Land Valorization in Waste Management Policy
Updated: Aug 12, 2021
Landfill Area Avoidance is one of the many benefits in waste management that is often overlooked by the experts. Without analysing the full impact of landfill as Business-As-Usual activity, it is difficult for the policy makers to understand the Value for Money of a Waste Management Policy. As consequence, public, observers, and policy makers labels proper waste management as expensive and unaffordable.
The Surabaya Waste-to-Energy (WtE) inaugurated by President Jokowi on May 10, 2021 gave tremendous hope that implementation of higher standard waste management methods in Indonesia is possible. The City of Surabaya has shown that consistencies in upholding its standard of waste handling is not singularly due to high budget, but also due to the willingness and assertion of its Mayor.
The boldness of the Municipality of Surabaya City in placing hygiene, sanitation, and environment as priority in shown in the municipality’s policy to budget and pursue various waste management efforts even before Waste to Energy becomes a national policy. In addition to various waste reduction efforts at source, in 2012 City of Surabaya signed a Cooperation Agreement with a private investor to operate and maintain Benowo Landfill with a budget which was considered fantastic in compare with other cities at that time.
Initially, many questions this move, and even accusation of corruption due to City’s willingness to upgrade Benowo Landfill management by paying tipping fee of Rp 130,000/ton to a third party, while other city budgets a mere than Rp 20,000/ton to dump waste in their central government constructed landfill. During the first quarter of 2020, Surabaya paid Rp 198,000/ton for Benowo Landfill tipping fee, a significantly higher amount compared to other cities.
Slowly, this cooperation come to its fruition. After the successful implementation of Surabaya WtE, many are now admitting that Surabaya City Government’s consistency and their end-to-end environmental policy has brought the Surabaya to be a livable city with eminent economic activities. In contrast with the City of Jakarta who dump their waste in its neighboring Bekasi City, Surabaya now has full autonomy of its waste management, and they don’t need to pay “odor fee” and fee for compensation of negative impact to community. Their regional budget is now truly utilized for purpose of waste management and its problem prevention, not for damage control.
One of Surabaya’s achievement that is not yet highlighted under the public spotlight is their ability to maintain the same total area of Benowo Landfill. During the period of 2012-2020, the landfill receives approximately 1,400 to 1,700 of municipal waste with a consistent number of 1,600 to 1,700 in the past two years; however, the total area stays in 37.4 hectare. During this period of 8 years, unlike other municipality, Surabaya has never requested assistance to central government through Ministry of Public Work for construction of additional landfill capacity.
The above can be compared with against what happen in other landfill in Indonesia. Tangerang City, for example requested the Ministry of Public Works to construct a sanitary landfill for its Rawa Kucing Landfill. An additional 5.2 hectares landfill were constructed with a total cost of Rp 82.7 billion and ready to use in 2019. If this value is divided by its design capacity of 409,500 ton, the construction cost of this facility reaches Rp 202,000/ton, excluding the land value.
Should Benowo Landfill were operated carelessly, it is possible that an additional Rp884billion must be invested by Ministry of Public Work to contain Surabaya’s 4.38milion ton of waste in the last 8 years. In addition to this Rp884bilion, the municipality must add costs of land and costs to contained its environmental damages. So, indeed, proper operation & management of landfill is significant in budget savings.
Rawa Kucing Landfill itself is located only 1.3 km from Soekarno-Hatta International Airport and is surrounded by residences and commercial area with NJOP (Tax Object Sale Value) value between Rp 5 to 10 million per m2 according to the data from BPN (National Land Agency). Hence, a 5 hectare in this area at a mint condition would have a potential value between Rp 250 to 500 billion. It is such fantastic value made for a final disposal site.
It was later found, that the large state’s investment to rehabilitate Rawa Kucing Landfill has not delivered sufficient benefits. Tangerang City in 2019-2020 delivered 1,400 ton per day up to 1,600 ton per day, and fill them on the newly constructed landfill without much management. Within two years, Rawa Kucing Landfill received 1,065,000 ton of waste, exceeding its design capacity, and spent Rp 30 million to operate the landfill. This translates to cost of operation and maintenance of only Rp 28,200 per ton or less than 15% of the budget by Surabaya City Government for Benowo Landfill. As consequence, this newly constructed 5 hectares sanitary landfill lost in vain within 2 years, followed by environmental impacts that now requires rehabilitation and damage control funding. Currently, Tangerang City is already on in need for landfill expansion and must pay compensation for its neighbour.
In addition to land cost and construction cost, landfill expansion and its improper management weakens the economic potential of an area around the landfill and surely brought down the Tax Object Sales Value (Nilai Jual Objek Pajak or NJOP) of that area by diminishing it’s ability to attract residence and commercial activities, and directly reduce the economic yield/output of that area. Not only that that 5 hectare areas can no longer support any economic activities, it also further decrease the surrounding land value. This means that the land has lost its valor.
The two cases above prove that waste management procedure accomplished by Surabaya City Government, by investing through early waste management at the landfill has effectively restrain the expansion of Benowo Landfill. With simple methods such as compaction system, leachate extraction, and gas extraction regularly, the capacity of landfill can continuously be optimized, and since las May this simple procedures were synergized with WtE facility. Had this management procedure not been done since early stage, it is very likely that Gelora Bung Tomo next to Benowo Landfill would be affected and resulted in the loss of this City asset’s value and function. Which means, Surabaya City has successfully maintained the valor of its land.
Similar case has happened in many big cities in Indonesia. Bekasi City represents the most significant case with the Bantargebang and Sumur Batu Landfill are both located in Bekasi City. With total land area covering more than 140 hectare (1,400,000 m2) the land has huge potential to become commercial and residential area but at current condition has lost its valor for years. If analyzed with the current NJOP1 value (Rp 500,000 up to Rp 1 million per m2), this land value located in the middle of the City is worth only Rp 1.4 billion.
Cibubur Tourism City is an elite residential area of Bekasi City. Despite its dense population, BPN data shows that the area has NJOP value of approximately Rp 2 to 5 million. This NJOP value is far lower than elite residential area in Tangerang City and South Tangerang City that do not receive waste from Jakarta City. Modern Land, an elite residential area in City of Tangerang has NJOP value between Rp 5-10 million, and Bumi Serpong Damai in South Tangerang City have NJOP between Rp 10-20 million.
Perhaps, if Jakarta do not dump its waste in Bekasi City, then it might be impossible that the NJOP of the land with 140 hectares area could reach Rp 5-10 million per m2 or Rp 7-14 billion of asset value, and raise the surrounding NJOP value and thus raise the annual Local Government Revenue from Land and Building Tax (PBB) that goes to the area’s Regional Budget.
Surely, the supply of waste from DKI Jakarta is not the only factor which cause the lower than average land sales tax value in Bekasi City. However, this factor has a significant role in attracting investment in properties. Well-maintained environment will boost demand of residence and increase high value commercial activities, and as-consequently healthy living environment becomes the fundamental for economic growth.
All in all, the capability of a city to steer its landfill area expansion is a big accomplishment which until today has not appeared and appreciated in urban planning policy. Policy maker must acknowledge that restraining landfill area expansion has a real economic impact; consider it in the studies of national and regional policy management in waste management.
By understanding the land/space valorization value and its consequential contribution in supporting regional economy, what looks like cost center activities such as landfill mining and landfill rehabilition, could now be considered as future investment yielding long-term benefits.