Throughout the municipalities and cities in Gujarat, municipal solid waste is largely dumped in uncontrolled sites. The Department of Urban Development for the State of Gujarat mandated the Gujarat Urban Development Company, a wholly owned GoG special Purpose vehicle to prepare and Implement a Solid Waste Management Program to cater to the need of the 161 Municipalities in the State. GUDC has adopted a part of the Master Plan prepared earlier, and has refined it further with the objective of ensuring optimum and efficient utilization of the asset created under the program. Towards this end various strategies, and technologies are been adopted and assessed so as to ensure that the function of collecting, treating and disposing of waste in an environmentally sound manner. Currently technologies such as composting of all biodegradable wastes and disposal of residues and inert wastes in engineered landfills have been adopted. Different forms of public private partnerships are also envisaged in the project from the perspective of sustainability.Realizing the importance of this issue, the Department of Urban Development of the Government of Gujarat has designated the Gujarat Urban Development Company Limited to administer, manage the municipal solid waste management project which includes the collection, transport, treatment and disposal. The Master Plan envisages composting and other alternative energy recovery options for treatment of organics and land filling the inert as well as residual compost, in conformity with the MSW 2000 Rules.The MSW 2000 rules specify that any land filling of wastes to be done in fully engineered landfills and prohibit the land filling of organic wastes. The MSW 2000 Rules set out compliance criteria for door to door collection, segregation at source, transportation, processing and final disposal. The goal of these rules is to establish effective MSWM services to protect public health, natural resources and reduce waste generation, separate recyclable materials, and recover compost and energy. However, the rules also recognizes composting as an alternative technology for the processing the organic wastes. To date, the states are catching up on the compliance of the 2000 MSW rules, in particular with regard to the prohibition on landfill ling of organic wastes. The main reasons for the lack of implementation of the MSW 2000 rules are the viability gap for land filling and processing options (including composting), financial constraints of Urban Local Bodies (ULBs), as well as limited capacity.Gujarat's Master Plan identifies the clear intent of GUDC to access carbon finance given the inherent difficulties in developing a compost market, and lack of public funds to finance the operations across the state. Already in February 2006, GUDC discussed the feasibility of accessing carbon finance for the compost program with a World Bank team.In order to reduce costs, impact on the environment, GUDC intends to cluster the 130 Urban Local Bodies (ULBs) in to 50 (Approximately) clusters for the purpose of land filling MSW in engineered/sanitary landfills according to the environmental and social selection criteria specified in the MSW 2000 Rules. However, each ULB will have its own composting unit. The wastes will be segregated into a wet fraction and a dry fraction with the wet biodegradable wastes being composted in vermi or microbial composting. In accordance with the MSW Rules, the compost will be recovered for reuse and inert wastes from the compost process as well as segregated inert waste will be disposed of in a sanitary/engineered landfill.The project is envisaged to be developed in two phases to account for the level of preparedness of the municipalities across the state:Phase 1: This includes composting units for 130 existing ULBs where GUDC has been designated as a nodal agency to implement MSWM. The estimated waste quantity is approximately 1520tpd (based on the forecast of 2001 census (see Annex 1 for details). For the purpose of population forecast, a growth rate of 2.08% per annum is assumed. This phase will start in 2007.In addition capturing methane on land fill sites, creating a carbon sink, plantation for land fill site covering 5000 acres.Phase 2: This will include 7 large cities, in addition to recently formed 31 ULBs with smaller populations (See Annex2 for details). This phase would generate approximately 4500tpd. This phase will start in 2008. The total waste generation would be approximately 5850 TPD.GUDC is at an advanced stage of bidding for the construction of new compost plants. Carbon revenues will be an important source of funds to bridge the viability gap to an extent possible. GUDC is also exploring various options for sustainable operation and maintenance of the newly created assets.The various stakeholders under the project consist of GUDC and other stakeholders. GUDC offers: (i) technical support to ULBs to structure MSW projects (ii) land as equity to operate landfills and composting plants (iii) capital investments (iv) consensus building with various stakeholders and (v) structuring a carbon finance project.