Collection and disposal services are essential, non-exclusive and non-rivaled (shared benefits). Reasons for introducing private sector participation in include:

• New investment and
• More efficient operation, which in turn leads to lower costs and tariffs. A useful analysis of cost structure (and hidden public costs and subsidies) is provided.

A discussion of the various private sector participation options (for waste collection, disposal and health care waste) is provided with country specific examples and a list of examples used in different countries.

This section discusses the key tasks for optimizing private sector participation, and making private services financially sustainable in the long-run:

• To maintain a balance between private and public sectors to secure contestability (e.g. maintaining public provision over some waste collection zones);
• To sign contracts for a minimum length of time to allow for full investment depreciation and economies of scale;
• To minimize labor redundancy, health and safety risks;
• To make provisions for waste flow control, especially at regional level;
• To monitor performance based on well-specified contracts;
• To consider willingness-to-pay in determining user charges;
• To define equitable collection zones, in order to minimize collusion and procurement irregularities;
• To provide guarantees against political risks;
• To define clear contractual clauses and well-advertised, transparent, equitable and scheduled procurement;
• To ensure that government has available financial means to comply with its commitments and to establish cost-recovery systems;
• To set up licensing system if necessary (for certain kinds of waste, such as waste from hospitals or laboratories, private companies may be allowed to compete freely to get subscribers to their services);
• To develop capacity of the public sector to regulate and monitor private service providers; and
• To provide central government support by changing national laws and policies, and by providing guidance and setting norms.

These Annexes contain tools that can be directly useful for local governments looking to introduce private participation, including:

• Benchmark data on solid waste quantities and costs vs. income.
• Performance monitoring measures, specifying who, how and how often such performance indicators should be measured. This list distinguishes between waste collection and landfill operations.
• Licensing criteria for solidwaste collection operations, for specific categories of waste such as healthcare waste or hazardous industrial wastes.
• Pre-qualification notice for selecting private operators and criteria for evaluating tenders.
• Detailed survey questionnaire on existing solid waste management services (both public and private services), for interviews with solid waste managers in cities or interviewing neighbourhood associations which contracted a private operator or finally, private operators themselves.
• ToR for a zoning study for introducing private sector participation in waste collection
• ToR for an institutional, financial and privatization study
• Demand assessment and willingness-to-pay survey for solid waste collection and disposal services, including a model questionnaire
• Checklist of issues related to municipal agreements: a detailed review of the type of private participation for waste collection services, of concessions for transfer stations and of BOT concessions for landfills. This section discusses issues related to the agreements' scope and duration, risk sharing (including operating, revenue and financial and regulatory risks) and payment issues.

Over 200 terms related to solid waste management (bioaerosol, chassis, refuse, tipping etc) and privatization (accountability, segregated accounts, procurement, take or pay etc) are defined.