PHI PDA: Decentralized Wastewater Treatment Facility for the Lilo-an Public Market (Final Report)

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PROJECT COMPLETION REPORT

ON THE PDA

Decentralized Wastewater Treatment Facili tyfor the Lilo-an Public Market

FUNDED BY ASIAN DEVELOPMENT B ANK, M ANILA

Republic of the PhilippinesProvince of Cebu

Municipality of Lil o-an

Department of Environment and Natural ResourcesEnvironmental Management Bureau

Region 7 Office, Mandaue City

March 2004 – March 2006The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian

Development Bank (ADB), or its Board of Directors, or the governments they represent. ADB does not guarantee the accuracy of

the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may notnecessarily be consistent with ADB official terms.



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TABLE OF CONTENTS

Executive summary .................................................................................................. 5 Introduction............................................................................................................... 7

Rationale of the report ............................................................................................ 7 Background of the project ....................................................................................... 7 Project rationale ...................................................................................................... 7 Summary table of project phases............................................................................ 8

Phase I – Project pre-phase..................................................................................... 9 Timeline of Phase I ................................................................................................. 9 Outset situation of the project ................................................................................. 9 Reporting to ADB ................................................................................................... 11

Project concept paper......................................................................................... 11 Project proposal ................................................................................................. 11

Social preparation activities ................................................................................... 11 Administrative and legal requirements ................................................................... 11 Official ceremonies ................................................................................................ 12

Phase II – Preparation phase of project implementation .................................... 13 Timeline of Phase II ............................................................................................... 13 Official start of the PDA – LoA signing between ADB and Lilo-an..........................13 Social preparation activities ................................................................................... 14

Organizational chart of the overall project .......................................................... 14 Inner project circle – project champions ............................................................. 14 Organizational chart of the Lilo-an project office / project task force ..................15 Information drive seminar................................................................................... 16

Technical project activities ..................................................................................... 16 Procurement procedure and public bidding........................................................ 16 Adjustments on the original WTF design - including of a second RBC unit ........17 Including of renovation of the public market’s toilets .......................................... 17

Legal requirements ................................................................................................ 17 ECC application.................................................................................................. 17 MoA between municipality of Lilo-an and the contractor .................................... 18

Phase III – Phase of physical ground development ............................................ 19 Timeline of Phase III .............................................................................................. 19 Technical project activities ..................................................................................... 19

Groundbreaking ceremony................................................................................. 19

WTF construction works proper.......................................................................... 20 Inauguration ceremony....................................................................................... 22

Social preparation activities ................................................................................... 24 Cooperative ........................................................................................................ 24 Information drive follow up seminar.................................................................... 24

Phase IV – Running-in phase of WTF and final social preparations .................. 25 Timeline of Phase IV .............................................................................................. 25 Practical issues encountered during the WTF running-in phase ............................25

Power supply of the WTF ................................................................................... 25 Operation of the wastewater pumps................................................................... 26 Maintaining and cleaning of the collecting sewer at the market..........................26

Final set up and flow chart of Lilo-an WTF ............................................................. 27



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Monitoring the running-in performance of the WTF through a thesis study...........29 Integrating of a thesis of an undergraduate chemistry student into the PDA......29 Results of the thesis ........................................................................................... 29 Discussion on the thesis study on the WTF running-in performance..................30

Social preparation activities ................................................................................... 30

O&M training of cooperative ............................................................................... 30 MoA draft on transfer of WTF O&M to the cooperative ...................................... 31 LGU forum.......................................................................................................... 32

Cost recovery scheme ........................................................................................... 33 Original cost recovery scheme ........................................................................... 33 ADB proposal: recovery of full project costs within 10 years time ......................34 Alternative cost recovery scheme....................................................................... 34

Project budgeting ................................................................................................... 36 Summary of the project budget .............................................................................. 36 Handling of the budgeting by the Municipality of Lilo-an ........................................ 37

Summary ................................................................................................................. 38

Conclusions and lessons learnt............................................................................ 40 List of attachments................................................................................................. 43



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EXECUTIVE SUMMARY

This project completion report summarizes an Asian Development Bank (ADB)funded Pilot and Demonstration Activity (PDA) on the construction of a decentralizedwastewater treatment facility (WTF) in Lilo-an, a third class municipality in the Prov-ince of Cebu, Philippines. Lilo-an was suffering for a long time from the deterioratedquality of coastal water, namely high coliform cell counts, which are an unambiguousindicator for fecal contamination, had been reported repeatedly in the local newspa-per. The project was implemented in the period of time from March 2004 to March2006. The report provides an overview of the technical aspects of the project as wellas of the social preparation activities accompanying the PDA.

The project came into existence as the project coordinator, who is based as consult-ant at the DENR/EMB-7 Office in Mandaue City, was able to bringing together thefunding agency and the implementing agency by filing of a project proposal. Whenbeginning with the PDA proper, a well organized and highly effective project infra

structure was established. The functions of these project committees -and particularlyof the group forming the inner circle of the project (“project champions”)- proved to bevital for successful project implementation and are being described. Several IEC ac-tivities and official ceremonies were held throughout the project in order to keep theproject partners involved and updated. Additionally numerous smaller informationdrive activities were conducted on a more informal basis.

From the technical point of view, the PDA proved that a $50,000 budget is good forthe construction of a WTF with a capacity of 60 m³ per day. As an added value to theproject, the renovation of the market’s toilets also was included in the PDA. The WTFwas based on the so-called Rotating Biological Contactor and was put up within the

rather congested and densely populated area of Lilo-an town center. Aside fromwastewater effluents from the market itself, the facility also serves wastewater com-ing from a nearby residential area. The WTF proved to be efficient in terms of BOD5 removal. It will be discussed that during the running-in period of the WTF severalpractical issues came up, with the consequence that eventually some compromisesin the WTF design had to be made. Still there was an immediate positive effect oncoliform cell counts along the Lilo-an coast line, which shows that sanitation and thehealth situation for the residents could be improved in the area.

Several legal and bureaucratic requirements have been dealt with during the project.In fact when this PDA had started, multiple interactions and learning processes werelearnt on how to deal with local bureaucracy. Complications concerning the handlingof project funds by the municipality lead to additional efforts exerted by the projectpartners. A “double bureaucracy” was sensed with regards to the two accounting de-partments of Lilo-an and at ADB, which had to be complied with. An EnvironmentalCompliance Certificate (ECC) had also to be secured for the project.

In order to establish a viability of this project, a user fee system was being estab-lished for the facility, in order to come up with the shortest possible cost recoveryscheme. In a conservative proposal a 26 years cost recovery period was computed.However along the way ADB insisted that a cost recovery system within 10 yearsshould be elaborated in order to make it more attractive for others to follow. Withinthis scheme the group came up with some innovative ideas to be able to cover op-

eration and maintenance (O&M) of the facility as well as the expected cost recoveryin 10 years.



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The Lilo-an market vendors, which are the primary beneficiaries of this project, hadalready their market vendors’ association. With the information meetings that wereprovided to them during the PDA, they have voluntarily and willingly spun-off fromtheir existing association to what is now known as the Lilo-an Community Multi Pur-pose Cooperative. The name was purposely made with the intention that its member-

ship will not only come from the market vendors, but also from the community of thesurrounding blocks that have also contributed to the wastewater feeding into the de-centralized WTF. At present there are 100 members of this cooperative, expectedly itwill be doubling its number in a few months. Right now the cooperative is quite happyand satisfied in taking O&M of the WTF and the market toilets, of course with theblessings of the LGU.

Although the focus is on the collection WTF user fees, the project team together withthe cooperative have come up with a wide variety of schemes in order to be able toreinforce the earnings that can be derived from it. The most prominent income gen-erator scheme by now –enjoyed by the cooperative- is the collection of user fees

from the renovated public market toilets. From its initial operation just about half whatwas collected monthly goes to the O&M, while the rest becomes savings and fundsfor the cooperative, thus a cost recovery within 10 years is coming within reach.

With this initial result and the wide opportunities for earning the cooperative in fact isbecoming really enthusiastic about this project, the basis to make it sustainable andsuccessful in the long run. This positive response by the people on paying for cleanli-ness have erased some doubts that the misconception that people are already satis-fied with their polluted environment could not be reversed. The PDA demonstratedthat the issue of sanitation, which usually represents for common people the lowestlevel, can be upgraded to attract people to profit generation, showing that environ-ment and business in fact can go hand in hand into a joint venture.

The “project champions” at the Lilo-an light-house, March 21, 2006.

Second from left the contractor, Mr. Jesselito V.Baring, in the middle Mrs. Pye S. Roble, Lilo-anMLGOO, second from right Dr. Andreas König,project coordinator from DENR/EMB-7.

Mandaue City, May 5, 2006 Dr. Andreas KönigEMB-7 in-house expert



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INTRODUCTION

Rationale of the report

This project completion report summarizes an Asian Development Bank (ADB)

funded Pilot and Demonstration Activity (PDA) on the construction of a decentralizedwastewater treatment facility in Lilo-an, a third class municipality in the Province ofCebu, Philippines. The project was implemented with a total budget of $50,000 in theperiod of time from March 2004 to March 2006.

The report provides an overview of the technical aspects of project. Furthermorespecial emphasis is given to the social preparation activities accompanying the PDA,which proved to become a vital part of the project. Obstacles being encountered dur-ing project implementation are also discussed.

Background of the project

Lilo-an has been suffering from the deteriorated quality of coastal water. 1 High coli-form cell counts in its coastal waters has been reported repeatedly in the local news-paper. The poor hygiene of the coastal water is not only a nuisance for the residents,but it also affects their tourism industry. The Lilo-an beaches used to be a highlypopular destination of weekend visitors from Cebu City. However, due to current wa-ter pollution, the number of visitors has dropped dramatically and the tourism industrysuch as restaurants, transportation, souvenir shops, and numerous small beach ven-dors have faced a serious customer decrease.

High coliform cell counts in water is an unambiguous indicator for fecal contamina-tion, caused by wastewater effluents of domestic origin. In this case, the wastewater

coming from the Lilo-an public market is considered to be the largest source of thispollution. The public market is equipped with only a septic tank that is insufficient tomaintain proper hygienic conditions of the coastal water.

Lilo-an, like other Philippine municipalities, cannot afford to construct a centralizedwastewater treatment system with an extensive collection system and a treatmentplant. A decentralized wastewater treatment, which is far less expensive than a cen-tralized system, is considered to be more suitable for this small municipality.

In March 2004, the President of the Philippines signed the "Philippine Clean Water Act", meaning that the country has made a major step toward wastewater treatment,which, previously has not been taken care of in the country. Wastewater treatment

will become a “hot issue” in the Philippines. Thus, this PDA could be a timely demon-stration activity.

Project rationale

Technically this project is about the construction of a decentralized wastewater treat-ment facility (WTF) at the Lilo-an public market area. The neighboring residentialarea also was connected to the WTF. The WTF was designed to treat approximately60 m³ of wastewater per day. Additionally, this project will include the renovation ofthe toilets at the public market to further increase the hygiene condition in the place.

1 Lilo-an is a municipality with a population of approximately 70,000, located on the east coast of Cebu Island,

some 19 km from Cebu City.



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It is expected that this WTF will clean the discharged water from the market, and as aconsequence, the quality of coastal water will be improved. Lilo-an expects that visi-tors will come back to its beaches and boost its tourism industry when the coastalwater become clean again.

There are also socio-economic aspects in this project. For ensuring sustainable op-eration and maintenance (O&M) of the WTF, the market vendors will organize a co-operative, which will collect WTF user fees, and operate and maintain the WTF byusing the money collected by those fees. Even though the project is funded by an ADB grant, a projected cost recovery scheme for recovering the initial project budgetis presented, as a model for future PDA.

Summary table of project phases

Table 1 summarizes briefly the project and the major milestones accomplished duringimplementation. The table illustrates that the PDA as a whole can be divided into fourproject phases. The so-called “project pre-phase” (or Phase I), which is the phase of

elaborating the project proposal and thus happened to be before ADB started theirfinancial support, is also included in this project completion report. The official start ofthe project proper was with the beginning of Phase II, upon signing of the Letter of Agreement between ADB and the LGU of Lilo-an. In the following the four projectphases will be discussed extensively.

Tab. 1: Summary table of project phases.

No. Timeline Duration Project phase Major accompl ishments

I Mar ’04 –Sep ‘04

7 months Project pre-phase • Introduction of project idea to ADB and LGU

• Elaborating and approval of project proposalII Oct ’04 –

May ‘058 months Preparation phase

of project imple-mentation (start ofproject proper)

• Setting up of project structure and projectcommittees

• Compliances with legal requirements (publicbidding procedure, environmental clearance)

III Jun ’05 –Nov ‘05

5 months Phase of grounddevelopment

• WTF construction carried out and completed

• Social preparation activities conducted

IV Dec ’05 – Apr ‘06

5 months Running-in phaseof WTF and project end

• Adjusting and optimizing of WTF operation

• Monitoring of WTF performance via a thesisof a chemistry student

• Final social preparation activities (O&M train-ing, IEC activities, turn-over of WTF O&M)



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PHASE I – PROJECT PRE-PHASE

Timeline of Phase I

The phase of elaborating the project idea until the official kick-off ceremony of the

project is seen as a project pre-phase and lasted six months (Table 2).

Tab. 2: Timeline of project pre-phase.

Time-line

Projectactivities

- technical -

Project ac-tivities

- social -

Officialceremo-

nies

Legalrequirements

Budget-ing

Reportingto ADB

Mar ‘04 Elaboratingproject idea

Project con-cept paper

Apr Preparing of

project pro-posal

Introducing

project tocouncil andto mayor

May Preparing ofproject pro-posal

Submitting ofproject pro-posal

Jun Council resolu-tion: certificationof availability ofproject site

Aug No Objection Let-ter from DENR

Sep ‘04 Kick-offceremony

Outset situation of the project

Figure 1 illustrates the outset situation of the Lilo-an WTF project. With ADB therewas a funding agency willing to give a $50,000 grant for a PDA on sanitation on oneside, and with the municipality of Lilo-an there was an LGU in need of support to im-proving their sanitation in their public market area on the other side. Local politicalfigures at Lilo-an already showed the necessary awareness since the deteriorated

water quality along the coast line was already featured repeatedly in local newspa-pers. A site map of the location is shown in attachment 1.

The graph emphasizes the bridging of the gap between the funding agency ADB andthe implementing agency (Lilo-an). By filing of a project concept paper and later on aproject proposal, and furthermore by conducting of several additional coordinatingactivities, it was possible to close the existing gap and bring the project into exis-tence. Figure 2 gives some visual impressions about the Lilo-an public market andthe environmental impact caused by the wastewater effluent.



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Fig. 1: Outset situation of Lilo-an WTF project.

Fig. 2: Lilo-an public market. The wastewater effluents are being collected by an open rim,incompletely treated via a passage through a septic tank, finally to get discharged into theLilo-an coastal waters. The market has a capacity of approx. 100 vendors.

Outset situation for the WTF projectOutset situation for the WTF project

ADB Mani la

Funding agency Supports

projects on

sanitation via

Water for All

program

$50,000 grant

available for

pilot projects

(PDA)

Lilo-an Municipality

Implementing agency

Deteriorated coastal

water quality due to

public market

effluents

Poor sanitation:

nuisance and health

impact on residents,

negative effects on

local economy

“ Political will”

to host PDA

DENR/EMB-7

Consultant Elaborating

project idea

Filing of project

concept paper

Filing of project

proposal

“Decentralized

WTF facility fo r

Lilo-an Public

Market”

DENR/EMB-7

Consultant Elaborating

project idea

Filing of project

concept paper

Filing of project

proposal

“Decentralized

WTF facility fo r

Lilo-an Public

Market”



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Reporting to ADB

Project concept paper

To get the ball rolling, in March 2004 the consultant of the DENR/EMB-7 Office inMandaue City, who later happened to be the coordinator of the project, filed a threepages project concept paper on a proposed wastewater treatment facility (WTF) atLilo-an public market. ADB reacted that the proposed project has good chances toget approved as a so-called Pilot and Demonstration Activity (PDA) within the Waterfor All program.

Project proposal

ADB signaled to go on with filing a more extensive project proposal. The proposalwas a ten pages document, which had to fulfill some formal requirements set by ADB. The project proposal was submitted to ADB in May 2005. The approval processby ADB took a few of weeks only. The maximum budget available for such a PDA of

$50,000 was granted.

Social preparation activities

During the time of elaborating the project proposal document, representatives of themunicipality of Lilo-an were informed about the possibility of an upcoming wastewatertreatment project, namely by discussing matters with the mayor, councilors, the mu-nicipal engineer and the planning & development engineer (Figure 3). It was soonbecoming obvious that there was a political will to host such a project.

Fig. 3: Site visit of EMB-7 personnel and of Lilo-an representatives at the already identifiedconstruction site for the proposed decentralized WTF. The concrete construction in theground is the septic tank, which is currently used as a primitive wastewater treatment.

Administrative and legal requirements

Upon informal approval of the project proposal, ADB requested two legal documentsbefore they would issue the formal approval papers. One of these requirements wasa resolution from Lilo-an municipal council documenting that the council is favorableon hosting the project in the municipality. This was done by securing a council resolu-tion declaring the availability of the project site for the construction of the new WTF

(attachment 2). The other requirement is a No Objection Letter (NOL,) concerning theproposed project, which was issued by the DENR Central Office in Manila (attach-ment 3).



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Official ceremonies

Official ceremonies were part of the project from its early stages on, partly to signalthe official support of the LGU and to underline the significance of the activity, partlyto create a certain level of public awareness. It should be added that public aware-ness activities actually are part of the socio-economic requirements for such projectsaccording to Philippine regulations (e.g. for securing environmental permits).

On September 20, 2004 the official project kick-off ceremony was being held at thefuture construction site of the WTF (Figure 4). Participants at the ceremony were thePresidential Asst. for the Visayas, the Lilo-an mayor, several councilors, theDENR/EMB-7 Regional Director, and by a number of market vendors as the futureproject beneficiaries. The ceremony was attended by a crowd of approx. 30 and wasintended to signal to the local people the start of the project.

Fig. 4: Lilo-an Mayor Dr. Maria B. Sevilla, Presidential Asst. for the Visayas Mr. Felix Guan-zon, DENR/EMB-7 Regional Director Jun E. Villafaňe, Lilo-an Councilor Jimmy C. Magla-sang, and EMB-7 in-house expert Dr. Andreas König address the attendants of the officialproject kick-off ceremony, held at the future WTF site.



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PHASE II – PREPARATION PHASE OF PROJECT IMPLEMENTATION

Timeline of Phase II

In October 2004 started the project proper. Phase II, the so-called “phase of project

preparation” lasted nine months (Table 3). In fact the original project plans scheduledthe beginning of the WTF construction works to December 2004 already, meaningthat in the original planning this eventually rather lengthy Phase II was intended totake short time only. However, as soon as it turned out that a number of legal and bu-reaucratic requirements had to be complied with before the WTF construction couldstart, it became clear to the project partners that it would not be possible to hold on tothis original project schedule. These unforeseen delays will be discussed under“technical project activities”.

Tab. 3: Timeline of Phase II, preparation phase of project implementation

Time-line

Projectactivities

- technical -

Projectactivities- social -

Official cere-monies

Legalrequirements

Budget-ing

Reportingto ADB

Oct ‘04 Filing of in-ception report

Setting upof projectinfra struc-ture

LoA signingby mayor;official projectstart

LoA between ADB and Lilo-an, prepared by ADB

1st projectinstall-ment($10,000)

Project incep-tion report

Nov Collectingquotationsfrom possiblecontractors

AwarenessseminarPublic Mar-ket

Mar ‘05 Pre bidding,bidding,awarding

Public biddingprocedure acc.to CoA rules

Reporting thebidding proc-ess to ADB

Apr Council resolu-tion: authoriza-tion of mayor tosign MoA withcontractor

May ‘05 Preparationof IEE docu-ment

MoA signingw/ contractor

ECC applica-tion at DENR;ECC issuance

MoA preparedby Lilo-an

Official start of the PDA – LoA signing between ADB and Lilo-an

The signing of the Letter of Agreement (LoA) between ADB and the mayor of Lilo-ansignaled the official project start (attachment 4). This was also the point of time whenthe first project installment of $10,000 was released by the funding agency. The LoAwas being prepared by ADB and regulates the project implementation arrangementsbetween the funding agency ADB and the implementing agency, the municipality ofLilo-an.



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Organizational chart of the overall project

The setting up of the project infra structure was one of the first things being accom-

plished and soon turned out to be very useful for project implementation. Figure 5shows the overall organizational chart of the Lilo-an WTF project. The main stake-holders are:

• ADB as the donor agency• the municipality of Lilo-an as implementing agency• the market vendors as beneficiaries, and• the contractor JV Baring Consultants (selection process for contractor see be-

low)• the coordinator, who is based at DENR/EMB-7

Fig. 5: Overall organizational chart of the PDA.

Inner project circle – project champions

As already mentioned before, the gap between the funding agency in Manila and theimplementing agency and the beneficiaries of the project in Lilo-an is very wide. Inother words, ADB and the coordinator would be loosing the beneficiaries during project implementation, if there is no further support coming from other partners, whichare closer to the municipality.

Fortunately for this PDA, Lilo-an municipality staff as well as the contractor were pro-active in project implementation. An “inner project circle” was formed, which con-sisted of the Municipal Local Government Operations Officer (MLGGO) based in Lilo-an municipal hall, the contractor based in Cebu City, and the project coordinatorbased in the DENR office in Mandaue City. The team met more or less on a weekly

basis to discuss project matters straight on and for brainstorming activities. Based onexperiences from this project, the establishing of such a “group of project champions”proved to be an efficient and successful tool in implementing the project.

Coordinator

DENR/EMB-7 Cebu

Regional Director

In-house expert

Donor agency

ADB Mani la

Water SectorCommittee

Case Officer

Organizational chart ofOrganizational chart of LiloLilo--an WTP projectan WTP project

Contractor

JV Baring

Implementing agency

Municipality of Lilo-an

Municipal Mayor

Project office

Decision makers

Implementers

MLGOO

Beneficiaries

Market vendors ’association

President

Members

Coordinator

DENR/EMB-7 Cebu

Regional Director

In-house expert

Donor agency

ADB Mani la


Case Officer


Contractor

JV Baring

Implementing agency


Municipal Mayor

Project office

Decision makers

Implementers

MLGOO

Beneficiaries


President

Members

Coordinator

DENR/EMB-7 Cebu

Regional Director

In-house expert

Coordinator

DENR/EMB-7 Cebu

Regional Director

In-house expert

Donor agency

ADB Mani la


Case Officer

Donor agency

ADB Mani la


Case Officer


Contractor

JV Baring

Contractor

JV Baring

Implementing agency


Municipal Mayor

Project office

Decision makers

Implementers

MLGOO

Implementing agency


Municipal Mayor

Project office

Decision makers

Implementers

MLGOO

Beneficiaries


President

Members

Beneficiaries


President

Members



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It was advantageous that the group included one member –impersonated by the co-ordinator- feeling comfortable to coordinate project matters directly with ADB (e.g.filing of project proposal and project reports, coordinating implementation adjust-ments, arrangement of budget issues), and with the Lilo-an MLGOO a “local counterpart”, who was close to the beneficiaries in the implementing agency, thus being fa-

miliar with coordinating things at the LGU level (mayor, councilors, accountants, localresidents, etc.). Additionally the contractor Mr. Jesselito Baring was introducing manycreative ideas, which were very useful for following through with the project.

In other words, from the point of view of the donor agency ADB the project coordina-tor was the champion of the project, since he has been the project’s initiator, he wasthe one coordinating with ADB, as well as he was the figure holding the project to-gether. From the point of view of the project beneficiaries, the market vendors, theLilo-an MLGOO and the contractor were championing the project, since they are theones “more visible” for them by approaching them in social preparation activities.

Organizational chart of the Lilo-an project offi ce / project task force

The composition of the so-called project task force is shown in Figure 6. The initialmeeting was held at Lilo-an Municipal Hall on August 30, 2004. As can be seen fromFigure 6, the Lilo-an project office was a well structured group, which in fact wasidentical with the municipality’s environmental committee. This group met weekly,thus project updates could be introduced and discussed on a regular basis with thehelp of this committee.

Fig. 6: Chart of the Lilo-an project office.

The project task force basically consists of two levels, the decision makers and theimplementers. The level of the decision makers is made up of three councilors,

spearheaded by Jimmy C. Maglasang, the chairman of the environmental committee.He is assisted at this level by the chairman on markets and by the chairman on co-operatives.

Organizational chart ofOrganizational chart of LiloLilo--anan ““project task forceproject task force””

Municipal Mayor

Maria B. SevillaFinal decision making

Project Office

Decisionmakers

I m p

l e m e n t e r s

Cnclr. Roberto MotusChair on cooperatives

Cnclr. Adrian PilonesChair of committee on

markets & slaughterhouses

Engr. Epifanio JordanMunicipal Planning &

Development Engr.

Dionesia OcheaMunicipal

AgriculturistCooperative

Alfredo AnoosPresident

Cnclr. Jimmy MaglasangChair on

environmental committee

Engr. Remidius UdtohanMunicipal Engineer

Pye S. RobleMunicipal Local Government

Operations Officer

Social preparationTechnical preparation

Link to

projectcoordinator


Municipal Mayor


Project Office

D e c i s i o n m a k e r s

I m p

l e m e n t e r s





Development Engr.








Operations Officer


Link to

projectcoordinator


Municipal Mayor


Project Office

D e c i s i o n m a k e r s

I m p

l e m e n t e r s





Development Engr.








Operations Officer


Link to

projectcoordinator



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There are two main implementers, the MLGOO and the municipal engineer. Togetherwith the municipal agriculturist the MLGOO mainly is responsible for the project’s so-cial preparation activities. In cooperation with the municipal planning engineer, themunicipal engineer provides the technical preparation. The Lilo-an market vendorsalso have a representative inside the committee in person of their market vendors

president (later on cooperative president).The linkage of the project office to the coordinator, and thus indirectly to ADB, is im-personated by the MLGOO (see also “inner project circle”).

Information drive seminar

On November 25, 2004, an information drive seminar was held at Lilo-an Public Mar-ket (“attendance sheet” see attachment 5). Dissemination of information on the project among the Lilo-an residents basically was one of the main tasks of the municipal-ity. EMB-7 office and the contractor provided assistance. As an example, during theNovember 25 activity the coordinator and the contractor together with the MLGOO

introduced technical and environmental aspects of the project to the market vendors,as well as the basic idea of income generation by forming a market vendors coopera-tive for WTF operation.

Technical project activities

Procurement procedure and public bidding

Two quotations from two possible contractors have been procured in November2004. One was submitted by JV Baring Consultants, a local contractor based in CebuCity. The company is well known in the region, since it was already quite often in-

volved in the construction of new or in upgrading of existing WTF. The other quota-tion was procured from BORDA, a German NGO engaged in sanitation projects.While BORDA nowadays have a field office in Manila, during the time of procuringquotations for this project their nearest office was located in Yogyokarta, Indonesia.

Both applications were technically and financially viable. Eventually the quotationfrom JV Baring was selected by the project task force based on technical and practi-cability reasons.

This preliminary selection of the contractor eventually had to be confirmed by a for-mal approval procedure. The issue came up as soon as the municipality officials real-ized that the first installment of the ADB project funds was deposited in Lilo-an bank

account. Lilo-an officials then claimed that in this case the project budget has to behandled like a local money, and local money is subject to following the rules of theCommission of Audit (CoA). Thus, as one consequence, the selection of the contrac-tor of the project must pass the regular public bidding procedure.

ADB first insisted that their project funding is not to be seen as local money, eventhough technically it is deposited on a local bank Lilo-an account. After a period oftwo months, where the coordinator was facilitating the discussion of the issue be-tween Lilo-an and ADB, it eventually turned out that it would become inevitable to fol-low the requirements of the municipality, and thus to undergo a public bidding proc-ess according to official LGU bidding requirements, including public notice, pre-

bidding, bidding proper and formal awarding.This process took place during the months of March and April 2005. In the end themunicipality’s screening committee opted in favor of the quotation submitted by JV



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Baring Consultants (attachment 6). The wastewater treatment technology is based onthe so-called Rotating Biological Contactor (RBC). A brief overview on the optionsavailable in wastewater treatment and a basic description of the RBC technology isgiven in the attachments 7 and 8.

Adjustments on the or ig inal WTF design - including of a second RBC unitThe WTF design originally proposed by the contractor considered the operation ofone RBC unit only. However, it soon deemed necessary that two RBC units must beoperated at the WTF site, since within the immediate vicinity of the public market’sdischarge point, another culvert was detected, which collects and discharges waste-water from the neighboring residential area.

In order to create a noticeable and sustainable positive environmental impact by thisproject, the only viable option was to also include this second wastewater line into thealready proposed (and by ADB already approved) WTF system. Therefore, differentform the original proposal, a second RBC unit was added to the WTF design. It was

negotiated with the contractor to incorporate that design change into his new quota-tion, without exceeding the total project budget of $50,000.

ADB eventually agreed to these technical adjustments. In order not to exceed theceiling amount of $50,000, an amount of $5,000, which originally was allocated forsocial preparation activities by the municipality, was re-allocated to the contractor’sbudget. This approach was reasonable, since several of the scheduled IEC activitieswere already being held by that time. Furthermore the municipality regarded it astheir project contribution to support such activities on their own budget, if necessary.

Including of renovation of the public market’s toilets

As an added value to the project, and for making the improvements in sanitation inthe area more complete, the renovation of the existing toilets in Lilo-an Public Marketalso was included into the project. The increased positive effects on the sanitarysituation, moreover this CR renovation was also meant for income generation of themarket vendors’ cooperative (see discussion of Phase IV).

Legal requirements

ECC application

After having passed the public bidding procedure and having selected the contractor,

the project still could not start with WTF construction, since another delay was com-ing up, which had to do with environmental clearances for the WTF.

Originally DENR/EMB-7 considered the Lilo-an WTF as a mitigating measure, as it isaimed to cleaning the wastewater effluents from the market, which are polluting theshore line for decades. In view of that, as environmental clearance document a so-called Certificate of Non-Coverage (CNC), which is a permitting document with fewrequirements only, would be sufficient.

However in April 2005 it turned out that Philippine environmental regulations requestto secure a so-called Environmental Compliance Certificate (ECC) for the construc-tion of new WTF with a treatment capacity of more than 30 m³ wastewater per day.

Since the Lilo-an WTF was designed for treating daily 60 m³ of wastewater, it wasinevitable to comply with said regulations.



18

The application for securing an ECC has to fulfill several detailed and rather exten-sive requirements, thus applying for an ECC takes some time. Among the require-ments is the filing of a so-called Initial Environmental Examination (IEE) manual,which is a document where substantial project information has to be consolidated.Usually an IEE would be prepared by an especially hired environmental consultant.

However, since the project coordinator as an employee of DENR was familiar withthe administrative and legal requirements, in this particular case the 30 pages IEEmanual could be filed by the coordinator, with support from the contractor and themunicipality staff.

After a couple of weeks for preparation of the IEE manual, the requested documentsfor ECC application were being submitted to DENR/EMB-7 end of May 2005. As dur-ing the initial document screening process no major objections were being made byEMB-7 personnel, the fact of officially submitting the ECC application to DENR wasalready seen as fulfillment of the requirements for the start of WTF construction.

The ECC application itself underwent the usual screening and permitting procedure

by DENR/EMB-7 and lasted several months. The ECC application eventually wasapproved by DENR (attachment 9) and the respective documents were signed by theEMB-7 director and the Lilo-an mayor in August 25, 2005 (Fig. 7).

Fig. 7: ECC signing at EMB-7 office, Left Dr. Maria B. Sevilla, Mayor of Lilo-an,right Engr. Alan C. Arranguez, DENR/EMB-7 Regional Director

MoA between municipality of Li lo-an and the contractor

After all the discussed requirements had been fulfilled, the end of this project phasewas marked by the signing of a Memorandum of Agreement (MoA) between the Lilo-an mayor and the contractor JV Baring Consultants. For the purpose of giving themayor the authority for the MoA signing, the municipal council issued another councilresolution. The MoA document was being prepared by the municipality of Lilo-an, ac-cording to their own local guidelines (first page of MoA see attachment 10). April 28,2005, which was the day of the MoA signing, also marked the day of the start ofground development.



19

PHASE III – PHASE OF PHYSICAL GROUND DEVELOPMENT

Timeline of Phase III

In May 2005 the construction phase proper eventually got off the ground. The occa-

sion was officially marked by the ground breaking ceremony. The timeline of PhaseIII is shown in Table 4.

Tab. 4: Timeline of the phase of physical ground development.

Time-line

Projectactivities

- technical -

Project activi-ties

- social -

Officialceremo-

nies

Legalrequire-ments

Budgeting Reportingto ADB

May ‘05 Groundbreakingceremony

Jun Start of WTFconstructionworks

Setting up ofnew coopera-tive

2nd projectinstallment($15,000)

Aug On goingWTF con-struction

Meeting withproject benefi-ciaries

Sep Preparing ofmid term re-port

3rd projectinstallment($15,000)

Midtermreport

Oct On goingWTF con-

struction

CDA seminarfor preparation

of cooperative

Nov ‘05 End of WTFconstructionworks

Inaugura-tion of WTF

Official regis-tration of newcooperative

Technical project activities

Groundbreaking ceremony

The WTF’s ground breaking ceremony was held at the project site in April 28, 2005

(Figure 8). The activity was led by Mayor Maria B. Sevilla and attended by Lilo-ancouncilors, the market vendors and representatives from DENR/EMB-7. The MoAsigning between the mayor and the contractor was conducted earlier the same day.



20

Fig. 8: Groundbreaking ceremony with the EMB-7 consultant and project coordinator Dr. An-dreas König and the Lilo-an Mayor Dr. Sevilla. Right picture shows officials from the munici-pality of Lilo-an and DENR/EMB-7 together with representatives from the market vendors.

WTF construction works properThe pictures shown in Figure 9 document the progress of the WTF constructionworks. The construction proper started in June with soil moving activities and plumb-ing works. After that the concrete wastewater tanks were being erected, and eventu-ally the RBC units got in place. Finally the motors and pumps including the electricalwirings were installed. For minimizing possible odor emissions, the RBC units werecovered with hoods. The first test run of the facility was conducted on November 22,2005. In parallel the public market toilets were being renovated (Fig. 10).

June 2005 June: Earth moving and plumbing works

July 2005: Erecting concreted reactor tanks

and fences August 2005: Erecting concreted reactortanks and fences



21

September 2005: Completion of concretingworks

October 2005: Installation of rotating discs ofRBC reactor

October 2005: On going installation of RBC November 8: Installation of RBC motors

November 11: Installation of wastewaterpumps in septic tank (wastewater collection)

November 15: Filling wastewater in RBCtanks

November 15: Installation of electrical wir-ings

November 22: Final polishing works



22

November 22: First WTF test run November 22: WTF effluent during test run

Fig. 9: Photo documentation of the WTF construction works.

Fig. 10: Renovated toilets at Lilo-an public market. Operated and maintained by the Lilo-anCommunity Multi Purpose Cooperative (see discussion of Phase IV).

Inauguration ceremony

The inauguration ceremony of the WTF was held on Wednesday November 23,2005, at the project site (Figure 11). Aside form Lilo-an officials, the ceremony wasalso attended by two representatives from ADB Manila, Mr. Florian Steinberg (ADBhousing and development specialist) and Mr. Bert van Ommen (ADB consultant),who were accompanying the PDA as counter part from ADB. With that day the WTF

started its operation (publications about the inauguration see attachments 11, 12).



23

Dr. Maria B. Sevilla, Mayor of Lilo-an Mr. Florian Steinberg, ADB representative

Mr. Bert van Ommen, ADB consultant Engr. Jun. Erasmo E. Villafaňe, DENR/EMB-7 admin chief

Dr. Andreas König, DENR/EMB-7 in-houseexpert and project coordinator

Inauguration site

Ribbon cutting ceremony Blessing of the facility

Fig. 11: Pictures form the WTF inauguration ceremony.



24


Cooperative

The Lilo-an market vendors’ association is an existing and well established group ofvendors. The members proved to be very open towards the idea of creating a specifi-cally formed WTF cooperative as a spin off from this association. The point of startinga cooperative lies in the fact that a cooperative has the option to go into income gen-eration, which would not be possible for an association.

The founding members of the cooperative attended the mandatory seminar of theCooperative Development Authority (CDA) in Cebu City. Aside from being a formalrequirement, participating in this seminar also represents a vital aspect concerningthe cooperative’s sustainability, since the members were taught how to organizethemselves, how handle their budget, how to keep transparency in their records andprocedures, etc. Furthermore the CDA later on will audit the cooperative and monitortheir funds in order to prevent mismanagement. The successfully passing of the CDA

seminar in October 2005 was the official go signal for the cooperative to come intoexistence. In November 9, 2005, the CDA issued the official certificate of registrationfor the new ”Lilo-an Community Multi Purpose Cooperative” (attachment 13).

There are 100 cooperative members at this point of time, what is a rather big numberconsidering they exist for a short time only. A second batch on another 100 membersis already scheduled for participating in the CDA seminar. This number still possiblywill increase further due to the ongoing renovation and expansion of the Lilo-an pub-lic market, and by including neighboring residents and small businesses (bakeries,etc.).

Information drive follow up seminarFor further supporting the process, in August 16, 2005, a seminar was held at mu-nicipal hall for the project beneficiaries (Figure 12). 10 market vendors, the coopera-tive president, the council chair on market and slaughterhouse, and the municipalengineer attended the meeting. Speakers were the project coordinator, the contractorand the Lilo-an MLGOO. Basic matters concerning WTF maintenance, WTF coopera-tive, and WTF and toilet user fees were discussed, as well as the mechanism on thecooperative can earn from the operation of the new facilities.

Fig. 12: IEC activity with market vendors at Lilo-an municipal hall. Right picture, back row,from right: market vendor’s association president Anoos, councilor Pilones, standing the con-tractor Jesselito Baring.



25

PHASE IV – RUNNING-IN PHASE OF WTF AND FINAL SOCIALPREPARATIONS

Timeline of Phase IV

The final project phase started in December 2005 after the WTF inauguration andlasted until the official project end in March 2006. The project completion report even-tually was prepared during the month of April. The timeline of the final Phase IV isshown in Table 5.

Tab. 5: Timeline of Phase IV of the PDA.

Time-line

Projectactivities

- technical -

Project ac-tivities

- social -

Officialceremo-

nies

Legalrequirements

Budgeting Reportingto ADB

Dec ‘05 WTF O&M

training ofcooperativemembers

Student the-sis: monitor-ing of WTF

On going IEC

activities withcooperativemembers

Feb ‘06 See above On going IECactivities withcooperativemembers

Mar See above LGU Forum MoA draft on turnover of WTFO&M to coopera-tive and on ordi-nance for WTFuser fees

Apr Preparing offinal report

Accreditation ofcooperative asNGO

4th projectinstallment($10,000)

ProjectCompletionReport

Practical issues encountered during the WTF running-in phase

Power supply of the WTFThe power supply of the WTF was an issue, which took quite some time to be re-solved. The local power supplier Visayan Electricity Company (VECO) insisted oninstalling an own transformer for the WTF, even though the contractor and the mu-nicipal engineer said that this would not be necessary since the facility does not con-sume that much power. The installation of a new transformer would have come to acost of 80,000 Pesos, which would have been outside the total project budget. ADBalso could not agree to give additional budget for a new transformer, since this wouldhave been a general infra structure development, not belonging to the PDA itself.

In order to keep the facility operational in the time after inauguration in November 23,

2005, electric power was being tapped from a neighboring household. EventuallyVECO agreed that the already existing transformer of the public market could betapped. This opened up another issue, as it turned out that there were so many illegal



26

wire tappings at the public market’s transformer. After these had been sorted out, theWTF finally was connected to the power grid in February 8, 2006. A positive side ef-fect of this clearing of illegal tappings was to be seen right away in the municipality’selectricity bill, which dropped by approx. 20 %.

Operation of the wastewater pumps Another issue related to power supply was that in this residential area of Lilo-an towncenter a single phase power line is available only. However for this type of facility an“industrial type” three phased power line would be preferable. To install a threephased power line would have come at a much too high price, thus for practical rea-sons there was no choice but to make use of the available single phase line.

Basically the facility can be operated with single phase power, but for some specialdemands the shortcomings are getting obvious. As an example, the wastewaterpumps, which are installed inside the septic tank, and which have the task of the ver-tical transport of the collected wastewater to the RBC, are not operating continuously,

but are regulated by a floater, which is getting activated dependant on the water levelinside the wastewater collection tank.

With the available single phase electricity line the wastewater pumps are not creatingenough power in the moment they are being activated, thus they cannot carry out therequired vertical wastewater transport. As a consequence the wastewater pumps,which in the original design were being installed in the third chamber of the threechamber septic tank, now had to be transferred to the wastewater collection tank,which is located closer to the WTF overhead tank.

While the problem with the vertical wastewater transport has been solved by theseadjustments, as a consequence the compromise had to be made that the WTF now

is being operated without a primary settling tank. This means that the RBC is nowburdened with more solids and thus with a higher organic load compared to the de-sign with primary settling tank. In order to ensure satisfactory wastewater effluentquality, the WTF maintenance must focus on regular cleaning of the RBC disks. An-other measure is to frequently channel the sludge, which settles inside the RBCtanks, to the septic tank, where anaerobic stabilization will take place.

Maintaining and cleaning of the collecting sewer at the market

After the WTF was getting operational, it soon turned out that plastic littering at thepublic market area would become a major subject of WTF maintenance. As it can beseen from the pictures (Figure 13), these plastics are causing the clogging up of thescreens, which are installed for filtering the wastewater before it enters the collectiontank. Screening of solids from the raw sewage is necessary in order to protect thewastewater pumps, which will stuck up as soon as plastics would get inside.

As counter measures the system of the installed screens was being improved andthe personnel for WTF O&M was being trained to regularly clean the screens and thecanal from these litters (see below). As a long term measure the solid waste man-agement at the public market should be improved. In fact some IEC activities werealready being conducted in this respect.



27

Fig. 13: Solid wastes from the market are clogging up the screens (green color), which filterthe wastewater before reaching the collection tank with the wastewater pumps. Right pictureshows cleaning of the sewer canal from the debris.

Final set up and flow chart of Lilo-an WTF

Figure 14 shows the Lilo-an WTF in his final set up as photographed in April 2006.Visible are the overhead wastewater holding tank with connecting pipes to the under-ground wastewater collection tank, the electric control panel (grey), the two coveredRBC units and their motors. The two “chimney-like” structures are meant to conductpotential odors to higher levels in order to protect the immediate neighbors. The pic-tures in Figure 14 also document the visual appearance of both the raw wastewater(after screening) inside the collection tank and the effluent quality at the dischargepipe.

Final set up of Lilo-an WTF Final set up of Lilo-an WTF

Lilo-an WTF influent (collection tank) Lilo-an WTF effluent (discharged to the sea)

Fig. 14: Pictures from the final set up of the Lilo-an WTF in April 2006.



28

Figure 15 presents the actual flow-chart of the facility in April 2006. Wastewater fromthe market and from the residential area is being collected via the respective twosewerage lines. While the average wastewater generation is assumed to be 60 m³per day, according to observations made by the contractor, at special market daysthe wastewater generation can reach up to 100 m³. After screening the wastewater is

directed to the underground wastewater collection tank (interceptor tank). From therethe wastewater is pumped vertically to the overhead wastewater tank.

Fig. 15: Flow chart of the Lilo-an WTF operation.

From the overhead tank the wastewater reaches the RBC tanks via gravimetric flow.The two RBC are being operated by one unit of 1 hp motor, respectively, at a rotating

speed of 1 rotation per minute. The average retention time of the wastewater insidethe two RBC tanks is 10 hours (continuous operation mode). The setting can be op-erated either in parallel or in serial mode.

After having passed the RBC treatment process, the wastewater is directed to a filtertank (cloth filters), then overflows to the final holding tank. From the final holding tankthe wastewater can be taken for recycling purposes, e.g. for flushing, gardening, or itcan be directed via the discharge pipe to the shoreline for disposal.

The public market’s old three chamber septic tank, which already existed before theproject (see Fig. 3, page 10), is still included in the WTF design. Sludge which mightaccumulate at the bottom of the RBC tank, can be directed via separate sludge return

pipes to the first chamber of this septic tank, which then acts as an anaerobic stabi-lizer for the WTF’s surplus sludge. Once the third chamber starts filling up, wastewa-ter pumps are activated to direct these liquor back to the overhead tank and thus tothe RBC. This completes a closed loop system for sludge management.

Two pairs of 2 hp wastewater pumps are being operated inside the interceptor tankand inside the third chamber of the septic tank. While one of the pumps is activated,respectively, the other pump of the pair is acting as a back up. The operation of allthese pumps is regulated by floating switch controls. This system shall prevent over-flowing of wastewater at the site, as the pumps will be stopped once the receivingoverhead tank is filled up.

Wastewater from market and houses

Effluent for disposal orrecycling

Sludge return to septic tank

Rotating Biological Contactors

Gravityflowfeed

0verhead tank

Interceptor tankwith 2 pumps

Three chamber septictank with 2 pumps

Influentfeedline

Filtertank

Wastewater from market and houses

Effluent for disposal orrecycling

Sludge return to septic tank

Rotating Biological Contactors

Gravityflowfeed

0verhead tank

Interceptor tankwith 2 pumps

Three chamber septictank with 2 pumps

Influentfeedline

Filtertank



29

Anticipated frequent maintenance works would be:

• Daily cleaning of canals and raw wastewater influent screens from debris• Biweekly cleansing of the rotating disks from surplus sludge• Weekly cleaning of cloth filters

• Biweekly directing of surplus sludge sediments at the bottom of the RBC tanksto the three chamber septic tank (manual opening of valves)

• Weekly routine check up and lubrication of motors and pumps

Monitoring the running-in performance of the WTF through a thesis study

Integrating of a thesis of an undergraduate chemistry s tudent into the PDA

Within the PDA the EMB-7 laboratory was assigned to assess the WTF performanceover the running-in period. An undergrad chemistry student from the University ofSan Carlos (USC), Cebu City, was showing interest to do these studies in the course

of her thesis. ADB agreed that the including of the thesis into the project would befully in line with the PDA’s rationale, and therefore approved the respective budgetreallocation.

In return for giving support to the student’s thesis, the resulting benefits for the PDAcan be summarized: (1) the university rendered all of their analytical data to EMB-7and thus to the PDA, (2) the generation of a comprehensive data base for quantifyingthe PDA’s positive environmental impact (USC plus EMB-7 monitoring data), and (3)the general benefit and perspective of an academe participation in the PDA.

The thesis of Ms. Chariz Peñalber with the title “Quality assessment of influents andeffluents from a wastewater treatment facility” was submitted to the University of San

Carlos, Cebu City, in March 2006 (approval sheet see attachment 14). The study washonored with the BPI-DOST Science Award in March 14, 2006.

Results of the thesis

According to the results from the thesis, in terms of BOD5 removal the treatment effi-ciency of the WTF unambiguously was good over the period of study. This is seen inthe overall BOD5 removal efficiency of 65% for the RBC treatment and 74% for thewhole WTF (including foregoing primary settling tank treatment). There is also an in-creasing trend in terms of COD removal efficiency, but COD removal needs moretime for undisturbed WTF operation to be able to develop full capacity for wastewater

treatment. Given the technical limitations of the WTF, removal of organics during thestudy period is considered satisfactory.

The data set was insufficient as to make generalizations on the behavior of the pa-rameters ammonia, nitrate, nitrite and phosphate within the study period. More con-clusive results have been achieved when data were averaged and comparison wasmade between characteristic levels in influent and effluent samples. Table 6 containsa summary of the characteristics of influent and effluent discharge from the WTF interms of the different test parameters indicated.

No nitrogen removal is observable during the treatment process as nitrate and nitriteboth did not exist in considerable amounts. However, since ammonia was present in

significantly higher amounts than its other nitrogenous counterparts (nitrate and ni-trite) a removal of about 3.35% was considered noting also that the RBC was actuallydesigned to partially nitrify ammonia, as stated in the design criteria of the Lilo-an



30

WTF. Phosphorus removal of around 18% was perfectly in line with literature data.Furthermore, bacteriological analysis of the coastal waters conducted by the DENR–EMB-7 showed a significant improvement of over 99.8% for total coliform and over97.8% for fecal coliform bacteria.

Tab. 6: Summarized influent and effluent characteristics from Lilo-an WTF, consolidated dataof 8 samplings covering the whole study period (data taken from thesis study).

Discussion on the thesis study on the WTF running-in performance

In the first 12 weeks after the inauguration, which happened to be the study period,

the power supply controversy with VECO could not be resolved (page 24). Thereforethe electricity for the WTF had to be imported from a neighboring household in orderto enabling the student to carry out the study within the deadline given by the univer-sity. Since this was an expensive type of power supply, the WTF usually was shut offat night time, i.e. most of the study period a continuous WTF operation was not pos-sible. This limits the interpretation of the data collected during the study. Howeversome important information on the WTF performance still could be retrieved.

As for the removal efficiency for organic pollutants, i.e. BOD5 and COD, some furtherimprovements of the WTF performance are expected when the facility will be operat-ing continuously and undisturbed for a longer period. According to the WTF design,eventually a BOD5 removal efficiency of 85 – 90 % and a COD removal efficiency of

75 – 80 % could be achieved. The WTF also should be capable for nitrogen removal,however this still has to be proven. While removal of ammonia would be desirablefrom the environmental point of view, from the regulatory side this is still no issue inthe Philippines due to lacking effluent standards. However this might change in thefuture as soon as the respective effluent standards would be implemented.


O&M training of cooperative

On December 8, 2005, a training on operation and maintenance (O&M) of the WTF

was conducted for the members of the Lilo-an Community Multi Purpose Coopera-tive. 10 cooperative members participated in the activity (Figure 18).

Parameter Influent

Ave Conc (RSD, %)

Effluent

Ave Conc (RSD, %)

Experimental %Removal/Difference

Ammonia 36.87 35.64 3.35

Nitrite 0.14 1.54 no removal

Nitrate 1.38 0.59 no removal

Phosphate 6.14 5.03 18.16

BOD5 123 50

30

59.08 overall

75.61 at end of study period

COD 241 171

87

29.37 overall

63.96 at end of study period



31

During the morning session, which was being held at Lilo-an municipal hall, theoreti-cal background, technical sketches and blue prints of the WTF were discussed by theuse of power point presentations. In the afternoon session a hands-on training wasconducted at the project site. Training contents were basic O&M of the WTF, such ashandling the electrical control board, manual cleaning of pipes and screens, basic

maintenance of motors and pumps, and manual cleaning of the RBC disks.The cooperative members participated in the activity with much interest and manyquestions concerning the O&M of the facility were raised. Similar activities, but on amore informal level maintenance briefing, are still on going, since quite naturally withtime more practical issues will come up, once the facility is in permanent operation.The contractor is making himself (or his staff, resp.) available as soon as furtherquestions or complaints will be raised. Usually upcoming issues are directed to himvia the cooperative president.

Fig. 16: O&M training of WTF for cooperative members

MoA draft on transfer of WTF O&M to the cooperative

Various issues were being tackled in the course of the PDA, most of them could beresolved in a satisfactory manner within the project’s time span. All but one more is-sue is left hanging at the end of the project period concerning the council resolutionon the turn-over of O&M of the facility to the Lilo-an Community Multi Purpose Coop-erative. The respective council resolution and MoA signing was already scheduledlong before, but some politically motivated delays inside the council prevented to re-solve the issue by now, even though the big majority of the council in fact is in favor

of the MoA.The respective MoA has been drafted and at this point of time there is already an of-ficial communication from the council, informing the cooperative president that said



32

MoA was referred to the Joint Committee on Ordinances and Legal Matters and Mar-ket and Slaughterhouse, for appropriate consideration (attachment 15). Thus it canbe expected that there should be movements in this matter soon. It should also benoted that the council already issued an official document for accreditation of the Lilo-an Community Multi Purpose Cooperative as a NGO (attachment 16).

The arrangements as suggested by the MoA draft (attachment 17) are that the mu-nicipality will stay the owner of the facility, as stated in the LoA with ADB and as re-quested by the New Clean Waster Act (LGU have the responsibility for implementingsanitation measures). For this reason only the WTF O&M will be transferred to thecooperative. In return the cooperative will avail the rights to claim user fees for theWTF as well as for the renovated public market toilets.

In fact the cooperative members are very positive towards the proposed MoA, whichalso would enact the ordinance for WTF user fees. According to them they would bewilling to pay the proposed fee of P5 per market vendor and day. It is quite apparentthat the cooperative members, being small time business men themselves, seen a

positive profit from the operation (see “cost recovery”). An advantage is that the al-ready implemented Lilo-an market vendors fees are included in the existing code,thus only an amendment is needed.

LGU forum

As the PDA’s final major social preparation activity, in March 16, 2006, a LGU forumwas held at San Fernando Rey Parish Pastoral Center in Lilo-an. Out of the 51 mu-nicipal mayors from Cebu Province, eventually three were attending the activity. TheRegional Director of DILG-7, Dr. Pedro Noval, and the chair of the environmentalcommittee of the City of Lapu-Lapu, Councilor Amores, were also attending. Somemayors sent their representatives, so that in total approx. 40 participants were pre-sent. In the afternoon a site visit of the WTF rounded up the activity (Figure 17).

Fig. 17: Site visit of the participants of the LGU forum.

By conducting the LGU forum at the end of the PDA there was another lesson learntthat sanitation issues obviously still are not on top of the agenda of the municipalitiesin Cebu Province, or one might say in the Philippines. This one can conclude directlyfrom the rather low turn-out of the invited LGU representatives. This is because of themotion that the establishment of a WTF is purely an expense and not an income

generating option. This project may reverse this trend. Nevertheless those attendingshowed real interest in the project, and since a video was taken the LGU forum stillcan be considered a useful IEC activity.



33

Cost recovery scheme

Original cost recovery scheme

The project is funded by an ADB grant, thus no returning of the project costs is re-quired after project completion. However it is one of the most interesting aspects ofthe PDA to quantify a possible cost recovery by implementing user fees for the newfacilities. This is seen as a valuable lesson to learn for future sanitation projects,which then might be based on loan funding. Cost recovery can be one of the attrac-tion for future projects.

Table 7 presents the original cost recovery scheme. While in the project proposal thecomputation was based on 100 market vendors, for this computation the number ofvendors was increased to 120 due to renovating and enlarging activities at Lilo-anpublic market. The cost recovery model is based on a WTF user fee of P5 per vendorand day, to which the Lilo-an vendors actually were agreeable during the consulta-tions.

Tab. 7: Model for possible recovery of project costs by implementing of WTF user fees. Com-putation based on 120 market vendors (cooperative members), each paying P5 per day.

As it can be seen from Table 7, with 120 market vendors paying daily P5, an annualincome from collection of user fees of P216,000 would amount. The annual costs forspare parts of the facility and electricity bills are estimated to P24,000 in the first yearand P36,000 in the following years. Labor costs for hired local WTF personnel andcontractor’s staff are given to P72,000 per year (according to the contractor). Basedon these figures the annual cost recovery would be P84,000 in year 1 and P72,000 inthe following years. Therefore, for cost recovery of the initial investment for the WTFof $50,000, a time span of 26 years would be necessary.

This is a crude computation only, e.g. not taking into account yearly inflation ratesand general development of prices. However the table at least is able to provide

some estimate what amounts of money are involved in the WTF user fee based costrecovery, and what time spans are to be anticipated for realistic cost recovery.

::::::::::::::

::::::::::::::

::::::::::::::

50,35750,3572,820,0002,820,00072,00072,00072,00072,00036,00036,000216,000216,0002626

19,50019,5001,632,0001,632,00072,00072,00072,00072,00036,00036,000216,000216,0001515

1010

55

44

33

22

11

YearYearoperaopera--tiontion ofofWTPWTP

13,07113,0711.092,0001.092,00072,00072,00072,00072,00036,00036,000216,000216,000

6,6436,643552,000552,00072,00072,00072,00072,00036,00036,000216,000216,000

5,3575,357444,000444,00072,00072,00072,00072,00036,00036,000216,000216,000

4,0714,071336,000336,00072,00072,00072,00072,00036,00036,000216,000216,000

2,7862,786228,000228,00072,00072,00072,00072,00036,00036,000216,000216,000

1,5001,500120,000120,00084,00084,00072,00072,00024,00024,000216,000216,000

CostCostrecoveryrecoveryin US$in US$(56P)(56P)

Cost recoveryCost recovery

Accumul Accumul-- Annual Annual atedated

Maintenance costsMaintenance costs

Spare partsSpare partsElectricity Labor Electricity Labor

FeeFeeincomeincome

from WTPfrom WTPusersusers

::::::::::::::

::::::::::::::

::::::::::::::

50,35750,3572,820,0002,820,00072,00072,00072,00072,00036,00036,000216,000216,0002626

19,50019,5001,632,0001,632,00072,00072,00072,00072,00036,00036,000216,000216,0001515

1010

55

44

33

22

11

YearYearoperaopera--tiontion ofofWTPWTP

13,07113,0711.092,0001.092,00072,00072,00072,00072,00036,00036,000216,000216,000

6,6436,643552,000552,00072,00072,00072,00072,00036,00036,000216,000216,000

5,3575,357444,000444,00072,00072,00072,00072,00036,00036,000216,000216,000

4,0714,071336,000336,00072,00072,00072,00072,00036,00036,000216,000216,000

2,7862,786228,000228,00072,00072,00072,00072,00036,00036,000216,000216,000

1,5001,500120,000120,00084,00084,00072,00072,00024,00024,000216,000216,000

CostCostrecoveryrecoveryin US$in US$(56P)(56P)

Cost recoveryCost recovery

Accumul Accumul-- Annual Annual atedated

Maintenance costsMaintenance costs

Spare partsSpare partsElectricity Labor Electricity Labor

FeeFeeincomeincome

from WTPfrom WTPusersusers



34

ADB proposal: recovery of fu ll project costs within 10 years time

This original proposal was deliberately prepared as a conservative cost recovery es-timate, and in this way accepted by ADB. However all project partners certainly wereaware that a 26 years period for full cost recovery actually could not be seen as auseful approach to attract future loan based WTF projects. Two and a half decades just is too long a time span in order to convince local political leaders. Thus it wasproposed by ADB to come up with an alternative cost recovery scheme, which stillwould be based on the experiences made in this PDA, but which would also enableto recover 100% project costs within 10 years time.

Basically this target would be still achievable by applying the scheme described inTable 6, i.e. requesting P5 WTF user fees per vendor and day, however the minimumnumber of market vendors needed to generate the required income was computed to215. While a number of 215 vendors is out of reach for a market like Lilo-an with itsavailable space of 1 ha only, some markets of bigger capacity would already be ableto fulfill this requirement. In the medium term even in Lilo-an a number of 200 plus

cooperative members is possible by including neighboring residents, small busi-nesses and tricycle drivers in the Lilo-an Community Multi Purpose Cooperative. Infact the cooperative president has already plans to approach said groups of citizens.

Al ternat ive cost recovery scheme

As an alternative to the original, conservative cost recovery estimate, some “busi-ness-like” ideas can also be included into the picture. Basically these ideas are aboutto introduce some incentives for the market vendors for generating a certain incomebased on the new facilities (Figure 18).

Fig. 18: Proposal for the new and enhanced cost recovery scheme.

Enhanced cost recovery schemeEnhanced cost recovery scheme

Renovation of public market toilets by project funds

Cooperative will operate, maintain and clean the toilets

Cooperative will collect user fees

P5WTP user

fees per vendor per day

P1Cooperative share

ResidentsTownhousesBusinesses

Recycling of treated wastewater

Money lending

Cooperative caring aboutWTP maintenanceP4

O&MEarnings

P4O&M

Earnings

P4O&M

EarningsTreating of septage?

P475 per day?



35

The business like approach is based on the computation that 215 vendors, each dailypaying P5 user fees, would generate a total income of P1,075 every day, which even-tually would lead to recovery of $50,000 in 10 years, while the small market in Lilo-anwith its 120 vendors only is able to generate P600 per day. In other words in Lilo-anthe cost recovery is short of P475 per day. There are now some ideas how to fill thisfinancial gap.

According to Figure 20, the main component meant for fuelling the O&M fund is thatthe Lilo-an Community Multi Purpose Cooperative operates the newly renovated pub-lic toilets at the market. Cooperative members take over cleaning and maintenance ofthe toilets, in return asking small user fees of P1 for urinal and P2 for bowl. As onecan say from experiences from the first few months of toilet operation, this has beena great success so far. The income for the cooperative (operating costs already de-ducted) in the period of time between November 24, 2005, and January 25, 2006,amounted to P21,650 (Figure 19), i.e. more or less P360 income per day. Thus theincome of the toilets alone can already almost equal the lacking amount of P475.

Fig. 19: Income of the Lilo-an Community Multi Purpose Cooperative for toilet operation fromNovember 24, 2005, to January 25, 2006.

Other income could be expected by collecting WTF user fees also from the neighbor-ing small businesses (e.g. bakeries, town houses) and residents, which are also con-nected to the WTF. These neighboring small businesses and residents can be of-fered the chance to also join the cooperative by availing cooperative shares.

If the market vendors are able to maintain the WTF to a certain degree on their own,i.e. in case there is no need to call for maintenance staff from JV Baring Consultantseach time when there is a minor problem with the RBC, the cooperative can savemoney for O&M, what again would increase the income of the cooperative.

In the same way, if the WTF is kept well maintained by the vendors, the effluent qual-ity of the treated wastewater supposedly should be good enough so that the watercould be resold for flushing and gardening purposes (water recycling). Another optionwould be that the “WTF management” could offer to treat contents from septic tanks,which are subject to get treated prior discharge by the New Clean Water Act.

All of these opportunities for income generation mainly depend on how much the co-operative members eventually will identify themselves with the WTF project. In otherwords, the more they care for their project or “business”, the better the potentiallyachievable results. This participating approach should prepare some basis for im-proving the rate of project cost recovery. However concrete results can be expectedat soonest in a few years from now.



36

PROJECT BUDGETING

Summary of the project budget

Table 8 indicates what budget was allocated for which of the project partners. The

applied currency conversion rate was 56 Pesos = 1 US$.

Tab. 8: Summary of the project budget.

Pesos US$

Construction costs for the WTF (including labor) 2,630,000 46,964

Organization of Lilo-an market vendors (social preparationactivities)

140,000 2,500

EMB-7 (laboratory costs, shared with University of San

Carlos)

30,016 536

Total 2,800,016 50,000

Different from the budget breakdown given in the project proposal, the share of thecontractor was increased by $5,000 to $46,964 due to the enlargement of the WTF(see “Adjustments on the original WTF design”, page 16). With his budget the con-tractor constructed the WTF, operated and maintained the WTF during the running-inphase, and conducted O&M trainings. Furthermore the contractor was participating inthe weekly project meetings in Lilo-an (see “inner project circle”, page 13), servicingthe transportation from Cebu City to Lilo-an with his private vehicle.

Said amount of $5,000 was deducted from the project budget of the municipality (ori-ginally $7,500), which was able to manage their social preparation activities with theirresidual $2,500 budget. Aside from organizing and conducting several IEC activitiesand one WTF O&M training, the municipality used their budget for activities such asthe kick-off ceremony, groundbreaking ceremony, inauguration ceremony, and theLGU forum (attachment 18). Also the MLGOO’s flight ticket for the participating in the ADB ICLEI seminar in August 2005 in Manila was paid from project funds.

P30,016 were allocated to EMB-7 for monitoring the performance of the WTF duringthe running period, and to monitor the effect on the environmental impact area, theLilo-an shore line. Thus the budget mainly was dedicated for sampling activities andlaboratory analyses. As these analyses partly were conducted in the chemistry labo-ratory of the University of San Carlos, Cebu City (see “Integrating of a thesis...”, page24), the P30,016 budget was shared between EMB-7 and the university.

The arrangement was made that the student carried out the analyses of the parame-ters ammonia, nitrate and phosphate in the university’s chemistry laboratory, whilethe EMB-7 laboratory conducted analyses for BOD5, COD, TSS, and coliform bacte-ria. In the end the EMB-7 laboratory consumed P16,296 for carrying out the analy-ses, while the USC chemistry laboratory issued a bill of P12,020 (attachments 19,20). Additionally a gross amount of P1,500 was approved for the public transportationof the student (and the sampling gear) from Cebu City to Lilo-an. Thus all in all a

budget of P29,816 was being used for monitoring the WTF performance.



37

Handling of the budgeting by the Municipality of Lilo-an

Concerning the handling of the project budget, the funding agency ADB and the im-plementing agency, the municipality of Lilo-an, have different points of view, which inthe end could not be fully brought in line with each other.

The issue starts from the fact that ADB transfers the four installments of the projectfunds to a local bank account of the municipality of Lilo-an, for further disbursementto the contractor, etc. For this very reason municipality officials claim that in such acase they have no choice but to follow local disbursement rules for handling themoney. This has consequences on the payment of national taxes from the projectfunds, what basically is the core of the disagreement between ADB and Lilo-an.

From the municipality’s perspective, after disbursement of a certain amount of projectfunds to the contractor this money is already regarded as the contractor’s income,and the income of the contractor is subject to taxation. It is the system of an LGU towithhold the respective amounts due for VAT and IT from the money they disburse to

the contractor, and forward the respective amounts directly to BIR. This is a LGU rou-tine to prevent tax evasion by a contractor and to speed up the tax return to BIR. Inother words it is the contractor’s income which is being taxed by this procedure, themunicipality is just the one facilitating this process for the reasons mentioned above.

From the point of view of ADB their project funds can never be subject to taxation.Therefore, when the municipality of Lilo-an states the payment of VAT and IT on theirstatements of expenditure which they submit to ADB, the respective amounts will bedisallowed by the ADB controlling and subsequently be deducted from the disburs-able project funds on ADB’s project budget processing sheet.

The issue could not be resolved. As a consequence some fraction of the $50,000

project budget will not be disbursed by ADB and will be “lost” for the PDA. In thestatement of receipts and disbursements on the WTF project budget, which the mu-nicipality of Lilo-an accounting issued in December 31, 2005, it is stated that out ofthe total cash of P1,915,328.53 ($34,202.30) received from ADB until that point oftime, an amount of P87,060.39 ($1,554.65) was being deducted and remitted to BIR.Since the amount deducted for VAT and IT is only 4.5% of the amount disbursed by ADB, this did not affect the project significantly.

It is another routine of the LGU accounting to keep 10% retention from that moneythey disburse to the contractor. These 10% retention are payable on project comple-tion and represent an insurance of the LGU against possible incomplete surrenderingof services by the contractor. Since the municipality eventually will release thismoney for the project, this procedure will not limit the availability of project funds.

Proof of liquidation of the project budget (first, second, and third installment), i.e.statements of expenditure and disbursement vouchers issued by the municipality ofLilo-an, official receipts of the contractor JV Baring Consultants, as well as the ADBprocessing budget sheet from April 11, 2006, are attached to this report. The fourthand final project installment is due to get released upon submission of this report.



38

SUMMARY

Project infra structure

When beginning with the PDA, a couple of project committees were formed at themunicipality level. Both the activities of the Lilo-an project task force as well as theso-called inner project circle proved to be vital for successful project implementation.

The inner project circle (“champions”) consisted of the Lilo-an based Municipal LocalGovernment Operations Officer (MLGGO), the contractor, and the project coordina-tor. The team met on a weekly basis to discuss project matters straight and for brain-storming activities. While the coordinator arranged upcoming issues with ADB (filingof project reports, coordinating adjustments of project implementation), the Lilo-anMLGOO was the “local counter part”, familiar with coordinating things at the munici-pality level and with the project beneficiaries. Additionally the contractor was introduc-ing many creative ideas, which were very useful for following through with the project.

The municipality’s regular environmental committee was acting as the Lilo-an projecttask force. The level of the decision makers was made up of three councilors, spear-headed by the chairman of the environmental committee. These people were tappedwhenever council decisions or resolutions were needed. The two main implementerswere the MLGOO (social preparation activities) and the municipal engineer (technicalpreparation). The project beneficiaries were represented by the cooperative presi-dent. The linkage of this project task force to the coordinator, and thus indirectly to ADB, was impersonated by the MLGOO.

Technical aspects

The PDA proved that a $50,000 budget is good for the construction of a WTF with acapacity of 60 m³ per day (approx. 600 capita). The WTF technology is based on theso-called Rotating Biological Contactor and was put up within the vicinity of Lilo-anpublic market, thus in a rather congested and densely populated area. Aside fromwastewater effluents from the market itself, the facility also serves wastewater com-ing from a nearby residential area. As an added value to the project, and for makingthe improvements in sanitation in the area more complete, the renovation of the exist-ing toilets in Lilo-an Public Market also was included into the project.

The WTF proved to be efficient in terms of BOD5 removal, in fact the removal effi-ciency was given to 75% at the end of the running-in period. As one might expect theremoval efficiency for COD is not as good as for BOD5, since the COD refers to

hardly biodegradable organics. Likewise no removal of ammonia was observed, thusthe RBC was not capable for nitrification during the running-in phase. Phosphate wasbeing removed by the WTF to 18%, what is according to literature data. Importantly,there was an immediate positive effect on fecal coliform cell counts along the Lilo-ancoast line, which dropped by 97.8% after WTF operation started. Thus sanitation andthe health situation could be improved in the area. The WTF performance was moni-tored in the course of a thesis of a chemistry student.

During the running-in period of the WTF several practical issues came up. It tookmany weeks to connect the facility to the power grid, as there was a controversy withthe local power company if a separate transformer has to be put up for the WTF.

Later on it turned out that the single phase power line, which is common in residentialareas such as Lilo-an town center, is not fully capable to serve the facility’s needs. Asa consequence inevitably some compromises in the WTF design had to be made.



39

IEC activities

In order to keep continued involvement of the partners and be updated on current ac-tivities, several IEC activities and official ceremonies were held throughout the project. The main official ceremonies conducted were the kick-off ceremony, thegroundbreaking ceremony, and the inauguration ceremony. Major IEC activities weretwo seminars with the project beneficiaries, one training of cooperative members onoperation and maintenance of the WTF, and one LGU forum. Numerous other infor-mation drive activities were conducted on a more informal basis, e.g. one-on-onetrainings on WTF operation, establishing of the new cooperative, etc.

Legal and bureaucratic requirements

Several legal and bureaucratic requirements have been dealt with before the actualWTF construction eventually could start. One issue causing major delays was due tothe fact that municipality officials insisted that ADB project funds deposited on themunicipality’s local bank account have to be handled like local money, thus the rules

of the Commission of Audit (CoA) have to be followed. As a consequence the selec-tion of the contractor of the project had to pass the regular public bidding procedure. Another issue was that an Environmental Compliance Certificate had to be secured.

New cooperative for WTF operation

The Lilo-an Community Multi Purpose Cooperative was formed as a spin-off from theexisting market vendors association. The new cooperative was founded to operatethe WTF and the newly renovated market toilets in anticipation of profit generationfrom the venture. The number of members is at 100 by now, and to including anotherbatch of 100 new members is scheduled already. This number still can be expected

to increase further due to the ongoing renovation and expansion of the Lilo-an publicmarket, and by including neighboring residents and small businesses.

Cost recovery

Part of the PDA was to quantify a possible cost recovery by implementing user feesfor the beneficiaries of the new facilities. In fact the municipality is about to implementa WTF user fee of P5 per vendor and day, to which the Lilo-an vendors were agree-able during the consultations. The models for cost recovery initiated by the PDA arediscussed, however at this point of time it is too soon for a final assessment of theirsuccess and sustainability. Still it is a strong signal that the cooperative already oper-

ates the new facilities in Lilo-an, event though the MoA for the official turn over of theWTF operation from the municipality to the cooperative has not yet been signed.

A conservative computation showed that with 120 Lilo-an market vendors (coopera-tive members) paying daily P5, total recovery of the initial project costs would be pos-sible after 26 years. The full recovery of the project costs within 10 years time wouldbe possible by applying this model with a minimum number of cooperative membersof 215. An additional “business-like” approach was included for fuelling the coopera-tive funds and to give incentives for continuation of the operation of the facilities. Asbasic idea, the cooperative operates the newly renovated public toilets at the marketby taking over cleaning and maintenance, and in return asking small user fees.Based on experiences from the first few months of toilet operation, this attempt of in-

come generation has been a great success so far. Other sources of income could becollecting user fees from the neighboring small businesses and residents, recyclingwater from the WTF effluent, treating septage, and eventually money lending.



40

CONCLUSIONS AND LESSONS LEARNT

Project infra structure

The PDA is designed to be done in a participatory approach. Each of the parties con-cerned has to play its role in project implementation. However it soon became appar-ent that there is a wide gap between the funding agency in Manila and the imple-menting agency in Lilo-an. In other words, ADB and the coordinator would be loosingthe project beneficiaries during project implementation, if there will no further link andsupport coming from other champion partners, which are closer to them. Thus wellestablished project committees are vital for implementing the PDA.

According to the experiences made in this PDA at least two “project champions” areneeded for successful project implementation, one “coordinator” (DENR/EMB-7 con-sultant) who can bridge gap between implementing agency and funding agency, andone “local implementer” (Lilo-an MLGOO) who reaches out to LGU and beneficiaries.The function of the MLGOO in this PDA was most helpful to simplify communications

with the LGU. Without this local project champion the coordinator would have to dealindividually with mayor, councilors, municipal engineer, accounting, etc., what wouldcomplicate project coordination and slow down project implementation.

Aside from bridging the gap between funding and implementing agency, the projectchampions are supposed to form a highly flexible and pro-active group, convening ifnecessary even ad hoc, for discussing project issues straight and for brainstormingactivities. Such ad hoc meetings happened quite frequently in the PDA, namely dueto the fact that all members of the inner project circle were only available for the PDAas “part time” personnel. There were some quick decision making adjustments in thecourse of project implementation that emanated from this group. In every step along

the way there were some “surprises” coming up that could have been potentially fatalblows for the project, but were ably been solved.

As a more practical aspect, the project coordinator together with the contractor had totravel frequently and on an as required basis from Cebu City to Lilo-an, in order toprovide frequent updates and to have brainstorming activities. This kind of scenarioshould be addressed well in future projects.

On the political level, the willingness of mayor and councilors to host the project wasa very positive experience. Several council resolutions were issued during the PDAimplementation, although there were some blocks along the way, which is a stamp ofthe political democratic process.

On the bureaucratic level, even though the willingness of the LGU and the ADB tomutually adjust to the respective counterpart requirements was always tangible, theadjusting of the two different bureaucracies several times lead to time consumingdouble efforts in the handling of project funds and preparation of certain documents.The generally slow processing routines of the LGU due to their limited resources andcommunications slowed down the project several times. Since the municipality werenot used to such a project, they usually did not show initiative and sometimes be-haved passively, e.g. not informing the other project partners they are in need of as-sistance, when in fact everybody else was already waiting for the LGU for makingtheir next move in the project. Thus constant follow-up always is necessary.

The cooperation with the ADB case handler was good and non-bureaucratic, e.g. ap-proval of project proposal, applications for budget reallocations, adjustments in project implementation was acted upon quickly. Communications between ADB and the



41

project coordinator were uncomplicated. However direct communication with the im-plementing agency (and vice versa) proved to be rather difficult, which could becomefatal if nobody would link both sides.

Finally, as a key statement one can say that delays in project implementation couldnot be avoided, but with the constant intersession, positive attitude and good coop-

eration of all project partners, the project kept on going.

Technical aspects

No major problems were encountered during the construction of the WTF. Howeverduring the running-in phase of the facility some practical issues were coming up. Firstmajor issue after completion of the WTF construction was the requirement of the lo-cal power supplier for the installation of a power transformer specifically for the WTF.These kind of issues should in fact already be tackled at the level of filing the projectproposal and be included in the project budget.

The power line running through the residential area is only limited to a single phase

system, and to acquire a three phase system would have been outside the projectbudget. A three phase power line would be needed to enable the pumps to workmore effectively and efficiently. It will be very strategic, if pumps could be eliminatedin future WTF designs, thus the influent feed will be flowing into the WTF just by freegravity flow.

Legal and bureaucratic requirements

Several legal and bureaucratic requirements have been dealt with during the project,particularly during the “project preparation phase”. In fact with this PDA started multi-ple interactions and learning processes how to deal with the local bureaucracy. Their

way of handling issues was understood, and if necessary the respective adjustmentswere made in project implementation. Concerning future projects, it is safe to say thatthe project phase of complying with legal and bureaucratic requirements can bestreamlined and shortened, as many lessons were learnt in this PDA.

An issue causing several complications was the handling of project funds. For futurePDA in the Philippines one has to consider that a LGU will insist to follow the rules ofthe Commission of Audit (CoA) in disbursing project funds, as soon as PDA funds aredeposited on the LGU’s local bank account. Aside from additional efforts of dealingwith double bureaucracy of the two accounting departments, this also has conse-quences on the selection process of the contractor. The project was also required to

secure an Environmental Compliance Certificate from DENR, which also has beencomplied with.

IEC activities

In order to keep continued involvement of the partners and be updated on current ac-tivities, several IEC activities and official ceremonies were held throughout the project. For one, public awareness and stakeholder participation are considered key is-sues in social preparation of projects. Furthermore these activities proved to be an-other useful tool for leading the PDA to success.



42

Cooperative

The project beneficiaries are the Lilo-an market vendors. As a spin-off from the mar-ket vendors’ association, the formation and approval of the new Lilo-an CommunityMulti Purpose Cooperative was being initiated by the PDA and made possible withina few months time. This formation of a 100 member cooperative definitely would nothave been possible by the activities of the coordinator alone, as the gap to the projectbeneficiaries proved to be too wide to be bridged without social preparation activitiesat the local level, including direct communication with these people in local dialect.

The market vendors’ association (later cooperative) president has been included allthe time in the Lilo-an environmental task force, thus receiving regular updates on theproject. He was open towards the idea of implementing WTF user fees for the benefi-ciaries and to take over operation and maintenance of the WTF, and was also pro-active in conveying these ideas to the market vendors, in this way raising their posi-tive attitude towards the project. How this attitude will develop in years to come de-

pends mainly on proper management and examples for success of this cooperative.

Cost recovery

It is one of the most interesting aspects of the PDA to quantify a possible cost recov-ery by implementing user fees for the new facilities. Aside from implementing WTFuser fees, in order to make the O&M of the facilities more attractive for the coopera-tive, the PDA through the project champions opened up ways on how a WTF can bepromoted for income generation by considering the activity as a business operation.

Particularly the operation of the renovated public market toilets proved to be a greatsuccess as a source of income. Based on this experience the cooperative has al-

ready started operating the WTF even before the formal turn-over procedure. Thusthe issue of sanitation, which usually represents the lowest level for common people,can be upgraded to attract people to profit generation, showing that environment andbusiness in fact can go hand in hand into a joint venture.

In this way the venue for earning is prepared by the creativity of the project imple-menters, now it depends on the creativity of the operator and on the identification ofthe cooperative members with the WTF project in as much they are able to make useof the available opportunities created by the establishment of the WTF. In otherwords, the more they will care for their project or “business”, the better part will beachieved in the end. The concrete result will be known in the years to come, but at

this point in time we have a very positive outlook for a new generation of environ-mental protection and sustainability.



43

LIST OF ATTACHMENTS

1 Site map of the project location2 Lilo-an council resolution on availability of project site

3 No Objection Letter, issued by DENR Central Office, Manila4 Letter of Agreement, issued by ADB (first page of five pages document)5 Attendance sheet for information drive seminar November 25, 20046 Certification of the municipality for the selection of the contractor JV Baring

Consultants7 Summary on aerobic wastewater treatment systems8 Principle of Rotating Biological Contactor (RBC) treatment9 Environmental Compliance Certificate (ECC) of the Lilo-an WTF10 MoA between implementing agency and contractor, issued by the municipality

of Lilo-an (first page of 20 pages document))11 Report on the Lilo-an WTF inauguration in Cebu Sun Star, December 12, 2005

12 http://www.adb.org/PHCO/gallery/story10.asp

13 CDA certificate of registration for the Lilo-an Community Multi Purpose Coop-erative

14 Approval sheet of the thesis on the study on the Lilo-an WTF15 Communication on the elevation of the MoA to the council committee level16 Certificate of accreditation of Lilo-an Community Multi Purpose Cooperative17 MoA between the municipality of Lilo-an and the Lilo-an Community Multi Pur-

pose Cooperative (draft)18 List of IEC activities conducted by the municipality of Lilo-an19 Bill for analyses conducted by EMB-7 laboratory20 Bill for analyses conducted by chemistry laboratory of University of San Carlos21 Statement of income and expenses for first installment22 Disbursement voucher for first project installment23 OR of JV Baring Consultants for first project installment24 Statement of income and expenses for second project installment25 Disbursement voucher for second project installment26 OR of JV Baring Consultants for second project installment27 Statement of income and expenses for third project installment28 Disbursement voucher for second third installment29 OR for JV Baring Consultants for third project installment30 Disbursement voucher for release of the 10% retention

31 OR of JV Baring Consultants for the release of the 10 % retention32 ADB processing sheet from April 11, 200633 Final billing of the contractor, for liquidation of fourth installment34 Council resolution on MoA governing the use of WTF and market toilets



44

1. Site map of the project location

Scale: 1:50,000

WTF site


Scale: 1 : 50,000

WTF siteWTF site


Scale: 1 : 50,000

Lilo-anLilo-an



45

2. Lilo-an council resolution on availabilit y of project site



46

3. No Objection Letter, issued by DENR Central Office, Manila



47

4. Letter of Agreement, issued by ADB (first page of five pages document)



48

5. Attendance sheet for in formation drive seminar November 25, 2004



49

6. Certification of the municipality for the selection of the contractor JV BaringConsultants



50

7. Summary on aerobic wastewater treatment systems

In order to putting things into some perspective, it shall be summarized briefly whereRBC stands among the aerobic wastewater treatment technologies.The usually cheapest wastewater treatment systems are the nature-like facilities such

as lagoons or wetlands. While –due to the limited efficiency- this type of treatment isalready no more common in developed countries, they still could provide local solu-tions for developing countries, particularly because of their simple operation. How-ever the great disadvantage there is that lagoons or wetlands definitely require a bigopen space, which often is not available (such as in Lilo-an town center). Thus tech-nical wastewater treatment systems are necessary, which have enhanced treatmentefficiencies through technological means, and thus require less space.In aerobic wastewater treatment technology, there are basically three main compo-nents, which must get in contact with each other in order to achieve maximum bio-chemical reaction: the wastewater itself, air and the biomass. The basic treatmentdesigns available are (1) the activated sludge technology, (2) trickling filters, and (3)

rotating biological contactors.In activated sludge technology air is introduced with high pressure into the reactor, inorder to create high turbulence and maximum mixing inside the tank. Since the en-ergy brought into the system by the compressed air is being used for mixing all of thethree components, the energy demand is very high. Likewise operation and mainte-nance are quire complex and thus costly. In return, activated sludge is considered themost effective aerobic treatment process. As for trickling filters, there is no need to move biomass (attached to pebbles) or air(coming via free diffusion from the ambient air). However there is a need for a verticalconveyance of the wastewater so that it can trickle down the filter via gravimetricflow. This uphill transport of the water also needs much energy, but the costs are al-ready smaller compared to activated sludge. The treatment efficiency still is consid-ered good, but cannot reach fully the efficiency of the activated sludge technology.Other than in activated sludge or trickling filter reactors, in an RBC only the biomassneeds to be moved. Air is again coming via free diffusion from ambient air, whilewastewater just flows along the tanks, thus no vertical conveyance needed. The en-ergetic advantage lies in the fact that biomass has the smallest mass of the threesaid components. Only the friction has to get overcome in order to keep the wheelsspinning, which results in the lowest energy costs of all discussed technologies. Infact the total energy costs of RBC are said to be 20 – 30 % compared to activatedsludge. Furthermore the maintenance effort and thus maintenance costs are low.



51

8. Principle of Rotating Biological Contactor (RBC) treatment

In RBC technology, an array of discs (2.4 m diameter in Lilo-an WTF), which aremade of some light synthetic material, will kept on rotating via the horizontal axis at a

rather slow speed inside a wastewater treatment tank. While the lower half of the ro-tating discs will have contact with the wastewater to be treated, the upper half willhave access to the ambient air.

Under these conditions aerobic wastewater bacteria soon will develop a microbial film(i.e. a layer of sludge) on the rotating discs surface, which will eventually carry out thebiological degradation of the organic pollutants inside the wastewater. In “layman-ized” words, with each rotation the biofilm on the turning disks will alternately undergoan “eating phase” by taking up of organics from wastewater, and a “breathing phase”by taking up oxygen from the ambient air. In this way the biodegradable organic pol-lutants eventually will be broken down.

Newly installed RBC with still clean surface

of the disc.

Already long time operational RBC with

biofilm (sludge) on the discs’ surface.



52

9. Environmental Compliance Certi ficate (ECC) of the Li lo-an WTF



53




54




55

10. MoA between implementing agency and contractor, issued by themunicipality of Lilo-an (first page of 20 pages document))



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11. Report on the Lilo-an WTF inauguration in Cebu Sun Star,December 12, 2005

Cebu Sun Star is considered the most relevant among the local newspaper circulat-

ing in Metro Cebu.



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12. http://www.adb.org/PHCO/gallery/story10.asp

Lilo -An’s “ Decentralized” Waste Water Treatment Facili ty Improves Cebu’s BeachesBy Flor ian Steinberg and Bert van Ommen, ADB Manila

Reproduced with permission from Business World, 10 February 2006.

In this small town of 80,000 inhabitants, a bold initiative of the Department of Environment and NaturalResources (DENR), with financial support from the Asian Development Bank (ADB), Manila has madea significant contribution to the improvement of coastal environment. On 23 November 2005, Lilo-anmunicipality, DENR and ADB inaugurated a decentralized water treatment facility which is going toclean all waste waters from a public market in Poblacion, which was known to be an environmental“hot spot” at Lilo-an’s beach. This market had been polluting this popular weekend beach of the Ce-buanos for many years, and had caused headaches and health concerns to many of the city’s visitorsand its administrators.

As DENR’s advisor Dr. Andreas Koenig recalls: “The idea for this decentralized water treatment facilitywas born in 2003, during a seminar-workshop, which dealt with the mitigation of environmental pollu-tion and discussed treatment of wastewater from households and from other domestic sources, suchas markets. One of the outcomes of this workshop was that big centralized wastewater treatment fa-

cilities – common in Europe- are too costly and complicated in maintenance to be affordable for com-munities in the Philippines. One possible answer to this issue is the so-called “decentralized” wastewa-ter treatment facilities. Decentralized wastewater treatment facilities are smaller units, which can beput up directly at the places of major wastewater outfalls by using the existing drainage, in this wayintercepting the wastewater before being discharged into the environment. The treatment technologycan be simple, low cost and simple in maintenance.”With the help of ADB, which provided a grant of $50,000 from its special fund for demonstration

nstalties in the water and sanitation sector, and with the technical support of DENR this facility wasdeveloped during an 18-month period. The implementation of the project involved a lot of consultationwith the city council, and the market vendors since they are the main cause of the liquids (from vege-tables, fruits, fish and meats, as well as public toilets) which have been flowing in an uncontrolled fash-ion into the sea.Fortunately, the market vendors realized that there is a connection between cleanliness of the beach,the arrival of tourists and weekend visitors at the beach and their own income. They all agreed to con-tribute a fee of P5/day to maintain this waste water treatment facility. With the Project in place, it willbe their Lilo-an Community Multi Purpose Cooperative which will collect the fees and administer main-tenance works of this facility.“I am still in a state of disbelief, even up to this day, that we would be able to own, much more operatea Decentralized Wastewater Treatment Facility, which is, I think, the first of its kind in the nearbynorthern Cebu area” were the words of Lilo-an’s Mayor Sevilla during the inauguration.With this work inaugurated, this small town deserves the attention of all environmentalists and water-sanitation experts. For the first time in the Philippines such a decentralized water treatment facility hasbeen inaugurated by a municipality. It has the capacity to absorb substantial growth of the market, andits sustainability is assured through the efforts of the market vendors. However, there is a much widerlesson to be learnt: As can be demonstrated from the financial return of this facility, similar facilitiescould even be built by other cities without the reliance on grants, once pre-financing can be secured.That lesson in itself should be taken very seriously by other cities. Or in the words of Dr. Koenig:“What you can see here is an entirely new approach to address the problems of sanitation in thiscountry… Other LGUs will become interested in having a similar project.”

http://www/

http://www/



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13. CDA certificate of registration for the Lilo-an Community Multi PurposeCooperative



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14. Approval sheet of the thesis on the study on the Lilo-an WTF



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15. Communication on the elevation of the MoA to the council committee level



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16. Certificate of accreditation of Lilo-an Community Multi Purpose Cooperative



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17. MoA between the municipality of L ilo-an and the Lilo-an Community MultiPurpose Cooperative (draft)

MEMORANDUM OF AGREEMENT

KNOW ALL MEN BY THESE PRESENT

This agreement made and entered into this _______ day of

_____________________

2006, by and between:

The LILOAN COMMUNITY MULTI-PURPOSE COOPERATIVE, a coop-

erative duly organized and existing, registered and recognized by the Coopera-

tives Development Authority (CDA), with principal office at the Liloan, Public

Market, Liloan, Province of Cebu, represented herein by its President Mr. AL-

FREDO ANOOS, of legal age, Filipino, married, and a resident of the mu-

nicipality, hereinafter referred to as the “OPERATOR”;

and

The MUNICIPALITY OF LILOAN, a local government entity duly organized

and existing under the laws of the Republic of the Philippines with principaloffice at the Municipal Hall, Liloan, Province of Cebu represented in this Act

by its Municipal Mayor MARIA B. SEVILLA, and hereinafter referred to as

the “OWNER”;

- WITNESSETH:

WHEREAS, the OWNER is a recipient of a grant for a “Pilot Demonstration

Activity” (PDA) a “Decentralized Wastewater Treatment Facility” (DWTF) and Reno-

vation of its Existing Public Market Toilet, funded by the Asian Development Bankwhich shall herein be referred to as the “FACILITIES”;

WHEREAS, the OWNER agreed to turn over the operation and maintenance

of the Decentralized Wastewater Treatment Facility and the Renovated Public Toilet to

the “OPERATOR”

WHEREAS the OPERATOR is willing to accept the responsibilities to under-

take the operation and maintenance of the above mentioned facilities;

NOW THEREFORE, for and in consideration of the foregoing and the mutual

covenants here in contained, the Parties do hereby, bind themselves and agree to thefollowing:



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1. That the OWNER will allow the operator to collect fees from the users of

the facilities which shall not be more than: 5 Pesos for the public toilet,

and 10 Pesos for the Decentralized Wastewater Treatment Facility (DWTF);

2. Any increase in the fees shall have prior approval from the OWNER;

3. The OWNER shall have the authority to regularly monitor, audit and in-

spect the books of the OPERATOR to determine the viability of the op-

erations;

4. The OWNER shall conduct regular monitoring on the actual operations and

maintenance of the facilities;

5. The OPERATOR shall conduct the following activities as part of their

daily maintenance:

a. Cleaning up of culverts from plastics, debris and other solid ma-

terials that can cause clogging of the in-let pipes;

b. Regular cleaning of filters, screens, and tanks and tightening of

bolts;

c. Conduct a continuous monitoring and inspection of the DWTF,

particularly the motors, pumps, control panel and valves, to make

sure that the DWTF is continuously in operation;

d. Conduct regular cleaning and maintenance of public toilets and

make sure it does not smell;

e. Endeavor to use treated water from the DWTF to use for toilet

flushing;

6. The OPERATOR shall submit the following monthly reports to theOWNER:



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a. Monthly Income and Expense Report

b. Monthly Operations and Maintenance Report

7. The OPERATOR shall shoulder the cost of electricity and water bills con-

sumption used by the facility;

8. The OPERATOR shall pay for the cost of spare parts after the warranty

period;

9. The OWNER has the right to rescind this Memorandum of Agreement ifand when there are gross violations committed by the OPERATOR after

Three (3) written reprimands from the OWNER;

10. This Memorandum of Agreement may be amended only in writing duly

signed by authorized representatives of all parties hereto;

11. This agreement is being entered into by the Municipality of Liloan as

OWNER,

thru the Office of the Municipal Mayor of Liloan in her official capacity

and

duly approved by the Municipal Council under Ordinance No.

______________,

and ostensibly exercising its function lawfully, done within the scope and by

the

apparent authority of her office and therefore valid and binding as against

any of

her successors-in-interests, third persons and assigns;

12. In case any one or more of the provisions contained in this Agreement

shall be

invalid, illegal or unenforceable in any respect, the validity, legality and en-

forcea-

bility of the remaining provisions contained herein shall not in any way be

affected or impaired thereby;



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12. This agreement and any documents attached hereto constitute the entire

Agreement

between the Parties and supersede all prior agreements, representation or

expressions of intent, whether written or oral, with respect to t he subjectmatter

contained therein:

13. This agreement and the rights and obligations of the parties hereto shall be

governed in all respects by the laws of the Philippines.

The OPERATOR hereby AGREES to all the conditions and provisions written

and imposed in this Memorandum of Agreement and together with the OWNER ex-

presses their agreement by signing this Memorandum of Agreement.

IN WITNESS WHEREOF, the undersigned duly authorized have signed this

Memorandum of Agreement.

MUNICIPALIRY OF LILOAN LILOAN COMMUNITY MULTI-

PURPOSE

OWNER COOPERATIVE

OPERATOR

By: By:

MARIA B. SEVILLA ALFREDO ANOOS

Municipal Mayor President



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18. List of IEC activit ies conducted by the municipality of Lilo-an



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19. Bill for analyses conducted by EMB-7 laboratory



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20. Bill for analyses conducted by chemistry laboratory ofUniversity of San Carlos, Cebu City



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20. Bill for analyses conducted by chemistry laboratory ofUniversity of San Carlos, Cebu City



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21. Statement of income and expenses for f irst installment



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22. Disbursement voucher for first project installment



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23. OR of JV Baring Consultants for fi rst project installment



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24. Statement of income and expenses for second project installment



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25. Disbursement voucher for second project installment



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26. OR of JV Baring Consultants for second project installment



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27. Statement of income and expenses for third project ins tallment



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28. Disbursement voucher for third installment



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29. OR for JV Baring Consultants for third project ins tallment



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30. Disbursement voucher for the release of the 10% retention



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31. OR of JV Baring Consultants for the release of the 10 % retention



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32. ADB processing sheet from April 11, 2006



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33. Final billing of the contractor, for liquidation of fourth installment



34. Council resolution on MoA governing the use of WTF and market toi lets

PHI PDA: Decentralized Wastewater Treatment Facility for the Lilo-an Public Market (Final Report)

Documents

Transcript of PHI PDA: Decentralized Wastewater Treatment Facility for the Lilo-an Public Market (Final Report)