#507 2013 · Delvic Sanitation Initiatives, Dakar, Senegal · Public utilities / sanitation
Dakar fixed its broken sewage-dump bottleneck by handing it to the trucking companies stuck waiting in line at it
the problem
A government-run facility was the choke point for an entire city's sanitation system, but the agency running it bore none of the cost of its own dysfunction
background
Dakar's fecal sludge treatment centers, run by Senegal's National Office of Sanitation (ONAS), were the required dumping point for every truck hauling waste from the city's pit latrines and septic tanks. By 2013 the centers were running far past their designed capacity and falling into disrepair: they closed early some afternoons, and one center shut down entirely for months at a time when overwhelmed with sludge or when equipment broke. Every disruption cost the private trucking companies real jobs and revenue, while ONAS, the government body running the centers, bore none of that cost directly -- it had no financial stake in whether the trucks it served waited five minutes or five hours.
In 2012, ONAS launched a call for proposals to hand over management of the centers to a private operator. Of eight initially interested firms, only one submitted a complete bid: a new partnership called Delvic, formed by Delta and Vicas, two of the largest waste-removal trucking companies already operating in the city -- meaning the centers' own biggest customers, the companies most damaged by the facility's dysfunction, became the ones positioned to fix it.
what everyone would do
Hire a specialized utility-management contractor, or simply invest more public money into the existing government-run facility -- the standard responses to a poorly performing public utility, neither of which changes who actually bears the cost of the facility's dysfunction.
what they saw
ONAS saw that the core problem wasn't a lack of funding or technical expertise at the treatment centers, it was that the party running them had no financial stake in whether trucking companies waited five minutes or five hours -- while the trucking companies bearing that cost had no authority to fix it. Handing operational control to a partnership of the city's own largest waste-removal companies collapsed that mismatch: the operator and the party most hurt by inefficiency became the same entity.
the move
Delvic began managing Dakar's treatment centers in November 2013 under a delegation agreement: ONAS retained ownership and responsibility for major capital investment in facilities and equipment, while Delvic got full authority to manage day-to-day operations and kept 50% of the revenue collected at the centers after paying ONAS an annual licensing fee, in exchange for making the smaller operational investments needed to keep the facilities running and accessible to all users. With support from the Bill & Melinda Gates Foundation, ONAS and Delvic also set up a loan guarantee program that let sanitation companies finance new trucks.
why it works
Once Delvic, formed by two major trucking companies, took over day-to-day management and kept half the dumping revenue after a licensing fee, it had a direct financial reason to minimize the disruptions that had previously cost its own affiliated companies (and, since the productivity gains extended to all trucking companies, everyone else's) real jobs and revenue. Because Delvic's profit depended on throughput at the centers it operated, its incentives finally pointed the same direction as its customers' interests, producing both higher legal dumping volume and lower downstream prices -- a combination a purely bureaucratic operator with no stake in throughput had never been positioned to deliver.
the payoff
An analysis of the universe of legal sludge dumps from May 2009 to November 2018 found legal dumping increased by an average of 61.7% following privatization -- roughly 14,000 additional cubic meters a month -- with the productivity gain showing up across all trucking companies using the centers, not just Delvic's own affiliated firms. Household survey data found prices for legal sanitary dumping services fell 10% after privatization, and Senegal's Demographic and Health Survey data showed diarrhea rates among children under five fell in Dakar relative to secondary Senegalese cities after the change, with no matching effect on respiratory illness used as a placebo check. The centers' own operating profit rose from $7,100 before privatization to $33,300 by 2016.
where it breaks
This mechanism depends on the customers being handed control genuinely having, or being able to acquire, the operational competence to run the facility well -- a customer with strong incentive but no capacity to actually manage complex infrastructure can still fail operationally despite caring about the outcome. It also creates a real risk of self-dealing: if a small number of large customers control access to a bottleneck facility, they could favor their own trucks over competitors' rather than genuinely improving throughput for everyone, a risk this specific study's finding (that productivity gains extended to all trucking companies, not just Delvic's own) suggests didn't materialize here but that isn't guaranteed to hold in every application of the same mechanism.
what came after
Delvic went on to become the first private African company to manage fecal sludge treatment plants at this scale, expanding to nine plants across Dakar, Thiès and Diourbel and later operating a Gates Foundation-backed waste-to-energy Omniprocessor, with Senegal's model cited as a reference case for public-private sanitation partnerships elsewhere in Africa.
references
- [1]Privatization of Public Goods: Evidence from the Sanitation Sector in SenegalNBER Working Paper 29295 (Deutschmann, Gars, Houde, Lipscomb, Schechter); published in Journal of Development Economics 160, 2023, 2021nber.org
- [2]Presentation — DELVIC Sanitation InitiativesDelvic Sanitation Initiatives (company website), 2024delvic-si.com