untitled 220 Abstract This paper presents a scheme for managing waste, proposed for the urban community of Arieş, Cluj County, in which we are going to show the main activities that should be accomplished with the support of the local public administration. Based on the analysis of the waste flows, the demographic trends and the waste generating trends, we propose a scheme for managing waste that has a major investment component, an administrative re-organizing component and an educational one. We suggest a scheme which includes advanced techniques and methods for treating waste. Moreover, we demonstrated that the efficiency of the scheme cannot be conceived outside a circuit for valorizing and recycling the useful materials contained in the waste. THE FINANCIAL ANALYSIS OF A MODERN SCHEME FOR MANAGING WASTE PROPOSED FOR THE URBAN COMMUNITY ARIEŞ, CLUJ COUNTY Lucia Monica SCORŢAR Ioan LAZĂR Mirela POPA Diana ZAGAN ZELTER Ioan POP Lucia Monica SCORŢAR Assistant Professor, Department of Management, Faculty of Economics and Business Administration, Babeş-Bolyai University, Cluj-Napoca, Romania Tel.: 0040-264-418654 Email: lucia.scortar@econ.ubbcluj.ro Ioan LAZĂR Professor, Department of Management, Faculty of Economics and Business Administration, Babeş-Bolyai University, Cluj- Napoca, Romania Tel.: 0040-264-418654 Email: ioan.lazar@econ.ubbcluj.ro Mirela POPA Associate Professor, Department of Management, Faculty of Economics and Business Administration, Babeş-Bolyai University, Cluj-Napoca, Romania Tel.: 0040-264-418654 Email: mirela.popa@econ.ubbcluj.ro Diana ZAGAN ZELTER Assistant Professor, Department of Modern Languages and Business Communication, Faculty of Economics and Business Administration, Babeş-Bolyai University, Cluj-Napoca, Romania Tel.: 0040-264-418654 Email: diana.zelter@lingua.ubbcluj.ro Ioan POP Lecturer, Faculty of Business, Babeş-Bolyai University, Cluj- Napoca, Romania Tel.: 0040-0264-599170 Email: ioan.pop@tbs.ubbcluj.ro Transylvanian Review of Administrative Sciences, 27E/2009 pp. 220-234 221 1. Introduction Any human activity generates waste. If it is found in big quantity in a certain perimeter any waste produced by a human activity may cause damage to the environment. The environment has a certain self-generating characteristic; it absorbs the waste by preserving its basic features. If this capacity of regeneration is exceeded, the degradation starts a process which can become very accelerated and irreversible at a certain moment. Due to these considerations, acknowledged both by the international organizations and by the local specialists and administration, a series of systems for managing the waste in order to limit the negative impact on the environment were elaborated. The proposed scheme serves a group of associated communities that includes two urban communities and six rural communities, which make up the Urban Community Arieş (117.780 inhabitants). 2. Purpose, objectives and location The situation of waste management which describes the researched area cannot be accepted any further, as the requirements of the European Union in this field are very clear. The main purpose of the present paper lies in the presentation of a scheme for waste management proposed for the Urban Community Arieş, according to the requirements of the European Union. At the present moment, in this area there is no adequate system for waste management, and the uncontrolled accumulations of waste have a negative impact on the environment and on the citizens’ health. In the financial analysis undertaken by us, we demonstrated the profitableness and the suitability of the proposed scheme for this area. By applying this investment project we aim at (1) increasing the citizens’ awareness concerning the practical activities of selective waste collection, (2) increasing the number of sanitation services at affordable prices, (3) minimizing the quantities of waste that are eliminated, and (4) valorizing the useful materials contained in waste. All these actions attempt to provide a healthy and clean environment. The Urban Community Arieş is an association of local authorities from the Arieş-Turda- Câmpia Turzii area; it is granted with public institutions and attributions for cooperation created through the free will act expressed by the participating Local Councils, according to their legal prerogatives, the current regulations and the regulations of the European Union. The legislatures bestowed on the member councils to perform for them and on their behalf the common interest public services. For each Local Council the fundamental criteria for joining and participating in the Urban Community Arieş are the efficient access to common resources and their rational and integrated management, aiming at environmental protection. Table 1: The Urban Community Arieş The Urban Community Arieş Urban Area Turda Câmpia Turzii Rural Area Mihai Viteazu Călăraşi Frata Aiton Luna Petreştii de Jos Sănduleşti Tritenii de Jos Viişoara 222 The waste management scheme proposed for the Urban Community Arieş includes the following actions: (1) waste pre-collection at the source (in the apartment or house), (2) waste collection (at the collection container, where the responsibility of the public service starts), (3) waste transportation with special vehicles, (4) intermediary waste storage (at the transfer station placed between Turda and Câmpia Turzii), (5) valorization of the selected fractions, made by the recyclers, and valorization of mixed collected waste, treated in the sorting/treating station placed on the platform of the former Chemical Plant in Turda, (6) final storage of the remaining waste at the ecological warehouse, ought to be opened in Feleacu village. Regarding waste collection, the project proposal has the following aims: The urban areas. The non-selective collection of waste means taking the waste from each household that has collection containers (gate to gate collection), respectively taking the waste from the non-selective collection points which are placed in the blocks area (there will be non-selective collection points for about 100 flats). In order to collect waste selectively, we propose the organization of selective collection points. There will be four containers for collecting the recoverable waste. We suggest the collection of recoverable waste in four fractions: (1) glass, in a two-compartment container, (2) metal, (3) paper and cardboard, and (4) plastics. In the household area, for every 100 houses there will be a selective collection point, and for the blocks area there will be similar points for every 200 flats. Exclusively for the urban region, for social-administrative areas (administrative and commercial units, schools and nurseries) we intend to purchase a number of collection containers with a capacity of 1.1m3. The rural areas. The collection and transportation equipments will take over the non-selected waste from each gate in the village. In order to collect selectively there will be collection points at the level of each village. The selective collection points from the villages will serve 150 rural households, as a result of a reduced quantity of waste compared to the urban area. The structure of the collection points is identical to the one in the urban area (three containers per collection point, adding to those a two-compartment container) 3. Data for analysis and interpretation The proposed waste-management scheme is designed for an area including 117.780 inhabitants dispersed in two towns and nine villages. As the next step after the analysis and the description of the waste management scheme we detailed the object estimates of the investment components, as well as the general estimate of the proposed management scheme, as follows: Object estimate 1: Setting up 388 collection points � 211.217 euro (with VAT) Object estimate 2: Purchasing transportation means � 773.500 euro (with VAT) Object estimate 3: Setting up the transfer station � 450.466 euro (with VAT) Object estimate 4: Setting up the sorting/treating station � 4.838.724 euro (with VAT) Object estimate 5: Purchasing and distributing collection containers to the population – 555.603 euro (with VAT) 223 W as te c ol le ct ed f ro m t he p op ul at io n C on ta in er 1 .1 m c re fu se G ar ba ge c an 2 40 L T ra ns fe r st at io n T re at in g/ so rt in g st at io n W ar eh ou se W as te f ro m e co no m ic a ge nt s C ol le ct io n po in t Se le ct iv el y co lle ct ed w as te V al or iz at io n Valorizable fractions Fi gu re 1 : T he fu nc tio na l s ch em e fo r w as te m an ag em en t 224 The calculations at the local level revealed the following inventory of collection containers and collection points (selective and non-selective): Table 2: The inventory of collection containers and collection points Community Population Total collection containers Out of which: Number of collection points Garbage cans 240 l Containers 1.1m3 Containers 0.6 m3/two- compartment Turda 55.887 4.523 3.894 93 536 134+68 Câmpia Turzii 26.823 3.413 3.027 46 340 85+23 Mihai Viteazu 5.749 809 757 0 52 13 Călăraşi 4.450 830 790 0 40 10 Frata 4.382 655 615 0 40 10 Aiton 1.338 345 333 0 12 3 Luna 4.450 473 433 0 40 10 Petreştii de Jos 1.891 429 413 0 16 4 Sănduleşti 1.892 497 481 0 16 4 Tritenii de Jos 5.066 731 687 0 44 11 Viişoara 5.852 964 912 0 52 13 Total 117.780 13.669 12.342 139 1.188 388 The general total sum of the investment, as it results from the general estimate, including VAT, is situated at 9.687.679 Euros. This value, although it seems a high value, compared to the usual schemes promoted in our country (see PHARE CES programs 2004, 2005, 2006 where the total budget of the project is limited to approximately 1.000.000 Euros because of the conditions imposed by the financier for non-reimbursable financial assistance) cover those segments of the management scheme which are not usually included in the budgets of the projects which need financing, such as the distribution of collection containers to the population, including in the rural area, as well as the expenditures for setting up a modern sorting/treating station. The specific investment value of de 82.25 Euros/inhabitant is justified by the costs for the modern sorting and treating station, as well as by the inclusion of the containers necessary for the population in the rural area, without which we consider the proposed scheme impossible to be transposed in reality. The respective value is similar to the typical values from the ISPA waste management schemes. In the waste management scheme proposed for The Urban Community Arieş we took into account the pre-existing endowments of the local sanitation systems and this is why we also considered the fact that a part of the population living in private houses and a part of the economic agents already own adequate containers for waste collection. In this respect, we included investment costs just for the difference in the containers inventory, costs which would be directly recovered from the direct beneficiaries based on a conscription tariff. Thus, it is considered that the local authorities will distribute 225 these containers in adequate conditions, and will charge a tariff from those who will benefit from the respective services, recovering in this way their equivalent value. We cannot consider the free distribution of these containers based on the following assumptions: (1) The equivalent value of these garbage cans is very high (12.342 garbage cans x 35 Euros/garbage can = 431.970 Euros without VAT) and has an important ratio in the total investment. (The 2.68% ratio represents the garbage cans distributed directly to the population in total general estimate, respectively 4.07% represent the total of endowments with collection containers, in total general estimate). (2) If the distribution of these pre-collection containers is done for free, those who previously purchase adequate containers would be in disadvantage in comparison to those who would get them for free; in this way the fundamental principle of chance equality would be broken. Thus, the project implementation funds would be supported exactly by those persons who do not make the smallest effort or show the minimum interest for the problem of waste management. (3) If the entire population has to support equally the costs of this action, this would lead to an increase in tariffs over the acceptable level, which would also affect those who before the implementation of the waste management scheme manifested a minimum effort for the adequate management of waste by purchasing containers. This situation can be also characterized as unfair. 4. The presentation of the scenarios for the proposed financial analysis a. Alternative Zero (no investment) From the citizens’ point of view, the non-selective collection of solid waste probably represents the most convenient method, in terms of time and space. In this case, in the Urban Community Arieş - UCA - there will be no investment for organizing a selective collection system of the waste, setting up the transfer station and the sorting-treating one, as well as for transporting the final waste to the ecological county warehouse from Feleacu. However, according to the current legislation The Urban Community Arieş will have to find the necessary funds for closing the existing urban warehouses (Turda and Câmpia Turzii), and the inadequate storage points from the rural area. Under these circumstances, the investment costs would be reduced to those necessary for closing the urban warehouses from UCA. Moreover, we must take into account the necessity of transporting the collected waste to the warehouse to be opened in Feleacu, a fact that will create supplementary costs for the transportation and storage. b. The proposed alternative (with investment) This option includes the alternative analyzed in this paper: ensuring the selective collection service, operating a transfer station, operating a sorting-treating station, transporting the useful fractions to the recyclers, and transporting the remaining waste to the ecological warehouse of Cluj County. For a successful alternative, an awareness and publicity campaign will be created to convey to the citizens the different problems 226 associated with uncontrolled generation and storage of waste. In this scenario, the sorted waste will be valorized by selling it directly to the recyclers. Thus we can obtain revenues which will allow the support of exploitation expenditures with direct impact on the tariff settled for the sanitation service. The duration proposed for the implementation of the investment project at the level of the Urban Community Arieş is 24 months; the execution period would last 12 months. The exploitation period calculated in the analysis is 20 years. Table 3: The forecast for the dynamics of the population in the proposed scheme Year Population URBAN Population RURAL TOTAL Population Economic agents/institutions 2009 82.710 35.070 117.780 2.975 2010 82.462 34.965 117.427 2.966 2011 82.214 34.860 117.074 2.957 2012 81.968 34.755 116.723 2.948 2013 81.722 34.651 116.373 2.939 2014 81.477 34.547 116.024 2.931 2015 81.232 34.443 115.676 2.922 2016 80.989 34.340 115.329 2.913 2017 80.746 34.237 114.983 2.904 2018 80.503 34.134 114.638 2.896 2019 80.262 34.032 114.294 2.887 2020 80.021 33.930 113.951 2.878 2021 79.781 33.828 113.609 2.870 2022 79.542 33.727 113.268 2.861 2023 79.303 33.625 112.929 2.852 2024 79.065 33.525 112.590 2.844 2025 78.828 33.424 112.252 2.835 2026 78.592 33.324 111.915 2.827 2027 78.356 33.224 111.579 2.818 2028 78.121 33.124 111.245 2.810 2029 77.886 33.025 110.911 2.801 Population decrease factor: 0,003 For the discussed environments (urban and rural) the forecast for the generation of collected waste is made based on the following indicators: (1) the evolution of the population at county level, (2) the evolution of the waste generation index. Table 4: The forecast of the waste quantities generated by the Urban Community Arieş Year Quantity population urban - tones - Quantity population rural - tones - Quantities economic agents - tones - Total quantities - tones - Indicator waste generation kg/person/day - urban - Indicator waste generation kg/person/day - rural - 2009 27.170 5.120 13.127 45.417 0,90 0.40 2010 27.414 5.166 13.232 45.812 0,91 0.40 2011 27.660 5.212 13.338 46.210 0,92 0.41 2012 27.907 5.259 13.445 46.611 0,93 0.41 227 Year Quantity population urban - tones - Quantity population rural - tones - Quantities economic agents - tones - Total quantities - tones - Indicator waste generation kg/person/day - urban - Indicator waste generation kg/person/day - rural - 2013 28.158 5.306 13.552 47.016 0,94 0.42 2014 28.410 5.354 13.661 47.424 0,96 0.42 2015 28.665 5.402 13.770 47.836 0,97 0.43 2016 28.922 5.450 13.880 48.252 0,98 0.43 2017 29.181 5.499 13.991 48.671 0,99 0.44 2018 29.442 5.548 14.103 49.094 1,00 0.45 2019 29.706 5.598 14.216 49.520 1,01 0.45 2020 29.973 5.648 14.330 49.951 1,03 0.46 2021 30.241 5.699 14.444 50.384 1,04 0.46 2022 30.512 5.750 14.560 50.822 1,05 0.47 2023 30.786 5.802 14.676 51.264 1,06 0.47 2024 31.062 5.854 14.794 51.709 1,08 0.48 2025 31.340 5.906 14.912 52.158 1,09 0.48 2026 31.621 5.959 15.031 52.612 1,10 0.49 2027 31.905 6.012 15.151 53.069 1,12 0.50 2028 32.191 6.066 15.273 53.530 1,13 0.50 2029 32.479 6.121 15.395 53.995 1,14 0.51 Based on this scenario we will make a prognosis for the expenses and the incomes that the waste management scheme involves, as well as for the determination of the efficiency of such a system. 5. The presumed evolution of the incomes obtained in the proposed scheme There are three different income sources in the proposed waste management system which will cover the operation and maintenance costs. These are (1) incomes from the sanitation tariffs for waste from physical entities, (2) incomes from the sanitation tariffs for waste from economic agents, and (3) incomes from selling the recovered materials (selectively collected waste and the bio-degradable waste sorted in the sorting station). Table 5: Total forecasted incomes Year Total value recoverable materials (Euros) Equivalent value services Physical entities (Euros) Equivalent value services legal entities (Euros) Total incomes (Euros) 2009 964.547,68 1.413.360,00 234.410,71 2.738.297,26 2010 1.002.840,13 1.440.120,56 239.567,75 2.807.512,80 2011 1.042.866,71 1.467.387,80 244.838,24 2.878.976,15 2012 1.084.708,15 1.495.171,32 250.224,68 2.952.774,63 2013 1.128.448,95 1.523.480,90 255.729,62 3.028.999,28 2014 1.174.177,57 1.552.326,48 261.355,68 3.107.745,08 2015 1.221.986,59 1.581.718,23 267.105,50 3.189.111,12 2016 1.271.972,95 1.611.666,49 272.981,82 3.273.200,73 2017 1.324.238,11 1.642.181,78 278.987,42 3.360.121,76 2018 1.378.888,29 1.673.274,85 285.125,15 3.449.986,73 2019 1.436.034,66 1.704.956,63 291.397,90 3.542.913,02 2020 1.495.793,62 1.737.238,28 297.808,65 3.639.023,16 228 Year Total value recoverable materials (Euros) Equivalent value services Physical entities (Euros) Equivalent value services legal entities (Euros) Total incomes (Euros) 2021 1.558.287,01 1.770.131,15 304.360,44 3.738.445,01 2022 1.623.642,35 1.803.646,82 311.056,37 3.841.312,02 2023 1.691.993,17 1.837.797,06 317.899,61 3.947.763,48 2024 1.763.479,22 1.872.593,91 324.893,40 4.057.944,79 2025 1.838.246,80 1.908.049,61 332.041,06 4.172.007,73 2026 1.916.449,07 1.944.176,62 339.345,96 4.290.110,78 2027 1.998.246,35 1.980.987,66 346.811,57 4.412.419,36 2028 2.083.806,46 2.018.495,68 354.441,43 4.539.106,23 2029 2.173.305,09 2.056.713,88 362.239,14 4.670.351,75 Table 6: Forecasting the operating costs in the proposed scheme Year Storage fee (euro/tone) The value of the storage fee (euro) Overheads (euro) Expenses for fuel and maintenance vehicles (euro) Depreciation (euro) Equipments maintenance (euro) Salaries (euro) 2009 8,00 137.238,06 31.200,00 83.660,00 430.289,00 64.264,00 383.160,00 2010 8,60 146.366,27 31.824,00 85.333,20 430.289,00 64.264,00 417.644,40 2011 9,20 155.198,61 32.460,48 87.039,86 430.289,00 64.264,00 455.232,40 2012 9,80 163.701,63 33.109,69 88.780,66 430.289,00 64.264,00 496.203,31 2013 10,40 171.839,71 33.771,88 90.556,27 430.289,00 120.000,00 540.861,61 2014 11,00 179.574,94 34.447,32 92.367,40 215.145,00 120.000,00 589.539,15 2015 11,60 186.866,97 35.136,27 94.214,75 215.145,00 120.000,00 642.597,68 2016 12,20 193.672,88 35.838,99 96.099,04 215.145,00 120.000,00 700.431,47 2017 12,80 199.947,05 36.555,77 98.021,02 215.145,00 120.000,00 763.470,30 2018 13,40 205.640,95 37.286,89 99.981,44 215.145,00 120.000,00 832.182,63 2019 14,00 210.703,05 38.032,63 101.981,07 215.145,00 120.000,00 907.079,07 2020 14,60 215.078,58 38.793,28 104.020,69 215.145,00 120.000,00 988.716,18 2021 15,20 218.709,39 39.569,14 106.101,11 215.145,00 120.000,00 1.077.700,64 2022 15,80 221.533,72 40.360,53 108.223,13 215.145,00 120.000,00 1.174.693,70 2023 16,40 223.486,04 41.167,74 110.387,59 215.145,00 120.000,00 1.280.416,13 2024 17,00 224.496,80 41.991,09 112.595,35 215.145,00 120.000,00 1.395.653,58 2025 17,60 224.492,23 42.830,91 114.847,25 215.145,00 120.000,00 1.521.262,40 2026 18,20 223.394,05 43.687,53 117.144,20 215.145,00 120.000,00 1.658.176,02 2027 18,80 221.119,31 44.561,28 119.487,08 215.145,00 120.000,00 1.807.411,86 2028 19,40 217.580,01 45.452,51 121.876,82 215.145,00 120.000,00 1.970.078,93 2029 20,00 212.682,91 46.361,56 124.314,36 215.145,00 120.000,00 2.147.386,03 Increase storage fee rate (Euros): 0.60 Salary increase factor: 0.09 The analysis of the efficiency of an investment project can be done with the help of an investigation instrument which is represented by the investment efficiency indicators. The indicators used in the financial analysis aim at quantifying the efficiency of a project taking into account the costs and the effects that the investment project involves at investor level or investment objective. The main efficiency indicators calculated and interpreted are the benefit-cost ratio (BCR), the net present value (NPV), and the internal financial rate of return (IRR). 229 The first analysis indicator results from comparing the costs and benefits for the entire life duration of the project, an indicator represented by the benefit-cost ratio (BCR) and which results from the comparison between the present value of benefits and the present value of costs. PVC PVB BCR = , where: BCR - the benefit-cost ratio; PVB - the present value of benefits; PVC - the present value of costs. From the point of view of this indicator, the condition for financial efficiency is that the benefit-cost ratio should be more than 1, which means that the present value of benefits should be bigger than the present value of costs. In this case, the benefit-cost ratio isn’t more than 1, at an adequate updating rate, we don’t recover the total updated expenses, thus the project is inefficient and the investment of the capital is not justified. The second indicator for an investment project analysis is the net present value (NPV), which is a fundamental financial analysis indicator for an investment project. This indicator also refers to the effort and the effects of the investment project for the whole duration of the project; it reflects the difference between the present value of benefits and the present value of costs (capital expenditure and operating costs). NPV = PVB – PVC The condition for the investment project to be efficient is that the net present value should be positive (NPV>0). The internal financial rate of return (IRR) represents the fundamental indicator for accepting a project. It refers to the updating rate for which the present value of the benefits equals the present value of the costs, consequently the benefit-cost ratio equals 1 and NPV equals 0. The IRR calculation is done through successive approximations, where we determine the net present value at a corresponding updating rate, considered to be the minimum rate and for which it should be positive. Then, we calculate the net present value at a higher updating rate than the minimum rate, high enough to obtain a negative net present value. In the end, the exact determination of the internal financial rate of return is done through interpolation, according to the relation: )NPV()NPV( )NPV( )R(RRIRR minmaxmin −++ + ×−+= where: IRR - the internal financial rate of return; Rmin- the minimum present rate; Rmax - the maximum present rate; NPV (+) - the positive net present value, obtained at the minimum rate; NPV (-) - the negative net updated income, obtained at maximum rate. 230 Table 7: The structure of the investment project proposed for the Urban Community Arieş Year Updating factor (a = 5%) Annual incomes Annual updated incomes Operating costs Updated operating costs Annual investments (Euros) 2008 0,952 - - - - 4.687.679,00 2009 0,907 2.738.297,26 2.483.716,34 699.522,06 634.487,13 5.000.000,00 2010 0,864 2.807.512,80 2.425.235,11 745.431,87 643.932,08 - 2011 0,823 2.878.976,15 2.368.540,81 794.195,35 653.386,48 - 2012 0,784 2.952.774,63 2.313.576,18 846.059,29 662.909,59 - 2013 0,746 3.028.999,28 2.260.285,90 957.029,48 714.150,13 - 2014 0,711 3.107.745,08 2.208.616,41 1.015.928,81 722.001,64 - 2015 0,677 3.189.111,12 2.158.515,93 1.078.815,66 730.184,90 - 2016 0,645 3.273.200,73 2.109.934,38 1.146.042,39 738.749,14 - 2017 0,614 3.360.121,76 2.062.823,28 1.217.994,15 747.742,75 - 2018 0,585 3.449.986,73 2.017.135,79 1.295.091,91 757.213,42 - 2019 0,557 3.542.913,02 1.972.826,54 1.377.795,82 767.208,27 - 2020 0,530 3.639.023,16 1.929.851,68 1.466.608,74 777.773,93 - 2021 0,505 3.738.445,01 1.888.168,77 1.562.080,28 788.956,69 - 2022 0,481 3.841.312,02 1.847.736,76 1.664.811,07 800.802,59 - 2023 0,458 3.947.763,48 1.808.515,94 1.775.457,50 813.357,54 - 2024 0,436 4.057.944,79 1.770.467,87 1.894.736,82 826.667,40 - 2025 0,416 4.172.007,73 1.733.555,39 2.023.432,79 840.778,12 - 2026 0,396 4.290.110,78 1.697.742,51 2.162.401,80 855.735,82 - 2027 0,377 4.412.419,36 1.662.994,45 2.312.579,53 871.586,90 - 2028 0,359 4.539.106,23 1.629.277,52 2.474.988,26 888.378,14 - 2029 0,342 4.670.351,75 1.596.559,15 2.650.744,86 906.156,79 - TOTAL - - 41.946.076,70 16.142.159,45 Updating rate: 0.05 NPV (Euros): 16.804.313,66 Table 8: The calculation of the internal financial rate of return IRR Year Annual investments (Euros) Operating costs (Euros) Annual incomes (Euros) Cash flow (Euros) Updating factor (a = 30%) Updated cash flow (Euros) 2008 4.687.679,00 0,00 0,00 -4.687.679,00 0,769 -3.605.906,92 2009 5.000.000,00 699.522,06 2.738.297,26 -2.961.224,80 0,592 -1.752.204,02 2010 0,00 745.431,87 2.807.512,80 2.062.080,92 0,455 938.589,41 2011 0,00 794.195,35 2.878.976,15 2.084.780,80 0,350 729.939,71 2012 0,00 846.059,29 2.952.774,63 2.106.715,33 0,269 567.399,69 2013 0,00 957.029,48 3.028.999,28 2.071.969,80 0,207 429.262,85 2014 0,00 1.015.928,81 3.107.745,08 2.091.816,27 0,159 333.365,05 2015 0,00 1.078.815,66 3.189.111,12 2.110.295,46 0,123 258.700,01 2016 0,00 1.146.042,39 3.273.200,73 2.127.158,35 0,094 200.590,17 2017 0,00 1.217.994,15 3.360.121,76 2.142.127,62 0,073 155.385,98 2018 0,00 1.295.091,91 3.449.986,73 2.154.894,81 0,056 120.240,06 2019 0,00 1.377.795,82 3.542.913,02 2.165.117,20 0,043 92.931,12 2020 0,00 1.466.608,74 3.639.023,16 2.172.414,42 0,033 71.726,41 2021 0,00 1.562.080,28 3.738.445,01 2.176.364,73 0,025 55.274,49 2022 0,00 1.664.811,07 3.841.312,02 2.176.500,95 0,020 42.521,50 231 Year Annual investments (Euros) Operating costs (Euros) Annual incomes (Euros) Cash flow (Euros) Updating factor (a = 30%) Updated cash flow (Euros) 2023 0,00 1.775.457,50 3.947.763,48 2.172.305,98 0,015 32.645,80 2024 0,00 1.894.736,82 4.057.944,79 2.163.207,97 0,012 25.006,98 2025 0,00 2.023.432,79 4.172.007,73 2.148.574,94 0,009 19.106,02 2026 0,00 2.162.401,80 4.290.110,78 2.127.708,98 0,007 14.554,21 2027 0,00 2.312.579,53 4.412.419,36 2.099.839,83 0,005 11.048,90 2028 0,00 2.474.988,26 4.539.106,23 2.064.117,96 0,004 8.354,57 2029 0,00 2.650.744,86 4.670.351,75 2.019.606,89 0,003 6.288,01 TOTAL: -1.245.180,00 Updating rate: 0.3000 NPV (Euros): -1.245.180,00 Graphically, the internal financial rate of return is at the intersection of the abscissa with the line that joins the points of the coordinates minimum rate and positive net present value, respectively maximum rate and negative net present value. The higher the internal financial rate of return, the more viable the project is, its efficiency being increased. From the point of view of this indicator, the efficiency condition of a project is that IRR should be superior to the corresponding updating rate. 6. The results of the research The three main efficiency indicators have clearly demonstrated the profitableness and the suitability of the waste management scheme proposed for the Urban Community Arieş, as follows: 66,1 58,603.999.845,159.142.16 70,076.946.41 = + =BCR >1 The 1,66 value obtained for BCR being more than 1 proves the fact that the project is efficient, justifying by this the capital investment. Through its content, NPV characterizes in absolute value the gain, or the reward for the invested capital. In this case, the net present was calculated at a minimum present rate of 5%. NPV = 41.946.076,70 – (16.142.159,45 + 8.999.603,58) = 16.804.313,66 Euros %28,28 180.245.166,313.804.16 66,313.804.16 )530(5IRR = + −+= x IRR = 28,28% (the rate is high, much higher rate than the minimum rate, which proves once again the viability of the proposed project). The analysis of the efficiency of an investment project, but especially its financial analysis can be considered complete only after making the sensitivity analysis (known also as the sensitivity analysis of the internal financial rate of return). The sensitivity analysis consists of modifying certain variables and re-calculating the efficiency indicators for the investment project under the new circumstances. Next we will be making a detailed analysis of the sensitivity by studying the tendencies of the financial indicators according to the evolution of the relevant variables, both for 232 the collection activity and the waste transportation, as well as for the activity of the transfer and the sorting-treating stations. This analysis studies the influence that the relevant variables have on the profitableness of the investment project for the Urban Community Arieş. The variables with the highest impact upon the profitableness of the project are: (1) the variation of the sanitation tariffs for waste, (2) the variation of the selling price for the recyclable materials sold to recyclers and of the compost, and (3) the variation in operating costs. We present below the variation of the main parameters of the project between the limits -/+ 20% and the impact of the critical parameters on IRR: Table 9: The main parameters of the project Impact on: The internal financial rate of return (IRR) The critical parameter: SANITATION TARIFF 28,28% 0,80 0,85 0,90 0,95 1,00 1,05 1,10 1,15 1,20 26,22% 26,83% 27,37% 27,85% 28,28% 28,65% 29,00% 29,31% 29,60% Impact on: The internal financial rate of return (IRR) The critical parameter: THE SELLING PRICE OF THE RECYCLABLE MATERIALS 28,28% 0,80 0,85 0,90 0,95 1,00 1,05 1,10 1,15 1,20 26,88% 27,28% 27,64% 27,97% 28,28% 28,55% 28,81% 29,04% 29,26% Impact on: The internal financial rate of return (IRR) The critical parameter: OPERATING COSTS 28,28% 0,80 0,85 0,90 0,95 1,00 1,05 1,10 1,15 1,20 29,30% 29,07% 28,83% 28,56% 28,28% 27,95% 27,60% 27,21% 26,78% Impact on: The internal financial rate of return (IRR) The critical parameter: COMBINED IMPACT OF THE 3 CRITICAL PARAMETERS 28,28% 0,80 0,85 0,90 0,95 1,00 1,05 1,10 1,15 1,20 26,49% 27,01% 27,47% 27,89% 28,28% 28,84% 28,93% 29,22% 29,49% Necessary data for the graph of the sensitivity analysis -20,00% -15,00% -10,00% -5,00% 0,00% 5,00% 10,00% 15,00% 20,00% 26,22% 26,83% 27,37% 27,85% 28,28% 28,65% 29,00% 29,31% 29,60% 26,88% 27,28% 27,64% 27,97% 28,28% 28,55% 28,81% 29,04% 29,26% 29,30% 29,07% 28,83% 28,56% 28,28% 27,95% 27,60% 27,21% 26,78% 26,49% 27,01% 27,47% 27,89% 28,28% 28,62% 28,93% 29,22% 29,49% Taken individually, none of the selected variables can jeopardize the IRR level so as to put under question the feasibility of the investment, as the IRR modifications are very small. For a combined modification of the critical parameters, the IRR variation is also reduced (1-2%) proving that the project proposed for the Urban Community Arieş 233 is not sensitive to the modifications that may appear in time, therefore this investment objective is functioning. Figure 2: The graph of the sensitivity analysis of IRR 7. Conclusions The proposed and analyzed waste management scheme is based on the access of the population to sanitation services, according to which the public authorities are responsible for organizing public utility services for the community so that all the members of the community should have equal access to these services. It is supposed that the waste management targets and objectives must comply with the national strategic plan, the specific policies in the field and the specific national objectives. Consequently, we stated in the analysis made in this paper that these sanitation services must be provided in such a way as to ensure the availability of the tariffs and equal access of the population to these services. The proposed scheme solves the problem of waste management at local level, introducing directly, both at the level of the urban population and the rural population, the selective collection of the waste generated in households, the advanced treatment of all collected fractions, including an adequate step for reducing the organic charge of the waste sent for final storage, by valorizing their energetic potential. However, besides the quantifiable benefits, the project also brings non-quantifiable benefits that we consider to be the most important gains for the citizens from the researched area: – The improvement of the environment and the population’s health as a consequence of developing an efficient system for waste management, due to improvement of water, soil and air quality; – The increase of life expectancy due to reduced pollution; – The increase of the real estate value (land and buildings); – The development of tourism in an area in which there is a suitable waste mana- gement system, as a consequence of the esthetical and hygienic aspect of the area; – The attraction of the investors and the creation of workplaces for citizens. 234 The calculated values of the financial indicators demonstrate the fact that waste mana- gement in compliance with the harmonized European policy in this field is benefic, which shows the real importance that should be given by local public authorities to this sector. 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