ensure in the financial report that all funds are subject to annual audit. - Co-operate with and assist Sida and the Auditor in the performance of audits - Document their position to received audit reports in a form of management response letter. - Act on the information that is received in the audit reports. - Cooperate and assist in performing any additional audits, follow-ups and financial studies that Sida may request. The auditor shall review whether the programme partners have fulfilled the requirements stipulated in the programme documentation and agreements/contracts. It shall also state which measures have been taken as a result of previous audits and whether measures taken have been adequate to deal with reported shortcomings. 8 Sweden intends to sign Specific agreement with MOFTER for coordination of the programme and for implementation of the awareness campaign. Sida will also enter into a separate contract with the Consultant who will provide services according to the ToR and this programme document. Agreements on investments will be signed between Sida and responsible authorities on the municipal /regional level. 9 It comprises of audit report and management report/audit memorandum.