61156 The World Bank Asia Sustainable and Alternative Energy Program ASTAE Cambodia Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters December 2010 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters ©2010 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: (202) 473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved This volume is a product of the staff and consultants of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Photo Credits: Michael Wild (Cover) and GERES-Cambodia Contents Acknowledgments ......................................................................................................................vi Acronyms ...................................................................................................................................vii Introduction ...............................................................................................................................viii 1. Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves.........................1 Introduction ..............................................................................................................................................................1 Activity 1: Develop and Test Production Technologies and Techniques to Increase Productivity and Rate of Stove Production ...................................................................................................................................2 Activity 2: Development of Standards for Production of the NKS and Kiln Firing.....................................................5 Activity 3: Model Production Facility ........................................................................................................................7 Activity 4: Train Producers in Management and Marketing ......................................................................................8 Activity 5: Evaluating Options for Introducing Improved Manufacturing of the NKS .............................................. 11 Activity 6: Plan to Scale Up Production ..................................................................................................................12 Appendix 1.1: About the Neang Kangrey Stove ......................................................................................................14 Appendix 1.2: NKS Production Facility Components ..............................................................................................15 Appendix 1.3: Firing the NKS ..................................................................................................................................18 2. Final Report to the Cambodian National Biodigester Program of Private Sector Development Technical Assistance Activities ..........................................21 Introduction ............................................................................................................................................................21 Project Background and Objectives ........................................................................................................................22 Summary of Project Activities ................................................................................................................................23 Summary of Project Results...................................................................................................................................23 Key Project Innovations, Accomplishments, and Lessons Learned .......................................................................24 Recommendations to the NBP...............................................................................................................................27 Sequential Narrative of Project Activities................................................................................................................31 Business Model Findings and Recommendations .................................................................................................35 3. Operations Manual for Private Biodigester Construction Companies ............................71 Introduction ............................................................................................................................................................71 Section 1. Marketing, Sales, Finance, and Contracting Operations Manual for Private Biodigester Companies 1. Finding Customers: The Promotion Network ...............................................................................................72 2. Visiting Customers ......................................................................................................................................73 3. Technical Feasibility: Site and Size Selection ...............................................................................................75 4. Biodigester Costs: The Bill of Quantities .....................................................................................................76 5. MFI Financing..............................................................................................................................................77 6. Making the Contract ...................................................................................................................................77 . 7 Instructing the Customer on Buying Construction Materials .......................................................................86 iii iv Contents Section 2. Organizing and Managing the Construction Process 8. Get Organized: Fill out a Project Control Folder ........................................................................................88 9. Setting the Construction Schedule ...........................................................................................................88 10. Submitting the Contract and Construction Schedule to the PBPO ...........................................................88 11. Inspecting Construction Materials ............................................................................................................93 12. Drawing the Plant Layout..........................................................................................................................93 13. Obtaining the Tools Required for Construction .........................................................................................93 14. Supervising the Excavation of Soil ............................................................................................................94 15. Supervising Construction to Ensure Quality .............................................................................................95 16. Appliances and Spare Parts ......................................................................................................................95 . 17 User Training: Explaining Plant Operations................................................................................................97 18. Collecting Work and Appliance Payments from Customers .....................................................................97 Section 3. After Plant Completion: Warranty, Maintenance, and After-Sales Service 19. BCC Obligations Under the NBP Guarantee: Maintenance and After-Sales Service ..............................102 20. Scheduled Maintenance Visits to Customers .........................................................................................102 21. Providing After-Sales Service for Customer Problems .............................................................................102 22. NBP Problem Reports .............................................................................................................................106 23. Submit End-of-Guarantee Form to PBPO and Receive Guarantee Fee ..................................................107 Figures 1.1 Neang Kongrey Stove ......................................................................................................................................14 1.2 Temperature in a Bonfire .................................................................................................................................18 1.3 Position of the Probes in the Bonfire...............................................................................................................19 1.4 Temperature in the Kiln ...................................................................................................................................19 1.5 Position of the Probes in the Kiln ....................................................................................................................20 2.1 Flow of Payment Entitlements in Private Biodigester Construction System ...................................................44 2.2 Offsetting Payments Utilizing the Appliance Credit System............................................................................44 Tables 1.1 Production Speed--Trained Potters...................................................................................................................3 1.2 Comparison of Pressure Strength .....................................................................................................................5 1.3 NKS Dimensions--Original, Smaller, and Larger Sizes .....................................................................................6 1.4 List of Model Production Facility Buildings and Floor Sizes ..............................................................................8 1.5 Common NKS Production Pattern pre-MPF .....................................................................................................8 1.6 Profit for Typical Family Producing NKS ............................................................................................................... 9 1.7 List of Agreed Steps and Values in NKS Production .......................................................................................10 1.8 Examples of Potter Productivity and Income .................................................................................................10 1.9 Factors Influencing Microenterprise and Family NKS Production .................................................................. 11 1.10 Provinces, Potential NKS Production per Month (in NKS Units per Month) One Year after Completion of Training ....................................................................................................................................13 2.1 Province Selection for Pilot PSD Activities and Rationale ...............................................................................32 2.2 Key Issues Raised by PBPO Directors ...........................................................................................................36 2.3 September 2009 Construction Labor Rates in Selected Cambodian Provinces..............................................37 2.4 Estimated Current Costs for 4m3 Biodigester and Cost and Overhead Analysis ............................................38 2.5 Estimated Current Costs for 6m3 Biodigester and Cost and Overhead Analysis ............................................39 2.6 Estimated Current Costs for 8m3 Biodigester and Cost and Overhead Analysis ............................................40 2.7 Estimated Current Costs for 12m3 Biodigester and Cost and Overhead Analysis...........................................41 2.8 Estimated Startup Costs for Biodigester Companies and First-Year Business Expenses ..............................42 2.9 Cost Increase with Plant Size .........................................................................................................................43 2.10 Time to Profit while Maintaining Baseline Income .........................................................................................43 2.11 Clustered Construction Benefits .....................................................................................................................43 Contents v 2.12 Evaluation Points in Self-Assessment Administered by CIEDC ......................................................................46 2.13 Skills Assessed in Oral Interview ...................................................................................................................47 2.14 NBP Data Analyzed in Mason Selection Process ...........................................................................................47 2.15 Masons Selected in Kampong Cham ..............................................................................................................48 2.16 Masons Selected in Kampot ...........................................................................................................................49 2.17 Masons Selected in Svay Rieng ......................................................................................................................49 2.18 Kampot Province Masons Trained ...................................................................................................................50 2.19 Kampong Cham Province Masons Trained .....................................................................................................51 2.20 Svay Rieng Province Masons Trained ..............................................................................................................51 2.21 Post-Training Needs of Kampot BCC Owners .................................................................................................54 2.22 Post-Training Needs of Kampong Cham BCC Owners ....................................................................................55 2.23 Post-training Needs of Svay Rieng BCC Owners ............................................................................................56 Acknowledgments The preparation of this publication, which combines Special appreciation and gratitude go to the World Bank three stand-alone reports, was carried out under two energy team in Phnom Penh, Cambodia, comprising technical assistance projects of the World Bank, Cambo- Veasna Bun (Infrastructure Officer), China Chhun (Team dia Improved Cookstoves Project and Cambodia National Assistant), Clive Hughes (Consultant), and Rogier van Biodigester Private Sector Development Project. The Mansvelt (Consultant) for providing local support, guid- financial and technical support of the Asia Sustainable ance, and technical assistance. and Alternative Energy Program (ASTAE) is gratefully acknowledged. The projects were led by Task Team The team is particularly grateful for the support of H.E. Leader, Jie Tang (Senior Energy Specialist) and coordi- Tun Lean, Director General of the General Department nated by Jason Steele (Consultant). of Energy of the Ministry of Industry, Mines, and Energy (MIME) and his team, as an active and enthusiastic coun- The final report from the Pilot Project on Improving Man- terpart for both projects, and other members of the donor ufacturing of Efficient Rural Cookstoves was prepared by community who are involved in rural energy projects in GERES-Cambodia, led by Iwan Boskoro. The final report Cambodia. for the National Biodigester Private Sector Development Project was prepared by a World Bank consultant team The team wishes to acknowledge the support from led by Philip Psilos with support from Yin Sombo. The the Asia Sustainable and Alternative Energy Program Operations Manual for Private Biodigester Construction (ASTAE), in particular Laurent Durix (Consultant) for his Companies was also prepared by Philip Psilos and Yin effective coordination in preparing this report for publica- Sombo in close collaboration with the National Biodi- tion and dissemination. The team is also thankful to Doug gester Programme Office (NBPO), in particular Ms. Lam Barnes (Consultant) for his expert guidance during the Saoleng, Director of the NBPO, and Jan Lam from SNV preparation of this report. A special thank you to Steve Netherlands Development Organization acting as Senior Meltzer (Consultant) for preparing the introduction to this Advisor to the NBPO. report and for his tireless efforts in editing and combin- ing the three separate reports into one publication. And last but not least, a sincere thank you to Laura Johnson (Consultant) for desktopping the report. vi Acronyms ASTAE Asia Sustainable and Alternative Energy KHR Cambodian Riel Program Program MAFF Ministry of Agriculture, Forests and BCC Biodigester Construction Company Fisheries of Cambodia CIEDC Cambodia-India Entrepreneurship MFI Microfinance Institution Development Centre MIME Ministry of Industry, Mines, and Energy DfID U.K Department for International MPF Model Production Facility (for NKS) Development NBP National Biodigester Program DGIS Directorate General International Cooperation of the Netherlands NGO Nongovernmental organization Ministry of Foreign Affairs NKS Neang Kongrey Stove DIME Department of Industry, Mines and Energy NLS New Lao Stove ESMAP The World Bank Energy Sector PBPO Provincial Biodigester Program Office Management Assistance Program PCF Project Control Folder GERES Groupe Energies Renouvelables, Environnement et Solidarités-Cambodia PDA Provincial Department of Agriculture, Cambodia GTZ Deutsche Gesellschaft für Technische Zusammenarbeit PSD Private Sector Development ICS Improved cookstove QCC Quality Control Checklist ISC Industrial Standards of Cambodia SNV Netherlands Development Organization ITC Institute of Technology of Cambodia, TLS Traditional Lao Stove Department of Civil Engineering As the US$/KHR exchange rate fluctuated between KHR 4,000­US$4,200 while these projects were underway, values in this report are approximate. vii Introduction In Cambodia, as elsewhere, reducing rural poverty, achiev- train participants in the skills they require to participate ing economic, social, and environmental benefits, and in planning, working in, and managing those enterprises. meeting development goals require improved access to The programs are consistent with Cambodia's national clean and affordable energy services. Especially in rural efforts to encourage decentralization by means of private households beyond the reach of the electricity grid, the enterprise development. use of energy-efficient and renewable energy technolo- gies could significantly reduce the large share of house- hold expenses currently required for cooking and lighting Support to the Production (estimated to represent 10 percent of all expenditures), and Dissemination of the allowing poorer people to devote more money and time to food production, education, and health services. Neang Kongrey Stove In the late 1990s, the NGO Groupe Energies Renouvel- In rural Cambodia, more than 90 percent of total house- ables, Environnement et Solidarités (GERES­Cambodia) hold energy used comes from wood and charcoal, which introduced the efficient New Lao Stove (NLS) in Cambo- will remain the primary energy source for many years to come. Rural families consume approximately 5 kilograms dia. Produced in about 20 facilities in Cambodia's main of firewood per day for cooking--in total about 5 million populated provinces, it uses 22 percent less charcoal tons per year--contributing to deforestation, black car- than traditional models and is used by more than 40 per- bon and other emissions from incomplete combustion cent of urban households. However, its relatively high of biomass, and their attendant health problems. Energy- price and the lack of a wide distribution network kept related activities such as gathering wood, boiling water, penetration in rural villages very low. and cooking take the poor as much as 3­4 hours a day. In 2001, to respond to the need for an affordable improved With support from the public and private sectors, includ- cook stove (ICS) in Cambodia's rural areas, GERES-Cam- ing technical assistance from the Asia Sustainable bodia developed the Neang Kongrey Stove (NKS). In addi- and Alternative Energy Program (ASTAE), the World tion to the energy-efficiency features found in the popular, Bank Energy Sector Management Assistance Program but largely unaffordable New Lao Stove, the NKS (ESMAP), and active involvement of NGOs, small and medium-sized enterprises are working to develop cre- · can use either charcoal or firewood, ative business models and payment schemes so that · can be made using (mainly) fine and coarse clay, the poorer households can access these energy-efficient, same raw materials as for traditional stoves in rural renewable technologies and improve their livelihoods. areas, · requires the same skills traditional stove producers This document highlights the technical reports of two already use, and such programs, briefly below and more fully in their · is transportable in the stove carriers used by tradi- respective sections: tional stove distributors. 1. Pilot Project on Improving Manufacturing of Efficient In 2007­08, the World Bank Energy Sector Manage- Rural Cookstoves ment Assistance Program (ESMAP), with funding from 2. Private Sector Development Technical Assistance the U.K. Department for International Development Activities to the Cambodian National Biodigester (DFID), provided support to pilot the introduction of the Program NKS in rural areas. The pilot activity was implemented by GERES­Cambodia. Some 8,000 NKS created by home- At the heart of each is a primary focus on creating sus- based potters were sold in rural villages. These were of tainable businesses that produce more affordable, more less than uniform quality and produced in insufficient energy-efficient products for local use, with provisions to numbers to meet demand. viii Introduction ix In response, the Asia Sustainable and Alternative Energy potters that were trained were producing a total of over Program (ASTAE) Program provided technical assistance 2,000 stoves per month. to create The Model Production Facility for the Efficient Neang Kongrey Stove in Bahn Shhkoul Village, Kampong Based on lessons learned from the pilot activity, a plan to Chhnang province. Kampong Chhnang is the main pottery- implement a National Efficient Cook Stove Program has and stove-producing province in Cambodia; Banh Shhkoul been formulated by the Ministry of Industry, Mines, and is the province's main stove and pottery production and Energy (MIME) with assistance from the World Bank­ distribution center. The facility serves as one business . ESMAP The national program would bring the NKS--and model to be replicated throughout Cambodia to achieve a model of decentralized enterprise creation--to Cambo- effective dissemination of an affordable, uniformly high- dia's rural households. quality stove. This would simultaneously accomplish some of the government's objective to decentralize Cam- bodia's economy by creating private enterprises through- Support to the Implementation out the country. of the Cambodian National The Model Production Facility was charged with achiev- Biodigester Program ing six key activities: The Cambodian National Biodigester Program (NBP) is a 1. Develop and test production technologies and tech- joint project of Cambodia's Ministry of Agriculture, For- niques to increase productivity and rate of NKS ests and Fisheries and SNV Netherlands Development production; Organization. It was launched in 2006 with cofunding 2. Develop standards for production and kiln firing; from the Directorate General International Cooperation 3. Pilot-test the new production facility; (DGIS) of the Netherlands Ministry of Foreign Affairs. The 4. Train producers to become self-sufficient in manage- NBP's primary goal is enterprise development--specifi- ment and marketing; cally, the creation of a sustainable program for efficient 5. Evaluate options for introducing improved manufac- private sector delivery of high-quality biodigester plants turing processes; and known as the Farmer's Friend. 6. Prepare a plan for scale-up of production. The NBP is informed by lessons learned from SNV's The facility will provide a future for women producers in biogas experience in Nepal and Vietnam, where it was Bhan Shhkoul, as the improved cookstoves are taking a clearly demonstrated that biodigester construction larger market share, and the need for traditional stoves in companies must be embedded in local communities to Bhan Shhkoul will slowly decline in the future. The facility ensure success. Accordingly, NBP focused on develop- will train several groups of women producers through- ing pilot private sector contractor enterprises called Bio- out its lifetime. With ASTAE funding, the first group of 10 digester Construction Companies--and on supporting women producers were trained to produce the NKS and the entrepreneurs who lead these enterprises. helped to organize into a collaborative enterprise. The facility allowed these potters, who would otherwise be , Pursuant to this objective, the NBP with the support of working on their own, to the World Bank ASTAE and with cofunding from SNV for supplemental activities, engaged a private sector and · share larger, more efficient, and more energy- value chain development consultant team to initiate a efficient production facilities (mechanical mixer, kiln) system to pilot and support the development of Biodi- than those available when working at home, gester Construction Companies. The team's work began · set up a microfinance mechanism providing a small with World Bank assistance from October 2008 through daily income, June 2009 and continued under direct funding from SNV · learn, then produce, proper production documenta- from July through September 2009. tion, · learn production management, and The NBP has established operations in eight provinces, · learn to negotiate more effectively with middlemen-- where Provincial Biodigester Program Offices supervise as a collective, rather than as vulnerable individuals. the construction of household biodigesters by NBP- trained biodigester masons. In addition to surpassing The Model Production Facility began operations in August the main milestone-linked project indicator (number 2008. By August 2009, one year out, the 10 women of businesses registered), the program achieved three x Introduction important outcomes that support private sector and value standards, and basic management skills. The 10 women chain development in Cambodia and provide a model for potters who were trained during the pilot were able to decentralized provision of biodigester services and other dramatically increase production to over 2,000 stoves product-focused social enterprise initiatives: a month. In cooperation with the Ministry of Industry, Mines, and Energy, lessons learned will later be incorpo- 1. Following an initially apprehensive reception, the rated into uniform production standards. project built strong support among NBP provincial stakeholders for private sector development, and for The planned scaling-up phase aims to train additional rural private enterprise development in general. traditional stove makers to become improved cookstove 2. Despite multiple obstacles to training masons to producers; to open new facilities nationwide modeled on become Biodigester Construction Company busi- the model production facility; and to strengthen existing ness owners, the private sector and value chain distribution channels and create new ones. development team devised a microfranchise system that made replication of the effort much easier. Each improved cookstove prevents 0.3 to 0.5 tons of car- 3. Customized training for semiskilled rural laborers bon dioxide emissions per year. When disseminated in resulted in a highly tailored and targeted business their hundreds of thousands, they will make an important skills training program developed in collaboration contribution to the fight against climate change. with Cambodia India Entrepreneurship Development Centre (CIEDC). Results for the Cambodia The private sector and value chain development process National Biodigester Program resulted in the legal registration, NBP authorization, and business launch of 15 Biodigester Construction Compa- The first years of the program, 2006­08, provided valu- nies in 3 provinces, each of which operates as a franchi- able learning. Installation of 750 Farmer's Friend biodi- see of NBP in a three-party contract between the NBP , gesters in 5 provinces revealed that mason-installers Construction Companies, and Provincial Program Offices. lacked the basic skills required to create a self-sustaining The NBP's operating plan prescribes that all Farmer's business--one of the program's key goals. Friend biodigester products and services in Cambodia will be delivered by private sector Construction Compa- ASTAE support was provided in fiscal 2009 to develop a nies by the end of 2011. service delivery model that included the required training. It was implemented in four test provinces by establishing and training private Biodigester Contracting Companies, Results for the Neang Kongrey and creating a trade association that would relay busi- Stove Program ness experiences and standards improvements. The lesson from the program's 2007­08 pilot dissemi- By the end of fiscal 2009, 21 Biodigester Construction nation of 8,000 stoves was that local producers were Companies had been created (100 percent over target) unable to create stoves of uniform quality or in sufficient in 4 provinces, responsible for 5,600 installations--a 600 numbers to meet demand. The response, in 2009, was percent increase. ASTAE funding to create the Model Production Facility, with improved production techniques (mechanized clay Each biodigester avoids burning about two tons of wood mixing, improved molding techniques, and modern kiln and kerosene annually and is estimated to reduce CO2 firing) and management practices that could be replicated emissions by 4­6 tons--about the equivalent of eliminat- by small and medium enterprises. The facility also trained ing a U.S. car's typical annual emissions (5.5 tons per year, its workers in production techniques, monitoring of according to the U.S. Environmental Protection Agency). 1 Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves Introduction · the skills of traditional stove producers are more than sufficient to produce it, and In the late 1990s, the NGO Groupe Energies Renouvel- · it is transportable by the common stove carriers ables, Environnement et Solidarites (GERES­Cambodia) operated by traditional distributors. introduced the efficient New Lao Stove (NLS). NLS tech- nology is based on a stove from Thailand that uses 22 The World Bank Energy Sector Management Assistance percent less charcoal than the Traditional Lao Stove (TLS) Program (ESMAP), with funding from the U.K Depart- in wide use at the time. Now produced in around 31 pro- ment for International Development (DfID), provided duction centers in Cambodia's main populated provinces, support to pilot trial the introduction of the NKS in rural the NLS is durable, attractive, and generally considered Cambodia. A strategy for a National Efficient Cookstove the best in its class. Program for rural Cambodia was formulated as a result. In 2002, GERES­Cambodia, with the support of the EU, During the pilot phase, implemented by GERES-Cambo- trained TLS producers to manufacture the efficient NLS dia (April 2007­08) 8,000 NKS created by home-based and launched a publicity and sales campaign that helped potters were sold in rural villages. Users understood and drive gradual adoption of the stove in urban markets, appreciated the savings in fuel and cooking time and the despite its higher cost (around US$3.50) compared to reduction in cooking smoke. Women who sold the stove the TLS (US$1.50). The NLS is now used by an estimated in village shops expressed interest in continuing to do so. 160,000 households. The stoves, however, were of less than uniform quality and produced in insufficient numbers to meet the con- The relatively high cost of the NLS and the lack of a dis- siderable demand. tribution network into rural villages, however, have kept NLS penetration in these villages very low. The develop- In response, the Asia Sustainable and Alternative Energy ment of the Neang Kongrey Stove (NKS) in 2001 was a Program (ASTAE) Program provided technical assis- response to the need to supply an affordable, improved tance to develop The Model Production Facility for the cookstove (ICS) to these rural areas. Efficient Neang Kongrey Stove (hereinafter both Model Production Facility and MPF) in Bahn Chkool Village, Kam- The NKS incorporates the energy-efficiency features of pong Chhnang province. If successful, it would serve as the TLS and the additional benefits that one business model to be replicated throughout rural Cambodia to achieve effective dissemination of an afford- · it can use either charcoal or firewood as fuel, able, uniformly high-quality stove. The facility would also · the main raw materials for production are fine clay play a role in Cambodia's national efforts to decentralize and coarse clay, the same as the material used to its economy by creating private enterprises. produce traditional stoves, 1 2 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters The Model Production Facility was charged with achiev- Clay Mixing ing six key activities: The traditional potting method begins with clay, collected 1. Develop and test production technologies and tech- from its source (a hill or river- niques to increase productivity and rate of NKS bank) or delivered by a sup- production; plier, then soaked in a pit to 2. Develop standards for production and kiln firing; allow uniform absorption of 3. Pilot-test the new production facility; water. Potters then knead the 4. Train producers to become self-sufficient in manage- wet clay together with coarse ment and marketing; clay or a nonclay material (usu- 5. Evaluate options for introduction of the improved ally fine sand from riverbank). manufacture of the NKS; and These act as a filler to reduce A mechanized clay mixer 6. Prepare a plan for scaled-up production. plasticity and shrinkage. In some cases, fillers may also lower the bulk density and The village-level goal was to find 30 potters interested increase the porosity of the fired piece, depending on the in producing the NKS and help them organize into a col- firing temperature. laborative enterprise. The facility would then to allow these potters, who would otherwise be working on their After kneading, the mixture is kept for a few more days to own, to reach a certain plasticity. Kneading 1 cubic meter of clay requires six hours at a labor cost of US$5. · share larger, more efficient, and more energy-effi- cient production facilities (mechanical mixer, kiln) At the Model Production facility, mixing was done by a than those available when working at home, mechanical clay mixer that ensures a homogenous mix- · set up a microfinance mechanism providing a small ture and reduces the time and effort required by knead- daily income, ing. Each mixer kneaded 1 cubic meter per hour, at a labor · learn, then produce, proper production documen- cost of US$0.50 and 1 liter of diesel fuel (US$0.75) for a tation, total cost of US$1.25 per cubic meter. For the US$5 cost · learn production management; and of hand-kneading 1 cubic meter, the mechanical mixer · learn to negotiate more effectively with middlemen-- produced 2 cubic meters. as a collective, rather than as vulnerable individuals. The clay mixer consists of a frame with two shafts, one In accordance with the mandate that the MPF must with five blades that sinks into the cylindrical metal tank accommodate the larger social needs of participating vil- and is fixed by five bearings and a pulley. The other shaft lagers, women were given the option to use the more is fixed by three bearings with two pulleys. The diesel efficient pilot technologies to prepare clay that they could engine is fixed and is connected to the mixing shafts by then take back to work in their homes. This let them pulleys. Detailed drawings are in appendix 1.2. more easily combine their production and their domestic duties--child care, meal preparation, and so on. Stove Body Molding The activities required to prove the MPF a viable model are discussed in the following sections. The typical way to form stoves in Kampong Chhnang is by hand: a lump of clay mixture is placed on a fixed pole and pulled up from the center into a hollow shape. Once the walls are the right thickness, coils of clay are added Activity 1: Develop and Test (when necessary) to the top to build up the form to the Production Technologies and correct size. To finalize the form, the walls are beaten Techniques to Increase Productivity from outside using a wooden bat while a round flat stone and Rate of Stove Production inside the form helps hold the proper shape. The final product is a cylinder with a bottom. To address the quality and uniformity problems found dur- ing the NKS pilot, and to increase production, alternative An important note: traditionally, Kampong Chhnang pot- forming technology and modern kilns were introduced. ters do not use a pottery wheel to throw the clay; instead, Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 3 the potter moves in a circle around a Carving and First-Step Drying fixed pole while pulling or beating the After molding, the stove body is dried in the clay. This technique cannot consistently shade until it is firm, but soft enough to be cut produce an NKS of uniform quality and with a carving knife. This is called "first-step dimensions. To achieve this standard, " drying. In the dry season, this takes 6­8 hours; in 2004, GERES-Cambodia introduced in the rainy season, it can take up to 24 hours. an external mold and a set of rotating trimming blades called a "jigger-jolly." The rim of the body is then carved to make three The reasons for choosing this technol- pot-rests. The next steps are to cut the rim for ogy were: the fuel inlet and then cut the lower part of the body for the primary air inlet. No special tools · It is hand-powered--no external A potter throwing clay with a are used in carving; those commonly used in power source is required. simple pottery wheel making the Traditional Lao Stove are sufficient. · The US$25 cost is quite affordable. · It requires minimum maintenance: The per-unit production speed achieved by newly trained can be washed with water, coated with used engine potters in the MPF after 3 months of training was com- oil to prevent rust. parable to that of a skilled NKS producer using traditional · Local workshops with basic technical skills can pro- techniques in Kdey Tnaot village (see table 1.1). duce it. · All parts can be easily calibrated at an affordable Therefore, the determining factor in production capacity cost. is the carving, which requires nearly 17 minutes. Mold- ing the final NKS body requires a special molding tech- There was interest in using a hydraulic press mold to nique-- ordinary press molds or extruding techniques make the stove body, but this was deemed a less desir- cannot achieve the NKS's proper inside shape or proper able alternative for the following reasons. thickness. · It requires external power (electricity). GERES tried to find an appropriate compression and · The cost is quite high (more than US$300). blow-molding technique but none supported stove mold- · It is not suitable for family-scale production. ing because · It requires a sophisticated workshop with precision tools to produce, and special training to operate. · the texture of the clay is too rough, · It needs special skills to maintain the parts--oil · its plasticity and elasticity are too low, pump, hose, joints and connectors, hydraulic shaft, · it cannot be easily cured and stabilized (polymer, rub- and so on. ber, resin, orother composite materials that can be stabilized by heat); and A previous study found that molding a stove body using · the internal shape of the NKS is complex--hollow a hydraulic press requires an average of 1 minute and with outward bulging on the inside walls. using the jigger-jolly requires 2.6 minutes. Although the hydraulic press is more productive, that is only one con- sideration at only one point in the NKS production cycle. TAble 1.1: ProducTion SPeed--TrAined PoTTerS Production Steps newly Trained Skilled Potter Molding the stove body 10.14 mins 2.6 mins Carving 23.12 mins 16.57 mins Cutting 2.39 mins 1.79 mins Grate molding 0.48 mins n/a Grate punching 6.60 mins n/a Source: GERES-Cambodia. 4 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters One other possibility was to apply a combination of com- pression molding and collaps- ible mold. This technology can be costly and requires additional work to finish the molding process. Second-Step Drying The body of the NKS is thicker Stacking the stoves for bonfire (l), igniting the fire (r) than that of traditional stoves (Siam Stove, Lao Kampong Chhnang, for example). It therefore needs considerably Before firing, all stove bodies are exposed to direct more time to dry. sunlight, usually for two hours, to ensure they are dry enough to be fired. The second-step drying process is critical, as most shrink- age takes place at this step--not later, during firing. If the stove body dries unevenly, stresses are created that can Firing lead to cracks forming in the stove body either immedi- Firing, like drying, must be done slowly, steadily, and for ately or after firing. It is therefore important to dry the the proper amount of time. As the NKS body is thicker stoves slowly, over several days. than traditional stoves, firing time is longer, to allow water content to slowly leave the center of the clay. If Potters in Kampong Chhnang usually dry the stove body this stage proceeds too quickly, the water can turn into under their houses. In the dry season, the ground is uni- steam and create enough pressure to break or crack the formly very dry and quickly absorbs the moisture from all stove body. of the stove bodies. In the rainy season, those stoves in the middle beneath the house are less exposed to air and Traditionally, the stoves are fired in an open space in the dry less effectively. yard of the potter's house. A layer of wood is placed on the ground, then the stoves are piled up and covered To facilitate the second drying properly, the Model Pro- with biomass--rice straw, palm leaves, and the like. The duction Facility introduced a new technique: a drying pal- fire is ignited from the four sides of the pile and more let and a three-row drying shelf. biomass is added gradually from all sides. The process, " known as "bonfire, usually takes 4­5 hours. Several fac- Two stove bodies are placed on each pallet; the pallets tors, for example, the temperature differential between are then stacked on the shelf. A typical 6 meter by 6 the center and the edges of the fire and the uncertain meter (36 square meters) house can accommodate 300 duration of the fire's hottest moments, make bonfire a stove units underneath, occupying less than a half of the less than predictable firing technique (see appendix 1.3). space beneath a house. To ensure better temperature control, potters in the Drying the stove bodies on shelves under houses in the Model Production Facility were given a simple kiln to shade provides these advantages: replace firing by bonfire. The kiln is made of brick, 4 meters wide by 2 meters long by 1.3 meters high. It can · Drying can be easily controlled by installing draper- accommodate 312 NKS units, costs US$300, and lasts ies made of used rice bags to protect against direct for 10 years with minimal maintenance. See appendix 1.3 sunlight and wind. for more details. · Each stove body is exposed to the same humidity and temperature. Tests performed by The Institute of Technology of Cam- · The drying is not affected by ground moisture; dry- bodia (ITC), Department of Civil Engineering, showed ing speed is uniform. that stoves fired in the kiln are slightly stronger than the · Stove bodies are protected against damage by ani- stoves fired in the bonfire (table 1.2). mals (chicken, dogs, pigs). Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 5 TAble 1.2: comPAriSon of PreSSure STrengTh fired in the bonfire fired in the kiln breaking point breaking Point Sample no. in kn in kg Sample no. in kn in kg A1 13.00 1,325.2 B1 25.60 2,609.6 A2 22.50 2,293.6 B2 32.50 3,312.9 A3 20.00 2,038.7 B3 34.50 3,516.8 A4 28.70 2,925.6 B4 14.10 1,437.3 A5 20.40 2,079.5 B5 24.50 2,497.5 A6 32.90 3,353.7 B6 28.80 2,935.8 A7 20.00 2,038.7 B7 17.50 1,783.9 A8 21.00 2,140.7 B8 25.00 2,548.4 A9 30.00 3,058.1 B9 19.60 1,998.0 A10 24.00 2,446.5 B10 34.00 3,465.9 Min 13.00 1,325.2 Min 14.10 1,437.3 Max 32.90 3,353.7 Max 34.50 3,51 6.8 Average 23.25 2,370.0 Average 25.61 2,610.6 Source: GERES-Cambodia. Activity 2: Development of Industrial Standards of Cambodia of the Ministry of Standards for Production of the Industry, Mines, and Energy (MIME). Standards for pro- duction and procedures will be included. NKS and Kiln Firing The report Gender Assessment: Gender Mainstreaming The NKS came to market in 2003­04. Many home-based Energy Planning Project (World Bank­GAP Fund, 2009) potters produced the stove, but modified or otherwise failed to follow the original design. recommends that a larger NKS is needed to cook rice for families with more than five members and a smaller Although GERES-Cambodia trained potters to produce NKS is needed for families of fewer than five. GERES the NKS according to set design standards, at the time determined the optimum dimensions for these new ver- of this report, there are no nationally recognized quality sions, which were validated in mid­2009. The sizes will standards that NKS potters must meet and no monitoring be included in the published standards manual. of potters' compliance. As a result, the NKS available in the market is smaller than the original dimensions (table The concept of standard dimensions is not easily under- 1.3 below). The incorrect dimensions of the NKS affected stood by traditional potters, who learn pottery techniques its performance by preventing the proper mixture of air from their parents and have no experience making prod- and fuel to produce optimum combustion--with the ucts with low dimensional and quality tolerances. The result that the smaller NKS disappointed users because traditional view that the shape is the most important it could not generate the heat expected. consideration had to be corrected. To ensure adherence to the GERES standards throughout the production pro- GERES will propose NKS standards to the Council of cess, MPF potters are trained to understand them and Ministers for ratification, then publish and disseminate to read relevant technical drawings and use templates a standards manual with the support of the Office of and molds. 6 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 1.3: nKS dimenSionS--originAl, SmAller, And lArger SizeS dimension of the nKS (mm) Parameter original Smaller larger 1 External Ø of top rim 260 253 280 2 Internal Ø of top rim 210 202 245 3 Pot rest width 50 40 60 4 Pot rest height (from the rim) 10 16 11 5 Ø of the combustion chamber 180 160 184 6 Ø of the grate hole 16 15 18 7 Grate thickness 40 18 38 8 Width of the firewood door (top) 140 143 150 9 Width of the firewood door (bottom) 110 130 145 10 Height of the firewood door 70 48 55 11 Height of the primary air inlet 50 43 55 12 Width of the primary air inlet 120 110 112 Source: GERES-Cambodia. The NKS standards were presented as simply as pos- · Traditional stove producers must be identified and sible in the MPF training program; potters were shown benchmarks for program targets must be created. a technical drawing and a sample NKS was created as they watched. Training also mentioned the importance of the molds set (outer body mold, inner body, and grate) Standards Implementation and Monitoring as tools that ensure potters work to the standard dimen- The preliminary conclusion reached by the working team sions shown in appendix 1. is that adherence to the standards by producers should be voluntary, with producer and product performance The potters were also shown the draft of the NKS stan- reviewed annually to decide when to amend the stan- dards guidebook, which includes proper stove dimen- dards and when to declare adherence mandatory. sions, production procedures, and quality control tests. To monitor adherence, GERES will collaborate with the Office of ISC of the MIME Department of Industry to set Standards Finalization up a monitoring system. The monitoring and standards The standards for the NKS were submitted to the MIME implementation plan is as follows. Office of Industrial Standards of Cambodia (ISC) in Octo- ber 2008. They have been assessed by the director of · Initially, over four months, GERES will train Depart- ISC and discussed thoroughly in two rounds by a working ment of Industry, Mines, and Energy (DIME) staff team of GERES technicians and ISC officers. The draft on ICS dissemination, NKS standards (NLS included) standards will eventually be submitted to the Council of and standards monitoring protocol. Ministers for ratification. · Over the following eight months, DIME will monitor production in the provinces, accompanied by GERES Some key points must be considered before creating the technicians. standards: · After 12 months, DIME is expected to be fully respon- sible for monitoring and standards implementation. · A standards monitoring and enforcement infra- GERES will continue to provide technical support. structure must be established at the national level. · Licensing and authorization mechanisms must be Coordination meetings with DIME provincial offi- developed along with a technology transfer plan. cers were planned for March 2009 (after two previous Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 7 reschedulings) but were post- poned by the ISC to April 1, 2009. The agenda was to set a plan to identify and inventory potters in 17 provinces (number of microenterprises, types of stove produced, capacity, and so on) and develop a map of stove producers in Kampong Cham, Kampong Thom, Kampong Speu, Kampong Chhhang, Pursat, Bat- tambang, Siem Riep, Banteay Meanchey, Takeo, Kampot, Kep, Sihanoukville, Prey Veng, Svay Rieng, Kandal, Kratie, and Stung Treng. Size of cooking pot compared to size of nKS. nKS too small for the pot (l), and suitable for the pot (r). user added a rim to adapt to the small cooking pot. The map will inform development of the monitoring system and standards implementation · build awareness and capacity for better bargaining plan based on the concentration of potters in each prov- power with middlemen. ince and among provinces. , While learning NKS production in the MPF the potters are also learning simple, practical management skills. Activity 3: Model Production Facility They are expected to use these as part of the rotating organizational structure to manage the facility. The Model Production Facility for the Efficient Produc- tion of the Neang Kongrey Stove was established in Bahn The potters are mainly women, who do not enjoy status Chkool Village, Kampong Chhnang province, in August or decision-making power equal to that of men in tradi- 2008, as a center where individual NKS producers could tional Cambodian society. Organizing them as an associ- access information, technical support, facilities, a ware- ation gives each of them an equal opportunity to receive house, and necessary assistance with any difficulties. peer support, to create a subculture based on a common interest, and to help increase the social status and per- The facility was established by GERES and managed by ceived value of women in Cambodia. From the social a technician, a facilitator, and an assistant technician. The development point of view, the presence of a productive, objective was to identify 30 local potters interested in well-managed potters' organization should create posi- producing the NKS and help them organize themselves tive perceptions of the potters themselves--and of the to work together to larger notions of decentralized enterprise development. · share production facilities (clay mixer, firing kiln, and The Model Production Facility consists of the facilities in warehouse) that improve production quality and table 1.4. reduce the labor required, · create a microfinance mechanism that regularly pro- Currently, GERES manages the MPF and will do so until vides potters a small daily income based on comple- the potters in the area are ready to take over and manage tion of agreed production steps (molding, carving, it properly. Continuous accompaniment for a period of cutting, grate production, and assembling), two years will still be necessary. · provide proper production documentation to allow disbursement of the production-based daily In implementing the long-term NKS production strategy, income, additional production facilities based on the MPF will · learn production management by voluntarily serving be similar in terms of building layout and equipment, as the administrator for two weeks (with a partner), but need not be identical. Locally available material and taking care of raw materials, production, finance, labor costs will be taken into account in design and salary disbursement, stocking of finished products, construction. and NKS sales, and 8 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 1.4: liST of model ProducTion fAciliTy buildingS And floor SizeS no. building Size in m cost (uS$) 1 Clay stock, including two soaking pits 4X5 350 2 Coarse clay stock 4X5 350 3 Clay mixer platform (in the corner of building 5) 1,5 X 2.5 300 4 Grate punching shelter 4X7 1,500 5 Molding and carving shelter 14 X 7 3,400 6 First-step drying platform and stock platform for dried unfired stove 12 X 5 2,700 7 Shelter to assemble stove body and grate 12 X5 2,700 8 Kiln 6X6 2,600 9 Rice husk warehouse 10 X 5 2,750 10 Warden house 5X4 1,200 11 Toilet 2.4 X 2.4 950 Total Cost 18,800 Source: GERES-Cambodia. Activity 4: Train Producers in cash flow were discouraging; many potters (except larger Management and Marketing families) considered giving up NKS production tempo- rarily to produce other products. The Model Production MPF training began by gathering interested potters and Facility offered these families an alternative--a new way helping them assess their current methods of NKS pro- to produce stoves that would increase production speed duction. The assessment indicated that participating pot- ters wanted to improve their production practices and TAble 1.5: common nKS ProducTion PATTern Pre-mPf earn a better income. day Activity Baseline NKS Production Prior to the MFP 0 Assumption: received payment from the NKS sales of 60 units @ KHR2,200=KHR132,000 In the original NKS pilot, GERES-Cambodia trained 24 (approx US$33) NKS producers (11 in May 2003 and 13 in February 2004); as of 2008 only 11 were actively producing the NKS. 1 Purchase raw material--clay (or coarse clay), sand, rice husk, straw--then soak in pit Together, their average monthly production capacity was 500 units (in 2008). Their production capacity was insuf- 2 Knead clay and sand, then keep lump covered ficient to meet market demand. The potters produced 3 Mold stove body (20­30 units) the NKS based on orders received from middlemen. The 4 Mould stove body (20­30 units) pace and volume of these orders did not utilize their full production capacity. 5 Carve stove (15­20 units) and make grate (30) 6 Carve stove (15­20 units) and make grate (30) The common daily activities pattern of NKS production 7 Carve stove (15­20 units) at that time (pre-MPF) is shown in table 1.5. The average cycle of 11 days (sometimes 12­13 days) as above was 8 Dry stove usually repeated twice a month, making the maximum 9 Dry stove production capacity 100­120 units for a family working at 10 Fire stove (morning) and assemble (afternoon) home. The profit margin is shown in table 1.6. (60 units) 11 Complete assembly and sell stove The net profit was considered monthly income, about US$1.55 per day. The potters' average production and Source: GERES-Cambodia. Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 9 TAble 1.6: ProfiT for TyPicAl fAmily Producing nKS investment Khr uS$ I m clay and coarse clay 3 8,000 2.0 Labor cost for kneading of 1 m 3 10,000 2.5 Fuel for firing (wood and straw) 60,000 15.0 Total Investment 78,000 19.5 income From selling the 120 NKS @ 2,200 KHR 264,000 66.0 Profit in one month 186,000 46.5 Source: GERES-Cambodia. and volume, reduce the labor required, and increase cash Potters' Savings flow and income. The average production cost of the NKS in the MPF (after 3 months' training) was US$0.47 per unit, with a selling price of US$0.54 per unit. The margin of US$0.07 for each Participatory Assessment for Planning and unit belonged to the potter, who received it the day the Introduction of the MPF Scenario stoves are sold--not in cash, however, but as savings in To launch the new plan, all potters interested in produc- a savings account in the potter's name. The savings could ing the NKS met in a facilitated meeting. At the end of be withdrawn only after a year on deposit, and were in the meeting, and based on the information provided, all addition to wages potters received for their labor. potters agreed to participate in the Model Production Facility. Selling the Stove from one Warehouse All of the NKS units produced during the day were docu- The most important new practice was that the program mented by the administrator in charge and stored in a was allocated "seed money" to help pay potters for their warehouse, following the first-in-first-out principal. The labor on a regular basis--while also engaging them to administrator organized the sale of the NKS to the mid- share some production risks. This was done by break- dlemen. Instead of dealing with several individual pro- ing the NKS production process into several production ducers, the middlemen dealt with only the warehouse. steps and agreeing on a valuation of each step. This system ensured proper recording of the sale and certainty about the number of NKS units sold on any identify and Assign Values to Steps in Production given day. , In the MPF instead of being paid for each produced batch of stoves, the production of the NKS was divided into Potter Training eight working steps with clear, quantifiable deliverables. Each step was valued based on time, skills, and labor To select the first group for training, GERES decided that intensity (table 1.7). all meeting attendees would draw straws because the MPF could accommodate only 10 of the more than 20 daily Payment based on Production Quantity interested potters. Depending on their needs and abili- The aim of the valuation was to allow each potter in the ties, the potters received training in the skills described program to be paid based on her or his output, verified below. by the administrator at the end of the working day (see Activity 3, Model Production Facility). The potter would Production Techniques receive different amounts of pay from day to day, depend- All potters learned how to mold the NKS body using a ing on production. jigger-jolly, to use a pallet to dry the stove, and to arrange the pallet on a shelf for drying. They also learned the The average daily income of the 10 trained potters (after requisite skills for carving, drying, making the grate, and three months training) at the NKS Facility was US$0.73 assembling. Though all of the potters knew these tech- to US$1.05, and the highest income was US$3.37 . niques quite well, it was necessary to teach them in the 10 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 1.7: liST of Agreed STePS And VAlueS in nKS ProducTion Payment no. Product or Process (uS$/unit) note 1 Mix clay and sand (or coarse clay) and firing costs 0.17 Cost includes · rawmaterial · dieselfuel · mixingoperatorcost · fuelforfiring · firingoperatorcost 2 Mold stove body 0.5 Based on number of molded stoves at the end of work day 3 Mold grate 0.01 Based on number of molded grates verified at the end of work day 4 Punch holes in grate 0.04 Based on number of punched grates verified at the end of work day 5 Carve and install pot-rests 0.10 Based on number of stove bodies carved and verified at the end of work day 6 Cut firewood gate and primary air inlet and dry 0.02 Based on number of carved stove bodies cut 8 Assemble stove body and grate into final product 0.07 Based on number of assembled stoves into final product Source: GERES-Cambodia. new context of the Model Production Facility, where opportunity work with each of their peers, building group operations would be collaborative and focused on maxi- knowledge, unity, and trust. mizing productivity and income. The day's production record was the baseline to calculate bookkeeping the profit to be received in the afternoon and the costs to Bookkeeping training was delivered through "learning be paid to the group. " by doing. Two potters worked together as "administra- tor" for one week, recording daily NKS production. Then finance management one was replaced by another for the following week, Training in finance management took place along with doing the same thing. This gave each of the potters an bookkeeping training, with the two administrator potters made responsible for paying their peers. This required collecting the money to be deposited in each individual's TAble 1.8: exAmPleS of PoTTer ProducTiViTy savings account and paying for the services provided by And income the production center (mixing clay and firing). Each indi- vidual potter was responsible for paying the production example 1--in a day a potter: uS$ center based on the quantity of produced and sold NKS units. Molds stove body 40 pcs @ 0.05 2.0 Molds grate 40 pcs @ 0,01 0.5 Stock management Total income for the day 2.5 The two administrators also learned how to determine how much clay to mix to meet the needs of their peers example 2--in a day a potter: and how to place the order for rice husk, fine clay, and Carves stove body 20 pcs @ 0.10 2.0 coarse clay. The administrator of the week also was Cuts stove 20 pcs @ 0.05 1.0 charged with informing distributors of NKS availability at any give time. On days when distributor picked up stoves, Punches grate 20 pcs @ 0.04 0.75 the assigned pair was also responsible for recording the Total income for the day 3.75 number of units that left the warehouse. Source: GERES-Cambodia. Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 11 The three months of training enabled the potters to do Improving Microenterprise Productivity paperwork for the first time in their lives. The additional Microenterprise productivity can be improved in the fol- benefits were many: lowing ways. · The potters (all women) were encouraged and · Labor skill improvement: Technical training to improve regained their confidence; they no longer felt inferior the potters' and other workers' understanding of and to their neighbors because now they were able to compliance with standards and to learn to operate write, fill in forms, and perform simple administra- semi-mechanized equipment; tive tasks. · Supervision and control systems: Quality control train- · "Team spirit" grew among the participating potters, ing to ensure that control systems are introduced to who began to take care of and help each other. minimize product defaults and ensure all products · Concern that other families producing NKS units in comply with standards; the village were competitors faded away; potters · Production chain management: Business training in pro- duction optimization to ensure that production steps began to consider partnership and collaboration with and workloads are proportional, to avoid overloading those families. or underloading workers; · The potters were able to do work that was familiar · Workshop and facilities: Similar to those in the Model to them, but with the all-important additional motiva- Production Facility (see table 1.4), and following the tion of earning daily income. same principals; · Safety and sanitation: A workplace that is well venti- lated, well-lighted, and protected against animals Activity 5: Evaluating Options for intruding, with a floor free of sharp objects and the Introducing Improved Manufacturing surrounding area neat and free of stagnant water (especially during the rainy season); of the NKS · Financial management: Introducing simple bookkeep- ing that includes records of production management The NKS is currently produced in Kampong Chhnang (raw material, labor, maintenance, final product, province on a household scale and (in a few instances) on sales, and so on) will ensure a clear picture of the a microenterprise scale as a result of the Model Produc- enterprise's financial status. Proper bookkeeping tion Facility. The overall production capacity ranges from facilitates access to additional capital (when needed) 100 units to 500 units per month. In addition to produc- from a bank or MFI. Training to improve those aspects tion capacity, other aspects characterize family-scale and requires active participation of the owner/manager microenterprise-scale production (table 1.9). for at least six months. TAble 1.9: fAcTorS influencing microenTerPriSe And fAmily nKS ProducTion no. Production factors microenterprises family 1 Capacity per month Minimum 500 units 50­100 units 2 Labor Employ paid labor Unpaid labor, mostly women 3 Production facility Specially constructed, often separate from the house Within house plot 4 Production flexibility Can be extended and scaled up Limited and highly dependent on family size 5 Capital investment Bankable, most get loan from MFI Limited, mostly loan from money lender 6 Raw materials Supplied by providers Partly supplied but mostly collected 7 Production Regular and reliable, usually able to fulfil the order Less regular and reliable in fulfilling on time the order 8 Applied production Intermediate technology, systematic Traditional technology, mostly unsystematic technology Source: GERES-Cambodia. 12 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Microenterprises that want to produce the NKS can use Projected Production Capacity their current facilities to produce traditional stoves or The Model Production Facility, in operation from August construct new facilities as in the Model Production Facil- 2008, produces about 600 units of NKS per month (as ity, using low-cost materials. Construction costs of about of March 2009). At the end of year one, the expected US$5­$8 per square meter should be expected. To pro- 40 potters from surrounding villages, trained by the duce 2,000­2,500 NKS units per month requires about , MPF are expected to produce at least 2,400 stoves per 400 square meters, a clay mixer (US$850), and a kiln of 4 month. meters by 2 meters by 1.3 meters (US$250). More than 1,200 potters produce various pottery wares in Kampong Chhnang province. There are at least three Improving Family-Scale Production more clusters of potters there who are interested in For family-based production, the most important factors producing the NKS--in Khsam, Kdey Tnaot, and Andong in optimizing production are the following. Russey. Establishing three more MPF-based production facilities in those clusters could add more than 7 ,000 · Ready-mixed clay stock: To assure continuous supply units per month to the province's total NKS production. of mixed clay (20 square meters), · Molding platform: Spacious enough for the potters Combining family scale production--supported by the to mold the stove body and the grate (20 square , MPF three new MPF-type facilities, and three new meters), microenterprises--can increase Kampong Chhnang · Drying area: Allows stove body drying (first and sec- province's total NKS output to around 13,000 units per ond drying) on shelves as well as on the drying floor month--a conservative estimate. Projected production (30 square meters), and (table 1.10) for all provinces is based on the 17 provinces · Assembly platform and temporary stocking space: To where there are currently potters and traditional stove facilitate installation of the grate and store the final microenterprises. product before the sale (30 square meters). Total projected NKS production for all provinces after three months of training is 44,300 units and is expected Those facilities can be located in the space under the to reach about 90,000 units per month by the end of year house. If the space is not available, such facilities will four. require a US$500­US$800 investment in low-cost mate- rials such as bamboo poles, leaf roofing, and hardened dirt floors. Such a facility can support the production of 600 to 800 units per month. Activity 6: Plan to Scale Up Production A plan to implement a National Improved Cook Stove Pro- The clay mixing machine and kiln should be procured and gram has been formulated by the MIME with assistance managed by an association or group of potters, such as by the World Bank-ESMAP and GERES-Cambodia. The in the Model Production Facility, to reduce each family's overall objective of the program is to scale-up dissemi- investment costs. nation of improved cookstoves, including the NKS, as a cleaner, more energy-efficient and cost-effective cook- As a production unit, a family has some limitations (see ing device, through the development of a commercial, table 1.9 above) that cannot be easily remedied. How- market-oriented improved cookstove sector in selected ever, families producing cookstoves usually live in areas provinces of Cambodia. where many other potters are doing similar work--in suf- ficient numbers to support setting up a pilot production The national program would lead the efforts to bring facility or a center where interested potters can learn to improved cookstoves to all 2.1 million rural households improve their production practices as mentioned in Activ- and make major contributions to reducing the negative ity 3 (Model Production Facility) and Activity 4 (Train Pro- impact of smoke on the health of women and children ducers in Management and Marketing). Given sufficient and reducing the time and cost of using firewood. The numbers and promotion, this is the best way to improve proposed target is to disseminate one million improved family-scale production. cookstoves over a four-year project period--equivalent Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 13 TAble 1.10: ProVinceS, PoTenTiAl nKS ProducTion Per monTh (in nKS uniTS Per monTh) one yeAr AfTer comPleTion of TrAining Production facilities microenterprises no. Province # cap/mo # cap/mo 1 Kg Chhnang 4 8,000 4 8,000 2 Kg Speu 2 4,000 1 1,000 3 Kg Cham 2 4,000 1 1,000 4 Kg Thom 1 1,000 5 Pursat 1 1,000 6 Battambang 2 2,000 7 B Meanchey 1 1,000 1 500 8 Siem Reap 1 1,000 1 500 9 Prey veng 1 1,000 1 500 10 Svay Rieng 1 1,000 1 300 11 Kracheh 1 2,000 1 500 12 Stung Treng 1 500 1 500 13 Takeo 1 1,000 1 500 14 Kampot 1 1,000 15 Kandal 1 1,000 1 500 16 Kep 1 500 17 Sihanoukville 1 500 Potential production capacity 21 28,500 16 15,800 Source: GERES-Cambodia. to 50 percent of all rural households. Reduction in the in the existing market for traditional stoves by convert- use of fuel wood through year four is estimated to be ing traditional stove producers to improved cookstove 500,000 tons. Reduction of CO2 emissions is estimated producers; and (ii) access new market segments, which at 250,000 tons. may require new production centers such as those simi- lar to the Model Production Facility, new distribution mar- In order to achieve the objectives, the program would kets, and new points of sale in rural areas (villages and aim to (i) increase market share of improved cookstoves communes). 14 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 1.1: About the Neang Kangrey Stove The Neang Kongrey Stove (NKS) is a simple ceramic to ensure sufficient fuel is always burning, cooks gain a cookstove that sells for about US$1.25 and lasts for 1­2 certain amount of free time to perform other tasks. Users years. The other efficient stove in wide distribution--but also say the NKS saves time because food cooks faster. mostly in urban areas--is the New Lao Stove, which has metal cladding and insulation that extend stove life by at The stove delivers about 30 percent overall energy effi- least two years but increase its cost to about US$4.00. ciency and uses approximately 21 percent less wood or charcoal than a Traditional Lao Stove and a signifi- The NKS is more efficient than the widely used Traditional cant 64 percent less than the traditional "three-stone" Lao Stove because of three main design improvements: stove. Families that collect and cut their own wood can then devote that time to other household tasks or 1. The space between the pot and the pot-rest is livelihoods. reduced. 2. The grate has smaller holes. Because of the significant savings on charcoal and wood, 3. The combustion chamber is smaller. payback time for the NKS is around 1 month. Significant further benefits of the NKS are that it reduces emissions These improvements combine to deliver increased com- by approximately 0.3 to 0.5 tons of carbon dioxide per bustion, reduced heat loss, and reduced smoke. Because stove per year and reduces deforestation--both impor- the NKS holds heat well and thus requires less attention tant contributions to the fight against climate change. figure 1.1: neAng Kongrey SToVe Characteristics Material: Baked clay Production: Stove artisans Size: 21.7 cm height 26 cm diameter Optimized pot size: 21 cm to 24 cm or diameter Specification: Portable (weight approx. 5 kg) Price at producer level: KHR 2,200 (US$0.55) Price at retailer level: KHR 5,000 (US$1.25) Main uses: Targeted for rural and peri-urban families Fuel: Commercial firewood Fuel savings: 22% (with fuelwood) DIssemination: Commercialization Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 15 Appendix 1.2: NKS Production Facility Components Unit: mm Axle Angle frame Pulley with axle Bearing Frame with engine 16 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 1.2: NKS Production Facility Components, Cont. Mixing tank Axle with blades Pulley fixed with axle Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 17 Appendix 1.2: NKS Production Facility Components, Cont. Pulley fixed to axle Pulley fixed to differential box Pulley fixed to differential box 18 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 1.3: Firing the NKS The temperature in the middle of the bonfire (A0) can Temperature was recorded every 30 minutes, starting reach up to 851°C, which is quite sufficient. At this tem- 10 minutes after ignition. perature, vitrification (when silica, then clay particles melt) begins, though with clay containing a large amount of The temperature in the center of the kiln (A1) reached iron and in a reducing atmosphere. When melting, silica above 800°C after 25 hours of firing and stayed above and clay bond together to form a strong, brittle material. 800°C for 3.5 hours with the highest temperature 871°C. A gentle, gradual temperature increase throughout the On the points close to the kiln walls, the temperature did process is crucial. This can be difficult to achieve, how- not reach 800°C but stayed at above 700°C for at least ever; the highest temperature in the heart of the bonfire 6 hours. lasts only for about 90 minutes and is not sufficient to completely vitrify the thick body of the NKS. The temper- Figure 1.5 shows the placement of thermocouple probes ature on the sides of the pile (B0), (C0) and (D0) is too low to measure the temperature in the kiln. All probes are to reach the vitrification point (see below for the position positioned at half of kiln height, 65 cm from the kiln floor. of the thermocouple probes). Probe A1 is exactly in the kiln center. Probes B1, C1, and D1 are installed 10 cm from the wall. All probes to measure the temperature in the bonfire were positioned at half the height of the bonfire pile, 60 Temperature is recorded every 30 minutes. Different cm from the ground. Probe A0 is exactly in the center of firing temperatures and temperature increments in the the pile. Probes B0, C0, and D0 were installed 15 cm from bonfire and the kiln affect the strength of the stove body the side of the bonfire. to resist pressure. figure 1.2: TemPerATure in A bonfire 900 800 700 BO 600 DO temperature in ºC AO 500 CO 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time in hours Source: GERES-Cambodia. Pilot Project on Improving Manufacturing of Efficient Rural Cookstoves 19 figure 1.3: PoSiTion of The ProbeS in The bonfire 1.8 meter Ao 1.8 meter Co Bo Do 1.2 meter Bo Ao Do Co Source: GERES-Cambodia. figure 1.4: TemPerATure in The Kiln 1,000 B1 D1 900 A1 800 C1 700 temperature in ºC 600 500 400 300 200 0 1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 106 113 120 127 134 141 148 Time in hours Source: GERES-Cambodia. 20 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters figure 1.5: PoSiTion of The ProbeS in The Kiln 4 meter A1 C1 2 meter B1 D1 B1 A1 D1 1.3 meter C1 Source: GERES-Cambodia. 2 Final Report to the Cambodian National Biodigester Program of Private Sector Development Technical Assistance Activities Introduction · design and implementation of a process to identify and select high-potential delivery of intensive busi- From July 2008 to June 2009, a Private Sector Devel- ness skills training programs for selected masons, opment (PSD) consulting team, supported (sequentially) · providing assistance for official business registration by Netherlands Development Organization (SNV) and to permit companies to enter legal contracts with the World Bank, developed and piloted an innovative customers, and replicable microfranchise model for the creation of · finalization of three-party Franchise Agreements biodigester construction companies (BCCs) providing , among the NBP the BCCs, and the Provincial Biodi- household biodigester services to rural Cambodians. This gester Program offices (PBPOs) project was undertaken to advance the development of a · the launch of 15 BCCs in 3 provinces, and permanent, private biodigester construction and service · post-training needs assessment and initiation of sector as envisioned by the Cambodian National Biodi- business coaching program. gester Program (NBP), a joint project of the Ministry of Agriculture, Forests and Fisheries (MAFF) and SNV. These results exceeded the PSD project's main per- formance indicators (10­12 BCCs registered) and are The project undertook anticipated to significantly accelerate the NBP's PSD development in 2009­11. · selection of appropriate province and district mar- ket areas to pilot private provision of the biodigester Key innovations included known as The Farmer's Friend, · management of provincial counterpart relationships, · a marked increase in support for rural private enter- · analysis of the NBP business model, including codi- prise among provincial government leaders, particu- fication of NBP operating procedures and develop- larly among NBP leadership, ment of a viable microfranchise business model, and · development of a replicable model for microfranchis- development of the Operations Manual for Privately ing decentralized biodigester construction services Provided Biodigester Services (the Operations that compensates for gaps in skills and resources Manual), among rural entrepreneurs, and · selection and management of a local capacity builder · effective development and implementation of cus- to co-develop and implement a mason selection pro- tomized entrepreneurship training and business cess and an intensive business skills training and coaching for marginally skilled rural business owners mentoring (business coaching) program, in partnership with a local training institution. 21 22 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters The system's sustainability will depend on Project Initiation The focus of the NBP project is its enterprise develop- · business capacity development supported by ongo- ment component, which is situated within the NBP's ing business coaching and development of BCC overall private sector and value chain development (PSD) owners, activities. Accordingly, it emphasized developing pilot pri- · NBP development of additional capacity in managing vate-sector contractor enterprises--(BCCs)--and devel- franchise operations, oping and supporting the entrepreneurs who lead these · the economic stability of the Cambodian agricultural enterprises, in anticipation of a fully privately-provided sector, contracting sector. · absence of donor distortion of market incentives for private provision, and , Pursuant to this objective, the NBP with the support of · further development of business-friendly sector reg- the World Bank ASTAE and with cofunding from SNV for ulation and supervision at the provincial level. supplemental activities, engaged a PSD consultant team to initiate a system to pilot and support the development of BCCs. The team's work began under direct funding Project Background and Objectives from NBP program partner SNV for the period of July 1 to September 31, 2008 and continued with World Bank Background assistance from October 3, 2008 to June, 2009. The Cambodian National Biodigester Program (NBP) is a joint project of the Ministry of Agriculture, Forests and The overarching goal of the NBP is private sector delivery Fisheries (MAFF) and SNV Netherlands Development of high-quality biodigester plants through the most effi- Organization, initiated in 2006 with cofunding from the cient means available. The NBP initiated this process to Directorate General International Cooperation (DGIS) of pilot and test the most promising options for private sec- the Netherlands Ministry of Foreign Affairs. tor development, in addition to assessing the masons' capacities and needs for this task. Since 2006, NBP has established operations in eight prov- inces of southern and central Cambodia through coopera- Microenterprise Focus tion with province-level agriculture departments (PDAs) and nongovernmental actors, consistent with Cambodia's The NBP's preferred option was to draw the BCC entre- current decentralized governance model. In these prov- preneurs from the pool of trained, certified NBP biogas inces, Provincial Biodigester Program Offices (PBPOs) masons. This reflected the organization's preference for supervise the construction of Farmer's Friend household projects that support both economic and social develop- biodigesters by NBP-trained biodigester masons. ment in rural Cambodia--and its desire to increase the presence of value-added private enterprises and to main- NBP's program objectives for 2008­09 included support tain and improve high standards of quality control in bio- for the development of a professionalized biogas con- digester provision. It also reflected lessons learned from tractor system in Cambodia that could drive significant SNV's biogas experience in Nepal, which demonstrated penetration of biodigester systems among rural farming that to ensure high quality construction, after-sales ser- families in targeted provinces. Program success depends vice, maintenance, and availability of spare parts, BCCs on the continued exposure of potential buyers (farm fam- must be embedded in local communities. ilies/customers) to working biodigesters, to peer families who are satisfied with their biodigester plants, and the A key project risk was that the available pool of NBP ability of the NBP marketing system to convert interest masons would lack adequate business skills to ensure into sales and successful installations performed by qual- their success as microbusiness owners and managers. ified, NBP-certified masons. They were skilled or semiskilled manual laborers, gener- ally with low levels of formal education and minimal (if The NBP's operating plan prescribes that all biodigester any) business exposure or experience. The NBP planned products and services in Cambodia will be delivered by to address these limitations by training promising masons private-sector BCCs by the end of 2011. Other value- in managerial skills, credit and finance, sales and market- chain-related development activities are underway or ing, and developing and enhancing foundational entre- planned in related elements of the NBP's 2009 and 2010 preneurial skills. operating plans. Final Report to the Cambodian National Biodigester Program 23 Workplan and Milestones The limited duration of this project, and its focus on tar- geted objectives related to business capacity building and The PSD project team developed a workplan defined company launch, as well as the construction of business around seven key activities and milestones (see appen- support structures through the NBP franchise system, dix 1). The milestones are: all point to further required M&E activities to compre- hensively assess progress toward sustainability-based 1. Business Model Recommendations: Recommendations indicators. on adjusting the business delivery model for biodi- gesters in Cambodia; 2. Province Selection: Selection by the consultant and NBP leadership of three provinces for privatization, Summary of Project Activities based on criteria to be determined in collaboration with the NBP and memoranda of understanding In accordance with the workplan, the project undertook between the NBP and each selected PBPO outlining the following nine activities to accomplish the objectives cooperation in the privatization process; above. 3. Training Partners: Identifying and contracting with training partners for needs assessment and mason 1. Selection of appropriate provinces and district mar- selection, with the consultant submitting a report on ket areas for private provision; contractual arrangements with selected partner(s); 2. Management of provincial counterpart relationships 4. Mason Selection: Identifying three to six highest- (PBPO); potential masons for placement in Farmer's Friend 3. Analysis of the NBP business model and develop- biodigester construction companies in selected ment of viable microfranchise business models, provinces, and their immediate training needs, or including codification of NBP operating procedures on other steps to develop private biogas contractor and development of the Operations Manual for Pri- firms in selected provinces; vately Provided Biodigester Services; 5. Training Development and Delivery: Organization and 4. Selection and management of a local capacity completion of appropriate SNV-funded managerial, builder to co-develop and implement a mason selec- entrepreneurial, and other training deemed neces- tion process and an intensive business skills training sary for selected masons by the NBP delivered by , and mentoring (business coaching) program; qualified national training providers or partners, with 5. Design and implementation of a process to select the consultant submitting a report detailing training high-potential entrepreneurs from among NBP bio- provided and the results of a post-training needs digester masons; assessment conducted in collaboration with training 6. Delivery of intensive business skills training program providers or partners; for selected masons; 6. Business Registration: Establishment of 10­12 biodi- 7. Assistance with official business registration to permit gester construction companies in selected provinces companies to enter legal contracts with customers; and their registration as companies with district 8. Finalization of three-party Franchise Agreements authorities, with the consultant submitting a report , among the NBP BCC, and Provincial Biodigester on company formation and registration and support- Program offices (PBPOs) and launch of 15 BCCs in 3 ing documentation; and provinces; and 7. Contractor Support Plan: Submission of contractor 9. Post-training needs assessment and initiation of business development and support plan for incorpo- business coaching program. ration into the NBP's operating plan (included in this report). Summary of Project Results Monitoring and Evaluation Framework The PSD process resulted in the legal registration, NBP Output and outcome measures defined for the project authorization, and business launch of 15 Farmer's Friend are related to the viability and sustainability of privately BCCs in 3 provinces, each of which operates as a fran- provided biodigester construction services in rural Cam- chisee of the NBP in a three-party contract between the bodia. The project's M&E framework is presented in , NBP BCC, and PBPOs. This entailed achieving the follow- appendix 2. ing nine outcomes. 24 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters 1. Districts privatized in three provinces: Kampot, Kam- section provides a summary of key innovations, accom- pong Cham, and Svay Rieng. Six Takeo Province dis- plishments, and lessons learned, some of which are tricts were in the process of privatizing at the time of drawn from the project narrative section in this report. project completion in June 2009. 2. Fifteen BCCs established in three provinces. Antici- pated that 5­6 additional BCCs will be registered in Building Support for Private Sector Takeo province in the 2 months following project Development among Provincial Government completion, resulting in formation 21 BCCs attribut- Leadership and Technical Supervisors able to the project by the third quarter of 2009; Following an initially apprehensive reception to the con- 3. Systematic and replicable mason selection process cept of privatization, the project has built strong support developed, documented, and implemented exclu- for private sector development among NBP provincial sively by Cambodian staff and program support part- stakeholders, and for rural private enterprise development ners (in later phases of the project); in general. This includes support among PBPO directors 4. Adjustment of business model for private sector (who are typically directors or deputy directors of the delivery, including codification of procedures and provincial agricultural departments) and, more recently, a incorporation of overheads sufficient to support base of support among provincial coordinators and tech- ongoing commercial development of the sector; nical supervisors who now understand private provision 5. Microfranchise model created for BCC development as a more efficient and labor-saving division of labor. and expansion, including franchisee Operations Man- ual, simplified project management tools and techni- To overcome initial apprehension about PSD among cal procedures, and business management forms; national and provincial program leaders, the PSD team 6. Development of customized training appropriate for conducted extensive outreach in July and August of 2008. condensed, six-day program for rural entrepreneurs, Subsequently, SNV led a learning mission to Nepal for the and system of continuous improvement of training directors of four PBPOs and national program leaders, to meet revealed needs through the SNV­Cambo- where they were shown the advantages and operational dia-India Entrepreneurship Development Centre details of commercially provided biodigester services. (CIEDC) partnership; Following the trip, the PSD team immediately captured 7. Mentoring/business coaching system implemented the impressions and lessons learned that the directors with local partner CIEDC and supported by SNV . believed could be applied to the Cambodia NBP These national staff, combining one-to-one mentoring and were used to structure specific PSD program activities needs-based group training with a peer-learning and training plans for the remainder of the project. component; 8. Progress in migrating provincial PBPOs to a regula- After this experience, a near-consensus emerged in favor tory and sector support role and familiarization with of the PSD process, with provincial leaders extremely regulation of private activities; (and directly) supportive of PSD program goals and activi- 9. Significant increase in acceptance of and support for ties. PBPO technical supervisors, who are government private sector provision of household-level energy employees, also offered some initial resistance to the services among national and provincial government privatization process, particularly in Svay Rieng province, partners, including significant buy-in for private deliv- where they were openly hostile to the new system. ery of biodigester construction among technical Supervisors there feared loss of control over masons, supervisors. " whom they had considered their "employees, and loss of prestige and status as the orchestrators of the pro- gram in their respective districts. Key Project Innovations, Accomplishments, and Lessons The PSD team engaged in intensive education and out- Learned reach to demonstrate that the privatization process stood to increase the efficiency of the program, directly ben- In addition to surpassing the main milestone-linked proj- efiting technical supervisors in terms of earning potential ect indicator (number of businesses registered), the NBP and work efficiency. Recognizing that supervisor out- PSD project has achieved three important outcomes that reach would be critical to the success of the program, support PSD outcomes in Cambodia and provide a model PSD team leaders and coordinators held meetings with for decentralized provision of biodigester services and PBPO coordinators and supervisors in January, Febru- other product-focused social enterprise initiatives. This ary, and March, 2009. In these meetings, supervisors Final Report to the Cambodian National Biodigester Program 25 indicated that customer identification and sales efforts , the NBP centralizes the most skill-intensive business provided the lowest financial returns to their efforts, with activities of the business, including brand, product, sys- 1­3 days of work yielding only US$5 in promotion fees in tem and business process development, and delegates most provinces, with technical quality inspections yield- franchisees with lesser skills and resources (BCCs) to ing more, for a smaller and more predictable investment contribute technical skill, direct sales networks, and of time and effort. When asked "Which would you rather direct personnel management. The risks and costs of do full-time--quality supervision or customer identifi- business entry for franchisees are reduced because (as cation and sales?" technical supervisors unanimously they lack previous exposure to effective business pro- chose quality supervision. When the PSD team explained cesses and operating procedures) they receive turnkey that the principal change PSD would entail would be full procedures developed by more highly skilled personnel dedication to quality supervision and (near) elimination (the PSD team and NBP technical management). Once of customer identification and sales responsibilities, the implemented, the franchise system becomes an ongoing supervisors recognized the logic of commercial provision dialogue between franchisor and franchisee, based on a and became highly receptive to the PSD process. shared interest in expanding market penetration. In addi- tion, because the franchisor can revoke a franchise in the The PSD efforts and auxiliary efforts by SNV effectively case of noncompliance with operating procedures, the neutralized opposition to privatization and built the foun- franchisor can exert significant control over procedures dation for a pro-commercial constituency among pro- with a more credible sanction than in the case of dealing vincial stakeholders. Still, sustaining support among with fully independent businesses. provincial stakeholders will require clearly and visibly suc- cessful BCCs, and sustained efforts by all actors to make This model required detailed codification (and in some the privatized system yield the expected benefits--faster cases, modification) of NBP operating procedures to growth in plant construction and overall improvements in ensure predictability and clarity for low-skilled Farmer's plant quality. Friend entrepreneurs. Development of this system, in the end, facilitated replication of the privatization effort in subsequent districts, as the basis for business sys- Replicable Microfranchise Business Model tems had been developed. The key tools of this system Early in the process, the PSD team recognized that local are the Operations Manual for Private Biodigester Com- NBP masons faced multiple constraints to becoming BCC panies and the Project Control Folder (PCF) (see chap- business owners, including lack of necessary business ter 3) and the Franchise Agreement (see this chapter's skills, lack of familiarity with administrative compliance pro- appendix 3). cedures, and low tolerance for the risks traditionally associ- ated with business startup. In initial meetings with masons, Effective Business and Entrepreneurship it was clear that they lacked many of the hoped-for skills Training for Semiskilled Rural Laborers and aptitudes required to support microenterprise-driven privatization. In addition, the responsibilities of new mason- development of customized Training focused entrepreneurs envisioned by NBP leadership continued on concrete business outcomes to grow, highlighting a severe supply-demand mismatch The training development process resulted in a highly and a need for adjustment of the PSD delivery model. The tailored and targeted business skills training program, PBPO directors and coordinators also expressed signifi- which was developed over the period of November 2008 cant concern about masons' financial capabilities and man- to February 2009. The PSD team worked with CIEDC, the agement skills, staff and operations management abilities, training partner and local capacity builder, to produce a six- and foundational entrepreneurial skills. day Entrepreneurship for Biodigester Construction Com- panies (BCCs) training course. The main objective was to The PSD team adjusted its approach accordingly, set- teach the skills that BCC owners would need to build and tling upon the development of a microfranchise system, operate a successful business as a NBP franchisee. with specific operating arrangements and business pro- cedures developed through a BCC Operations Manual, CIEDC was selected as the only full-service entrepre- simplified project management tools, and a three-party neurship training provider able to provide diversified Franchise Agreement. training and ongoing support services to Cambodian rural entrepreneurs, and the most appropriate for work- The microfranchise system emulates successful com- ing with rural nonagricultural businesspersons with low mercial franchise systems in the sense that the franchisor, formal skill levels (low literacy and numeracy). The PSD 26 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters team found over time, however, that CIEDC's ability to The business skills training program was structured as provide ongoing mentoring required further upgrading to contextual learning, within the cognitive abilities of highly meet NBP sector development needs. SNV then hired a motivated learners with limited formal education. It is National Advisor for Rural Private Sector Development to unlikely that the initially selected group of BCC owners improve CIEDC's capacity to deliver ongoing customized would have absorbed training related to developing busi- training and business coaching services. (SNV intends to ness procedures in which significant business learning continue building the capacity of CIEDC and other local was embedded. This suggests an additional benefit of the institutions to provide mentoring and business coaching franchise development model, in that it provides potential to low- and moderately-skilled rural entrepreneurs.) entrepreneurs with concrete learning contexts in which to develop basic business and entrepreneurial skills. While the development process was not without obsta- cles, the final training program effectively overcame business coaching and mentoring for bcc owners many of the limiting features of "generic" business train- It is a given in the entrepreneurship support community ing programs by attending specifically to the unique situ- that initial or sporadic training is insufficient to improve ation of rural entrepreneurs in Cambodia and the specific survival rates for startup businesses, even within a tightly activities required of new BCC business owners. managed franchise system. The NBP project adopted international best practices in providing ongoing training In November 2008, the PSD team worked with the support, professional coaching, and peer support through CIEDC training team to familiarize them with NBP to , the local capacity builder, CIEDC, supported by the SNV prepare them for a field visit to meet with masons and national advisor. for the mason capacity assessment and entrepreneur selection process. Preparation included customization Mentoring and business coaching activities were initi- of assessment tools based on projected company struc- ated by CIEDC in late May 2009 and performed in the ture, in order to ensure appropriate training for future last week of June 2009, coordinated by the PSD coordi- BCC owners. nator and assisted by the SNV National Advisor for Rural Private Enterprise Development. , During the week of November 17 2008, the team was briefed and conducted visits to Svay Rieng and Kampot CIEDC will ensure that masons receive the required sup- Provinces. The PSD team developed a functional map of port for company registration. To the extent required for BCC operational processes and implications for mason sustainability, CIEDC trainers will assessment and training, forerunner of the BCC Opera- tions Manual. This early version was used as the basis · hold one monthly mentoring meeting with each for targeting business training approaches to the specific selected mason­contractor group or individual (see needs of new BCC owners. below), · provide explanation and introductions to service During the week of November 24, the training team pre- providers for additional services required by BCC sented their findings and consultants held three workshop owners, sessions to clarify the BCCs' functional requirements · provide telephone support to monitor masons' prog- using the process map referenced above and to map ress and answer questions in a timely way, and required skills and competencies to each projected BCC's · in limited cases, travel to target provinces on an as- activities. The main training-related results of this pro- needed basis for additional direct mentoring. CIEDC cess were a number of additions to the CIEDC, a mason personnel will also provide NBP and SNV leadership capacity-assessment tool used in Farmer's Friend mason a brief report on current needs and status of each selection and training design, and a succinct map of key BCC owner after each bi-monthly individual mentor- business skills around which training would focus. ing session. Results will be shared with PBPOs as necessary and appropriate to improve PBPO back- Several iterations of the training process were required to stopping activities. fine-tune and target training to the level and skills appro- priate to new BCC owners. The parallel development of To achieve efficiencies in costs and coaching delivery, the Operations Manual and codification of associated mentoring sessions, which began in July 2009, alternate BCC business processes (many of which had not been between group and individual sessions. During the first previously codified by the NBP) helped to focus the final month of business mentoring, all BCC owners received training on immediately useful skills and activities. one­to­one mentoring by a CIEDC trainer. Following this meeting, the CIEDC team met with the SNV PSD Final Report to the Cambodian National Biodigester Program 27 advisor and NBP personnel to discuss common BCC Recommendations for PSD Replication in owner needs. The following month's mentoring session Current NBP Provinces was held in the provincial capital and focused on a small number of training topics (one or two issues) that are Objective: Biodigester construction and maintenance common BCC owner needs. This creates a fertile envi- (warranty) services in all eight existing NBP provinces ronment for peer­to­peer learning among BCC owners, are conducted by private NBP-authorized or recognized franchisee businesses by the end of 2011. which the PSD team believes will be an essential basis for cooperation among BCCs in future business associa- nbP organization, management, and Administration tions or federations. Franchise management is a complex task requiring a number of related business skills and a high level of dedi- This structure also enables better coordination among cation to the brand being franchised. technical training enrichment activities conducted by NBP technical supervisors, for example, on appliance The NBP may not currently have the capacity to manage estimating and product improvement, as well as provid- the appliance supply chain, enforce company agreements ing a centralized distribution opportunity for Operations and procedures, or monitor BCC performance and apply Manual updates and information about province-level appropriate sanctions within the franchise system. There changes in PBPO operations. is a further risk that BCCs may not hire or appropriately manage NBP-certified masons, limiting sector growth. Finally, PBPOs may attempt to micromanage the sector, Recommendations to the NBP resulting in a difficult business climate and eventual BCC exit or abandonment. Careful monitoring will be required This section provides recommendations for NBP to within the context of the franchise system. extend the PSD process within and beyond the current NBP program context. As a result, no later than mid-2010, the NBP should estab- lish a Franchise Operations Manager position, reporting to An Elevated NBP PSD Objective the national coordinator and parallel or horizontal to the technical manager and director of administration. This Based on the experience of the pilot PSD process, the position should take over the responsibilities of the private PSD team articulates the medium-term vision of privately sector development coordinator position, since the privati- provided biodigester services in Cambodia as follows. zation process should be nearly complete by this time. In all Cambodian provinces, commercially provided house- The principal responsibility of the Franchise Operations hold biodigester construction and maintenance services Manager should be to oversee, manage, and implement and spare parts are available to meet growing demand from livestock raisers (farmers/customers) who recognize the · ongoing revisions to the BCC Franchise Agreement multiple benefits of ownership. Competition among NBP and BCC Operations Manual, franchisees to provide these services ensures that potential · negotiation, consultation, and communication with customers can choose among BCCs based on their qual- BCCs and PBPOs regarding changes to the BCC ity and service reputation. Destructive price competition Franchise Agreement and BCC Operations Manual, is minimized by effective sector regulation and an optimal · monitoring and improvement of the appliance credit franchisee density, maintained by the NBP and provincial system and supply chain, with the primary goal of partners. Because franchisees are rewarded for profession- continued sector expansion, alizing their businesses by higher revenues and increasing · negotiation of preferred Farmer's Friend materials status as business owners in their communities, they par- supplier arrangements with construction material ticipate actively in the development of a sustainable com- supply companies in each NBP province, with the mercial biodigester sector, and provide input to the NBP on objective of materials quality control and program continuous, sector-wide improvement and upgrading. compliance, · development of a market-focused consultative pro- To achieve this bold vision, the NBP can explore the cess for sector promotion activities, with BCC own- following recommendations on replicating and expand- ers' ideas and needs driving brand development, ing the PSD process to all current NBP provinces, and marketing, and communications activities, expanding into new provinces with a PSD-friendly model · establishment and operational supervision of a of program initiation. national federation or association of BCC owners 28 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters to provide ongoing input to NBP and PBPO pro- stimulate awareness of and commitment to internal cedures and operations and to provide an effi- quality control. cient delivery mechanism for ongoing training and · Beginning on January 1, 2010, the QCC should communication, become mandatory in all biodigester construction · monitoring of company's use of NBP-trained projects, both BCC and PBPO. It should be used as a masons, tool for supervision in PBPO-run operations, and NBP · selective auditing of BCCs' financial, sales, and mar- masons in PBPO-run districts should be required to keting operations, and of PBPO appliance credit submit the QCC in order to be paid by PBPOs. accounts, · The NBP technical department should provide new · development and enforcement of clearly articulated or refresher training to all BCC owners, and possibly and appropriate sanctions for BCCs violating the to participating NBP masons, in the following skills. franchisee agreement or other policies outlined in · Estimating appliance costs to give custom- the BCC Operations Manual, and ers precise cost estimates, using forms and · assistance in province-level planning for new com- . guidelines produced by the NBP Precise cost pany authorization and new NBP mason training. estimates for appliance systems are somewhat difficult, but are an essential skill. The PSD team, human resources and Training in collaboration with the NBP technical man- There remains some risk that new BCC owners may be ager, has developed relatively precise estima- unprepared for the responsibilities of business owner- tion routines (forms) for use by BCC owners or ship, particularly those related to new paperwork and sales representatives. Intensive training should administrative requirements, and may abandon BCC be provided in their correct use to ensure that operations. Of course, business survival is not guaran- incorrect estimates do not generate resentment teed, and the NBP should aim for realistic business sur- or negative publicity among buyers. vival and growth rates. Nonetheless, to address these · Enrichment training in evaluating the potential risks, the NBP should undertake the following. of farm families to benefit from biodigesters. In accordance with the revised PRASAC-NBP PSD Training for All New Masons. For all new Farmer's agreement, BCC owners and masons require Friend masons, the NBP should add to existing techni- additional training in determining the technical cal training activities a two-day PSD training component, feasibility of biodigester construction. Train- providing an overview of the possibilities of business ing should be focused on helping BCC owners ownership (franchisee status) in the NBP system, of the improve basic evaluation of appropriateness and responsibilities of ownership, and of quality control. technical potential, and explain to families the potential cost savings on firewood and cooking Integration of Quality Control Checklist (QCC) Training into fuel. In addition, the NBP should clearly articu- Initial Mason and Supervisor Training. This is an essential late sanctions against franchisee BCCs who sell element of BCC operation for all masons in the NBP sys- biodigester installations to nonqualifying fami- tem. In anticipation of PSD in all NBP provinces, the QCC lies, as this represents a significant potential should be introduced as a normal part of biodigester risk to the ongoing success of the NBP . construction. , The NBP through CIEDC, should also provide training · The NBP should provide training in the QCC and for families of BCC owners in accounting and inventory other PSD procedures (for example, the Project procedures. The basic systems developed present chal- Control Folder) to all supervisors in all participating lenges to most BCC owners. In addition, the assump- provinces. This should be conducted by the NBP tion of the PSD team from the outset has been that BCC technical manager (who co-designed the tool) or owners will initially depend on family labor to staff their NBP technical supervisors in the third and fourth offices and handle basic administration, inventory, and quarters of 2009. By the end of 2009, all NBP and financial management. Since the majority of such sup- PBPO personnel should be familiar with the QCC porting family members are likely to be women, the NBP and able to instruct masons in its proper use. should produce and deliver gender-sensitive training cov- · , The NBP in coordination with the PBOs, should train ering the inventory management system, receivables all participating masons in the use of the QCC, which and payments, cash book, and basic filing and records should be introduced in all new mason training to management. This training should be delivered as soon Final Report to the Cambodian National Biodigester Program 29 as possible to BCC owners' spouses, daughters, and deployment are varied, and BCC owners will soon other appropriate family members. have the best information regarding the disposition of customers to biodigesters. The NBP should care- financial System/regulation fully listen for and extract information about common To facilitate the system-wide transition to private provi- customer concerns, objections, and motivations, and sion of biodigester services in Cambodia, the NBP should develop sector-wide promotion activities and market- do the following. ing materials to raise awareness of these concerns and help BCCs sell to new customer groups. It is · Add company overhead to the official bill of quantities important that the social goals of sponsoring NGOs in the third quarter of 2010 for all BCCs and PBPOs. This are complemented by an acute understanding of the will help limit the NBP's costs and prepare BCCs drivers of customer interest, which may be (broadly) for a fully privatized system. Ultimately, to create financial, sanitary, social, hedonistic (more time to a self-sustaining household biodigester construc- relax), or others. While there is no need for the NBP tion sector, company overheads must be borne by to compromise its social mission, effective marketing customers (farmers). Furthermore, though the cur- activities must be developed in a way that respects rent US$150 subsidy level is no longer justified by all possible motivations for biodigester ownership. materials prices, which peaked in 2007­08, reducing · Broaden the target market and reduce the intensity of pro- the subsidy may be extremely difficult. At the same moter training. Under the pre-PSD system, promoters time, the NBP cannot (and should not) bear all over- were principally responsible for evaluating technical head costs in a privatized system. In districts that are . feasibility using Form 02-P In the privatized system, not privatized by mid-2010, this additional overhead Form 02-P will normally be completed by the BCC cost should be recaptured by the NBP to offset sub- owner or sales representative. At the same time, sidies and overhead payments previously provided. remuneration for promoters is also being privatized, · Revisit company overhead charges annually. At the end of , and, though auditable by the NBP should be primar- 2009, and at the end of each subsequent year, NBP ily the responsibility of BCC owners. As a result, the staff should revisit the overhead percentage (currently primary goal of NBP promoter training should be around 7 percent) in light of the previous year's busi- to engage a broader range of community and com- ness operations, progress toward targets, and BCC mercial actors and stakeholders, and to empower failures. The current US$30 overhead plus US$5 pro- the personal and professional networks of BCC motion fee is actually US$5 lower than the originally owners to effectively communicate the benefits of recommended US$35 overhead, but it should not be biodigester ownership. Reducing the intensity of raised unless needed to stimulate sector growth. technical feasibility training should be accompanied by co-recruitment of promoters by BCC owners marketing/Promotion/communications (including farmer promoters, feed dealers, veteri- The NBP remains the "brand owner" of Farmer's Friend narians, and other agriculture sector stakeholders). biodigesters in Cambodia. Within the objective of sector For greatest effect, NBP technical supervisors might and brand promotion, the NBP should do the following. be deployed monthly over the next year for half-day scheduled meetings with newly identified promot- · Step up sector promotion activities, through local media ers to ensure that an informed promoter network and public advertisements, to raise awareness of BCCs continues to grow in PSD districts. and the NBP brand. Province-specific marketing mate- rials should include the names and telephone num- NBP Expansion into Four Additional bers of masons serving specific districts and be Provinces with Accelerated PSD updated on a regular basis. The NBP should consider facilitating radio (and possibly television) exposure A second objective is the expansion of the NBP into addi- for more articulate BCC owners as an outreach and tional provinces, which may be supported by additional brand promotion strategy, in concert, where possi- donor funds beginning in 2010. ble, with other agricultural extension efforts that use radio and television to reach agricultural audiences. Objective: Beginning in 2010, expand the NBP into four · In collaboration with BCCs, develop a consultative pro- additional provinces, fully leveraging the experience of cess for developing sector promotion activities based on the NBP PSD pilots to accelerate the formation of a sus- BCC experience. Household incentives for biodigester tainable commercial biogas construction sector. 30 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Recommendations for Expansion into and provide for more rapid privatization. Recruitment Additional Provinces with Accelerated PSD of new masons is also an important attitudinal test for potential BCC owners: masons who are willing All of the recommendations for Farmer's Friend con- to refer their peers and helpers for NBP certification tractor support and enrichment outlined in the previous should be favored for BCC ownership. section, if rigorously implemented, will support program · Plan for a second class of masons. The NBP should plan expansion. However, additional actions to configure pro- a second round of mason training at approximately vincial programs so that they are "primed" for a quick 9­10 months in order to ensure a supply of trained transition to commercial operation should be considered and skilled masons sufficient to cover the entire by NBP and its implementing partners. province. Trainees referred by existing masons with high potential for BCC ownership should be favored, PSd-ready given that they are likely to support sector develop- It is the recommendation of the PSD team leader that ment post-privatization. This approach will also help new provinces be introduced into the NBP system in a the PBPO role develop more consistently with the manner that reduces obstacles to privatization. The team's overall and long-term objective of the project, with recommendations for adding new provinces follow. supervisors regarding masons as essential to pro- gram success and to their own financial well-being. · Upon establishment of PBPOs, fully inform and train PBPO directors, coordinators, and supervisors on their principal human resources and Training role as sector regulator, the limited duration of their direct If the NBP wishes to rapidly introduce a commercial bio- supervision of construction activities, and their responsi- digester sector, new mason training should incorporate bility to create PSD-ready Farmer's Friend masons. If nec- the necessary skills and understanding to facilitate this essary, facilitate field exposure visits to participating introduction. This requires additions to NBP mason train- PSD districts for new coordinators and supervisors ing to "prime" masons for a PSD role. to help them clearly understand the program objec- tive: a sustainable commercial sector. · PSD training for new masons. For all new masons · Establish one or two demonstration districts in each new , trained by the NBP provide a one-or two-day PSD province for one year. The demonstration district should training component providing an overview of possi- be run by the PBPO with intensive supervision. bilities for BCC ownership (franchisee status) in the · Train 10­20 masons from all districts in the province to NBP system, responsibilities of business ownership, serve only their own districts during the first year. Masons and quality control. should be chosen based on geographic distribution · Introduce the Quality Control Checklist (QCC) in initial and willingness and ability to travel to demonstration mason training. This will stimulate awareness of and districts (demonstrating commitment, mobility, and commitment to internal quality control. Use the QCC future service area coverage). as a supervision tool for new masons and require · Introduce the BCC franchise system and basic sales and QCC submission for payment by PBPOs from the marketing in a two-day addition to basic mason train- outset. ing. The PSD concept should become familiar and · Train supervisors and masons in appliance cost estimat- expected for masons and supervisors alike. ing. Appliance cost estimating should be incorpo- · Establish a plan for introducing new districts in each new rated into initial training for new supervisors. For province through PSD only, after masons have "matured" masons, this should occur during the first refresher in their technical skills and have a basic understanding training (perhaps at six months) in preparation for of the concept and practices. This can help the NBP BCC owners' sales and contracting roles. Accurate avoid issues with provincial supervisors' territoriality cost estimating could also be incorporated as a BCC- and should allow the demonstration district in each owner selection criterion, as it demonstrates ability province to achieve economy of scale and serve to perform the planning and applied calculations that as a marketing tool for training promoters in new are essential to the BCC owner role. districts. · Use a promoter identification competition and new mason financial recruitment as part of the process to select masons as BCC Include company overhead in the official bill of quantities in owner/NBP franchisee. Assuming masons have been all new provinces. Company overhead charges should be appropriately trained in PSD, incorporating a BCC- included in the bill of quantities for all new provinces centered promoter system into the program struc- at standard levels. These additional charges should be ture should improve BCCs' initial sales performance retained by the NBP (not by PBPOs) and used to fund Final Report to the Cambodian National Biodigester Program 31 the NBP contribution to PBPO operating costs prior to these suppliers into the NBP system. Preferred sup- privatization. In this manner, company overhead charges pliers could be informed of plant construction pro- will more smoothly migrate into a fully private system, jections on an annual or semiannual basis to ensure while PBPO compensation for quality control and pro- availability of supplies, and could negotiate further gram management activities will never be visibly linked arrangements with BCCs for package discounts, to overhead charges. delivery of materials to customer homes, and other ways coordinate basic supply operations. marketing, Promotion, and communications · Demonstration districts. Develop the promoter sys- tem using demonstration districts to highlight both Sequential Narrative of the individual and community benefits of Farmer's Project Activities Friend biodigesters. Begin promoter system devel- opment in additional provinces approximately six This section presents a narrative of major project activi- months after program initiation in new provinces. ties, presented in sequence according to the date of ini- Conduct exposure visits to demonstration districts tiation of sub-activities. for new promoters. · Develop a BCC-linked promoter system. In newly initi- ated districts, link new promoters to new BCCs Selection of Appropriate Province and at the onset of operations. The NBP can migrate District Market Areas for Private Provision toward a commercially oriented promotion network by directly involving BCCs in newly served districts Project activities were initiated on July 1, 2008 in prepa- from the outset in the network's development. ration for the July PBPO directors meeting, during which the concept of the pilot PSD program was presented operations and materials management in detail. The meeting successfully led NBP and PBPO There is a risk that PBPOs may not understand or sup- directors to think about sector sustainability, but some port the BCC franchise system, and problems with man- initial resistance to the PSD concept was encountered. agement of credit accounts, appliance provision, or both As a result, the PSD proposal was translated to Khmer could lead BCC owners to abandon operations. The NBP and circulated to NBP and PBPO directors, and in con- should work to: sultation with the national coordinator and international advisor, a PSD steering committee was formed to over- · Monitor appliance supply and inventory credit with BCCs. see PSD activities, provide input, and validate PSD team The PSD coordinator or his successor (franchise decision making. manager, for example) should conduct a bimonthly telephone call with each BCC owner to ensure that The NBP directors arrived at the decision to select three PBPO supply operations are effectively meeting the provinces for initial PSD pilot activities beginning in 2008, demand for materials, and that the system remains and at the behest of the NBP coordinator, a fourth prov- free of abuse or demand for informal payments ince was selected for incorporation into the PSD program related to the appliance credit system. in early 2009. · Conduct spare parts spot checks. NBP technical super- visors should conduct approximately one spot check Management of Provincial Counterpart per month on each BCC to ensure they are main- Relationships taining appropriate spare parts inventories. The NBP should articulate and enforce appropriate tiered Stakeholder engagement was conducted with PBPO sanctions against BCC owners who fail to maintain directors and PBPO coordinators and supervisors during the required inventory. For example, first offense: August and September of 2008, and was a necessary warning; second offense: suspension of one startup ongoing part of project activities throughout. The follow- bonus payment of US$15; third offense: suspension ing sections outline the process of stakeholder engage- of overhead payment of US$30; fourth offense: revo- ment and key findings. cation of Franchise Agreement. · Negotiate preferred construction materials supplier The stakeholder engagement process also elicited feed- arrangements. NBP technical supervisors, working back and input from PBPO directors, coordinators, and with BCC owners, should identify reputable materials supervisors on their suggestions of appropriate districts suppliers who are willing to meet NBP quality stan- for PSD pilots. District selection was also discussed, dards in each PSD province, and work to incorporate though ultimately it was decided that final selection 32 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 2.1: ProVince SelecTion for PiloT PSd AcTiViTieS And rATionAle Province rationale Start date Adequate performance with some strong districts and reasonably committed leader- Kampong Cham 2008 ship in PBPO. CEDAC PBPO, success in organizing NBP start-up, and strong performance during Kampot 2008 initial period. Svay Rieng Strong leadership of PBPO Director and rapid growth in past year. 2008 Takeo Need for restructuring and improved performance. 2009 would be conducted as a function of Farmer's Friend · Promoter system. In all provinces, the success of the mason selection in potential districts. This process was program rests on effective promotion at the local conducted in collaboration with training partner CIEDC to and district level, either by district officials, village ensure adequate coverage of selected districts by skilled vets, or other district- or commune-level promoters. and well-prepared masons. According to directors and supervisors, masons are not ready to handle these activities on their own engagement of PbPo directors in a single district of the surveyed provinces. Yet, On August 8­14, the PSD team held meetings with direc- the most intuitive option--pairing promoters with tors of each PBPO and with supervisors or coordinators masons as the basis of companies--does not pro- from Kampot and Kampong Cham. This section outlines vide for competition within communes, and does not issues common to all provinces, specific findings on key match the well-considered geographic structure of points of discussion with each province (summarized in a the current promotion system. PSD activities must table on subsequent pages), and directions indicated by accommodate or incorporate this system, as failure these meetings that were expanded upon by the NBP . to do so would seriously curtail demand growth and threaten overall NBP goals. issues common to All Provinces · Noncompetitive assumptions. PBPO directors' initial In all provinces, there was clear agreement on the fol- ideas on PSD do not provide for the level of com- lowing issues. petition among mason-companies that is assumed in the NBP PSD roadmap. The PSD team will need · Enthusiasm for PSD. All PBPO directors expressed to explore these issues further to ensure competi- enthusiasm for PSD activities as a means of expand- tive outcomes in selected districts, and to deter- ing the NBP No serious concerns were raised by any . mine the level of "monopoly control" acceptable as director. an interim situation while the PSD system is under · Masons' construction capacity. Each province director or development. coordinator identified a limited number of outstand- · Financial structure. The PSD team leader is very con- ing masons. Unfortunately, their geographic distribu- cerned that the current financial structure of plant tion and capacity for plant production (approximately construction leaves insufficient funds to account for two per mason in a single village) does not necessar- company overheads, marketing and promoter costs, ily provide the combination of geographic coverage supervision costs, rising labor costs, and materials and competition required by the NBP for expansion. costs in a privatized system while maintaining com- · Masons' skills. All province directors expressed con- petitive pricing. This issue needs to be resolved in cern about the business and financial management order to give potential masons a clear idea of the skills of available masons--even those identified as benefits of starting and registering a business, and outstanding. Directors have so far been flexible in to assure other participants of their continued finan- addressing these deficiencies, though the two pro- cial stake in the process. The PSD team and project vincial PBPOs anticipate a PBPO role in financial advisor need to construct and analyze a biodigester management, which may be incompatible with the value chain in the immediate future to clarify options NBP PSD roadmap. and viability. Final Report to the Cambodian National Biodigester Program 33 Analysis of Provincial biodigester Program Performance After this experience, a near consensus emerged in and rationale for Selection of Appropriate districts for favor of the PSD process, and provincial leaders were PSd Activities extremely (and directly) supportive of PSD program The PSD team undertook analysis of the potential dis- goals and activities. PBPO technical supervisors, who tricts for the pilot PSD, both independently and with are government employees, also initially offered some the PBPO directors and coordinators. Initial PSD analy- resistance to the privatization process, particularly in sis yielded findings that were consistent with provincial Svay Rieng Province, where they were openly hostile to stakeholders' suggested target areas, suggesting that the new system. Supervisors feared loss of control over there is a high degree of agreement on successful dis- masons, whom they had considered their employees, tricts in each province. The PSD coordinator also held in- and loss of prestige and status as the orchestrators of depth meetings with each province's PBPO coordinator the program in their respective districts. in late August 2008 to ensure project ownership and to elicit concerns and suggestions regarding target districts The PSD team engaged in intensive education and out- and challenges to masons. reach to demonstrate that the privatization process stood to increase the efficiency of the program, directly bene- Ultimately, however, final district selection was deferred fitting technical supervisors in terms of earning potential until completion of the mason selection process. It was and efficiency of work. decided that the local network and service capacity of outstanding masons would be the most important guide Recognizing that supervisor outreach would be critical to to appropriate selection of districts. To this end, mea- the success of the program, the PSD team leader and sures of mason "embeddedness" in their home districts coordinator held meetings with PBPO coordinators and (as indicated by the intensity of their past work in the supervisors in January, February, and March, 2009. In district and success in identifying customers with appro- these meetings, supervisors indicated that the customer priate technical potential in these districts) were added to identification and sales effort provided the lowest finan- the mason selection process. cial returns to their efforts, with 1­3 days of work yield- ing only US$5.00 in promotion fees in most provinces, in building Support for Private Sector development among contrast to technical quality inspections yielding higher Provincial government leadership and Technical Supervisors compensation for a smaller and more certain investment Following an initially apprehensive response to the con- of time and effort. When asked "which would you rather cept of privatization, the project built strong support do full-time, quality supervision or customer identifica- among NBP provincial stakeholders for private sector tion and sales?" technical supervisors were unanimous development, and for rural private enterprise develop- in choosing quality supervision. ment in general. This includes support among PBPO direc- tors (who are typically directors or deputy directors of the When the PSD team explained that the principal change provincial agricultural departments) and, more recently, a for supervisors would be full dedication to Farmer's Friend base of support among provincial coordinators and techni- quality supervision and (near) elimination of customer cal supervisors who now agree that private provision is a identification and sales responsibilities, they became more efficient and labor-saving division of labor. highly receptive to the PSD process and recognized the logic of commercial provision. To overcome initial apprehension about PSD among national and provincial program leaders, the PSD team The PSD efforts and auxiliary efforts by SNV have effec- conducted extensive outreach in July and August of tively neutralized opposition to privatization and built the 2008. Subsequently, SNV led a learning mission for the foundation for a pro-commercial constituency among directors of four PBPOs and national program leaders to provincial stakeholders. Nonetheless, sustaining support Nepal, where they saw the advantages and operational among provincial stakeholders will require successful details of commercially provided biodigester services. BCCs and sustained efforts on the part of all actors to After the trip, the PSD team immediately captured the make the privatized system yield the expected benefits directors' impressions and the lessons learned that they of faster growth in plant construction and overall improve- . believed could be applied to the Cambodia NBP These ments in plant quality. were used to structure specific PSD program activities and training plans for the remainder of the project. 34 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Business Model Analysis and Development · The firm's profit margin is usually captured in the of a Viable Microfranchise Business Model, overheads, providing entrepreneurs with the space to negotiate price and delivery terms and reduce Including Codification of NBP Operating profits as appropriate to win contracts. Procedures and Development of the · As material and labor costs are somewhat transpar- Operations Manual for Privately Provided ent in these markets, clients can compare bids and Biodigester Services determine what is an acceptable rate of compensa- tion for the firm based on comparative estimates. The business model analysis task of the consultant terms · The system rewards entrepreneurial and innovative of reference was ongoing throughout the project, with management, as good management practices can the bulk of analysis conducted in September and Octo- reduce overall overhead costs and a larger share of ber, 2008. In accordance with the terms of reference, the markup can be captured by the entrepreneur. this section outlines analysis of and recommendations for selecting appropriate business models for implemen- Rising construction labor costs. Cambodian construction tation of PSD in selected districts, accounting for market, labor costs have risen sharply since the NBP biodigesters economic, financial, labor, geographic, technical, and key were constructed in 2006, as the domestic construction success and failure factors of each potential model. sector has been saturated by foreign-investment-driven projects. PSD team members conducted a spot check on The PSD team and NBP leadership agreed that the Farm- labor costs in September 2008, and found that the rates er's Friend biodigester pricing model or models would for skilled labor in most NBP provinces exceeded the cur- have consequences for both program and contractor rent compensation rates for biogas masons. The National enterprise sustainability, and ultimately for the sustain- Committee of Sub-National Democratic Development ability of the entire PSD effort. Key observations, pre- (NCDD) provincial and national stakeholders reported liminary analysis, and some recommendations from this that many commune-level projects were cancelled or analysis are presented in this section. postponed in 2008 because both labor and materials costs exceeded the ceiling prices set by NCDD. observations on the Pricing model Administrative and overhead costs excluded from present It is very likely that the September 2008 findings reflected model. The current pricing model assumes that adminis- a temporary construction boom that began to subside trative overheads of all kinds are covered by NBP com- with the financial crisis of October 2008 and a seasonal pensation to the PBPOs. Because PBPO supervisors increase in construction labor rates tied to the rice-plant- in effect serve as project marketers and managers, the ing season. Nonetheless, the long-term trends in con- current pricing model (cost estimation) excludes these struction labor costs, and their distribution throughout costs. In a privately provided system, these overheads, Cambodia (not confined to Phnom Penh) must be taken including the entrepreneur's time and direct costs for into account in designing pricing models that promote marketing, client contact, contracting, and after-sales PSD pilot sustainability. service, must be compensated. In the longer run, pricing structures must also provide for BCC administrative and The SEILA (poverty reduction program) system in Cambo- overhead expenses. dia has operated with only a 5 percent markup on costs, though several informants suggest that, in the context Standard construction pricing models. In most developed of Cambodia's construction boom, this low rate of com- countries, company overheads are covered by a markup pensation threatens project sustainability and does not on construction materials and direct labor expenses. In encourage or reward contractors to adopt good or inno- Malaysia, these rates may be 35­40 percent of total con- vative management practices. struction costs, while in Europe and the United States the markups are commonly 25­50 percent of costs or Competition for skilled labor. The NBP leadership is aware more. This system has several advantages: that the pricing model adopted must be sufficiently lucra- tive for mason-contractor entrepreneurs and skilled labor- · Overheads and firm support are linked to overall ers masons) to remain interested and active in the sector inflation rates in the materials and labor markets. As for the long term. In part, this will depend on the NBP's firms consume (administrative and marketing) labor, commitment to enhanced sector promotion in PSD prov- materials, and technology, their overhead costs are inces. More importantly, individual entrepreneurs' skills likely to grow in tandem with other costs across the levels in customer identification, marketing, and closing economy. the sale will determine contractor-firm profitability. Final Report to the Cambodian National Biodigester Program 35 Unfortunately, no data are available on the amount of calculated for reference, based on a percentage of marketing and sales an entrepreneur must do to ensure construction materials and labor costs, but exclud- company maintenance and growth, making precise activ- ing guarantee and participation fees. The increase ity-based costing very difficult. Furthermore, existing bio- in cost for the following plant sizes is presented in digester penetration and PBPO sector promotion support the table below, based on the current NBP labor and influence how easy or difficult the mason-entrepreneurs' construction materials estimates. sales efforts are likely to be. As it is unlikely to be equal · NBP sustainability depends on maintaining mason- across provinces, sales may be harder to close in some contractor income in the first six months following districts or provinces than others. This conflicts with the privatization. Income maintenance is calculated as NBP agenda, which requires relatively uniform pricing US$90 per month for skilled masons, based on a across districts and provinces. minimum 10 working days per month as a skilled mason at the approved US$4.50 rate. This figure was Sales and marketing skills development. Mason-entrepre- used as a reference (minimum required) income for neurs' skill levels in sales and marketing should improve existing masons. over time and with training, but it is essential to pro- · Anticipated expenses far surpass anticipated rev- gram sustainability that they maintain income during the enues in the first four months of PSD company startup period, as failing to ensure this could jeopardize operation. Depending on the speed with which commitment to the program. mason-entrepreneurs gain skills related to sales, marketing, and team management, it is estimated The cost analysis on the following pages presents a set that all firms will incur losses during the first four of pricing and cost scenarios that illustrate the gaps in months of operation. These can be expected even capital finance and income that must be met by the pro- with highly subsidized loan interest rates of 18 per- gram to address these issues, and analyzes potential pric- cent for motorbike, trailer, and short-lived capital ing structures in light of the labor conditions observed in equipment. September 2008. · Profitability is possible from month four onward. Based on these assumptions, companies may be results of Preliminary cost Structure Analysis able to reach profitability after four months while Tables 2.2­2.8 present potential pricing structures in light maintaining baseline income. of labor conditions in September 2008. They illustrate-- · If mason training effectively communicates the as the NBP model (left column) versus per-province enhanced profitability of completing installations in costs--the gaps in capital finance and income that must a clustered fashion, and if promotion and marketing be addressed to achieve relatively uniform pricing across efforts bring this goal to fruition, it is possible that provinces. after the fourth month (in this scenario), companies can begin to generate relatively significant profits. · Net pretax income in this scenario in year 1 for Business Model Findings and mason-entrepreneurs of US$1,458 (US$121.49 per Recommendations month) is projected. Year 2 pretax income, at a level of 18 plants per company per month, is projected as Drawing heavily on the analysis of the previous PSD US$3,374. These estimates do not include additional consultant with respect to required startup costs for potential revenues from efficiencies generated in pilot biogas contractor firms, and based on very rough clustered construction. In the case of clustered con- estimates of time and expenses involved in scaling up struction, year 1 income could rise by US$576 to operations in such firms, the foregoing analysis points US$2,034 and year 2 income could rise to as much to some preliminary conclusions and recommendations. as US$4,670 for BCCs. Validation of these assumptions is also needed in discus- · Direct subsidy requirement (cash, in-kind, or loan sions with key NBP personnel. deferral): The foregoing company growth scenario requires a total subsidy of US$419 per mason-entre- · Approximately 7 percent overhead rate on bio- .5 preneur to ensure income stability in the first four gas construction and labor should be sufficient to months of operation, in addition to indirect subsidies permit PSD sector growth. Calculations for a num- on interest rates for equipment purchases. ber of overhead scenarios were performed using a simplified version of the bill of quantities provided . by the NBP A variety of overhead scenarios were continues on page 42 36 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 2.2: Key iSSueS rAiSed by PbPo direcTorS issue Kampong cham Kampot Svay rieng 1. General Strongly positive CEDAC moving ahead quickly Strongly positive: believes that disposition on with PSD. PSD aligned with PSD system could remedy low PSD CEDAC priorities motivation of Prov/District staff 2. Current S · oilissuesnearMekong B · ricksupply Limited PDA staff exposure in challenges to L · owdemandinforestedareasand R · ockysoilmakesdigging communities limits promotion biodigester near Mekong (flooding) more expensive and time efforts program S · lowexpansionofdemanddueto consuming cost of biodigesters G · roundwaterandrain impede expansion 3. Capacity and Director identified masons in most Dang Tong, Kampong Trach, Director suggested Svay Teab, suggested successful districts of region 3, and Banteay Meas are Romeas Haek, Svay Chrum, districts including Banthea, Cheung Prey, possible candidate districts, and possibly Rumdol. Excluded Prey Chor, and Kang Meas. Possibly Kampot also possible; not well-performing district of Ou Reng Ov enough capacity to cover all Kampong Rou districts 4. Mason · 41masons · 30masons ·29total assessment · 28goodmasons · 4readytoengageforPSD ·12active 1 · 5outstandingmasons · Identifiedkeycapacitylimit: ·3­4outstandingcandidates (candidates) · 1 masoncansupervise · ostmasonsstillveryweakin M C · oncernaboutnewmasoninterest 2 plants in a single village finding new customers in program due to limited effective N · BPmasonfeeabovecurrent demand expressed by supervisors market rate of US$3.25/day for skilled labor (positive) 5. Key mason · Financialmanagement · Bricksupply · 80%ofgoodmasonswantPSD challenges in · Businessmanagement · Businessskills W · eaknessinfindingcustomers; PSD W · orkrulesvscontract masons requested continued format help in customer identification C · odeofconductand · Financialmanagement controls · Generalbusinessskills 6. PBPO and Supervisors concerned about None identified; discussions None identified; discussions with supervision · Placementofplants with supervisors in next supervisors in next phase of work issues · Guaranteecertification phase of work · Cementquality . 7 Promotion S · uggestedfarmerassociations 1 commune, 1 promoter Network of district-level promoters and marketing as promotion partners system is working effectively; needs to be maintained systems P · DAhasvillagevetswhoarekey need to maintain in PSD promoters. Must include in PSD structure 8. Preference No strong preference expressed S · uggestedindividualand Strong preference to start with for PSD cooperative model options 1 company formed by strongest structure/ S · omeresistenceto masons (effective monopoly) business concept of competition model 9. Opinion Generally positive. Little discussion None. CEDAC serves as key No resistance to outside business of outside outside capacity builder capacity builders, but none capacity identified in Svay Rieng builders 10. Key issues to Expectation of PBPO control of CEDAC actively thinking about Preference for single company address mason finances PSD needs to be two structures: addressed (1) partnerships between masons and promoters; (2) Co-op company including masons, possibly providing brick and other supplies Final Report to the Cambodian National Biodigester Program 37 TAble 2.3: SePTember 2009 conSTrucTion lAbor rATeS in SelecTed cAmbodiAn ProVinceS ranges of labor rates (uS$)/day Supervisor Skilled unskilled Semi- no. low high low high skilled low high company type comments 1 Phnom Penh 10.00 12.00 7.00 8.00 3.00 3.75 Contractor Rate increased in rainy season when construction laborers are planting and plowing rice fileds 9.00 10.00 5.00 10.00 3.75 2.50 3.25 Contractor- Rate has changed this year by skilled mason US$0.50 to US$0.75, est. 7.00 8.00 5.00 6.00 2.50 3.50 Contractor Informant stopped bidding on house construction projects because labor rates have risen quickly this year N/A 6.00 7.00 N/A 3.00 4.00 GS and Estimate construction co. 2 Kampong Cham 11.00 11.00 6.25 7.50 5.00 2.25 2.75 Construction material Unskilled labor is currently hard supplier to hire 10.00 12.00 7.00 7.00 2.25 3.75 Contractor Many laborers have shifted to farming in response to high com- modity prices 6.25 NCDD-SPPA 3 Kandal 10.00 15.00 5.00 10.00 5.00 2.50 3.25 Mr. Sreang Chantha, Technical Officer, Public Transportation Office 4 Takeo 12.00 15.00 10.00 5.00 2.50 Contractor After April 2008, labor rates increased around US$0.75 to US$1/day 5 Kampot 5.75 6.25 4.00 3.00 3.25 NCDD-SPPA 5.00 8.00 5.00 3.00 3.25 Contractor International seaport and hydro- power are under construction, both need labor 6 Svay Rieng 5.00 5.00 3.50 2.50 2.50 NCDD-SPPA 7.00 8.00 3.75 5.00 3.75 2.00 2.75 Contractor 7 Prey Veng 5.00 5.00 3.00 2.00 NCDD-SPPA Updated to May 2008. No current update available 6.00 7.00 4.50 5.00 3.75 2.00 2.50 Contractor 1.75 2.25 Private information Informant indicates that skilled from independent labor nearer PV Town researcher 38 TAble 2.4: eSTimATed currenT coSTS for 4m3 biodigeSTer And coST And oVerheAd AnAlySiS nbP Kch KPT SVr TAK as of 4/08 as of 9/08 as of 9/08 as of 9/08 as of 9/08 rate rate rate rate rate (uS$) days Total (uS$) Total (uS$) Total (uS$) Total (uS$) Total I Construction materials Total 267.65 267.65 267.65 267.65 267.65 II Appliances Total 56.53 56.53 56.53 56.53 56.53 III Labor 80.00 107.50 102.50 90.00 140.00 Skilled labor No. 4.5 10.0 45.00 6.25 62.50 5.75 57..50 5.00 50.00 10.00 100.00 Unskilled labor No. 2.0 10.0 20.00 3.00 30.00 3.00 30.00 2.50 25.00 2.50 25.00 Excavation of soil m3 1.5 10.0 15.00 1.50 15.00 1.50 15.00 1.50 15.00 1.50 15.00 IV Guarantee Given 10.00 10.00 10.00 10.00 10.00 V Participation fee Given 15.00 15.00 15.00 15.00 15.00 429.18 456.68 451.68 439.18 489.18 Labor as % total cost 19 24 23 20 29 Materials as % total cost 62 59 59 61 55 5% of non-administrative costs 20 22 21 21 23 7.5% of non-administrative costs 30 32 32 31 35 10% of non-administrative costs 40 43 43 41 46 15% of non-administrative costs 61 65 64 62 70 20% of non-administrative costs 81 86 85 83 93 25% of non-administrative costs 101 108 107 104 116 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 2.5: eSTimATed currenT coSTS for 6m3 biodigeSTer And coST And oVerheAd AnAlySiS nbP Kch KPT SVr TAK as of 4/08 as of 4/08 as of 4/08 as of 4/08 as of 4/08 rate rate rate rate rate (uS$) days Total (uS$) Total (uS$) Total (uS$) Total (uS$) Total I Construction materials Total 330.45 330.45 330.45 330.45 330.45 II Appliances Total 56.53 56.53 56.53 56.53 56.53 III Labor 89.50 119.75 114.25 100.50 155.50 Skilled labor No. 4.5 11.0 49.50 6.25 62.50 5.75 57.50 5.00 50.00 10.00 110.00 Unskilled labor No. 2.0 11.0 22.00 3.00 30.00 3.00 30.00 2.50 25.00 2.50 27.50 3 Excavation of soil m 1.5 12.0 18.00 1.50 15.00 1.50 15.00 1.50 15.00 1.50 18.00 IV Guarantee Given 10.00 10.00 10.00 10.00 10.00 V Participation fee Given 15.00 15.00 15.00 15.00 15.00 501.48 531.73 526.23 512.48 567.48 Labor as % total cost 18 23 22 20 27 Materials as % total cost 66 62 63 64 58 5% of non-administrative costs 24 25 25 24 27 7.5% of non-administrative costs 36 38 38 37 41 10% of non-administrative costs 48 51 50 49 54 15% of non-administrative costs 71 76 75 73 81 20% of non-administrative costs 95 101 100 97 108 25% of non-administrative costs 119 127 125 122 136 Final Report to the Cambodian National Biodigester Program 39 40 TAble 2.6: eSTimATed currenT coSTS for 8m3 biodigeSTer And coST And oVerheAd AnAlySiS nbP Kch KPT SVr TAK as of 4/08 as of 9/08 as of 9/08 as of 9/08 as of 9/08 rate rate rate rate rate (uS$) days Total (uS$) Total (uS$) Total (uS$) Total (uS$) Total I Construction materials Total 387.75 387.75 387.75 387.75 387.75 II Appliances Total 56.53 56.53 56.53 56.53 56.53 III Labor 107.00 142.75 136.25 120.00 185.00 Skilled labor No. 4.5 13.00 58.50 6.25 81.25 5.75 74.75 5.00 65.00 10.00 130.00 Unskilled labor No. 2.0 13.00 26.00 3.00 39.00 3.00 39.00 2.50 32.50 2.50 32.50 Excavation of soil m3 1.5 15.00 22.50 1.50 22.50 1.50 22.50 1.50 22.50 1.50 22.50 IV Guarantee Given 10.00 10.00 10.00 10.00 10.00 V Participation fee Given 15.00 15.00 15.00 15.00 15.00 576.28 612.03 605.53 589.28 654.28 Labor as % total cost 19 23 23 20 28 Materials as % total cost 67 63 64 66 59 5% of non-administrative costs 28 29 29 28 31 7.5% of non-administrative costs 41 44 44 42 47 10% of non-administrative costs 55 59 58 56 63 15% of non-administrative costs 83 88 87 85 94 20% of non-administrative costs 110 117 116 113 126 25% of non-administrative costs 138 147 145 141 157 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 2.7: eSTimATed currenT coSTS for 12m3 biodigeSTer And coST And oVerheAd AnAlySiS nbP Kch KPT SVr TAK as of 4/08 as of 9/08 as of 9/08 as of 9/08 as of 9/08 rate rate rate rate rate (uS$) days Total (uS$) Total (uS$) Total (uS$) Total (uS$) Total I Construction materials Total 387.75 387.75 387.75 387.75 387.75 II Appliances Total 56.53 56.53 56.53 56.53 56.53 III Labor 107.00 142.75 136.25 120.00 185.00 Skilled labor No. 4.5 13.00 58.50 6.25 81.25 5.75 74.75 5.00 65.00 10.00 130.00 Unskilled labor No. 2.0 13.00 26.00 3.00 39.00 3.00 39.00 2.50 32.50 2.50 32.50 Excavation of soil m3 1.5 15.00 22.50 1.50 22.50 1.50 22.50 1.50 22.50 1.50 22.50 IV Guarantee Given 10.00 10.00 10.00 10.00 10.00 V Participation fee Given 15.00 15.00 15.00 15.00 15.00 576.28 612.03 605.53 589.28 654.28 Labor as % total cost 19 23 23 20 28 Materials as % total cost 67 63 64 66 59 5% of non-administrative costs 28 29 29 28 31 7.5% of non-administrative costs 41 44 44 42 47 10% of non-administrative costs 55 59 58 56 63 15% of non-administrative costs 83 88 87 85 94 20% of non-administrative costs 110 117 116 113 126 25% of non-administrative costs 138 147 145 141 157 Final Report to the Cambodian National Biodigester Program 41 42 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters continued from page 35 Based on these recommendations, an overhead and from the PBPO, which were determined to invite startup bonus structure was developed that provided demands for commissions or other informal payments. US$30 per plant overhead payments, a US$5 promoter fee to be transferred by BCCs to referring promoters, and NBP leadership decided to use the appliance credit sys- a US$15 per plant startup bonus for the first 30 plants com- tem to offset Farmer's Friend BCC liabilities for NBP- pleted by BCCs (total of US$450 subsidy per company). provided appliances with credits for plant completion in the amount of the overhead payment, promoter fee, and overhead Payment Through offsetting credits startup bonus. Each time a plant completion report was in the Appliance Account to be submitted, the BCC's account payable to the NBP The next task was to determine how to create a reliable would be reduced by the corresponding amount, and the system for BCCs to receive overhead payments and NBP receivable account reduced by the same amount. In startup bonuses without depending on cash transactions this way, the actual cash payment flow from BCC­PBPO TAble 2.8: eSTimATed STArTuP coSTS for biodigeSTer comPAnieS And firST-yeAr buSineSS exPenSeS (Pro formA) month/uS$ 1 2 3 4 5 6 7 8 9 10 11 12 Production Assumptions Number of teams managed 1 1 1 1 2 2 2 2 3 3 3 3 Plants completed 3 3 6 6 9 9 12 12 15 15 18 18 Mason income @ $30/plant 90 90 180 180 270 270 360 360 450 450 540 540 Entrepreneur baseline income 90 90 90 90 90 90 90 90 90 90 90 90 Expenses Motorbike and trailer* 46 46 46 46 46 46 46 46 46 46 46 Tools and equipment** 56 56 56 56 56 56 56 56 56 56 56 Petrol 25 28 30 33 37 40 44 49 54 59 65 71 Communications 20 22 24 27 29 32 35 39 43 47 52 57 Service expense(s) 10 11 12 13 15 16 18 19 21 24 26 29 Business registration 25 Tax (no date) Estimated total company expense 80 162 168 175 182 190 199 209 220 232 245 259 Profit margin 10 (72) 12 5 88 80 161 151 230 218 295 281 Required direct subsidy or loan to 80 162 78 85 2 10 (71) (61) (140) (128) (205) (191) maintain Clustered construction management scenario Labor saving from clustered ­ ­ ­ ­ 36 36 72 72 72 72 108 108 construction Profit margin with clustured 10 (72) 12 5 124 116 233 223 302 290 403 389 construction Required direct subsidy or loan to 80 162 78 85 (34) (26) (143) (133) (212) (200) (313) (299) maintain *Assumes equipment account finance @ 18% p.a. simple interest, repayment in 11 installments. **Assumes tool and equipment finance @ 18% pa, simple interest, repayment in 11 installments. Final Report to the Cambodian National Biodigester Program 43 risks traditionally associated with business startup. In ini- TAble 2.9: coST increASe WiTh PlAnT Size tial meetings with masons, it was clear that they lacked many of the hoped-for skills and aptitudes required to Plant Size overhead @ 7.5% (uS$) support microenterprise-driven privatization. In addition, 4m3 30 the anticipated responsibilities of new mason-entrepre- 6m3 36 neurs envisioned by NBP leadership continued to grow, highlighting a severe supply-demand mismatch and a 8m3 41 need to adjust the PSD delivery model. Furthermore, the PBPO directors and coordinators expressed significant concern about masons' financial capacity and manage- TAble 2.10: Time To ProfiT While mAinTAining ment skills, staff and operations management abilities, bASeline income (uS$) and foundational entrepreneurial skills. year 1 year 2 The PSD team adjusted its PSD approach accordingly, Plants completed 126 216 settling upon the development of a microfranchise sys- Mason income @ $30/plant 3,780 6,480 tem, with specific operating arrangements and business procedures developed through a BCC Operations Man- Estimated total company expenses 2,322 3,106 ual, simplified project management tools, and a three- Net profit 1,458 3,374 party Franchise Agreement. Return on investment (ROI, simple) 63% 109% A microfranchise system emulates successful commer- First four-month subsidy required 419 ­ cial franchise systems in the sense that the franchisor, , the NBP centralizes the most skill-intensive activities of the business, including brand, product, system and busi- TAble 2.11: cluSTered conSTrucTion benefiTS (uS$) ness process development, and delegates franchisees with lesser skills and resources (in this case, BCCs) to clustered construction case year 1 year 2 contribute technical skill, direct sales networks, and direct Labor saving from clustered 576 1,296 personnel management. The risks and costs of busi- construction ness entry for Farmer's Friend franchisees are reduced Net profit with clustered construction 2,034 4,670 because--lacking previous exposure to effective busi- Return on investment with clustered 88% 150% ness processes and operating procedures-- they receive construction turnkey procedures developed by more highly skilled per- First four-month subsidy required 406 ­ sonnel (the PSD team and NBP technical management). Once implemented, the franchise system becomes an for appliances would be greatly reduced, as would BCCs' ongoing dialogue between franchisor and franchisee, reliance on direct payments from the PBPOs. with shared interest in expanding market penetration. In addition, because the franchisor can revoke a franchise in Figures 2.1 and 2.2 outline the flow of funds in the the case of noncompliance with operating procedures, revised system. The first diagram outlines the proposed the franchisor can exert significant control over proce- flow of "payment entitlements" related to BCCs; the dures with a more credible sanction than would be the second illustrates the devised mechanism of offsetting case dealing with fully independent businesses. payments. This model required the detailed codification (and in Development of a Replicable Microfranchise some cases, modification) of NBP operating procedures to ensure predictability and clarity for low-skilled entrepre- Business Model neurs. This system made replication of the privatization Early in the PSD process, the PSD team recognized that effort in subsequent districts much easier, as the basis for local NBP masons faced multiple constraints to becom- business systems had been developed. ing BCC business owners, including lack of several necessary business skills, lack of familiarity with adminis- The key tools of the system are the Operations Manual, trative compliance procedures, and low tolerance for the the Project Control Folder, and the Franchise Agreement, 44 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters figure 2.1: floW of PAymenT enTiTlemenTS in PriVATe biodigeSTer conSTrucTion SySTem (uS$) NBP $61 $15 Start-up Ap plia nce $35 Fee s bonus Masons and $85 Labor $61 Appliances Mason company PBPO construction helpers fee e tee fe an ation Appliances r $85 Labor ua ip 0 G tic $1 Par 5 $61 $1 $245 Construction Farmer material supplier figure 2.2: offSeTTing PAymenTS uTilizing The APPliAnce crediT SySTem Example: flow of funds for 4m3 plant (US$415 total cost) NBP $6­2 1 Ap plian ces dy u bsi $10 Guarantee fee 0S $15 $61 Appliances - $30 Company overhead - $5 Promoter $26 Ongoing - $15 (first 30) Bank/MFI Mason company $11 (first 30 plants) PBPO $42 fee fee $42 tee Appliances 1L an ation $85 Labor 1­$ oan r 150 ua icip =$2 0G t 71 $1 5 Par $61 Loan $1 rep aym $245 Materials Construction ent Farmer material supplier Final Report to the Cambodian National Biodigester Program 45 described briefly here and included in their entirety (Eng- Furthermore, their reliance on part-time trainers who lish translation of Khmer original) in chapter 3. are employed elsewhere was seen as a disadvantage. These findings confirmed the lack of an active sector of operations manual private providers of rural business development services In response to concerns about the clarity, transparency, in Cambodia. and ease of replication of NBP operating procedures, the PSD team produced the Operations Manual for Private Further inquiries in the donor and development community Biodigester Construction Companies, which presents pointed to Cambodian-Indian Entrepreneurship Develop- and formalizes all known required business procedures ment Center (CIEDC) as the only full-service entrepre- corresponding to the business process map for private neurship training provider capable of providing diversified biodigester construction companies. The Operations training and ongoing support services to Cambodian rural Manual assumed a central role in training development, entrepreneurs, and the most appropriate for working with as it ultimately contained an authoritative statement of rural nonagricultural businesspersons with potentially low expected company procedures. Developing the manual formal skill levels (that is, low literacy and numeracy). also revealed and clarified the feasibility of a microfran- chise approach to BCC development. Based on this research, CIEDC was selected as the key partner in the Farmer's Friend mason selection process and as a partner in delivering pre-training and training in Selecting and Managing a Local entrepreneurial skill and business management directly Capacity Builder to mason-contractors. This recommendation was based on the general reliance on CIEDC by other reputable orga- With the objectives of co-developing and implementing nizations involved in training, and by the lack of another mason skills evaluation and a business skills training and suitable alternative. mentoring (business coaching) program, the following steps were taken. However, further assessment of CIEDC's capabilities and ability to provide ongoing mentoring outside of business Selection of Training Partner (ciedc) and entrepreneurial skills was required. This stimulated The NBP engaged the entrepreneurship development SNV to hire a National Advisor for Rural Private Sector training team of the Cambodia India Entrepreneurship Development to improve CIEDC's capacity to deliver cus- Development Center (CIEDC) to co-develop and imple- tomized training and business coaching services. ment training. CIEDC's main objective is to provide entrepreneurship skills, mentoring, and coaching to rural Training development Process businesses in Cambodia. The PSD team held partnership meetings with CIEDC on October 6 and October 28, 2008. The PSD team also Before contracting CIEDC, the NBP PSD team shortlisted worked with CIEDC's international advisor to plan and several experienced potential training centers and organi- program November 2008 CIEDC training team activities, zations to provide required assessment and training ser- including team briefing, field visits, and mason capacity vices. Development community leaders were consulted and mason needs assessment and selection--precur- in the research process, including Deutsche Gesellschaft sors to mason-entrepreneur training activities. für Technische Zusammenarbeit (GTZ) and project staff of USAID efforts. In November, 2009, consultants worked with the training team from CIEDC to familiarize them with the NBP to , Referring organizations were also asked about viable prepare for a field exposure visit and engagement with private-sector training organizations, to ensure that masons, and to conduct the mason capacity assessment for-profit partners were given adequate consideration. and entrepreneur selection process--including customi- Their answers, confirmed by PSD team research, indi- zation of assessment tools based on projected company cated that most such organizations are tightly focused structure, in order to secure customized and appropri- on the urban Phnom Penh marketplace, and offer training ate training for future BCC owners. During the week of programs focused on advanced business skills develop- , November 17 the team was briefed and conducted field ment that would not be appropriate for NBP masons. visits to Svay Rieng and Kampot. 46 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Functional and Process Mapping of BCCs Some high-performing districts (particularly in Kampong to Guide Training Development Cham), where masons did not have adequate interest to permit privatization, were omitted from the first round of During the week of November 24, 2008, the training district selection. team presented their findings and consultants held three workshop sessions to clarify the BCCs' functional Steps in mason Selection Process requirements (using the process map cited above) and to The formal selection process entailed eight steps: map required skills and competencies to each activity of projected Farmer's Friend BCCs. The main result of this 1. Development of application forms by NBP PSD process was a number of additions to the CIEDC mason Application forms were developed to elicit information capacity assessment tool used in mason selection and about the real interest, asset position, personal stabil- training design. ity, family status and obligations, personal and business network, and other factors potentially relevant to perfor- A functional map of BCC processes and their implica- mance as biodigester company owners (see appendix 5: tions for mason assessment, training, and the Opera- Application Form). tions Manual appears in appendix 4 of this report. 2. Announcement meeting customization, Testing, and review All of the province's masons were brought together to The training development process required close collabo- learn about the process and the opportunities it pre- ration between the PSD team and CIEDC and ultimately, sented, and to receive application forms that were to be a six-day training package (in Khmer) was satisfactorily completed in the week following. submitted to the PSD team and reviewed by the PSD team leader and PSD coordinator and final refinements 3. Independent completion of applications by were implemented. interested masons Masons were encouraged to solicit help from their fami- SNV's National Advisor for Rural Enterprise Development, lies and communities in developing a well thought out who joined SNV shortly after the first training, continued application. to work with CIEDC and the NBP to improve CIEDC's capacity to continuously improve the training process and materials. These activities are ongoing at the time TAble 2.12: eVAluATion PoinTS in Self-ASSeSSmenT of this report. AdminiSTered by ciedc Self-Assessment dimension Possible Score Design and Implementation of a Process Initiative 1­25 to Select High-Potential Entrepreneurs Sees and Acts on Opportunities 1­25 from among NBP Biodigester Masons Persistence 1­25 The NBP PSD collaborated with training partner CIEDC Information Seeking 1­25 to develop a selection process for masons. Before begin- ning the process, the team analyzed district-level bio- Concern for High Quality Work 1­25 digester performance to identify the districts with the Commitment to Work Contract 1­25 most promising masons--those who had built large Efficiency Orientation 1­25 numbers of plants. PBPOs were engaged to provide additional input on districts with established promotion Systematic Planning 1­25 networks and those with masons who already were tak- Problem Solving 1­25 ing responsibility for customer identification, promotion, Self­Confidence 1­25 and marketing. Assertiveness 1­25 The mason and district selection processes were indi- Persuasion 1­25 visible, as the selection of a district for privatization Use of Influence Strategies 1­25 depended on district performance, and masons' interest in being part of the first "class" of private BCC owners. Total Possible Score 325 Final Report to the Cambodian National Biodigester Program 47 4. Selection Meeting I (written self-assessment of entrepreneurial readiness) TAble 2.13: SKillS ASSeSSed in orAl inTerVieW This document was prepared by CIEDC to learn about Skill Area in oral interview rating Scale the personal and professional qualities noted below. The scoring formula for the written self-assessment was Marketing and (product) Explanation 0­5 normalized to account for possible distortions by dock- Calculation 0­5 ing points for unrealistically positive ratings in certain key Communication 0­5 question areas. "Trigger" questions were used to identify those respondents whose answers were likely to reflect Loans and Finance (MFI) 0­5 unrealistically positive self-assessment. Time Management 0­5 Management and Supervision 0­5 5. Selection Meeting II (oral interview) CIEDC team members conducted an oral review of the Payment and Record-Keeping 0­5 masons' applications and administered an interview pro- Materials Management 0­5 tocol designed to gauge entrepreneurs' skill level, capac- Business Contracts 0­5 ity, and readiness to assume specific responsibilities Administrative 0­5 related to BCC entrepreneurship. The areas of capacity assessed are presented in table 2.13. In addition, CIEDC Total Possible Score 50 and NBP PSD coordinator provided comments on each interviewed mason's interview performance, demeanor, and attitude, and reported questions and concerns the mobilization (especially marketing and promotion), the applicants raised during interviews. mason's supervision and management skills, and overall supervisor recommendation (rated 1­5). 6. Analysis of Mason Performance in the NBP Program and Related Measures In addition, the selection(s) were reviewed with PBPO The NBP PSD team analyzed each applicant's biodigester coordinators prior to finalization to ensure that any con- construction history, using NBP records and focusing on cerns about mason selections were addressed. No major the factors below. issues were raised in these consultations, except in Kampot, where the PBPO was concerned about exces- In consultation with NBP leadership and SNV advisors, sive competition among masons who would operate in it was decided that measures of construction quality the same district(s). (faults identified in quality control) would not be included in the evaluation process because of variations among 8. Approval of PBPO Directors PBPO supervisors in the frequency of fault reporting. The PSD submitted a final list of its recommendations BCCs were generally licensed to operate in a specific for mason selection to the PBPO directors, solicited district that the NBP determined had sufficient business concerns and questions, and offered to discuss final potential to sustainably ensure NBP masons' participa- tion (rather then returning to, for example, farming). If a district lacked sufficient business potential, a mason could be licensed in an additional district. TAble 2.14: nbP dATA AnAlyzed in mASon SelecTion ProceSS 7. Consultation with NBP Technical Supervisors and PBPO Coordinators nbP data Points The NBP PSD interviewed NBP technical supervisors Date of First Plant Completion Report in each of the three provinces in order to gain more Months Since First Plant Completion Report qualitative information about finalist applicants, par- Total Number of Plants Constructed ticularly where more than one mason in a district was considered. Specific areas of discussion included NBP Plants Constructed in 2008 technical supervisors' experience with and assessment Plants/Month of the quality of the plants constructed by the mason, % Plants in Home District the mason's personal maturity and capacity for business 48 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters selections. No concerns were raised in these meetings, masons Selected in Svay rieng though with CEDAC (Kampot), a productive discussion Five masons representing four districts were selected for arose on competition among mason companies, service training in Svay Rieng. territory, and opportunities for CEDAC to participate in construction materials supply activities. In the district of Romeas Hek, two very similarly qualified masons applied for training. Though their strengths dif- masons Selected for business and entrepreneurship fered somewhat, no objective criteria were found to favor Training in Kampong cham one over the other. In addition, the opinions of CIEDC Final mason selection for Kampong Cham included four interviewers and PBPO coordinators were split on which outstanding masons in three districts (Prey Chor, Che- mason was more qualified. The masons were consulted, ung Prey, and O Raing Ov). Because two outstanding and it was decided that both will be invited to attend. They masons applied for the O Raing Ov designation, both agreed to decide, after completing training, whether to were selected for training. Upon successful completion form a company together, to compete against each other, of training and business registration, each was authorized or if one should work for the other. to work in O Raing Ov and one of the adjacent districts (either Tboung Khmum or Ponhea Kraek). One of the selected masons, Ngoun Sam Ann, was con- sidered a relatively risky choice. His strengths included In addition, one mason, Pav Paoheng of Bathay district, marketing ability (he finds 70 percent of his own clients) applied and scored very well in the process, but had not and a history of satisfied customers with well-function- completed the required minimum number of plants to ing plants. He was also known to effectively manage his secure designation. The PSD team's recommendation (one) helper. Risks, however, included plants that were was to allow Mr. Paoheng to participate in the first round of below average appearance (despite functioning well), of entrepreneurship training, and to agree that he be and possible personal issues that could interfere with his allowed to launch a company after having completed an work. While these are risk factors, personal issues are NBP-designated minimum number of plants (20) at a sat- entirely subjective and impossible to verify. Therefore, isfactory quality level. As of May 2009, Mr. Paoheng is a the PSD team suggested that he be trained and given a registered BCC operating in Bathay district. chance to demonstrate his level of commitment. masons Selected in Kampot Additional Province mason Selection: Takeo In Kampot, six masons were selected to form five com- Mason selection for a fourth province, Takeo, added to panies serving three districts. Each district will be served the workplan as an extended activity, began following by two companies under this arrangement. Two masons the completion of initial training and business launch of who are brothers--Em Vin and Em Soteha--will form masons in the initial three provinces. This process was a company to serve two districts in which each has a finalized in July, 2009. Mason selection was performed significant profile. All masons were in agreement with by NBP and SNV staff with minimal supervision and input this arrangement in a meeting with the NBP PSD and the by the PSD team leader. Kampot CEDAC coordinator. TAble 2.15: mASonS SelecTed in KAmPong chAm mason name district no. Plants built Self-Assessment Score Skills Score nbP Supervisor rating Soam Thy Prey Chor 81 81% 68% Excellent (5) By Pheap Cheung Prey 57 81% 70% Excellent (5) Korng Sokhon O Raing Ov 52 69% 66% Very Good (4.5) Yim Sopourn O Raing Ov 76 70% 60% Very Good (4.5) Pav Paoheng Bathay 9 82% 68% Unknown Final Report to the Cambodian National Biodigester Program 49 TAble 2.16: mASonS SelecTed in KAmPoT mason name district no. Plants built Self-Assessment Score Skills Score nbP Supervisor rating Toun Sambo Kampong Trach 12 84% 78% Very Good Huot Sengly Banthay Meas 45 84% 60% Very Good Hin Banthay Meas 25 85% 75% Unknown Chankhemrith Nouch Sophon Dang Tong 18 83% 73% Unknown Em Vin Dang Tong, 17 85% 74% Very Good Kampong Trach Em Sothea Dang Tong, 17 87% 58% Very Good Kampong Trach commentary and obstacles encountered during after an educational outreach meeting with PBPO super- mason Selection Process visors and the reassertion of support for the PSD process During the week of December 15, 2009, the National by the PBPO director. PSD coordinator accompanied the training partner team (CIEDC) to Svay Rieng, Kampong Cham, and Kampot In Kampong Cham, low attendance was attributable to provinces to accept applications, administer a written test a wider range of reasons. Masons lacked confidence, on entrepreneurial readiness, and conduct oral interviews felt that outreach had been inadequate, and believed with applicant masons. In Kampot province, 10 candidates they lacked the financial resources to start businesses presented themselves for assessment. Attendance in the of their own. The PSD coordinator found no evidence of other two provinces, Svay Rieng and Kampong Cham, systematic or deliberate efforts to discourage masons was inexplicably low, with only one mason presenting from applying for the process. Followup outreach was himself in Svay Rieng and only two in Kampong Cham, performed in January, 2009 by the PSD coordinator, who leading to an investigation by the PSD team. personally visited the homes and worksites of outstand- ing Kampong Cham masons to encourage them to apply In Svay Rieng, the team discovered that NBP provincial for BCC leader designation. officials (supervisors) had actively and systematically dis- couraged several qualified masons from attending the Delivery of Intensive Business Skills Training previous week's announcement meeting, causing them Program for Selected Masons to also miss the application process and the capacity assessment. This situation was immediately reported to Kampot Province mason Training, march 9­14, 2009, the NBP and remedial measures taken in collaboration held in Kep municipality with the province's director. Followup in Svay Rieng took The NBP PSD and training partner CIEDC conducted a place in January, 2009. The process was re-implemented six-day training for the six Kampot masons selected as TAble 2.17: mASonS SelecTed in SVAy rieng mason name district no. Plants built Self-Assessment Score Skills Score nbP Supervisor rating Ngoun Sam Ann Svay Teab 72 74% 62% Good 3 Prac Lei Rumdoul 52 51% 62% Good + 3.5 Am Deun Romeas Hek 40 75% 65% Very Good 4 Mov Bork Romeas Hek 31 67% 71% Very Good 4 Lor Sam Eun Svay Chrum 43 75% 72% Very Good 4 50 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters business owners. The training was held in Kep, Cam- Training Strategy bodia March 9­14. All but one participant (whose father In order to achieve the cited objectives, training tech- passed away on day five) completed the training course niques focused on the fundamentals of entrepreneur- to the trainers' satisfaction. The training team reported ship, leadership, marketing and sales, hiring staff, time that the masons maintained a consistently high level of management, accounting, finance, and production top- engagement with technical, financial, and administrative ics. Each topic was also designed utilizing resources from themes throughout the training process. the Operations Manual. Trainees ware required to work in groups so that they could share knowledge and experi- Training Agenda for Kampot Province BCC Owners (Masons) ences, and demonstrate their skills and understanding 1. Participant Registration by working on a small business case study. Trainees suc- 2. Welcome Speech cessfully achieved objectives, learning how to set up a 3. Case study: "Biography of Mr. Chin" business, develop their market, and manage their time 4. Success Factors in Establishment of the and workforce to service a specific target customer Biodigester Construction Company group and market. 5. "Entrepreneur as Leader" 6. Biodigester Construction Plant Sales Contract Trainees' Assessment of Kampot Mason Training 7 Implementation of Sales and Promotion . At the end of the training course, a training assessment 8. Customer Visits (Customer Relations) was conducted by trainers in order to assess trainees' 9. Gathering Marketing Information level of satisfaction and understanding. Trainees were 10. Forms for Marketing Planning generally pleased and satisfied with the training course; 11. Goods Customer Service the trainers' tactics and efforts, and especially the train- 12. Cost of Goods Sold and Selling Price ing topics, exceeded trainees' expectations. However, 13. Assistance from Microfinance Institution when asked about timing and level of learning, trainees on Loan Application responded that the program was short, given the num- 14. Time Management ber of topics to cover. All trainees proposed that there be 15. Staff Recruitment and Hiring additional training. 16. Motivation 17 Planning . Feedback by Trainers on Kampot Mason Training 18. Production Planning Trainers believed that trainees still had limited commu- 19. Accounting System nication experience and average levels of education. 20. Financial Management (PC Folder) However, trainees showed very strong commitment 21. Inventory Control and interest in learning the training topics. They shared 22. Training Assessment experiences and ideas in coping with business problems. 23. Closing Some trainees had creative business ideas and others sought further illustration on topics such as business management, especially marketing and accounting. TAble 2.18: KAmPoT ProVince mASonS TrAined Self- no. Plants Assessment mason name district built Score Skills Score nbP Supervisor rating Toun Sambo Kampong Trach 12 84% 78% Very Good Huot Sengly Banthay Meas 45 84% 60% Very Good Hin Chankhemrith Banthay Meas 25 85% 75% Unknown Nouch Sophon Dang Tong 18 83% 73% Unknown Em Vin Dang Tong, Kampong Trach 17 85% 74% Very Good Em Sothea Dang Tong, Kampong Trach 17 87% 58% Very Good Final Report to the Cambodian National Biodigester Program 51 TAble 2.19: KAmPong chAm ProVince mASonS TrAined mason name district no. Plants built Self-Assessment Score Skills Score nbP Supervisor rating Ngoun Sam Ann Svay Teab 72 74% 62% Good 3 Prac Lei Rumdoul 52 51% 62% Good + 3.5 Am Deun Romeas Hek 40 75% 65% Very Good 4 Mov Bork Romeas Hek 31 67% 71% Very Good 4 Lor Sam Eun Svay Chrum 43 75% 72% Very Good 4 Recommendations Based on Kampot Training Training Strategy It was recommended that further trainings be custom- In order to achieve the course objectives, training tech- ized and shortened to better meet BCCs' needs, taking niques focused on the fundamentals of entrepreneur- into account training time limitations and the trainee's ship, leadership, marketing and sales, hiring staff, time ability to study on their own for each topic. It was also management, accounting, finance, and production. Each recommended that there be more training in business section was designed to utilize the resources from the planning, accounting systems, and inventory manage- Operations Manual. Trainees were required to work in ment and control. groups so that they could share knowledge and experi- ences and demonstrate their skills and understanding by combined Kampong cham­Svay rieng mason Training working on a small business case study. The training course "Entrepreneurship for Biodigester Construction Companies" was conducted from March As a result, trainees successfully achieved training objec- 30 to April 4, 2009 in Phnom Pros Hotel, Kampong Cham tives, learning how to set up a business, develop their province, under the PSD component of the NBP The 10 . market, and manage their time and workforce to service trainees were the BCC owners in Kampong Cham and a specific target customer group and market. Svay Rieng provinces. Trainee's Assessment of Combined Kampong Cham, The training was led by CIEDC, an NBP partner whose Svay Rieng Training main objective is to provide entrepreneurship skills, men- At the end of the training course, trainers assessed toring and coaching to rural businesses. trainees' level of satisfaction and understanding. Train- ees were also generally pleased and satisfied with the Training Materials training course and the trainers' tactics and efforts. How- The training material was improved by CIEDC with input ever, the majority of the trainees replied "medium" (less from the NBP PSD team, following an evaluation of the than good) to a question assessing the amount of learn- Kampot BCC owners' training experience. ing they gained ("What did you get from this training?") TAble 2.20: SVAy rieng ProVince mASonS TrAined mason name district no. Plants built Self-Assessment Score Skills Score nbP Supervisor rating Soam Thy Prey Chor 81 81% 68% Excellent (5) By Pheap Cheung Prey 57 81% 70% Excellent (5) Korng Sokhon O Raing Ov 52 69% 66% Very Good (4.5) Yim Sopourn O Raing Ov 76 70% 60% Very Good (4.5) Pav Paoheng Bathay 9 82% 68% Unknown 52 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters The average amount of learning among the ten trainees of agriculture (in which two of the PBPOs were located). was 72 percent; three of them learned only 60 percent The registration process involved only minimal require- from the course, that is, they missed 40 percent of the ments for unexpected administrative payments, and only content. Nevertheless, trainees requested more of such in one province (Kampot). While the process required training through the survey. some investigation into local rules for business registra- tion, its relative simplicity suggested that the model for Feedback by Trainers microenterprise and microfranchise development was Trainers believed that trainees still had limited communi- viable, expandable, replicable, and efficient--provided cation experience and an average level of education. Train- PBPOs and Provincial Departments of Agriculture main- ees showed very strong commitment to and interest in tain an ownership stake in the process. learning. They shared different experiences and ideas in coping with business problems. Some trainees had cre- registration Strategy ative business ideas and others sought further instruction The NBP's business registration strategy was established in topics such as accounting and inventory control. . by the previous PSD consultant in 2007 The consultant investigated similar construction-related programs for Recommendations Based on Combined Training rural and small-town microenterprise development, most The assessments and the trainers' feedback indicate that prominently the SEILA program (now NCDD). In this limited training time, with many topics to learn, probably system, small construction companies are required to most affected trainee's learning and catching up. The register at the district or provincial level only, not at the complexity of the accounting and inventory control pro- national level. They are required to register only after they cesses in the Operations Manual was also an obstacle have been awarded a live construction contract as the to trainees' comprehension of the topics. These conclu- lowest bidder. Registration constitutes payment of the sions were addressed in recommendations delivered in license tax (Patong) of approximately US$25. early May 2009 on preparing and delivering further train- ing on accounting and inventory control. Further practical Additional requirements exercises and process guidance were presented along The PSD team's research found that additional require- with other business operations and marketing topics. ments would be needed for BCC owners to register: Providing Assistance for Official Business · Authorization from the Provincial Department of Agricul- Registration to Permit Companies to Enter ture. A letter indicating that the biodigester construc- tion business is officially authorized to exist under Legal Contracts with Customers the authority of the department. This appears to be Official registration is required to permit companies to a custom according to continental legal systems enter into binding two-party contracts with customers in which a specific company type must be defined (farmers purchasing biodigesters). It also permits them through legislation or directive(s) by a government to establish BCC business premises according to local agency before it can be registered. laws and regulation and to display commercial signs indi- · Registration with the District Governor. For BCCs to cating that they provide NBP-authorized services, and to establish an official business premise and display enter into legal employment agreements with employ- commercial signs, the permission or certification of ees and financial institutions. the district governor must be acquired. The fee for this registration did not appear to be established by In March and April, 2009, the NBP PSD team and training statute, but was effectively approximately US$20 partner CIEDC successfully assisted in the official, dis- per incident of registration. Companies may operate trict-level registration of a total of 15 private BCCs in the outside of their home district (in which they are reg- provinces of Kampong Cham, Kampot, and Svay Rieng. istered) but may not establish commercial premises This surpassed the PSD team's main project indicator, nor display commercial signs. Only one BCC was in which prescribed registration of 10­12 BCCs during the this category in the initial registration period. project. · Patong not required. Because the license tax (Patong) is collected annually, based on estimated previous The process received consistently strong support from year's revenue, BCCs were not required to pay it the NBP PBPO directors, and the provincial departments , prior to initiating operations. Final Report to the Cambodian National Biodigester Program 53 narrative of registration Process The PSD team also coordinated with the PBPO in inviting Complying with these requirements required additional key participants and development partners, such as pro- engagement with the NBP and PBPOs. In Kampong moters from each province and staff from PRASAC MFI Cham and Svay Rieng, PBPO directors assumed respon- (the key local finance partner), and worked to ensure they sibility for official communications with the provincial attended. The participation of these numerous develop- department of agriculture, and for preparing a letter to ment partners enhanced the BCCs' credibility, increased each district governor on behalf of the BCCs, explaining awareness among all participants of their status in the the program and requesting assistance or permission or privatized system, and earned recognition by key sector both to register. development partners. In Kampot province, CEDAC, a large Cambodian NGO, The BCC agreement signing ceremony for Kampong serves as the NBP PBPO. In this case, the necessary Cham was held on May 5, 2009 at the Kampong Cham , relationships among NBP the PBPO, and the provincial provincial department of agriculture. The BCC agreement department of agriculture were not in place to facilitate signing ceremony in Svay Rieng was conducted on May the registration process, so the PSD team and training 6, 2009 at the provincial department of agriculture's meet- partner CIEDC were required to facilitate these relation- ing hall. The PSD coordinator also assisted and advised ships in order to register the five Kampot companies. This BCC representatives in drafting appropriate speeches to involved securing a letter from NBP and the MAFF-Office present in these events. of Animal Health and Production introducing the NBP program and explaining the purpose of the BCC registra- Significant media coverage was arranged for these two tion process. The process had the unintended benefit of ceremonies. The PSD team arranged the event schedule providing the Kampot PDA with an introduction to the to accommodate local mass media (newspaper and local NBP and the BCCs, revealing the Kampot PDA's lack of television). In Kampong Cham, newspaper Rasmey Kam- knowledge of (or exposure to) the program and lack of puchea was invited to join and was given a press release enthusiasm for working with BCCs to promote dissemi- prepared by the NBP and the PSD team. Koh Santepheal, nation of biodigesters in Kampot province. another newspaper, was invited to the signing ceremony at Svay Rieng and provided with similar materials. Addi- It is expected that as a result, Kampot BCCs will benefit tionally, Bayon Television and Radio covered the event, from a new set of marketing channels in the province, capturing the signing ceremony event for broadcast. resulting from the required formalities of the process. In Kampot, the PSD team also provided materials and Analysis of business registration Process and Franchise Agreements to BCC owners at CEDAC, and Performance Time organized a signing with BCCs and the Kampot PBPO On average, the time from application to approval by the , on May 17 2009 at the CEDAC office at Chhouk district. district governor for business registration was 1.4 days A similar public ceremony was conducted on June 5 in in Kampot, 4 days in Kampong Cham, and 20.5 days in Kampot, though companies were officially launched in Svay Rieng. May. This event also received local newspaper coverage. Launch of 15 Companies in 3 Provinces Post-Training Needs Assessment and Signing of three-party Franchise Agreements by the Initiation of Business Coaching Program , NBP BCC, and PBPOs marked the launch of 15 BCCs in In the four weeks after completion of training, and dur- 3 provinces. This took place in May 2009, with the PSD ing the process of business registration, the NBP PSD team organizing a formal business launch and signing Coordinator conducted a post-training needs assess- ceremony to launch BCC operations in Kampong Cham ment to evaluate new BCC owners' most urgent fol- and Svay Rieng provinces. Working with NBP leadership, lowup training needs. This had been planned as part of the PSD team converted these events into public rela- the training program, but time constraints and the very tions events to promote local awareness of the privatized full training schedule made combining the training and system, and of the new BCCs and their roles in the future needs assessment impractical. In the end, however, the of the sector. PSD team believed that they better understood the BCC owners' needs because of the delayed assessment. 54 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 2.21: PoST-TrAining needS of KAmPoT bcc oWnerS mason name district business Training issues Technical Training needs Toun Sambo Kampong Trach Appliance credit payment and accounting Overall quality aspect is clear, but process system, especially money paid to PBPO of PSD Quality Control Checklist not clear Huot Sengly Banthay Meas Develop more methodology and marketing Overall quality aspect is clear, but process skills to identify more potential clients of PSD Quality Control Checklist not clear Hin Chankhemrith Banthay Meas Not clear on accounting and finance Overall quality aspect is clear, but process system of PSD Quality Control Checklist not clear Nouch Sophon Dang Tong Not clear on accounting and finance Overall quality aspect is clear, but process system of PSD Quality Control Checklist not clear Em Vin Dang Tong, Not clear on sale contract and finance and Quality control process: doesn't know Kampong Trach accounting system how to start, end, and check Em Sothea Dang Tong, Not clear on sale contract and finance and Quality control process: doesn't know Kampong Trach accounting system how to start, end, and check Summary of Post-Training needs identified transition to a privately operated system had been · The "Appliance Credit and Simple Accounting Sys- delayed until the beginning of May 2009 to allow a tem" session was considered the most difficult by smooth transition in PSD districts. all BCC owners, and was the major concern among · In all provinces, BCC owners have some concerns the new entrepreneurs. All BCC owners expressed about promoter networks and other certified masons enthusiasm about changing it to a new system- who might not be willing to work for the BCCs in atic credit management system. All BCC owners the immediate term. These issues will need to be requested more training in this session to enhance addressed by the NBP through coordination with their knowledge of accounting and inventory or stock PBPO leadership and supervisors. control. · BCC owners requested additional training in writing Kampot bcc owner Post-Training needs and finalizing the sale contract in order to increase Business Training Issues the number of plants and to meet their sales pro- Kampot masons required the most followup on business jection. The sale contract requires structured calcu- issues related to accounting and finance, inventory con- lations and is the first contractual agreement that trol, and appliance credit. Only one BCC owner identi- many BCC owners have ever entered into. As a fied foundational marketing skills as a concern, though all result, ongoing mentoring to increase their comfort requested assistance with effective market planning. level with these contracts is indicated. · BCC owners indicated that the training provided on Technical Training Needs market surveys and marketing strategy by CIEDC Only the QC process and the use of the program-designed trainers was excellent, but nearly all indicated that they Quality Control Checklist were identified by Kampot BCC required more assistance before they could design owners as technical challenges. In fact, this is a challenge and implement their own marketing programs. arising from the transfer of responsibility for initial quality · BCC owners also raised concerns related to techni- control from PBPO supervisors to BCC owners and their cal aspects of construction overall and some techni- mason teams. It requires practice and support from the cal and quality control aspects designed by the NBP NBP PSD and technical management. PSD team to ensure strong internal quality control. All owners indicated that they had limited capacity Kampong cham bcc owner Post-Training needs and understanding of the QC process generally, and Business Training Issues in the Project Control Folder's QC section specifically. Kampong Cham BCC owners also required the most They also indicated that they had not had opportuni- followup on business issues related to accounting and ties to practice this process since the training, as the finance, inventory control, and appliance credit, as well Final Report to the Cambodian National Biodigester Program 55 TAble 2.22: PoST-TrAining needS of KAmPong chAm bcc oWnerS mason name district business Training issues Technical Training needs Soam Thy Prey Chor N · eedstrainingonNBPappliancecreditand Clear on PSD Quality Control Checklist finance and accounting system D · ifficultyworkingwithForm02-P By Pheap Cheung Prey Does not understand accounts receivable and No problem on general quality control, payable with NBP and overall finance system but still unclear on PCF Korng Sokhon O Raing Ov S · tillworriesbutunderstandsprinciplesof No problem on general quality control, finance and accounting but still unclear on PCF N · eedstrainingonsalecontractandForm02-P Yim Sopourn O Raing Ov N · eedstocontinuetrainingoncashbook, Still some problem with quality control accounts receivable and payable PC and keeping information in the back D · oesn'tknowhowtocheckandfill part of PCF Pav Paoheng Bathay D · oesnotunderstandsimpleaccount, Technical part is fine, but requests finance and stock management to continue training on PCF D · evelopnewtrainingmethods;trainingnot and overall technical aspect retained after training D · oesnotunderstandsalecontract Em Sothea Dang Tong, Not clear on sale contract and finance and Quality control process: doesn't know Kampong Trach accounting system how to start, end, and check as the sales contract and Form 02-P (customer informa- and Kampong Cham masons were trained together, it tion). BCC owners also required assistance with the Proj- is unclear why Svay Rieng masons were, on the whole, ect Control Folder. Marketing and sales skills were not more confident with this process. raised as an important concern. Technical Training Needs Implementation of Mentoring and Only the quality control process and the use of a program- Training Activities designed Quality Control Checklist and Project Control Mentoring and business coaching activities were con- Folder were identified by Kampong Cham BCC owners ducted by CIEDC in late May and late June of 2009, as technical challenges that required further training. coordinated by the PSD coordinator and assisted by the SNV National Advisor for Rural Private Enterprise Svay rieng bcc owners' Post-Training needs Development. Business Training Issues Svay Rieng BCC owners uniformly requested assistance on business issues related to accounting and finance, In April and May, to prepare for the May 2009 BCC men- inventory control, and appliance credit. This group had toring sessions, the PSD team managed the training the lowest overall education levels, and may have ongo- partner's activities around a set of themes that emerged ing difficulties with basic accounting and finance, requir- from the post-training needs assessment. ing significant followup. May mentoring sessions were held as group sessions Technical Training Needs because of the similar identified needs of new BCC own- Svay Rieng BCC owners identified fewer technical chal- ers, and focused on extended training in the use of busi- lenges. The QC process, and the use of the program- ness, accounting, and inventory forms, and helping BCCs designed Quality Control Checklist and Project Control prepare 2009 sales projections. Significant revisions and Folder were identified by some owners as technical chal- simplifications of the business forms were undertaken lenges requiring further training and support, but most in April and May to ensure that the final distribution attributed this to a lack of practice. Because Svay Rieng of these forms in the May mentoring sessions would 56 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters TAble 2.23: PoST-TrAining needS of SVAy rieng bcc oWnerS mason name district business Training issues Technical Training needs Ngoun Sam Ann Svay Teab Does not understand simple account and Needs to practice with PCF quality control inventory management--requests help folder and practice with Form 02-P and sale contract Prac Lei Rumdoul Difficulty with simple account and PCF quality control folder is clear but feels inventory management complicated Am Deun Romeas Hek Understands some but not all--can work No problem with technical part with but worries about the ledger, finance and inventory stock Mov Bork Romeas Hek Needs some help with simple account and No problem with technical part inventory management and sale contract Lor Sam Eun Svay Chrum Doesn't understand simple account and Still has problems with PCF quality control inventory management folder because never practices Em Sothea Dang Tong, Not clear on sale contract and finance and Quality control process: doesn't know Kampong Trach accounting system how to start, end, and check provide BCCs with the capability to effectively manage owners will receive one-to-one mentoring by a CIEDC their basic financial and commercial operations. training team member, after which the CIEDC training team will meet with the SNV PSD advisor and NBP per- The June 2009 mentoring/coaching sessions were held sonnel to discuss common and shared needs among on an individual basis with each BCC owner in each BCC owners. The subsequent month's mentoring ses- privatized district. These sessions focused on review sion will be conducted centrally (in the provincial capital) of the BCCs' status, to ensure that they had all neces- and will focus on a small number of training topics (one sary resources and preparation required for business or two issues) that are common needs of BCC owners. operation; on further coaching in finance and inventory This should also create a fertile environment for peer-to- control, calculation of accounts receivable and payable, peer learning among BCC owners, which the PSD team and general use of business forms; on establishment believes will be an essential basis for cooperation among of individual company action plans to facilitate meeting BCCs in future business associations or federations. sales projections submitted in May 2009; and on direct coaching, with trainers answering BCC owners' opera- This structure will also facilitate better coordination tional and business questions. These individual sessions among technical training enrichment activities conducted also permitted a confidential review by CIEDC trainers of by NBP technical supervisors, for example, in appliance progress to date in basic business functions. estimating, product improvement, and providing a cen- tralized distribution opportunity for Operations Manual Going forward, to achieve efficiencies in costs and coach- updates and information about province-level changes in ing delivery, mentoring sessions will alternate between PBPO operations. group and individual sessions. In one month, all BCC Final Report to the Cambodian National Biodigester Program 57 Appendix 1: Detailed Project Workplan, Completion Dates no. Activity date completed 1 Project Planning and Review 1.1 Review project goals and parameters 1.2 Review existing reports and studies of NBP 1.3 Review projected demand for biodigesters and future sales by province and analyze geographic structure of biogas markets and construction service provision 1.4 Review existing business delivery model--institutional arrangements with current NBP partners and resource/commitment assessment, technical and safety regulations, pricing mechnism 1.5 Review NBP assumptions of characteristics of successful contractor businesses 1.6 Gender issues review and planning in collaboration with World Bank Gender Mainstreaming Project MILESTONE 1: Recommendation on adjustment of business delivery model for Report to SNV, biodigesters in Cambodia October 8, 2008 2 PBPO Coordination 2.1 Develop presentation for PBPO directors on privatization plans · OutlinePSDprocess · Outlinemason-contractorselection · Outlineinformationneeds 2.2 Present to PBPO directors' meeting · PresentPSDworkplan · Gatherinputonkeymasonperformanceandreadinessissues · Gatherinputondevelopmentofcompetitiveprocessformasonselection · Identifypotentialnon-masoncontractoroptionsforeachprovince · InterviewPBPOdirectorsandselectthreeprovincesforprivatization · SchedulecoordinationmeetingwithPBPOTechnicalStaff MILESTONE 2: Select 3 provinces for privatization based on PBPO revealed Report to SNV, interest in meeting October 8, 2009 2.3 Coordination Meeting with PBPO technical staff/coordinators in selected provinces · PresentPSDworkplan · Gatherinputonkeymasonperformanceandreadinessissues · Seekinputondevelopmentofacompetitiveprocessofcontractorselection · Identifypotentialnon-masoncontractoroptionsforeachprovince Not required · Planandschedulemasonmeetings 3 Partner Identification and Coordination (funded by SNV) 3.1 · Identifypotentialtrainingpartners · ESOs(entrepreneursupportorganizations) · Creditandfinancepartners · Othernationalandregionaltrainingorganizations 3.2 Assess capacity and resources of potential training partners 3.3 Develop partnership parameters and work plans 3.4 MILESTONE 3: Issue initial (SNV) contract(s) to identified partners to provide Contract issued needs assessment, including expenses and staff time October 30, 2008 (continued) 58 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 1: Detailed Project Workplan, Completion Dates (Continued) no. Activity date completed 4 Mason Selection 4.1 Develop screening criteria and needs assessment in collaboration with training partners · Identifycriteriaand/orcharacteristicsofidealenterprises · Finalizecompetitiveselectionprocess(tasks) D · evelopobjectivesuccesscriteriainconsultationwithnationaltechnical manager of NBP program 4.2 Meeting Preparation · Developmeetingagenda,locationsandsoonformasonmeetings · CoordinationwithpartnersandPBPOs 4.3 Mason Meetings (2 per province) · AnnounceandexplainPSDplanstoNBPmasons · Partnerpresentationsonwhatittakestorunacompany · Solicitindicationsofinterestforbecomingcontractors(on-site) · Interviews,pre-qualification,andneedsassessmentofinterestedmasons I · ssuecompetitiveassignment(s)tomasonsexpressinginterestinbecoming contractors 4.4 Evaluation of interested masons' service records with PBPOs 4.5 Review of competitive assignments for interested masons 4.6 Review of selected masons based on objective potential success criteria 4.7 Verification and follow-up interviews, possibly in collaboration with PBPOs 4.8 Mason selection or re-direction of process based on needs assessment and verification 4.9 Inform selected masons and PBPOs of selection 4.10 MILESTONE 4: Submit report to NBP on selection of 3­6 masons per province for Selection report submitted development as contractor-entrepreneurs March 2, 2009 5 Pilot Mason Training 5.1 Identify and select Cambodian business mentor for post-training support of masons (either individual or local NGO) New Develop Mason Business Operations Manual including business-related and tech- Completed February, 2009 nical materials to support company operation(s) for use in training activities Revisions ongoing New Develop and compile necessary mason business forms for training and distribution Completed February, 2009 to eligible masons Revisions ongoing 5.2 Development and review of training plans in collaboration with training partners · Reviewproposals/TORfromtrainingpartners · IssuecontractsfordevelopmentoftrainingforMasons New · Supervise Partner development of appropriate training materials · Reviewcompletedtrainingprograms 5.3 Schedule and coordinate pilot training(s) 5.4 Conduct pilot training(s): Organize and supervise the delivery of approximately six days of training for selected masons to be delivered as a group, in approximately three skill areas identified as most critical needs (continued) Final Report to the Cambodian National Biodigester Program 59 Appendix 1: Detailed Project Workplan, Completion Dates (Continued) no. Activity date completed 5.5 Conduct post-training training and support needs assessment in collaboration with training partners. Assessment will include: · Financialcapabilitiesofselectedmasons · Managementcapabilitiesofselectedmasons · Entrepreneurialandpersonaldevelopmentofselectedmasons 5.6 Establish mentoring and support plan for subsequent phases 5.7 MILESTONE 5: Consultant will submit a report detailing training provided and Training completed April, 2009. the results of a post-training needs assessment (PTNA) PTNA May 2009. Milestone report submitted June 3 6 Company formation and registration, ongoing mentoring support 6.1 Address identified needs of potential masons and partners A · ssistmasonswithdistrict-levelcompanyregistration A · ssistmason-entrepreneurswithacquisitionofappropriatefinancialproducts from MFIs or other (appropriate) partners A · ssistmason-entrepreneurswithestablishingbasicprotocolsforbusiness operation A · ssistmason-entrepreneurswithsalespartnershipdevelopment 6.2 Monthly meetings with mentor in provinces 6.3 Provide ongoing business mentoring support 6.4 MILESTONE 6: Consultant will submit a report on company formation and Business Registration registration and supporting documentation of business registration concluded April 2009. Milestone Report Submitted June 5, 2009 7 Ongoing PBPO coordination and optimization of contractor support system 7.1 Assess potential contribution to NBP and viability of regional contractor networks or federations 7.2 Assess potential contribution to NBP and viability of ongoing entrepreneurial mentoring options 7.3 Assess potential contribution to NBP and viability of commercial sales force management tools and sales force support 7.4 Assess potential contribution to NBP and viability of additional required credit and finance tools 7.5 Assess potential contribution to NBP and viability of partnerships with existing successful small contractors in target provinces 8 Finalization and integration into NBP Operating Plan 8.1 Draft contractor support program 8.2 Review of contractor support program guidelines with NBP 8.3 MILESTONE 7: Submission of final report outlining recommendations on Attached Final Report satisfies adjustment of business delivery model and contractor support Milestone 7 program for incorporation into NBP operating plan 60 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 2: Project M&E Framework monitoring and outcomes Performance indicators evaluation Assumptions and risks In 3 provinces, 10­12 economically N · umberofoperationalbusinesses NBP viable, well-managed biodigester · Numberofregisteredbusinesses monitoring companies are established S · alestargetsmetbyprivate businesses M · aintenanceofbusinessregistration and records in line with NBP requirements Competitive markets for biodigester S · alesgrowthinlinewithNBP NBP Anti-competitive behavior provision in districts/provinces projections in privatized areas. monitoring (price fixing, collusion) among in which contractor services are N · umberofbiodigesterfirmsthatare contractors privatized going concerns in each privatized district/province Contractor bias toward larger installations could leave less profitable segments of biodigester market underserved Expanded partner sales network I · ncreasedsalescreditawardstonon- NBP PBPOs may resist sharing PBPO actors. monitoring sales commissions with other I · ncreasedsalescreditawardsto partners, impeding partner private firms sales network development Mason-contractor businesses N · umberofmasonsubcontractsper NBP Masons' disposition toward enter into contractor or employee month/year monitoring employee status is unknown relationships with masons who N · umberofmasonfirmswith are not selected as contractors for employees Seasonality of biodigester selected districts N · umberofmason-employeesper sales may limit the stability of month/year (FTEs) employee relationships Mason-contractor businesses gain C · ontractorutilizationofprivatesector NBP Business services may not access to the financial, managerial, and NGO services monitoring be available locally, requiring and technical resources to establish ongoing PBPO/NBP role in viable businesses facilitating access to services Mason-contractor businesses C · ustomercomplaintslevelmaintained NBP Inconsistent quality maintain or improve quality of or reduced in privatized provinces monitoring management by PBPO staff biodigester installations (continued) Final Report to the Cambodian National Biodigester Program 61 Appendix 2: Project M&E Framework (Continued) outputs Performance indicators monitoring and evaluation Assumptions and risks Selection of provinces and PBPO participation in Memorandum of terms for terms of cooperation with meetings ongoing collaboration between PBPOs established NBP and PBPO in each pilot Selected provinces province Identification and contracting Partners selection based Consultant will submit a report Ability of partners to of training partners for needs on objective criteria on contractual arrangements customize training to mason assessment and mason with selected partner(s) needs must be assessed selection Cost of engagement within budget Selection of 3­6 masons M · arketcoverageof Report identifying the Moderate to high risk that per pilot province for further selected masons 3­4 masons selected for masons are unsuitable development S · electedmasons development into biodigester contractors (technical scored based on contractor firms in selected skill, financial resources, objective criteria provinces, and their immediate management skills) or T · ransparencyof training needs, or an alternative unwilling to engage NBP competition for course of action for development contractor status of private biogas contractor firms Low to moderate risk that in selected provinces non-selected masons become discouraged by process and withdraw from NBP program Masons complete appropriate N · umberofmasons Report detailing training provided Moderate risk that 10% or managerial, entrepreneurial, completing training and the results of a post-training more of selected masons will and other training % · ofmasonsselected needs assessment conducted withdraw from training prior to who complete training in collaboration with national completion training providers/partners 10­12 (total) biodigester Company establishment Report on company formation High risk that business contractors established as data and records and registration and supporting registration process will be businesses in target provinces documentation impeded by administrative and their registration as obstacles (outlined below) contractors with district authorities Monthly mentoring meetings Frequency of mentor Verified log contact record of and ongoing telephone support contact with mason- mason-mentor meetings contractors Submission of contact log and % of issues successfully problem reports by national resolved business mentor Finalize NBP protocols for Adoption of consultant- Submission of draft and final ongoing support of sector developed protocols support protocols to NBP and privatization NBP approval (continued) 62 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 2: Project M&E Framework (Continued) Activities inputs monitoring and evaluation Assumptions and risks Selection of 3 NBP provinces World Bank funding of Activities will be verified for pilot privatization of $65,000 through regular project biodigester services and monitoring by NBP establishment of PBPO role in supporting the process Identification and contracting SNV Funding of $18,000 of training partners for needs to Cambodian partners assessment and mason for 2008 training selection activities Mason selection process International consultant Assumes the level of literacy, financial, resulting in Identification of input--55 days technical and managerial capacity of 9­18 masons for development current NBP masons is sufficient to as contractors permit successful training Organization and completion National coordinator of appropriate managerial, input: 150 days entrepreneurial, and other training deemed necessary by NBP for selected masons, delivered by qualified national training providers/partners Support and oversee National business F · ormalrecognitionofconstruction establishment and district- mentor input: 55 days contractors is controlled by the level registration with Ministry of Land Management Urban district authorities of Planning and Construction (MLMUPC) 10­12 biodigester contractor and its provincial departments businesses in selected T · herequirementforformal provinces registration/certification of enterprises may contribute toward solicitation of substantial informal facilitation' fees leading to reluctance to register S · imilarissuesexistwithestablishing commercial enterprise and obtaining the relevant certificates from different departments P · BPOparticipationandinvolvement necessary to ensure successful process Mentoring and ongoing A · ssumesidentificationofsuitable support of contractor- national business mentor candidate entrepreneurs in early stage with requisite skills and experience of business operation A · numberofbusiness/service networks have previously been established in country--their effectiveness is unclear Develop SNV plan for M · icrofranchisesystemservesas contractor business support contractor business support system and development in additional provinces Final Report to the Cambodian National Biodigester Program 63 Appendix 3: Three-Party Company Franchise Agreement Private biodigester construction company Agreement bcc, nbP, PbPo Agreement for Authorization of biodigester construction company for biodigester construction Services: Name of Company Owner: ________________________________________________________________________________________ National ID Number of Company Owner: __________________________________________________________________________ Telephone Number: _______________________________________________________________________________________________ Business Premises (Office) Address: ______________________________________________________________________________ District: ___________________________________________________________________________________________________________ Province: _________________________________________________________________________________________________________ Company is Authorized to Provide Biodigester Construction Services only in the following District(s): ________________ 1. Biodigester Construction Company Leader Agrees to: company registration, administration, and operation: 1. Register his/her company with appropriate provincial/district authority in order to become eligible to enter into contracts with customers, and maintain business registration and payment of legally required taxes while operat- ing as a Private Biodigester Construction Company recognized by NBP . 2. Open and maintain an account at a bank or registered microfinance institution (MFI) to facilitate professional busi- ness operations and reduce the risk of financial mismanagement. 3. Provide biodigester construction services to customers in ______________________ District(s) of ___________ Province on a year-round basis in accordance with the procedures outlined in the NBP Private Biodigester Con- struction Company Operations Manual. 4. Establish and maintain a business premises that is clearly identifiable to customers and potential customers with appropriate NBP signage, either at the home of the owner or at a location in the district of his residence. The busi- ness premises will be open for the public during office hours. Changes in office address and unscheduled closing of offices shall be reported to the PBPO without delay. 5. Maintain NBP promotional information, appliance and spare parts inventory, at this business premise according to NBP procedures. 6. Properly maintain business records in a file at the business premise, including project control folder, sales con- tracts, bills related to the transaction with the buyer of a biodigester plant, plant completion report, guarantee card, . and written complaints. Filing will be according to the unique plant code number as assigned by NBP All files will be kept for a period of at least three years after date of construction. Employees of NBP and PBPO have the right to inspect the content of the files at any time during office hours. . 7 Comply with all NBP administrative procedures as outlined in the NBP Private Biodigester Construction Company Operations Manual, including timely registration of contracts and submission of construction schedules to PBPO; appliance inventory management and payment; quality control procedures; after sales service and scheduled maintenance; and maintenance of records on customers and work performed. 8. Make timely payment to PBPO for biodigester appliances provided by the PBPO each time that the BCC has used/ installed ten (10) appliance sets, or whenever spare parts inventory falls below the level defined by NBP . 9. Issue unique sales contracts to customers for the construction of a biodigester plant. The sales contract shall be filled out in duplicate before beginning the construction. One copy will remain with the company and another will remain with the client. The company will register each contract with the PBPO in a timely manner. 10. Submit to annual re-authorization based on NBP performance and management audits, and to improve areas of business operations that do not not meet NBP requirements. 11. Submit to the binding decision of the NBP Coordinator or other NBP official designated by the Coordinator with respect to disputes or disagreements between the company and other NBP-related entities, including PBPOs, licensed biodigester masons, and NBP . 64 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters construction and Sales Procedures 12. Adhere to the current official NBP pricing structure as provided by NBP in periodic updates. The general quotation on the cost of biogas plants will be according to the Bill of Quantities as provided in NBP Private Biodigester Con- struction Company Operations Manual. 13. Construct biodigester plants according strictly to the design, construction materials, and construction method stipulated in the NBP Biodigester Construction Manual and NBP Private Biodigester Construction Company Opera- tions Manual. 14. Assist customers who wish to obtain credit for biodigester construction in obtaining such loans from NBP micro- finance partners in accordance with NBP procedures. 15. Participate in additional training on business and technical subjects related to the operation of a Private Biodigester Construction Company recognized by NBP . 16. Make all reasonable efforts to achieve annual biodigester sales targets in the districts in which the company is authorized to operate. 2. NBP Agrees to: Pbcc compensation and Appliance finance 1. Compensate private biodigester construction companies the sum of $30 for each biodigester plant constructed during the period of this agreement, until such time in the future that company overhead charges are incorporated into the official NBP Bill of Quantities and paid by the customer. 2. Provide BCCs with $5 promotion fee for each plant constructed, which BCCs are obligated to pay to the promoter who referred the purchaser (customer). 3. Compensate BCCs with an additional start-up bonus of $15 per plant for the first 30 plants constructed in accor- dance with NBP procedures. 4. Provide subsidy payments to qualified customers who purchase biodigesters from BCCs recognized by NBP (and in good standing). 5. Provide BCCs with officially approved appliances on credit with zero interest as outlined in the NBP Private Biodi- gester Construction Company Operations Manual. Pbcc Training and mentoring/coaching 6. Provide BCC leaders with ongoing mentoring/coaching on business skills for a period of one year from the date of this agreement. . 7 Conduct periodic training to improve the business and technical skills of BCC leaders and their staff. 8. Continue mason training activities so as to ensure an adequate supply of NBP-certified masons to permit the growth of BCCs and of the sector as a whole. 9. Regularly provide biodigester promoter training for new promoters identified by BCCs. Promotion, regulation, and Administration of the Sector 10. Regulate the sector and participation of new and existing BCCs to ensure that the territory in which BCCs are authorized to operate allows companies to grow in accordance with NBP goals. 11. Provide marketing and promotional materials and business cards to private biodigester construction companies. 12. Provide regular updates to the NBP Private Biodigester Construction Company Operations Manual apprising BCCs of changes to required operating and business procedures. 13. Provide updated price information to BCCs in a timely manner, once updates to the pricing structure have been established by the NBP Steering Committee. 14. Arbitrate (settle) any and all disputes or disagreements between the company and other NBP-related entities, , including PBPOs, licensed biodigester masons, and NBP where such disputes are not satisfactorily resolved by the PBPO. Final Report to the Cambodian National Biodigester Program 65 3. The Provincial Biodigester Promotion Office (PBPO) of _________ Province Agrees to: maintain an orderly provincial biodigester construction market 1. Recognize private biodigester construction companies as the exclusive providers of biodigester construction ser- vices in the districts authorized by NBP . 2. Maintain and grow the official network of promoters in PSD districts through regular promoter training and development. 3. Regularly report to NBP on BCC performance and capacity. 4. Monitor production and sales performance of BCCs relative to NBP and PBPO goals and expansion plans. Provide transparent and consistent administration of nbP processes and regulations 5. Maintain sufficient inventory of official NBP-approved biodigester appliances to meet the requirements of BCCs, and provide these appliances to BCCs under the terms outlined in the NBP Private Biodigester Construction Com- pany Operations Manual. 6. Maintain records of BCC appliance accounts in accordance with NBP procedures. . 7 Provide necessary business forms to BCCs when requested. All forms necessary for the proper administration of the programme and all promotion material for companies produced by NBP will be available from the PBPO. 8. Issue appliance account invoices and receipts for payment upon request of BCCs, and receive and channel pay- ments to NBP on behalf of BCCs. 9. Register contracts and construction schedules presented by BCCs in a timely manner, and provide BCCs with plant codes promptly. 10. Inspect finished plants and issue plant completion reports in a timely manner. Support Pbccs in enhancing the quality of biodigesters and customer access 11. Provide technical consulting to assist BCCs in resolving problems and issues with biodigesters during construc- tion, at the time of the Plant Completion Report, and during the after-sales service period. 12. When required, participate in loan application verification processes with biodigester lenders (MFIs) under the terms set out in official NBP policy. 4. Further, All Parties Agree: 1. rights of nbP and PbPo to promote quality control NBP and the PBPO have the right to control the quality of construction, maintenance, and after sales service as pro- vided by the biogas plants whereby: a) NBP and PBPO staff will have the right to supervise and check the work of the company concerned to this agreement. b) The company shall give full cooperation to NBP or PBPO staff during execution of its duties. c) Control procedures for the quality of newly constructed plants or plants under construction; penalty, bonus cal- culations, construction quality standards and resulting penalties; and calculations of the performance index are according to the Operations Manual. d) Control procedures on the quality of maintenance and after sales service of existing plants, maintenance and after sales service procedures, quality standards and resulting penalties are according to the Operations Manual. 66 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters 2. closing of the company or its branch offices Termination of this agreement from the side of the company or closing of one or more branch offices of that company will only be permitted when the following procedure is strictly adhered to: a) Listing of all plants for which responsibilities are transferred provided to the PBPO. b) Transfer of all pending responsibilities regarding guarantee, repair, and maintenance of biogas plants constructed by the company or branch office or to another BCC officially recognized by NBP . c) Transfer of the guarantee funds belonging to the biogas plants constructed by that branch office to another BCC officially recognized by NBP . d) Proof that all involved plant owners are properly informed. 3. Suspension or termination of the agreement NBP retains the right to immediately suspend the cooperation with a company or company office in the cases as speci- fied below in this article for a period of 1 month. Further suspension or termination of this agreement from the side of NBP will be subject to the advice of the NBP Steering Committee. All correspondence regarding suspension of an agreement shall be copied to the NBP Steering Committee. In case of a suspension, the company will be invited for clarification of the issue. Depending on the com- pany's reaction, the suspension may be lifted. It is the company's responsibility to react at its earliest convenience. NBP will suspend cooperation in the case of: a) Gross irregularities, such as claiming of subsidy for plants not constructed, or unauthorized claiming or channeling of subsidy money. b) Non-observance of the terms and conditions of this agreement by the company. c) Ongoing neglect for quality of plant construction as agreed by both NBP and the PBPO after a quality warning from NBP has been issued. , In case this agreement between NBP PBPO, and the company is terminated, the remaining balance of Guarantee Fee . funds shall be fully at the PBPO's disposal, supervised by NBP PBPO will relocate the pending guarantee obligations to other companies, and allocate the guarantee funds accordingly or return the outstanding guarantee amount to the customer. Final Report to the Cambodian National Biodigester Program 67 Appendix 4: Training Development Framework Based on BCC Business Process Map responsibility new mason mason Skill capacity existing Assessment Activity/Step Topic Training Topic operations manual content Marketing and Sales 1 Identify potential clients in X X Survey Market survey Information on marketing collaboration with promoter network network and other referrers 2 Explain benefits of biogas to potential X X Communication Communication Existing marketing clients, indicative costs, and credit and explanation skills materials for use with options farmer 3 Technical feasibility visit: site and size X N/A N/A Site selection guide selection 4 Provide cost estimate (BOQ) for X Good calculation Cost estimate Pricing, BOQ, explaining biogas plant to potential clients (quotation) prices 5 Explain and facilitate MFI financing for X How to take from Loan process Step-by-step guide potential clients MFI to obtaining finance, contact names, and numbers. Explanation of payment process and interest rate 6 Verify financing and make contract for X Making contracts Business Contract(ing) forms construction contract Operations Management, Human Resources, Financial Management 7 Make construction schedule and plan X X Managing time Time Schedule, planned and with farmer management actual, in PCF 8 Instruct farmer on construction X X Communication Communication Checklists for farmer- materials purchase (or acquire and explanation skills purchased construction construction materials) materials 9 Submit contract copy and construction X Document Administration Contract issues and schedule to PBPO processing procedures 10 Organize construction team, assign X X Skills for staff Skills for staff Guidelines for payment responsibilities management management of construction teams 11 Inspect construction materials X Taking N/A Inspection guidelines responsibility 12 Draw/establish plant layout X X Taking N/A None: technical content responsibility 13 Acquire and provide tools to X N/A N/A None: technical content construction team 14 Supervise excavation of soil X N/A N/A Excavation checklist 15 Supervise and inspect construction X Management Quality control Project Control Folder quality control guidelines 16 Provisioning of appliances X General admin Finance, stock Appliance system 17 Appliance and pipeline installation X N/A N/A None--technical content (continued) 68 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Appendix 4: Training Development Framework Based on BCC Business Process Map (Continued) responsibility new mason mason Skill capacity existing Assessment Activity/Step Topic Training Topic operations manual content Financial Management; Quality Control, After-Sales Service; NBP Administration 18 Receive appliance and work payment X Material and Stock, book of Book of accounts, I/S from farmer payment accounts, I/S format management 19 Collect overhead payment X Financial Book of accounts Book of accounts format management 20 Completion report, final inspection, X X Write report, Report format and collection of guarantee fee and collect and record participation fee (with PBPO) revenue 21 Explain user manual, plant operation, X Small manual (operation, guarantee, and maintenance warranty) 22 Payment to construction team X X Expenditure Book of accounts Book of accounts format reports 23 Payment/transfer of promotion fee to X Expenditure Book of accounts Book of accounts format promoter reports 24 Follow-up 3­7 days after feeding to X Taking None Procedures for follow-up ensure operation of plant responsibility 25 Extended user training X Customer care Service quality None 26 Follow-up every 6 months after X Responsibility Service quality Warranty procedures and completion inspection and user obligations relation(s), and recording of situation(s) 27 Provide after-sales service of client X Responsibility Service quality After-sales service request protocols 28 Submit end of guarantee Form (10) to X X Submitting forms Admin skill Warranty format, PBPO procedures, and obligations 29 Collect guarantee fee--after 2 years X X Expenditure Book of accounts After-sales service reports protocols General Business Functions 30 General operations planning X N/A Scheduling None materials, etc. 31 Accounting and tax payment X N/A Bank account, None records 32 Loan repayment X N/A Understanding None loans, finance, interest 33 Networking and promotion system X X N/A Working a sales Section in marketing network 34 Administration X X N/A Working with the Incorporated in inventory NBP system procedures and QC Final Report to the Cambodian National Biodigester Program 69 Appendix 5: Application for NBP Masons Seeking BCC Owner Designation Personal Information Name ___________________________________________________________________________________ Address _________________________________________________________________________________ Age ______________ ID number ___________________ Advantages and Disadvantages of Company Ownership List 3 of each: Advantages _______________________________ Disadvantages _______________________________ _______________________________ _______________________________ _______________________________ _______________________________ Personal Network Who can help you with this business? Who How Skill(s) Marketing and sales ______________________ ______________________ ______________________ Record keeping ______________________ ______________________ ______________________ Finance ______________________ ______________________ ______________________ Inventory and Logistics ______________________ ______________________ ______________________ Does anyone in your family currently own a business of any kind? Who? _____________________________________________ What kind? ________________________________________ Assets (Capital) Do you or your immediate family own: Yes No Motorbike _______ _______ Remork _______ _______ Land _______ _______ Livestock _______ _______ ______ Cows ______ Pigs Mobile telephone _______ _______ Bank account _______ _______ Name of bank or MFI ____________________________ Family Income Sources Agriculture Business Job Me ______________________ ______________________ _____________________ My wife ______________________ ______________________ _____________________ Mother ______________________ ______________________ _____________________ Father ______________________ ______________________ _____________________ Child (1) ______________________ ______________________ _____________________ Child (2) ______________________ ______________________ _____________________ Child (3) ______________________ ______________________ _____________________ 3 Operations Manual for Private Biodigester Construction Companies Introduction Operations Manual for Private Biodigester Construction Companies As the National Biodigester Program (NBP) proceeded In response to concerns about the clarity, transparency, through its stages of implementation, it became clear and ease of replication of NBP operating procedures, the to the Private Sector Development (PSD) team that local PSD team produced this Operations Manual, presenting NBP masons lacked business skills, were unfamiliar with and formalizing all known required business procedures administrative compliance procedures, and had low tol- corresponding to the business process map for BCCs. erance for the risks traditionally associated with busi- The manual played a key role in training development, ness startup. The Provincial Biodigester Program Office as it contained the authoritative statement of expected (PBPO) Directors and Coordinators also expressed sig- company procedures. nificant concern about masons' financial capabilities and management skills, staff and operations management abilities, and foundational entrepreneurial skills. Project Control Folder The PSD team adjusted its approach accordingly, settling Because the BCC owners lacked experience with project on the development of a microfranchise system, with spe- management, the PSD team created the Project Control cific operating arrangements and business procedures Folder as the principal tool for team operations, schedul- developed through a Biodigester Construction Company ing, quality control, and basic financial management. The (BCC) Operations Manual, simplified project manage- PCF also serves as the "project file" for each biodigester ment tools, and a three-party Franchise Agreement. constructed, and comprises the framework of the busi- ness records BCCs are required to maintain. According This model required detailed codification (and in some to the Franchise Agreement, the PCF must remain at the cases, modification) of NBP operating procedures to customer's premises during construction and in the files ensure predictability and clarity for low-skilled entrepre- of the BCC for three years after plant completion. It estab- neurs. The key tools of this system were the Operations lishes a permanent record of the construction process Manual for Private Biodigester Construction Companies that concurrently provides basic business skills training. (included in its entirety here), the Project Control Folder (PCF), and the Franchise Agreement. Franchise Agreement A three-party agreement was formulated, outlining the , responsibilities of BCCs, the NBP and the PBPO of each province. The agreement is based on a hybrid of the exist- ing Cambodia program structure and the company agree- ment in place in Nepal under the Nepal National Biogas Program. The complete agreement appears in chapter 2, appendix 3. 70 Operations Manual for Private Biodigester Construction Companies 71 Operations Manual for Private Biodigester Construction Companies Table of Contents Section 1. Marketing, Sales, Finance, and Contracting Operations Manual for Private Biodigester Companies 1. Finding Customers: The Promotion Network 2. Visiting Customers 3. Technical Feasibility: Site and Size Selection 4. Biodigester Costs: The Bill of Quantities 5. MFI Financing 6. Making the Contract . 7 Instructing the Customer on Buying Construction Materials Section 2. Organizing and Managing the Construction Process 8. Get Organized: Fill out a Project Control Folder 9. Setting the Construction Schedule 10. Submitting the Contract and Construction Schedule to the PBPO 11. Inspecting Construction Materials 12. Drawing the Plant Layout 13. Obtaining the Tools Required for Construction 14. Supervising the Excavation of Soil 15. Supervising Construction to Ensure Quality 16. Appliances and Spare Parts 17. User Training: Explaining Plant Operations 18. Collecting Work and Appliance Payments from Customers Section 3. After Plant Completion: Warranty, Maintenance, and After-Sales Service 19. BCC Obligations Under the NBP Guarantee: Maintenance and After-Sales Service 20. Scheduled Maintenance Visits to Customers 21. Providing After-Sales Service for Customer Problems 22. NBP Problem Reports 23. Submit End of Guarantee Form to PBPO and Receive Guarantee Fee 72 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Section 1. Marketing, Sales, Finance, NBP will also provide training to new promoters you iden- and Contracting tify. Having trained promoters is an advantage to you, because they will better understand the characteristics of good customers. 1. Finding Customers: The Promotion Network good relationships with the Promotion and Sales network All NBP masons know that the Farmer's Friend biodi- One of the most important parts of your job as a com- gester is a great product for farmers. But new Biodi- pany owner is developing good relationships with the gester Construction Company owners (leaders) may people in your sales network. How? wonder how exactly to find new customers who will be interested in installing a biodigester. Tips for building your company's' Sales network 1. Personal visit A sales (promotion) network is a group of people or When you begin your company, pay a personal visit to companies that consistently introduce you to new each person you think could refer you to new Farmer's customers. Friend customers. Fortunately, NBP and your PBPO have worked hard to · Introduce yourself: Introduce yourself as the NBP- build a network of promoters who can help connect you licensed Biodigester Construction Company for the to the right customers. You will have the tools and sup- district. port of NBP in building this promotion network into your · Leave information: Provide information about biodi- company's sales network. gesters and the NBP . · Offer an exposure visit: Offer to take the person to These are some of the people in your area you should visit the home of one of your customers who has a get to know as soon as your Biodigester Construction working Farmer's Friend biodigester. If they accept, Company is started. inform your customer by telephone one day in advance of bringing the promoter to his/her home. · Promoter fee: Explain that he or she will receive Who Why US$5 for every customer that they refer to you who Village Livestock They know the farmers in your area ends up hiring you to build a biodigester. Agents/Village who own land and have enough live- · Official business card: Leave your business card so Animal Health stock to operate a biodigester. Workers (VAHW) the person knows how to contact you, and under- stands that you are the officially designated NBP Commune Chiefs They know the successful farmers in and Commune their commune who are interested in Biodigester Construction Company in the district. Council Members improving the commune environment. · Make a next appointment: Promise to visit again after two weeks to one month. Set an appointment Village Chiefs and They know the most successful Village Council farmers in their village who are for a specific day, if possible. Members interested in improving the village environment. 2. Follow up and build trust Animal Feed and They know the customers who buy If you do not hear from the promoter in the first few Agriculture Supply a lot of animal feed and are likely to weeks after you visit him or her, don't get discouraged. Dealers have enough livestock to operate a Return to see them and remind them who you are and biodigester. what you are offering. It may take some time for the pro- Local NGOs Inter- They are interested in the community's moter to understand what you are offering, and to trust ested in Agricul- quality of life and in people having you with their customers. That's normal--they need to tural Community more productive, healthier lives by trust that you are responsible before making referrals. Development using resources more efficiently. Satisfied Biodi- They can tell others about the positive 3. Provide new material gester Users impact a biodigester has had on their Each time you receive new promotional material from family and finances. , NBP go to each member of your sales network and share it. If the promoter is a person who has a place of busi- As you move forward in your business, you will also iden- ness that many people visit, offer to place posters and tify other people who can be part of your sales network-- leaflets in their place of business. this list is a starting point, not a final list. Operations Manual for Private Biodigester Construction Companies 73 4. Respond quickly · Livestock: How many cows and pigs does he/ Try to visit potential customers within two days of the she have? time that you receive a referral from the promoter. · Land: Look at how much land the customer has. · Water: Does the customer have access to nec- 5. Say "thank you" essary water to run a biodigester? If a promoter's referral leads to a sale, call or visit the · Firewood: How much firewood does the family promoter in person. At this time, do two things: (1) Thank use every week for cooking? How much does it him/her for the referral; (2) Tell him/her when the con- cost the family? How much time does the fam- struction is scheduled and when he can expect to receive ily spend collecting firewood? his US$5 promotion fee. 3. Give information: Provide information about biodigest- ers and the NBP Program. Use official NBP promo- 6. Pay promptly tion materials to help explain the benefits of the As soon as you are paid by your customer (the same day, biodigester. These are summarized below. if possible), visit the promoter who provided the refer- · Save time and money on firewood: Families with ral. Pay him the US$5 promotion fee and thank him for biodigesters spend less money on firewood for helping you build your business. Over time, this will build cooking. Use the customer information sheet to trust and make the promoter more willing to help you figure out the farmer's potential savings from a find more customers. biodigester. · Healthy family environment: Cooking with gas from a biodigester improves the family's health 2. Visiting Customers because there is less smoke. Preparing to Visit a Prospective customer for the first Time · Safer, better manure: Manure that has been 1. Appointment: Ask the promoter who referred you to " through a biodigester is called "slurry. It does call the farmer and tell him/her you'd like to visit. Set not smell bad or attract insects and is safer for an appointment if possible, so you know that the the family. It is also a high-quality fertilizer that farmer will be free to talk with you when you arrive. can improve the family's crops. 2. Information: Make sure you have the correct NBP pro- · Clean environment: Families with biodigest- motion information (pamphlets and your business ers have cleaner home environments because card) to bring with you. manure is put to good use. 3. Relax! You have a great product to sell. If you are 4. Explain price and subsidy: Tell the farmer about the relaxed, your customer will be relaxed. If you are costs of a biodigester and the process for figuring nervous, your customer will also be nervous. Go out the right size of biodigester for his farm. into the first meeting to build a relationship with 5. Explain microfinance institution (MFI) financing: Tell the your prospective customer--but without expecting farmer that the key local finance partner (PRASAC to make an immediate sale. MFI) can provide special low-interest loans for biodi- gester construction, and that you can help the cus- The first visit: your goal is to determine whether this is tomer apply for this loan. a good customer. 6. Offer an exposure visit: Offer to go with the farmer and When you are talking to a farmer who may want to buy a his family to visit the home of one of your customers Farmer's Friend biodigester, you should: who has a working biodigester. If they accept, set a schedule and inform your old customer by telephone 1. Introduce yourself: Introduce yourself as the NBP- one day before bringing the promoter to his home. licensed Biodigester Construction Company for the 7. Offer to talk to an expert: Some customers will want district. Immediately give the customer your busi- to find out for themselves about biodigesters. Give ness card identifying you and your company. the customer the names, telephone numbers, and 2. Learn about the customer: Keep notes on the customer information of some knowledgeable people he can information sheet (Form 02­P). talk to about biodigesters, including the local Village · Family: How many people are in his/her family? Animal Health Worker, and your satisfied customers Are they healthy? who live near the customer. · Economic condition: What is the family's eco- 8. Explain the construction process: Explain the process nomic status? Are they respected in the com- of building a plant, the mason team that you will use, munity? Are they busy working when you visit? and the amount of time it will take to complete the plant. 74 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters National Biodigester Program--Form 02-P Survey form for potential Farmer's Friend households Code ______________ Company Name: ______________________________________________________ General Information Province: ______________________ District: ______________________ Commune: _______________________ Village: _____________________ Name of household head: ___________________________________________________ Telephone No: ___________________________________ Number of people in family: Adult: _____________ Children (age <16): _____________ Total: _____________ Date of survey ______________________________ Land information Total land area: _________ m2 Land area for biodigester: _________ m2 Groundwater level in dry season _________ m2 Flooding problems in wet season: yes/no WATer And SAniTATion informATion general sanitary Sanitary works running water sources good fair bad Simple pit latrine River Kitchen Improved latrine Lake/pond Latrine No latrine Deep tube well Water source Drainage system Shallow tube well Drainage system Dug wells Household wastes disposal Piped water tap Canal Animal husbandry development activities number of domeSTic AnimAlS: Animal type Pig Cattle Buffalo Adult Calf Adult Calf Adult Calf Quantity Daily manure volume: __________ kg/day firewood and fuel use firewood lighting oil/kerosene 13 Kilograms/week KG/week Liters/week 14 Cost per week US$/KHR US$/KHR 15 Annual cost of firewood (cost per week x 52) US$/KHR US$/KHR 16 Potential savings on firewood/fuel (Annual cost X .8) US$/KHR US$/KHR Assessment Plant construction recommended Y/N Recommended plant size _____________ m3 Approximate cost of recommended plant __________US$/KHR Credit required by customer __________US$/KHR BIODIGESTER COMPANY REPRESENTATIVE BIOGAS HOUSEHOLD HEAD __________________________________________________________ __________________________________________________________ NAME NAME __________________________________________________________ __________________________________________________________ SIGNATURE SIGNATURE __________________________________________________________ __________________________________________________________ TELEPHONE NUMBER TELEPHONE NUMBER STAMP OF BCC GOES HERE BEFORE SUBMITTING TO PRASAC The BCC leader can place promotional materials here. Operations Manual for Private Biodigester Construction Companies 75 9. Offer to come back and answer questions: A biodigester make sure he has done this before you make your next is a big purchase. Tell the customer that you under- trip to his/her home. stand he needs to think about it, and discuss it with his family. Make an appointment to come back in When you return to the customer's property, weigh the one week or less to answer more questions. manure if you have the right equipment, or estimate the 10. Leave information: Leave the farmer official NBP infor- quantity as best you can. mation about biodigesters and the NBP PRASAC , MFI, and slurry. As a rule of thumb, most farmers can collect about 8.5 11. Decide whether another visit is useful: Not every family kilograms of manure per cow per day, when cows are you visit is going to install a biodigester. If you feel roaming during half of the day. the customer is not really motivated, maybe your time is better used finding another potential cus- fresh manure Water Approximate tomer. You must decide this based on your experi- required every required every number of cows ence with sales. Plant size day (Kg) day (liters) required 4m3 20­40 20­40 3­5 6m3 40­60 40­60 4­6 following up: (Second Visit) 8m3 60­80 60­80 6­8 1. Keep your appointment: Come back when you say you 10m3 80­100 80­100 8­10 will. 15m3 100+ 11+ 2. Provide more information and answer questions. 3. Explain the next step(s): Is there a suitable location on the farmer's property? · Choosing the right size biodigester size and In general, a biodigester site should be selected that: location (technical feasibility visit); · Arranging for financing with PRASAC (fill out · Minimizes construction materials costs; loan forms); · Ensures easy operation and maintenance activities · Signing a contract and setting a schedule for like "feeding" the biodigester, turning the main gas construction; valve on and off, composting and using slurry, check- · Buying construction materials. ing for gas leakage, draining condensed water from 4. Collect manure: Ask the customer to collect manure pipeline, and so on; for one day before your next visit to estimate the · Guarantees plant safety; and right size biodigester. · Makes construction work easy. 5. Estimate customer's real level of interest: You don't want to waste your time or your customer's time if they're Based upon these factors, plant locations should be not really interested. selected based upon the following specific considera- 6. Close the sale or offer to follow up again. If the customer tions. is still not sure, offer to come back again. Set spe- cific goals for your next visit, for example, the techni- · Location that receives sunlight, not in the shade cal feasibility visit or filling out loan paperwork. or in a damp or cool area (to maintain operating temperature); · On even (level) ground; 3. Technical Feasibility: Site and Size Selection · Slightly higher elevation than the surroundings (for There are two goals for the technical feasibility visit: (1) to drainage and slurry outlet); determine the right size biodigester for the customer, and · As close as possible to the cattle shed or pig sty (to (2) to determine if there is a suitable location (the most avoid wasting manure); suitable location) for the plant on the farmer's property. · No more than 100 meters from a source of water (to make transporting water easy); What Size biodigester is correct? · At least 10 meters away from well (to avoid ground- The best and most accurate way to choose the right water contamination); biodigester is to weigh or measure the manure that the · As close as possible to kitchen or cooking area (to customer actually collects on a daily basis. avoid leaks and reduce cost); To decide the correct size of biodigester, ask the cus- · Edge of plant at least two meters away from the tomer to collect the manure from his property that he foundation of house or any other structure; usually collects for one day and set it aside in a pile or · Enough space for compost-pit(s)--3x4 meters is a bucket for you to measure. You may need to call and good guideline; 76 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters · At least two meters from big trees to avoid damage In general, the following costs will be paid to your com- to biodigester by roots; and pany by the customer for appliance installations. · Soil hard enough to support biodigester (to avoid the biodigester sinking). cost number Total cost item (uS$) per plant (uS$) It may not always be possible to meet all of these Main gas pipe 5 1 5 requirements, but as many points as possible should be considered. Water drain 4 1 4 Pressure gauge 2 1 2 Note: When space is a problem, the pigsty can be con- Stove kits (stove, burner, 18 1 or 2 Company structed on top of the plant after proper backfilling. and gas tap) must calculate Lamp 5 1­5 Company 4. Biodigester Costs: The Bill of Quantities must The simplified Bill of Quantities (in US$) shown below calculate can be used to explain biodigester costs to customers. Total of appliance pur- Company chases by company must Detailed Bills of Quantities for each size biodigester calculate appear on the following pages. These can be used to explain the cost to farmers who have more questions. Most customers will buy construction materials them- selves, so you do not need to calculate these costs to calculating Appliance costs make a contract, but you will need to advise customers Each Farmer's Friend biodigester installation will have on how much of each item to purchase in order to explain slightly different costs based on the appliances that the the total cost of the plant correctly. Use the following customer selects. You will need to calculate these costs Bills of Quantities to help your customer understand his/ every time you give a customer a quote for a biodigester. her choices and costs. SimPlified bill of QuAnTiTieS (uS$) 4 m3 6 m3 8 m3 10 m3 15 m3 I Construction Materials 229 285 335 390 632 II Appliances 61 61 61 61 61 Purchased locally 27 27 27 27 27 Purchased from NBP 34 34 34 34 34 III Labor 80 90 107 126 168 Skilled labor 45 50 59 68 90 Unskilled labor 20 22 26 30 40 Excavation of soil 15 18 23 29 38 IV Guarantee Fee 10 15 20 25 35 V Participation Fee 15 15 15 15 15 Total Cost 395 466 538 617 911 NBP Subsidy 150 150 150 150 150 Cost to Farmer 245 315 388 467 760 Operations Manual for Private Biodigester Construction Companies 77 5. MFI Financing BCCs must submit Form 02-P to PRASAC for the customer. . PRASAC MFI is a partner of NBP PRASAC provides special low-interest loans for biodigesters. Biodigester It is also a good idea to develop a relationship with the Construction Company leaders need to understand the PRASAC loan officer in your area who is in charge of bio- PRASAC loan process so they can sell biodigesters to digester loans. This will make it easier for him or her to customers who want them but do not have the money help you make sales using these special loans. available to pay in advance. Key points that you can explain to customers are: 6. Making the Contract · PRASAC MFI offers loans for biodigesters for a spe- cial interest rate of 1.2 percent per month (14.4 per- The NBP-approved Biodigester Sales Contract is a writ- cent per year). This is a much lower rate per month ten agreement between a BCC and a customer that than regular MFI loans or local moneylenders' rates. clearly outlines the costs, schedule, and obligations of It is a special rate for NBP customers only. Sample both the BCC and the customer. This sales contract has promotional materials are shown on page 83. been developed for BCCs to ensure that all questions that · The loan can be used to build a biodigester and might come up are clearly answered. A biodigester is not for small improvements required to make the bio- eligible for the NBP subsidy unless a contract has been digester work better, for example, connecting it to made correctly between the BCC and the customer. stables or a kitchen. · Customers can choose to pay back the loan in one Steps for completing the contract year or two years. 1. Write the date and contract number at the top of the · Customers can borrow from US$150 up to US$1,000 page. for biodigesters. 2. Write your company's name and information and cus- · Customers can choose to borrow all of the money tomer's name and information at the top of page 1. required for a biodigester, or only part of the money, but the minimum loan is US$150. They cannot 3. Line 1: Write the size of the biodigester in m3 (4, 6, borrow more than what is required for the plant 8, 10, or 15) in the space provided. construction. 4. Line 2: Write the number of days after the contract · There are different payment plans available for cus- signing that you plan to start work (for example, if tomers, depending on how regular their income is. you will start in one week, write "7" for 7 days. · There are plans that allow customers to pay equal amounts every month. 5. Line 2: Give a final completion date. Usually this · There are plans that allow customers to pay should be one month from the date of the contract, interest monthly and principal (the money unless you have made other arrangements with the borrowed) every two, three, or four months, client. For example, if today's date is June 1, 2009, (according to an agricultural income schedule). the completion date should be July 1, 2009. · Customers may qualify for lower payments for the 6. Line 7: Who will buy construction materials? first two months. This is called a "grace period. " · If they borrow money from PRASAC to build their If the client will buy construction materials himself, biodigester, the NBP subsidy will be used to pay put an "X" in box (a). back PRASAC first. If you (the Company) will purchase the construction · Farmers with another loan from PRASAC are still eli- materials for the client, put an "X" in box (b) and fill gible for biodigester loans, even if the other loan has in the amount in dollars or KHR that the customer not been fully paid. has agreed to pay for these materials. If you will buy the construction materials, make sure to negoti- BCCs are strongly advised to offer customers all necessary ate a fee for delivery of between US$5 and US$10, assistance in securing a loan. It is also a good idea to go depending on the expenses that you will pay. You with the customer to PRASAC MFI to help him apply should add this to the construction materials cost in for a biodigester loan, and to become familiar with the the contract. papers that he/she will need to show PRASAC to obtain the loan. continued on page 84 78 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters bill of QuAnTiTieS for 4m3 biodigeSTer, JAnuAry 1, 2009 unit cost Total cost no. item unit uS$** 4m3 Qty (uS$) I Construction materials (normally purchased by customer) 1 Solid brick piece 0.10 2000.0 100.00 2 Cement bag 5.50 14.0 77.00 3 Gravel 1x2 m 3 26.00 0.5 13.00 4 Coarse sand m3 8.00 0.4 3.20 5 Fine sand m3 10.00 1.1 11.00 6 Inlet PVC pipe 10cm Ø piece 4.50 2.0 9.00 7 Iron bars ø 6 kg 1.50 8.0 12.00 8 Binding wire kg 1.30 0.5 0.70 9 Acrylic emulsion paint* liter 3.00 1.0 3.00 Subtotal I 229.00 IIa Appliances/accessories (normally purchased by customer) 10 GI nipple, Ø 0.5" piece 0.70 1.0 0.70 11 Main gas valve Ø 0.5" piece 3.00 1.0 3.00 12 Male-female socket Ø 0.5" piece 0.70 1.0 0.70 13 PVC 90o elbow piece 0.10 4.0 0.50 14 Tee Ø 0.5" (aluminum thread inside) piece 1.00 3.0 3.00 15 Reduction nipple Ø 0.5"-9 mm piece 1.00 2.0 2.00 16 Glue for PVC connection bottle 0.70 1.0 0.70 17 Teflon tape piece 0.30 1.0 0.30 18 PVC pipe Ø 0.5 meter 1.50 10.0 15.00 19 Gas hose pipe Ø 0.5" meter 1.00 1.0 1.00 Subtotal IIa 27.00 IIb Appliances purchased from NBP only 20 , G.I, Gas outlet pipe Ø 2" 0.6 m long piece 5.00 1.0 5.00 21 Water drain valve piece 4.00 1.0 4.00 22 Gas tap piece 6.00 1.0 6.00 23 Stoves single burner piece 12.00 1.0 12.00 24 Lamp piece 5.00 1.0 5.00 25 Pressure gauge unit 2.00 1.0 2.00 Subtotal IIb 34.00 III Labor 26 Skilled labor no. 4.50 10.0 45.00 27 Unskilled labor no. 2.00 10.0 20.00 28 Excavation of soil m3 1.50 10.0 15.00 Subtotal III 80.00 Total 369.70 Guarantee 10.00 Participation Fee 15.00 Total (including guarantee and after sales services) 395.00 * Should be purchased by customer from Biodigester Construction Company ** Indicator price; actual price will vary depending on location and market developments, ±5 percent Operations Manual for Private Biodigester Construction Companies 79 bill of QuAnTiTieS for 6m3 biodigeSTer, JAnuAry 1, 2009 unit cost Total cost no. item unit uS$** 4m3 Qty (uS$) I Construction materials (normally purchased by customer) 1 Solid brick piece 0.05 2400.0 120.00 2 Cement bag 5.50 18.0 99.00 3 Gravel 1x2 m 3 26.00 0.9 24.20 4 Coarse sand m 3 8.00 0.6 4.80 5 Fine sand m3 10.00 1.2 12.00 6 Inlet PVC pipe 10cm Ø piece 4.50 2.0 9.00 7 Iron bars ø 6 kg 1.50 10.0 15.00 8 Binding wire kg 1.30 0.5 0.65 9 Acrylic emulsion paint* liter 3.00 1.2 3.60 Subtotal I 288.20 IIa Appliances/accessories (normally purchased by customer) 10 GI nipple, Ø 0.5" piece 0.70 1.0 0.70 11 Main gas valve Ø 0.5" piece 3.00 1.0 3.00 12 Male-female socket Ø 0.5" piece 0.70 1.0 0.70 13 PVC 90o elbow piece 0.12 4.0 0.48 14 Tee Ø 0.5" (aluminum thread inside) piece 1.00 3.0 3.00 15 Reduction nipple Ø 0.5"-9 mm piece 1.00 2.0 2.00 16 Glue for PVC connection bottle 0.70 1.0 0.70 17 Teflon tape piece 0.25 1.0 0.25 18 PVC pipe Ø 0.5 meter 1.50 10.0 15.00 19 Gas hose pipe Ø 0.5" meter 1.00 1.0 1.00 Subtotal IIa 26.80 IIb Appliances purchased from NBP only 20 , G.I, Gas outlet pipe Ø 2" 0.6 m long piece 5.00 1.0 5.00 21 Water drain valve piece 4.00 1.0 4.00 22 Gas tap piece 6.00 1.0 6.00 23 Stoves single burner piece 11.00 1.0 11.00 24 Lamp piece 3.50 1.0 3.50 25 Pressure gauge unit 2.00 1.0 2.00 Subtotal IIb 31.50 III Labor 26 Skilled labor no. 4.50 11.0 49.50 27 Unskilled labor No. 2.00 11.0 22.00 28 Excavation of soil m 3 1.50 12.0 18.00 Subtotal III 89.50 Total 436.10 Guarantee 15.00 Participation Fee 15.00 Total (including guarantee and after sales services) 466.10 * Should be purchased by customer from Biodigester Construction Company ** Indicator price; actual price will vary depending on location and market developments, ±5 percent 80 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters bill of QuAnTiTieS for 8m3 biodigeSTer, JAnuAry 1, 2009 unit cost Total cost no. item unit uS$** 4m3 Qty (uS$) I Construction materials (normally purchased by customer) 1 Solid brick piece 0.05 2800.0 140.00 2 Cement bag 5.50 22.0 121.00 3 Gravel 1x2 m 3 26.00 1.3 34.58 4 Coarse sand m 3 8.00 0.8 6.40 5 Fine sand m3 10.00 1.3 13.00 6 Inlet PVC pipe 10cm Ø piece 4.50 2.0 9.00 7 Iron bars ø 6 kg 1.50 12.0 18.00 8 Binding wire kg 1.30 0.5 0.65 9 Acrylic emulsion paint* liter 3.00 1.3 3.90 Subtotal I 346.50 IIa Appliances/accessories (normally purchased by customer) 10 GI nipple, Ø 0.5" piece 0.70 1.0 0.70 11 Main gas valve Ø 0.5" piece 3.00 1.0 3.00 12 Male-female socket Ø 0.5" piece 0.70 1.0 0.70 13 PVC 90o elbow piece 0.12 4.0 0.48 14 Tee Ø 0.5" (aluminum thread inside) piece 1.00 3.0 3.00 15 Reduction nipple Ø 0.5"-9 mm piece 1.00 2.0 2.00 16 Glue for PVC connection bottle 0.70 1.0 0.70 17 Teflon tape piece 0.25 1.0 0.25 18 PVC pipe Ø 0.5 meter 1.50 10.0 15.00 19 Gas hose pipe Ø 0.5" meter 1.00 1.0 1.00 Subtotal IIa 26.80 IIb Appliances purchased from NBP only 20 , G.I, Gas outlet pipe Ø 2" 0.6 m long piece 5.00 1.0 5.00 21 Water drain valve piece 4.00 1.0 4.00 22 Gas tap piece 6.00 1.0 6.00 23 Stoves single burner piece 11.00 1.0 11.00 24 Lamp piece 3.50 1.0 3.50 25 Pressure gauge unit 2.00 1.0 2.00 Subtotal IIb 31.50 III Labor 26 Skilled labor no. 4.50 13.0 58.50 27 Unskilled labor No. 2.00 13.0 26.00 28 Excavation of soil m 3 1.50 15.0 22.50 Subtotal III 107.00 Total 511.90 Guarantee 20.00 Participation Fee 15.00 Total (including guarantee and after sales services) 546.90 * Should be purchased by customer from Biodigester Construction Company ** Indicator price; actual price will vary depending on location and market developments, ±5 percent Operations Manual for Private Biodigester Construction Companies 81 bill of QuAnTiTieS for 10m3 biodigeSTer, JAnuAry 1, 2009 unit cost Total cost no. item unit uS$** 4m3 Qty (uS$) I Construction materials (normally purchased by customer) 1 Solid brick piece 0.05 3200.0 160.00 2 Cement bag 5.50 26.0 143.00 3 Gravel 1x2 m 3 26.00 1.6 40.82 4 Coarse sand m 3 8.00 1.0 8.00 5 Fine sand m3 10.00 1.4 14.00 6 Inlet PVC pipe 10cm Ø piece 4.50 2.0 9.00 7 Iron bars ø 6 kg 1.50 13.0 19.50 8 Binding wire kg 1.30 0.5 0.65 9 Acrylic emulsion paint* liter 3.00 1.5 4.50 Subtotal I 399.50 IIa Appliances/accessories (normally purchased by customer) 10 GI nipple, Ø 0.5" piece 0.70 1.0 0.70 11 Main gas valve Ø 0.5" piece 3.00 1.0 3.00 12 Male-female socket Ø 0.5" piece 0.70 1.0 0.70 13 PVC 90o elbow piece 0.12 4.0 0.48 14 Tee Ø 0.5" (aluminum thread inside) piece 1.00 3.0 3.00 15 Reduction nipple Ø 0.5"-9 mm piece 1.00 2.0 2.00 16 Glue for PVC connection bottle 0.70 1.0 0.70 17 Teflon tape piece 0.25 1.0 0.25 18 PVC pipe Ø 0.5 meter 1.50 10.0 15.00 19 Gas hose pipe Ø 0.5" meter 1.00 1.0 1.00 Subtotal IIa 26.80 IIb Appliances purchased from NBP only 20 , G.I, Gas outlet pipe Ø 2" 0.6 m long piece 5.00 1.0 5.00 21 Water drain valve piece 4.00 1.0 4.00 22 Gas tap piece 6.00 1.0 6.00 23 Stoves single burner piece 11.00 1.0 11.00 24 Lamp piece 3.50 1.0 3.50 25 Pressure gauge unit 2.00 1.0 2.00 Subtotal IIb 31.50 III Labor 26 Skilled labor no. 4.50 15.0 67.50 27 Unskilled labor No. 2.00 15.0 30.00 28 Excavation of soil m3 1.50 19.0 28.50 Subtotal III 126.00 Total 583.80 Guarantee 25.00 Participation Fee 15.00 Total (including guarantee and after sales services) 623.80 * Should be purchased by customer from Biodigester Construction Company ** Indicator price; actual price will vary depending on location and market developments, ±5 percent 82 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters bill of QuAnTiTieS for 15m3 biodigeSTer, JAnuAry 1, 2009 unit cost Total cost no. item unit uS$** 4m3 Qty (uS$) I Construction materials (normally purchased by customer) 1 Solid brick piece 0.05 4500 225.00 2 Cement bag 5.50 40 220.00 3 Gravel 1x2 m 3 26.00 2.3 59.80 4 Coarse sand m 3 8.00 2.5 20.00 5 Fine sand m3 10.00 3 30.00 6 Inlet PVC pipe 10cm Ø piece 4.50 2.5 11.25 7 Iron bars ø 6 kg 1.50 25 37.50 8 Binding wire kg 1.30 1 1.30 9 Acrylic emulsion paint* liter 3.00 3 9.00 Subtotal I 613.90 IIa Appliances/accessories (normally purchased by customer) 10 GI nipple, Ø 0.5" piece 0.70 1 0.70 11 Main gas valve Ø 0.5" piece 3.00 1 3.00 12 Male-female socket Ø 0.5" piece 0.70 1 0.70 13 PVC 90o elbow piece 0.12 4 0.48 14 Tee Ø 0.5" (aluminum thread inside) piece 1.00 3 3.00 15 Reduction nipple Ø 0.5"-9 mm piece 1.00 2 2.00 16 Glue for PVC connection bottle 0.70 1 0.70 17 Teflon tape piece 0.25 1 0.25 18 PVC pipe Ø 0.5 meter 1.50 10 15.00 19 Gas hose pipe Ø 0.5" meter 1.00 1 1.00 Subtotal IIa 26.80 IIb Appliances purchased from NBP only 20 , G.I, Gas outlet pipe Ø 2" 0.6 m long piece 5.00 1 5.00 21 Water drain valve piece 4.00 1 4.00 22 Gas tap piece 6.00 1 6.00 23 Stoves single burner piece 11.00 1 11.00 24 Lamp piece 3.50 1 3.50 25 Pressure gauge unit 2.00 1 2.00 Subtotal IIb 31.50 III Labor 26 Skilled labor no. 4.50 20 90.00 27 Unskilled labor No. 2.00 20 40.00 28 Excavation of soil m 3 1.50 25 37.50 Subtotal III 167.50 Total 839.70 Guarantee 35.00 Participation Fee 15.00 Total (including guarantee and after sales services) 889.70 * Should be purchased by customer from Biodigester Construction Company ** Indicator price; actual price will vary depending on location and market developments, ±5 percent Operations Manual for Private Biodigester Construction Companies 83 PrASAc-nbP informATion on biodigeSTer crediT, in Khmer PrASAc PAmPhleT exPlAining The loAn ProgrAm, in Khmer 84 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters furTher informATion on PrASAc And office locATionS/conTAcT TelePhone numberS continued from page 77 7. Line 8: Who will dig the pit for the plant? 9. Line 10: Write the total for labor that the client will pay in the space provided. If the client will dig the pit, put an "X" in box (a). 10. Line 11: Write the total amount of the contract in the If your company will dig the pit, put an "X" in box space, and fill in the table that provides a clear and (b) and fill in the amount in dollars or KHR that the easy to read summary of the costs. customer has agreed to pay for excavation of soil, according to the Bill of Quantities. The costs allowed " 11. Line 13: Circle "Cash" or "Loan. How will the cus- by the NBP are shown below. tomer pay? Circle the correct payment method and cross the other one out. For example, if the cus- 4m3 6m3 8m3 10m3 15m3 tomer is paying with cash, it should look like this: Excavation of soil 15 18 23 29 38 Cash/Loan 12. Date and sign: At the end of page 2, fill in the date 8. Line 9: Appliance Costs: Write down the amount and sign the contract. The customer must also sign the appliances that the client has chosen will cost. the contract. Remember, the main gas pipe costs US$5, each stove kit costs US$18 (stove and gas tap), and each 13. Take one copy of the signed contract to your place of light costs US$5. The water drain costs US$4, and business, and leave one copy with the customer. the pressure gauge costs US$2. Operations Manual for Private Biodigester Construction Companies 85 Form 03-P No.: ________________ _______________________, date _______________________ month _______________________ 200 ______ BIODIGESTER SALES CONTRACT Between: 1. Customer: Biodigester Program 2. Company: Licensed Biodigester Supported Household Construction Company Address: Address: Telephone: Telephone: Household Owner Name: Representative Name and Position: for the construction of biodigester plant under the NBP whereby: The Company: 1. Shall construct a _____ m3 biogas plant for the client. 2. Shall commence construction within _____ days of client's notification and will complete construction no later than Day ____________ Month____________, Year 20____. 3. Shall provide to the client all services regarding this biogas plant according to the agreement between NBP and the Company. 4. Shall be responsible for safety at work, and bear all expenses if any accident happens. 5. Shall warranty construction works for 24 months from the Acceptance Date if Party A operates and maintains the biodigesters correctly to program requirements. 6. Shall carry out four scheduled visits, one every 6 months, to provide Party A with maintenance of the biodigester and after-sales service. The Client: 7. (a) ____________ shall provide the construction materials (cement, bricks, stones, gravel, sand) as instructed by company within the period as stipulated in article 2. Construction materials shall be rejected by company if not as per NBP standards; or; (b) ____________ shall pay Company to obtain construction materials in the amount of US$/KHR ____________ including delivery charge; 8. (a) ____________ shall provide unskilled labor for excavation of soil prior to the construction of this plant, or; (b) ____________ pay the company US$/KHR ____________ for excavation of soil. 9. Agrees to pay the Company US$/KHR ____________ for appliances provided by the company. 10. Agrees to pay the Company US$/KHR ____________ for labor to construct the biodigester plant. 11. Agrees to pay the Company a total of ____________ US$/KHR for construction of the plant, as outlined below: Construction Materials provided by Company including delivery fee KHR/Dollars Labor Provided by Company KHR/Dollars Appliances Provided by Company KHR/Dollars Total to Pay Company KHR/Dollars 12. Declares that he or any other member of his/her household has not taken subsidy for a biogas plant before and will not request subsidy twice for the same plant. 13. Declares that this plant is financed on cash/loan basis. 14. Shall not request or allow other companies to construct the biogas plant without the written permission of the Company. (continued) 86 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Form 03-P (Continued) 15. May allow other companies to construct plant if the Company does not commence construction within the time as mentioned in article 2. 16. Agrees to put the plant into operation and prepare for acceptance in 30 days at the latest after the completion date. . 17 Agrees to pay to the PBPO a program participation fee of US$15 and a guarantee fee of US$ ____________ in order to receive a plant completion report and subsidy payment of US$150. Both parties: 18. Agree to strictly follow the rules of NBP regarding the installation of the biogas plant and receipt of the subsidy for the plant. 19. Declare that this sales agreement is the first and only between the client and any biogas company. 20. Have agreed that in cases not specified above, they will follow the existing laws of Cambodia. Unilateral termination of construction contract and compensation: 21. Both Company and Customer have the right to terminate the construction contract unilaterally and can request compensation when the other party violates contract provisions. 22. The responsible party has to compensate all expenses that the other party has paid for the loss, unless otherwise stated. Complaints and dispute settlement: 23. All complaints and disputes will be considered and settled by both parties based on mutual interest. If both parties cannot reach final agreement then the matter will be brought before Civil Court for final judgment. This agreement is signed on the ____________ day of ____________, ________ in two copies, one copy for each party. FOR CUSTOMER: FOR COMPANY: (Full name + Signature (Full name + Signature ________________________________________________________ ________________________________________________________ 7. Instructing the Customer on mild Steel bars Buying Construction Materials · Bar should be free of heavy rust · 8 mm diameter for plants of 4, 6, and 8 m3 Your ability to construct a high-quality biodigester · 10 mm diameter for plants of 10 m3 and 15 m3 depends on the quality of the construction materials. If farmers decide to purchase their own construction mate- cement rials, you should remind them of the characteristics of · High quality Portland cement from a brand with a good construction materials. good reputation, fresh, free of lumps, and stored in dry place When you sign the contract, you should give your cus- tomer a copy of the list of construction materials (shown gravel on the next page), and draw a circle around the size of · Size: not very big or very small biodigester that the customer has purchased. This will · Maximum size about 2 cm help him buy the right materials of the right quality. · Should be clean, hard, and of angular shape You should also explain the purchase list step-by-step to Sand the customer. Be sure to explain each item. · Should be clean, should not contain soil or other materials bricks · Coarse and granular sand for concrete · Should be high-quality (No.1), usually the best qual- · Fine sand for plastering and mortar works ity available in the local market · Should be well burned, straight, regular in shape and size and have no cracks or broken parts conSTrucTion mATeriAlS PurchASe liST for biodigeSTer cuSTomerS To be giVen To cuSTomer WiTh conTrAcT 10m3 unit cost 4m3 Total cost 6m3 Total cost 8m3 Total cost Total cost 15m3 Total cost Sn item unit (uS$) (Qty) (uS$) (Qty) (uS$) (Qty) (uS$) Qty (uS$) (Qty) (uS$) I Construction materials 1 Solid brick piece 0.1 2,000.0 100.0 2,400.0 120.0 2,800.0 140.0 3,200.0 160.00 4,500.0 225.0 2 Cement bag 5.5 14.0 77.0 18.0 99.0 22.0 121.0 26.0 143.00 40.0 220.0 3 3 Gravel 1x2 m 26.0 0.5 13.0 0.8 20.8 0.9 23.4 1.2 31.20 3.0 78.0 3 4 Coarse sand m 8.0 0.4 3.2 0.6 4.8 0.8 6.4 1.0 8.00 2.5 20.0 3 5 Fine sand m 10.0 1.1 11.0 1.2 12.0 1.3 13.0 1.4 14.00 3.0 30.0 6 Inlet PVC pipe 10 cm Ø piece 4.5 2.0 9.0 2.0 9.0 2.0 9.0 2.0 9.00 2.5 11.3 7 Iron bars ø 6 kg 1.5 8.0 12.0 10.0 15.0 12.0 18.0 13.0 19.50 25.0 37.5 8 Binding wire kg 1.3 0.5 0.7 0.5 0.7 0.5 0.7 0.5 0.65 1.0 1.3 9 Acrylic emulsion paint litre 3.0 1.0 3.0 1.2 3.6 1.5 3.9 1.5 4.50 3.0 9.0 Approximate cost 228.9 284.9 335.4 389.90 632.1 Operations Manual for Private Biodigester Construction Companies 87 88 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Acrylic emulsion Paint Page 4: Summary of Plant financial information · BCC should provide customers with Kaltex® brand Page 4 of the Project Control Folder will help you keep acrylic emulsion paint because it is not available in accurate financial records for each biodigester you build. the local markets If you keep these records correctly, you will have all of · BCC may charge customers US$3 per liter under the information you need in order to collect your over- NBP procedures head payments, pay for the appliances you have used, keep track of how much money you have made on each Remember, the Biodigester Construction Company plant, and pay taxes at the end of the year. There are four owner is responsible for inspecting the construction sections in the financial information summary. materials that farmers buy, so provide these instructions before farmers buy the materials, not after. 9. Setting the Construction Schedule The construction schedule is the first page of the Project Section 2. Organizing and Managing Control Folder. It should be filled out with the customer the Construction Process at the time you sign the contract. It must be submitted to the PBPO with the contract for biodigester construction. It contains basic information about when you expect to 8. Get Organized: Fill out a Project start and complete certain tasks, and who will be work- Control Folder ing on the job with you. The dates that you enter should The Project Control Folder (PCF) has four sections that be your best estimate of the dates at which each stage you will need to use to effectively manage biodigester will be complete. construction projects, and to verify that you have taken all the required actions to complete your obligations to your customers and your team, and your obligations to NBP . 10. Submitting the Contract and Construction Schedule to the PBPO This folder must be kept at the site of the biodigester You are required to register three documents with the construction project, and used throughout the project. PBPO when you have made a contract with a customer: When the biodigester is complete, it will serve as your record of the project, and should be kept at your busi- · Contract; ness premises. NBP and PBPO employees have the right · Construction Schedule; and to inspect this folder at any time during the project at · Form 02-P--Customer Information. the construction site, or after the project is complete at your business premises during regular business hours. BCCs must do this in order to obtain a plant code and for The four sections of the PCF are reproduced on the fol- customers to be eligible for the subsidy. lowing pages. how to register these documents Page 1: basic information To register a contract, the BCC must make a photocopy Page 1 is used to keep basic information about the proj- of each page of the biodigester sale contract, the front ect, the team, and your planned schedule for the project. page of the project control folder showing the construc- Once you receive a plant code from the PBPO, you must , tion schedule, and Form 02-P and submit them to the also put this information in the Project Control Folder. PBPO Coordinator during office hours. The PBPO Coordi- nator will assign a unique plant number at that time. You Pages 2­3: company Quality control checklist should keep the original copies for your records at your The Quality Control (QC) Checklist on pages 2­3 of the place of business. Project Control Folder should be used to ensure that your company is taking all the required steps to ensure high Why must these documents be registered with the PbPo? quality biodigesters are constructed. There are a number Only registered contracts are eligible for overhead and of QC points in each section of the checklist. Each QC subsidy payments. If you do not register your contract point must be verified by a Certified NBP Mason in the before you begin construction, your customer may not Project Control Folder. The mason must sign his initials receive his subsidy, and you will not receive your over- and the date of the inspection for each point in the num- head payment from NBP . bered box corresponding to the QC point. Operations Manual for Private Biodigester Construction Companies 89 ProJecT conTrol folder: Page 1--Basic Information and Construction Schedule 1. Basic information about Name of customer your customer Street Village Commune Telephone 2. Plant Code Plant code 3. Information about your Team information company's construction team Name of NBP mason responsible for construction Name(s) of helpers 4. Your construction schedule Schedule Planned date Actual date that you plan to follow Date of contract Contract and schedule registered with PBPO Appliances received from PBPO Date to begin excavation Date excavation complete Date(s) of concreting foundation Date to begin plastering Date of appliance installation Date of user training Date of completion report Follow-up visit 1 Follow-up visit 2 Follow-up visit 3 Follow-up visit 4: End of guarantee period 90 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters ProJecT conTrol folder: Pages 2­3--Company Quality Control Checklist checklist for company Quality control checked by/date 1 Before excavation begins, check site selection and draw layout. 1.1 Use site selection checklist (guidelines) in Section 3 of the Operations Manual. 1.1 2 When construction materials arrive, check their quality. 2.1 Use construction materials checklist in Section 11 of the Operations Manual. 2.1 3 During pouring concrete for the plant foundation, inspect the biodigester's curvature and the qulity of concreting. 3.1 Center of the foundation's curvature is also the center of the pit. 3.1 3.2 Depth of the pit is as drawing before making the curvature. 3.2 3.3 Radius of curvature is as in the drawing. 3.3 3.4 Top of the curvature is leveled. 3.4 3.5 Concrete is composed of (1 cement, 2 sand, and 4 aggregate) with proper water/cement ratio. 3.6 .7 Concrete is 7 to 10 cm thick. 3.6 4 Before laying the inlet pipes, inspect the bricklaying of the plant wall. 4.1 Brick is soaked with clean water for about 15 minutes before using. 4.1 4.1 Ratio of mortar: sand = 1:3 with clean water. 4.3 Mortar joints in two adjacent brick layers never fall in a vertical line. 4.3 5 When laying the inlet pipe, inspect laying of the inlet pipe. 5.1 Inlet pipe diameter is 10 cm. 5.1 5.2 Inlet pipe is placed at the heart-line. 5.6 5.3 Slope of the inlet pipe is at least 60° with the ground level. 5.3 5.4 Pipe's surface is cleaned at the contact surface between the pipe and the wall. 5.4 5.5 Pipe is properly fixed. 5.5 5.6 Toilet pipe (optional) is placed not farther than 30 cm from the heart-line. 5.6 6 After inspecting the inlet pipe, inspect the curvature of the outlet. 6.1 Constructing the wall up to certain height, then making the curvature of first outlet. 6.1 6.2 Soil used as the mold is correct shape for making the curvature. 6.2 6.3 Position of brick at both sides of edges of the curvature: half of the brick stays on the wall and 6.3 half stays on soil frame. 7 When the guide bamboo is 45° from horizontal, inspect outside plastering. 7.1 Outer wall is plastered before starting the fresh layer each day. 7.1 7.2 Before plastering, the entire surface of the brick wall is cleaned with clean water and steel brush. 7.2 7.3 One (1) layer of 8 mm thick cement sand plaster is used, 1:4 mix. 7.3 8 After plastering, inspect the quality of bricklaying and the use of S-hooks. 8.1 Right amount of mortar has been used to lay bricks. 8.1 8.2 Bricks are soaked with clean water. 8.2 8.3 Mortar joints in two adjacent brick layers never fall in a vertical line. 8.3 8.4 Approximately 100 S-hooks used. 8.4 8.5 Each S-hook attached to a brick. 8.5 8.6 S-hooks are proper shape. 8.6 8.7 Counterweight is 2 or 3 pieces of brick. 8.7 (continued) Operations Manual for Private Biodigester Construction Companies 91 ProJecT conTrol folder: Pages 2­3--Company Quality Control Checklist, Cont. checklist for company Quality control checked by/date 9 Before closing the dome, inspect dome construction, frameworks, gas pipe, and mortar. 9.1 Diameter of the top dome is 50 to 90 cm before closing the dome. 9.1 9.2 Frameworks: scaffoldings correct, soil prepared as mold for laying bricks, and sand is sprinkled in 9.2 mold. 9.3 Main gas pipe is placed at the center of the dome and faced toward the kitchen. 9.3 9.4 Mortar is well poured and compacted and left to dry for minimum 2 days before removing the 9.4 framework. 10 Ensure quality during plastering of digester and gas chamber. 10.1 Entire surface of the brick wall is cleaned with water and steel brush before starting the plastering. 10.1 10.2 Outside: Bricks are scrubbed and scratched. 10.2 10.3 Outside: 1 layer of 8 mm thick cement sand plaster, 1:4 mix. 10.3 10.4 Inside: Bricks are scrubbed and scratched. 10.4 10.5 Inside: Each plastering layer is smooth and fine. 10.5 10.6 Inside: 5 layers of dome treatment works applied on the proper schedule. 10.5 11 Ensure that the second outlet is correct during construction. 11.1 Height of the manhole is as drawing. 11.1 11.2 Inspect the dimensions of the outlet against drawing. 11.2 11.3 Mix of concrete cement: sand: aggregate is 1:2:4. 11.3 11.4 .5 Concrete floor is 7 cm thick. 11.4 11.5 Each plastering layer is smooth and fine. 11.5 11.6 Surface of the floor is horizontal and smooth. 11.6 11.7 Overflow opening is on the heart-line. 11.7 12 During construction of the inlet, ensure that inlet is correct. 12.1 Foundation of the tank is well rammed and hard and the surface is level. 12.1 12.2 The floor of the inlet is at least 15 cm above the outlet overflow level. 12.2 12.3 Inlet pipe position: Pole or rod cam entered through inlet pipe without obstruction for de-blocking. 12.3 T If toilet attachment to the plant T.1 No siphon or trap in toilet plan construction. T1 T.2 Inlet pipe from toilet discharges less than 45° from the heart-line. T2 T.3 Pan level of toilet is at least 15 cm above the overflow levels in the outlet. T3 Notes on actions taken by Company to repair defects in quality check: PBPO Supervisors will use the construction schedule to feasibility to maintain the relationship between NBP and supervise your construction projects, to plan inspections, PRASAC MFI. and to schedule plant completion reports in a timely manner. no Payments required There are no payments required of BCCs at the time of Form 02-P must be submitted because PBPO and NBP contract registration and construction schedule submis- Technical Supervisors need to be able to verify technical sion, unless the company is delinquent with payments 92 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters ProJecT conTrol folder: PAGE 4: SUMMARY OF PLANT FINANCIAL INFORMATION 1. Summary of Summary of Plant Financial Information the contract Contracted items Amount Date Signature you have made with Construction materials $ the customer, Labor $ and a record Appliances $ of payments that have been Total of contract $ made. Payment 1 $ Balance $ Payment 2 $ Balance $ 2. Appliance Appliance Accounting Accounting: 1. Customer's appliance payment to company $ KHR Summary of the amounts 2. Overhead retained by company $35 KHR that the 3. Company start-up bonus ($15 for plants 1­30 only) $0 or $15 KHR customer 4. Total amount due to company from NBP (2+3) $ KHR pays you for appliances, 5. Total owed to PBPO for appliances (1 4) $ KHR and the Team Payment(s) amount you must pay to Mason in charge 3. Summary of the PBPO for payments you these after make to the Name of Mason in Charge Contract Amount Amount Paid Date Signature of Mason your project is construction complete. Helper 1 team, and to the promoter who Name of Helper 1 Contract Amount Amount Paid Date Signature of Helper referred you to your customer. Helper 2 Name of Helper 2 Contract Amount Amount Paid Date Signature of Helper Payment to Promoter Name of Promoter Amount Owed Amount Paid Date Signature of Promoter Other Project Expenses Description Amount paid Date 4. Other expenses you have paid during this project. Tools Transportation Other Total ------ Operations Manual for Private Biodigester Construction Companies 93 for appliances. In this case, the PBPO may require you · Check the size diagonally to ensure that the cor- to pay the amount you owe NBP for appliances, but may ners are exactly at 90 degrees. not charge any fees or request any payments for contract · Decide the location of slurry pits while laying registration or to receive a plant code. out plant digester and outlet. If a PBPO official asks you for a payment to obtain a plant code or to register your contract, contact the Finance Officer [Name] 13. Obtaining the Tools Required at the NBP office in Phnom Penh, Telephone ___________. for Construction The following tools are required for different stages of 11. Inspecting Construction Materials the biodigester construction process. The form shown on page 94 provides guidelines for BCC owners or lead masons should arrange tool respon- inspecting the construction materials that you or your sibilities in advance with their teams to ensure that the " customer buy. For each answer marked "NO, describe correct tools are available at the construction site for the what must be corrected in the third column. appropriate phase of construction. BCCs should be pre- pared to provide tools for the use of their construction teams if necessary, or to compensate masons and help- 12. Drawing the Plant Layout ers (or share costs) for the use of their tools if this is Construction work on the biodigester starts with laying appropriate. out the plant. This is the activity carried out to mark the dimensions of the plant on the ground so you can start bricklaying (masonry) Work the digging work in the right place. · Hoe · Shovel The following steps should be followed: · Axe · Hammer · Stick a small peg in the ground at the center spot of · (Hand) saw the biodigester (to mark the spot). · Trowel · Level the ground and determine the center line of · Wooden brace for top of dome the biodigester, outlet tank, and inlet pit (generally called the heart-line). Plastering · Mark the area to dig for biodigester · Plastering trowel · Select the outer diameter of the pit (digester · Wooden boards for smoothing diameter plus wall thickness) as shown in the · Wood palate drawing and mark it with rope or cord. · Plastic trowel · Mark the area to dig: Insert a stick or wooden · Broom/sweeper peg in the leveled ground at the center of the · Paint brush (#3) proposed digester pit. With the help of the pole · Mortar bucket and cord prepared earlier, make a circle. This will · Level-line ruler indicate the area to dig. · Rubber boots for all workers · Mark the dimensions of outlet (1) and outlet (2) · Metal shears (snips/scissors) · Mark the width of outlet (1) and outlet (2): · S-Hooks (100) From the center point, where the central line meets with the perimeter line, draw a tangent measuring Tools and measure a length equal to half of the inner · Tape measure width of outlet plus wall thickness on either side · T-square (steel) of this tangent. · Nylon string · Mark the length of outlet (1) and outlet (2): Draw · Plumb bob horizontal parallel lines from the points on either · Level side in the tangent, which will meet the dome. · Transparent water pipe for leveling From the center point where the central line meets the perimeter line, measure the length of outlet plus wall thickness to decide the outer dimension of outlet. 94 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters conSTrucTion mATeriAl inSPecTion guidelineS Schedule yes no correction required Cement High quality Portland cement from a brand with a good reputation Fresh, free from lumps and stored in dry place Sand Clean and does not contain soil or other materials Coarse and granular sand for concrete Fine sand for plastering and mortar works Gravel Size: not very big or very small Maximum size 2 cm or ¼ of thickness of concrete layer Should be clean, hard, and of angular shape Dirty gravel must be washed properly before use Bricks Should be of high quality (No.1), usually the best quality available in the local market Should be well burned, straight, regular in shape and size with no cracks or broken parts Mild Steel Bars MS bar should be free from heavy rust 8mm diameter for plants of 4, 6 and 8 m3 10mm diameter for plants of 10m3 and 15m3 Acrylic Emulsion Paint NBP Strongly Recommends Kaltex® Brand Acrylic Emulsion Paint 14. Supervising the Excavation of Soil sides and crumbles, scaffolding may be needed to After completion of layout, the work of digging must keep the soil in place as digging continues. begin. Tools--crowbar, picks, spades, shovels and bas- · If the water table is high and digging to the required kets--should be available at the site. depth is difficult, a deeper pit must be constructed near the biodigester pit. Water from the biodigester Farmers will usually want to do the digging themselves. If pit has to drain to this second pit through underground this is the case, remind them that excavated earth should pipes. Water should be pumped from this pit. be deposited at least two meters away from the pit on · Once the biodigester pit is of the proper depth, the each side to make construction work easier. work of fixing curvature at the pit's bottom has to be considered while digging. Dig the foundation for the manhole (first step of out- · Now horizontal poles are placed on the ground cross- let tank) along with the foundation for the biodigester ing each other at 90 degrees in the center. Ensure according to the dimensions determined during layout. that the poles rest on level ground. · A rope or cord the length of the inner radius of the The following points have to be observed: biodigester (as shown in the drawing) plus additional length needed to tie it to a pole and a wedge at each · As far as practical, digging should be straight down end is tied at the pole exactly at the center. A wedge without creating a slope. If the soil is loose on the is tied to the other side of the rope. The length from Operations Manual for Private Biodigester Construction Companies 95 the pole to the wedge should be equal to the inner · When the BCC has used 10 sets of appliances, BCC radius of the biodigester plus plaster thickness. should obtain 10 new (replacement sets) from the · With the help of the rope or cord, decide the depth PBPO and pay for the 10 sets it has used. of the pit and the shape of its curvature. Never dig · The payment required by the BCC calculated as more than the depth as indicated in the drawing. If follows: done so, earth has to be compacted firmly in this area to fill it. Cost of 10 appliance Actual cost of 10 sets of · Be careful to avoid accidents while digging near the sets appliances provided by PBPO sides, as soil may collapse. minus 2 Overhead (US$35 3 Plant Completion Reports since last payment) 15. Supervising Construction to Ensure Quality minus 2 Quality control is the shared responsibility of the BCCs Start-up bonus (US$15 3 Number of Plant and the PBPO supervisors. The checklists on the next two Completion Reports since last pages appear on the Project Control Folder and should be payment that are eligible for used by BCC owners and team leaders to ensure that start-up bonus) quality of biodigester construction is maintained for each equals = customer, and in each phase of construction. Required payment Payment from BCC to PBPO There are 12 phases in the construction process that are most important for BCCs to check, and several specific If the BCC has (additionally) sold part of a complete appli- points that must be checked at each of these twelve ance set, he should also replace those individual parts times. each time he/she receives an additional 10 appliance sets. NBP will not extend credit for items that BCCs have For each point, a Certified NBP Mason (either the com- already sold to customers. pany owner or a Certified NBP Mason who is working for him) must check and place his initials and the date of the Example: check in the box on the project control sheet. A new Biodigester Construction Company takes In the Quality Control Checklist in your PCF every box , 15 sets of appliances and spare parts from the with a number (for example, 1.1, 3.4, 5.5) must have PBPO valued at US$,1200 (US$80 per set). the initials of a Certified NBP Mason and the date of the check. After completing its first 10 plants, the BCC must replenish its appliance and spare parts stocks for new jobs. 16. Appliances and Spare Parts The cost of the 10 appliance sets is US$800 Following the procedures for appliance payment is very (US$80 per set 3 10 sets) important, because this is the mechanism that NBP uses to pay your company the US$35 overhead fee that you PBPO then subtracts the overhead payment for are entitled to as a Biodigester Construction Company, ten plants (US$35 overhead 3 10 plants=US$350) the US$5 promotion fee, and the US$15 start-up bonus from the total due. US$800­US$350=US$450 for your first 30 plants. total due after overheads. Procedure for biodigester construction company Appliance PBPO then subtracts the start-up bonus and Spare Parts Provisions and Payment with PbPo (US$15 startup bonus 3 10 plants=US$150) · BCC receives sufficient appliances and parts in from the total due after overheads. advance from PBPO to complete 15 plant installa- US$450­US$150=US$300 final payment due. tions. BCC is issued an invoice for these materials and the invoice is recorded by the PBPO Coordinator. · BCC is obligated to store these appliances at their The balance of the BCC's Appliance Account premises or place of business. with the PBPO after this payment is US$1,200­ US$800=US$400 plus the value of 10 additional appliance kits (US$800) and any spare parts or other appliances that the BCC takes from the PBPO. 96 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Spare Parts Activity: Are parts being used for a new Farmer's Friend The BCC is also required to hold additional spare parts biodigester construction? Are they spare parts or for in stock that are required for maintenance at the time " after-sales service? Write this in the area under "activity. of making payments for appliance purchases. The BCC It is best to use the plant code to keep close track of the should maintain the following spare parts stock at all items that are used, both for new construction and for times. service. nbP SPAre PArTS STocK reQuiremenT for bccs Number of each item received or used: Under the head- ing of the appropriate item, write the number of parts that are coming in or going out. number to Keep item in Stock cost (uS$)/unit The current inventory of each part should be calculated 1. Mantles 10 0.01 and entered in the dark shaded line every time parts 2. Lamp glass 10 0.50 come in from the PBPO or go out to be used with a 3. O-rings 10 0.00 customer. After each transaction, calculate the current inventory by adding parts coming "in" (on lines where 4. Lamp reflectors and 10 1.00 upper shell (kit) you have entered "in") to the previous number of parts in stock, or subtracting items going "out" (on the lines 5. Muddy shower 10 0.20 where you have entered "out") from the previous num- ber of parts in stock. Keeping Track of company Appliance and Spare Parts inventory In this way, BCCs can keep track of parts that are in stock, BCCs should keep careful track of appliance and spare and will know when they need to get more appliance kits parts inventory, and the money that is owed to the PBPO or spare parts from the PBPO. for the appliances and spare parts they have used. There are two forms (following pages) that BCCs are required 2. Form A­2: Appliance and Spare Parts Account to maintain to keep track of appliances and spare parts. This is the second form that BCCs are required to main- These are: tain to keep track of appliances and spare parts. Account- ing for the value of appliance kits and spare parts in stock 1. Appliance Inventory Form (Form A­1) and of the money you owe to the PBPO is the most The appliance inventory form is used to keep track of the important and difficult/complex accounting task for BCCs. appliances and spare parts that come in to the BCC and Form A-2 provides a way to keep track of these two fig- the appliances and spare parts that are used by the BCC. ures, and to make sure you receive the right amount of It has a column for each item that is provided by NBP . money from NBP for your overhead payments. BCCs should keep a continuous inventory of the parts that are received from the PBPO and the parts that are recording Appliances and Spare Parts received used for new biodigester construction, scheduled main- from the PbPo tenance, and after-sales service. First, when the company receives appliances and spare parts from the PBPO, the date of receipt and the value The blank (white) lines are for recording transactions of these parts stated on the PBPO invoice should be (items coming in or going out). Each transaction should entered on the first white line, and "Received from be recorded in a separate white line. You should always PBPO" should be written in the Description (Plant Code/ use a different line for items coming in and items going Customer) column. Then, these totals should be trans- out. " ferred to the shaded line marked "Total, reflecting the inventory of parts on the date they were received. The dark (shaded) lines are for keeping a running total of the items in the BCC's stock. recording Appliances and Spare Parts used Next, whenever spare parts or appliances are taken Date: The date of parts coming in or going out of the out of the company's place of business, this should be BCC's place of business. recorded. The BCC should write on a white line: Date; Plant code of customer for new appliance kits, (or customer's " In/Out: If parts are coming in from PBPO, indicate "in. If name for spare parts sales); and value of appliances and/or parts are going out to a client's home or a new construc- spare parts being taken from inventory; tion, write "out." Operations Manual for Private Biodigester Construction Companies 97 For New Plants Only: Calculate the amount of over- · Oiling of gas tap head payment (US$35) and start-up bonus (US$15 for · Cleaning of gas stove the first 30 plants) and add the two together for the · Cleaning of gas lamp total amount due from NBP . · Breaking of scum layer Calculate how much the BCC owes the PBPO for these Approximately 3­7 days after plant completion, you appliances and spare parts. should visit your customer to make sure that the plant is functioning properly. · If these are spare parts only, the amount owed to the PBPO will be exactly the same as the value of the appliances. 18. Collecting Work and Appliance Payments · If these are appliances for a new biodigester, the from Customers amount owed to the PBPO is Value of Appliances After the plant is finished and you have given basic user and Spare Parts MINUS Total Amount Due from training and maintenance instruction to the customer, NBP. you may collect the appliance and work payments. At this time, you should do the following: Keeping Track of the Total The shaded (dark) lines are used to calculate the value of 1. Present the customer with an official nbP invoice. the BCC's inventory and the amount owed to the PBPO This should clearly show the amounts that the customer after each transaction. After each transaction, BCCs owes for appliances and construction services. The should use the dark (shaded) lines to calculate approved NBP invoice is shown below. · the value of BCC's inventory of appliances and spare 2. Ask the customer for payment in full. parts, by subtracting the value of appliances or spare Some customers may ask you to wait for payment until parts from the previous value of inventory, and they have received their subsidy payment after the plant · the amount owed to PBPO, by adding the amount completion report. This practice is not approved by NBP , owed to the PBPO for the appliance or spare parts although it may occur occasionally. If this is the case, you transaction to the amount previously owed to the should require the customer to make a partial payment. PBPO. New totals of the value of inventory and amount owed to the Official Biodigester Construction Company Invoice PBPO should be entered after each transaction in the next dark (shaded) line. Invoice No. ______________________________ Date of Sale _____________________________ Company Information Customer Information 17. User Training: Explaining Plant Operations Name ______________________________ Name _____________________________ After the completion of all construction work, the BCC Address ____________________________ Address____________________________ Telephone __________________________ Telephone __________________________ mason must provide proper training to users in plant operation and minor maintenance. The importance of No Name of Item Description Quantity Unit Cost Total daily feeding in the right amount, operation of different Amount appliances, and major points to be remembered while 1 operating the plant should all be explained to the user 2 before leaving the construction site. Information on 3 the following aspects of operational activities must be 4 provided. 5 6 · Initial filling of plant Total Amount · Daily feeding of plant Discount · Use of main valve Payment Received · Checking leakages Balance · Use of water drain · Cleaning of outlet · Composting/maintaining compost pits Signature of Seller Signature of Customer 98 form A­1: APPlicAnce inVenTory form Appliance kits Spare parts Pressure lamp lamp upper "muddy date Activity in/out Stoves lamp gauge gas tap mantles glass o-rings reflector shell shower" Signature Inventory Inventory Inventory Inventory Inventory Inventory Inventory Inventory Inventory Inventory Inventory Inventory Inventory Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Inventory Operations Manual for Private Biodigester Construction Companies 99 3. record the customer's payment on the invoice. If the customer has made full payment, write, "PAID IN Write: "AMOUNT Received on MONTH DAY YEAR by " FULL. If the customer has only made a partial payment, YOUR NAME and sign the invoice. For example, "US$140 write the amount paid and also write: "Balance Due: Received on 1 June, 2009 by Sok Sokhal" and then your " _________. For example, "Balance Due: US$50.00" signature. form A­2: APPliAnce And SPAre PArTS AccounT (uS$) Amount due from nbP Value of appliances and Amount owed no. date Plant code/customer spare parts stock/inventory overhead bonus Total to PbPo Total Total Total Total Total Total Total Total Total Total Total Total Total Total Total Total 100 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters 4. enter the customer's payment on page 4 of the Project 6. Pay your workers. Control Folder in the appropriate place. When you give your workers payment for their labor, write their names, the amount, and the date of the pay- 5. calculate amount owed to PbPo for appliances. ment on page 4 of the Project Control Folder and require Calculate how much of the payment must be saved (put that they sign to verify that you have paid them. away) to pay the PBPO for appliances. NBP strongly rec- ommends depositing this amount into your bank account 7. Pay the promoter who referred your customer. immediately. NBP strongly recommends that you (the company owner) go to thank the promoter for his referral and deliver the US$5 promoter fee yourself. PlAnT comPleTion rePorT Operations Manual for Private Biodigester Construction Companies 101 PlAnT comPleTion rePorT (conTinued) 102 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters Section 3. After Plant Completion: 1) Problems that result from mistakes of users who Warranty, Maintenance, and do not follow PBPO Supervisor's instructions on the proper use of the plant; After-Sales Service 2) Problems that result from maintenance and use that does not follow the mason's, the BCC's, or other 19. BCC Obligations Under the NBP Guarantee: NBP instructions on proper use of the plant; Maintenance and After-Sales Service 3) Where repair or change of damaged parts is not done by the mason or BCC who built the plant; A guarantee is a written promise by a company that if a 4) Damage to a plant that occurs during natural disaster product they build and/or sell develops faults or problems (for example, flood). within a particular time, it will be repaired or replaced 5) Damage to lamp parts, which must be replaced by free of charge. Each NBP customer pays a guarantee fee the customer. based on the size of the plant constructed. This fee is paid to the PBPO and deposited into a special bank account. 20. Scheduled Maintenance Visits to Under the NBP guarantee, BCCs are obligated to provide Customers a guarantee of their services to biodigester customers, As a Private Biodigester Construction Company, or as and to address any problems with the biodigester during a Certified NBP Mason, you or another Certified NBP this period. The following are BCC obligations. Mason who works for your company are required to visit each customer once every six months for scheduled 1. guarantee of bcc Work for a Period of 24 months maintenance of the biodigester. BCCs must guarantee their work for the period of two years (24 months) from the date of the Plant Comple- You should make a schedule for follow-up at the begin- tion Report. In particular, BCCs must respond quickly to ning, write the approximate follow-up dates in your Proj- customer complaints about problems with their plants, ect Control Folder in the section illustrated below, and and maintain at the place of business a record of all such make a note on your schedule. complaints and the solutions provided. Detailed proce- dures on guarantees are provided in sections 21­22. Scheduled maintenance Visit date 2. replacement of Appliances Provided by nbP for 12 months Scheduled Maintenance Visit 1 (excluding lamps) The NBP guarantee requires that BCCs replace any Scheduled Maintenance Visit 2 NBP-provided appliance found within 12 months of con- Scheduled Maintenance Visit 3 struction to be defective or broken beyond repair. If the Scheduled Maintenance Visit 4: End of customer claims that the appliance is broken or defective Guarantee Period but cannot produce the appliance for inspection by the company and return to the PBPO, the customer must When you or your employee visits for scheduled mainte- pay for the replacement appliance(s). nance, make sure to: 3. Scheduled maintenance Visits 1. call the customer in advance. Let them know when Every six months for a period of two years after construc- you plan to come, and ask them to identify any tion, a Certified NBP Mason representing the BCC must issues they may have. In particular, ask whether pay a routine visit to inspect the structure of the plant, there are any appliance parts that they know need to the pipeline, and the appliances. Detailed procedures for be replaced. This may save you an extra trip. scheduled maintenance are outlined in section 21. 2. bring tools and spare parts. You should always bring your tools and spare parts, including those listed Exceptions to the Guarantee on the next page, on scheduled maintenance vis- NBP and the BCC are not responsible for the Farmer's its. Forgetting tools or spare parts makes you lose Friend guarantee in five situations that are outlined on face because you are not prepared, and lose time the guarantee certificate: because you have to make several trips back to the customer's property. Operations Manual for Private Biodigester Construction Companies 103 nbP biodigeSTer WArrAnTy cerTificATe Biodigester size: _______ m3; Plant code code: _____ ­ _____ ­ _____ / _____ Household Head: ____________________________________________________________________________________________________ Address: ____________________________________________________________________________________________________________ Date of Acceptance: _______ / _______ / 200 ___ Warranty Performance Organisation: Company Code: _____ ­ _____ ­ _____ Address: _________________________________________________________________ Telephone: _________________________________ Team Leader: ________________________________________________________________________________________________________ 1. Warranty period is 24 months from the date of the Plant Completion Report 2. NBP appliances are covered for the period of 12 months 3. Plant owner must keep broken appliance(s) or part(s) in order for NBP to provide a replacement 4. BCC will provide two scheduled visits during the warranty period 5. Lamps are not warranted by NBP: 6. All faults caused by the following reasons will not be covered under the warranty: a. Faults caused by carelessness of customer b. Operation and maintenance activities are not performed correctly according to program instructions c. Repair activities have been conducted other than by Certified NBP Masons. d. Natural disaster or Act of God e. Material quality does not meet program requirement For user only: name of technician date Trouble repair activities (full name + signature Biodigester Construction Company Owner (Full name + signature) 104 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters 3. inspect the plant, the pipeline, and appliances. Examine, functioning and general condition. If necessary, the and where necessary, adjust and clean the various BCC should immediately repair or replace an appli- parts of the biodigester plant so that it will keep ance. If immediate replacement is not possible, working efficiently and safely. replacement should be made within a one week. 4. Perform maintenance. If the mason performing this Masons may also sell spare parts to customers for work detects a fault in the structure that is hamper- appliances that are not under guarantee according to ing the proper performance of the plant or has the the NBP spare parts pricing guidelines. potential to threaten the functioning of the plant in 6. Suggest improvements to user. During the visit, the the future, the mason must carry out the neces- mason should interview the user to obtain informa- sary repair work. If not possible at that moment, the tion on plant operation such as daily feeding with mason should make an appointment to perform that manure and water, mixing and straw removal, use repair work within a period of one week. of appliances--main valve, water drain, taps, stoves, 5. replace broken appliance parts and provide spare lamps, and the like. The mason should instruct users parts. Appliances should be inspected for proper on how operation of the plant can be improved. National Biodigester Program--Form 10-P biodigeSTer comPAny WorK rePorT Plant Code Name of biodigester owner Mr/Mrs. Address Commune: District: Province: Name of user(s) consulted during visit Size of biodigester (m3) 4/6/8/10/15 Visited by Date of visit Purpose of visit Main activities carried out at the site during the visit Existing problems reported by the user(s), if any Instruction(s) given to the users User's level of satisfaction Fully satisfied/Partly satisfied/Not satisfied Reason for not satisfying fully Comments on overall condition and functioning of the biodigester Recommendation for follow-up Signature: ______________________________________________________ Date: ________________ Operations Manual for Private Biodigester Construction Companies 105 7. Ask for help from the PbPo if needed. You must first try When the BCC receives a complaint from a customer to solve the customer's problem yourself, but if you about the operation or functioning of a biodigester, the cannot, PBPO supervisors should be called to help company must send a Certified NBP Mason to the plant you with any difficult problems that you cannot solve owner within one week. on your own. 8. if you need help and can't get it, call nbP. If a PBPO Here are some guidelines for responding effectively to supervisor does not make him/herself available customers' requests for after-sales service: to address difficult problems with your customers within three days, call the NBP office immediately. 1. Ask questions before you go: When the customer Telephone number ______________. contacts you asking for service, ask him or her to describe the problem. Ask the customer whether all Procedure for Appliance guarantee: of the appliance parts are functioning, and whether If the broken or defective appliance can be presented they need spares. by the customer, neither the BCC nor the client will be 2. Schedule promptly: You should schedule an after-sales charged for appliances provided by NBP/PBPO that are service visit within 48 hours of the customer con- replaced during their guarantee period. The BCC should tacting you. return any defective appliances that are under the guar- 3. Always bring spare parts and tools: Always bring basic antee period to the PBPO and receive replacement spare parts with you to visit a customer and the cor- appliances. For example, if a customer's stove is not rect tools that you require to fix the problem they functioning properly and cannot be fixed, the BCC should have described to you. replace the broken stove from its stock (inventory) and 4. Analyze the problem, and conduct the necessary take the broken stove to the PBPO along with BCC Work repair(s): If it is not possible to repair the plant at that Report (Form 10-P) to secure a replacement. moment, make an appointment to come back within one week. If the customer claims that the appliance is broken or 5. Sign the customer's guarantee card: This shows that the defective, but cannot produce the appliance for inspec- company has responded effectively to a customer tion by the company and return to the PBPO, the cus- complaint and will protect you and your company in tomer must pay for replacement appliance(s). case the customer is not satisfied. 6. fill out a bcc Work report (form 10-P): Fill out a report Tools and equipment that should be carried on on the work performed on the service visit and ask scheduled maintenance visits the client to sign the report. To be able to perform his/her duties adequately, the Cer- 7. Ask for help from the PbPo if you need it: PBPO supervi- tified NBP Mason should carry the following tools and sors should be called to help you with any difficult spare parts on visits. problems that you cannot solve on your own. 8. if you need help and can't get it, call nbP: If a PBPO · 1 pipe wrench supervisor does not make him/herself available · 1 pair of pliers to address difficult problems with your customers · 2 rolls of Teflon(R) tape within seven days, call tel ______________ at NBP · 1 bottle of shampoo solution for leak testing immediately to secure the assistance of an NBP · 20 nylon washers Technical Supervisor. · 20 o-rings for gas taps 9. Keep records: The BCC must keep BCC Work Reports · 5 meters of rubber hose pipe (Form 10-P), and any written complaints by the plant · 20 lamp mantles owner, in the Project Control Folder at the company's · 1 small container of grease place of business. The company must also maintain at its place of business a register for complaints lodged in writing or verbally by or on behalf of plant 21. Providing After-Sales Service for owners. In this register, the company must note the Customer Problems owners name, address, and plant code number, the As a company owner, you are also responsible for provid- date the complaint was received, the nature of the ing service to your customers after biodigester construc- complaint, the date and nature of the company's tion is completed. In addition to the annual routine visits, response to the complaint, and the result of that BCCs must visit a plant free of charge in case the owner action. or user lodges a complaint. 106 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters 22. NBP Problem Reports and list of masons and helpers who will conduct the repair, or (b) a request for re-inspection of the Problem reports are created when NBP or the PBPO iden- . problem by NBP The BCC owner must request the tifies a serious problem with an operational plant during re-inspection directly to the NBP Technical Supervi- the course of a random inspection. Problem reports are sor responsible for the district in which the plant is made for plants that require major repair in order for the located. plant to meet NBP standards and to continue operation. · On request of the BCC, NBP will re-inspect the plant Either NBP or the PBPO may initiate a problem report, with a reported problem within five business days. but the BCC and PBPO are responsible for the process · If, after re-inspecting the plant, NBP verifies that the as a whole. plant has a serious problem in need of repair, the BCC will be charged a fee of US$10 to cover the The procedure for problem reports is as follows. costs of re-inspection. If NBP determines that the plant does not have a serious problem that requires · PBPO will create a problem report using the NBP repair, the BCC will not be charged any fee. The deci- Problem Report form (see below). sion of the NBP Technical Supervisor is final in this · Within three days of creating a problem report, the situation. PBPO will deliver one copy of the report to the place · Costs for repairs of problem plants will be allocated of business of the BCC that constructed the plant, and as follows. . one copy to NBP When delivering a problem report, · If the Quality Control Checklist in the Project the PBPO must obtain the signature of the person at Control Folder was completed properly dur- the BCC's place of business who receives it. ing construction, 60 percent of the cost of the · After receiving a problem report, the BCC has five plant repair will be charged to the PBPO, and business days to respond with either (a) a plan for 40 percent of the cost of the plant repair will be repair of the problem, including a repair schedule charged to the BCC. NBP BIODIGESTER PROBLEM REPORT FORM Date ______________________ Province __________________________________________ I. General Information about the Plant Plant Code Number ______________________ Plant Size ______ m3 Date of Plant Completion Report DD ______ MM ______ YY ______ Does the plant owner have Guarantee Certificate ______ Y ______ N Address of Plant ____________ Village ____________ Commune ____________ District Party Making Report ______ Plant Owner ______ Mason ______ VLA ______ BCC ______ OTHER Date of Report DD ______ MM ______ YY ______ When was the last supervision by PBPO or NBP? DD ______ MM ______ YY ______ Name of Supervisor to last inspect plant ______________________ II. Problem What is the problem with the plant? Provide explanation and please attach photo. When was the plant broken? DD ______ MM ______ YY ______ III. Plan or Strategy to Solve Problem 1. What measures have been taken to solve the problem? When were these measures taken? What were the costs involved? 2. If you did not solve problem, what approach (measures) will be used to fix it and when will they be taken? What is the esti- mated cost of repair? 3. Do you need the assistance of a National Technical Supervisor? Y/N Report Made by/Signature __________________________________________________ Operations Manual for Private Biodigester Construction Companies 107 · If the Quality Control Checklist in the Project 23. Submit End-of-Guarantee Form to PBPO Control Folder was not completed properly dur- and Receive Guarantee Fee ing construction, the PBPO will be responsible for 40 percent of the cost of the plant repair, and end-of-guarantee Procedures the BCC will be responsible for 60 percent of If the BCC (or mason) has fulfilled all obligations under the cost of the plant repair. the guarantee to provide after-sales service and repairs · After the BCC completes repairs, an inspection by during the two-year guarantee period, the guarantee fee an NBP Technical Supervisor is required to complete is paid to the BCC (or mason) by the PBPO at the end of and close out the problem report. the guarantee period. nbP'S end of guArAnTee form (Khmer only) 108 Cambodia: Supporting Self-Sustaining Commercial Markets for Improved Cookstoves and Household Biodigesters To collect the guarantee fee, the following steps should has expired, the PBPO will follow the procedures be taken. outlined for problem reports to ensure that the plant is repaired by the BCC. The BCC is responsible for · A Certified NBP Mason should visit the customer completing any repairs to the plant before receiving for the final scheduled maintenance visit. This final the guarantee fee in accordance with the procedures scheduled maintenance visit should be performed for problem reports outlined in section 23. within two weeks of the date two years after the · An authorized agent of the Company can collect Plant Completion Report. the guarantee fee from the PBPO within 21 days of · At this time, the mason fills out the End Of Guar- submitting the End of Guarantee form if no problem antee form, receives the customer's signature, and report is filed by the PBPO. submits the form to his/her supervisor. · If a problem report is filed by the PBPO, the Com- · PBPO Technical Supervisors will randomly select bio- pany can collect the guarantee fee from the PBPO digester plants to re-inspect within 14 days of sub- within 21 days of resolving the problem with the mission of the End-Of-Guarantee form. If the PBPO plant in accordance with the official procedures for detects a problem with a plant where the guarantee problem reports. 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