IN 1997, WITH little preparation or support and no tendering process, the Biratnagar Sub-municipal Corporation entered into a ten-year contractual agreement with Americorp Environmental Services Inc., a US-based company, for municipal solid waste management. The contract favoured the municipality, but the foreign-based Americorp representative soon fled the country and a local engineering consultancy assumed responsibility for the company, unknowingly taking on a large debt burden. The company is still operating, but the sustainability of the current arrangement is questionable. This case study is used to demonstrate the importance of building capacity in both the private and public sectors.