labels: environment
Neel Metal Fanalca to increase revenue stream news
Venkatachari Jagannathan
21 January 2008

Chennai: Even as it tries to ensure the daily cleanliness of the three residential zones of Adyar, Kodambakkam and Ice House, Chennai's private conservancy agency Neel Metal Fanalca Environment Management Pvt Ltd is looking forward to beefing up its revenue streams.

The company, a 51:49 joint venture between Neel Metal Products Ltd and Fanalca S.A Colombia, is now looking at the corporate sector, sale of recyclable garbage and garbage composting as new opportunities.

Says S Pattabhiraman, vice president, "Multinational companies and large Indian corporate houses have a policy of disposing their waste through a certified waste management company so as to get and retain their quality certifications."

Nokia, Motorola and Tata Consultancy Services in Chennai have hired Neel Metal Fanalca to dispose off their garbage.

The company has entered into a contract with the Chennai Metropolitan Development Authority (CMDA) to clear the garbage generated at the Koyembedu Vegetable Market at Rs.143 per ton of garbage lifted. (See: Outsourcing of cleanliness operations trips Chennai Municipal Corporation)

However the company sees better potential in selling recyclable wastes like plastics, glass, metal, paper and other scrap collected from residences in Chennai. "Our target is to get around 15 per cent of our total revenue from selling recyclable waste," Pattabhiraman explains.

Though the company has been four zones, the Chennai Corporation had handed over only while the fourth, Pullianthope, will be entrusted only after its performance has been evaluated.

Spoils not to be shared
He categorically says that the Chennai Corporation can have no claim on the revenue Neel Metal Fanalca generates from garbage collection.

"The concessionaire agreement has no such revenue share provision. It is up to us the manner in which we dispose the collected garbage-dumping it in the landfill or selling it."

Interestingly the nearby Pammal Municipality collects Rs500 per ton of compost manure and Rs100 per ton of recyclable/inorganic waste sold by private agency Exnora Green Pammal.

Neel Metal Fanalca does not plan to provide bins to households free to enable the garbage segregation.

 "Our low tender quote was owing to factoring the revenue potential from selling garbage. As such our costs do not allow any additional expenditure," Pattabhiraman insists.

The city corporation had been paying Rs1,200 per ton of garbage cleared to Chennai Environmental Services popularly known as Onyx till 2007.

Last year Neel Metal Fanalca won the contract floated by the Chennai Corporation quoting Rs645 per ton for clearing garbage in Ice House and Adyar areas and Rs.670 per ton for Kodambakkam and Pullianthope zones.

The seven-year concessionaire agreement stipulates that the company segregate the garbage at source.

Speaking about the source segregation William Bendeck, operations director says, "On a pilot basis we have started implementing in Adyar zone and the results are satisfactory. We have started propagation in Ice House area."

The segregated garbage is first transported to the transit station owned by Chennai Corporation for further classification and sales.

According to T Palanichammy, associate vice president, the biodegradable/non-biodegradable garbage is sent to the landfill.

In the three zones Neel Metal Fanalca collects around 1200 ton of garbage daily of which the recyclable and biodegradable waste would be 40-45 per cent each and the rest non-biodegradable.

Pattabhiraman is also on the look out for suitable plot to compost biodegradable waste into manure that would fetch around Rs10 per kilo at the retail end. Four tons of kitchen, garden and other organic waste generate one ton of manure when composted over 60 day period.

Sale of plastic garbage is expected to fetch Neel Metal Fanalca at least Rs4,000 per ton.

Cleaning its backyard
Though the soft spoken Pattabhiraman, a waste management expert, does not agree that Onyx had set some high benchmarks in cleaning the Chennai's streets that Neel Metal Fanalca finds difficult to match, at the streets the story that is different.

Soon after it started operations last August, garbage on the streets had piled up and the company found it difficult to clear it for want of men, material (garbage bins) and machines (compactors, hook loaders). The company had also faced high levels of attrition and other labour problems.

In order to set right its house the company is now focusing on employee welfare. It has decided to absorb on its rolls all the contract labourers in order to develop a sense of belonging amongst the street-level workers.

"Starting next month there will be no contract workers. Instead of paying the labour contractors we have decided to pay the workers directly," he says.

For the company the cost impact of doing this would be zero but expects to generate a positive psychological impact among the 2100 workers towards it. The company is also covering all its workers and staff under a group personal accident insurance policy. The staff would also be offered group healthcare insurance, says Palanichammy.

The company has started a worker welfare fund with a one-time contribution from workers and has introduced an incentive package to reduce absenteeism.

"The incentives are on scaled basis and it goes up to Rs300 per month if a worker attends work for 26 days in a month," he adds. With all these measures the average earnings per worker per month will be around Rs3000.

On the machines and materials front the company operates 170 Tata Ace vans, 35 compactors, 10 hook loaders and has installed around 3,400 garbage bins of three sizes 660, 770 and 1100 litre.

"We have stabilised our operations now and we clear around 1000-1200 ton of garbage daily," claims Pattabhiraman.


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Neel Metal Fanalca to increase revenue stream