ACHIEVING 24X7 WATER SUPPLIES THROUGHACHIEVING 24X7 WATER SUPPLIES THROUGH COMPREHENSIVE WATER LOSS CONTROL PROGRAM: NAGPUR (INDIA)( )

1Dinesh Rathi

Nagpur Water SupplyNagpur Water Supply

• Population 2.5 million in 217 sq km• 530 mld of water supply ( 210 lpcd)530 mld of water supply ( 210 lpcd)• 225 Thousand connections• 2100 km of distribution network• 31 water districts• 31 water districts• 41 service reservoirs• 5 water treatment plants

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Equitable Water Distribution 2005Equitable Water Distribution-2005

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NAGPUR WATER SUPPLY: Status before JNNURM

MeasurementLosses 125 mld Losses 235 mldLosses 125 mld

Commercial losses/theft/metering error

20 mld

TREATMENT500 mld

Distribution480 mld Recovery

Raw waterPurchase625 mld

LossesIn canal

480 mld

Physical

Recovery200 mld

625 mld

CollectionPhysical losses

SYSTEM EFFICIENCY : 32%140 mld

Collection Losses 45mld

Annual Loss (W/O Dep): Rs 56 croreWith Depreciation : Rs 75 crore (appx)

Water sector Challenges: NMC

• Water Losses and UFW• Equitable distribution (Alternate day / 20 hrs/day)• Accountability

W t t Sl (i ffi i t t )• Water to Slums (inefficient system)• Water network coverage and inadequacy of network• Water supply management during summer peakWater supply management during summer peak

demand • Old and inefficient assets

D l i it t ti f f t d d• Delay in capacity augmentation for future demand from Limited water sources.

• Capital availabilityCapital availability • Low water tariff and Poor billing mechanism.• Lack of professional approach.

Vicious circle

Inadequate maintenance of existing assetsLack of operational

Unsatisfied demandPoor cost recovery

AUGMENTATIONStrain on water resources

Lack of operational expertiseHigh UFWStrain on Water R

Additional capital expenditure

ResourcesTariffs not rational

FUNDING CONSTRAINTSCONSTRAINTS THROUGH COMMERCIAL SOURCES

FUNDING BURDEN ON STATE

MISMATCH BETWEEN INCREASING NEEDS & DECREASING RESOURCES

BWSSB-NOV '96

WATER AUDIT FACTSWATER AUDIT FACTSWATER AUDIT IDENTIFIES HOW MUCH WATERWATER AUDIT IDENTIFIES HOW MUCH WATER IS LOST AND WHAT IS THE COST OF THAT LOSS.

• FACT-1 : NOT ALL WATER SUPPLIED BYFACT 1 : NOT ALL WATER SUPPLIED BY NMC REACHES THE CUSTOMER

• FACT-2 : NOT ALL OF THE WATER THAT REACHES THE END USER IS PROPERLYREACHES THE END USER IS PROPERLY MEASURED OR PAID FOR.

• Pressure Reduction– National norm is 8 – 12 m actual 0 5 – 10 m– National norm is 8 – 12 m, actual 0.5 – 10 m

• Minimum Night flowS l h i i ht t i di id l t t k– Supply hours are in night to individual storage tank

• Metering errors– 90% meters are non working

• Real losses Vs Apparent losses– You can only guess

• Leak Detection TechnologyLeak Detection Technology– Kindly let me know the technology which detect leak

at 5 m pressure at underground pipep g p p• IWA Methodology or AWWA M36 ???

Water Efficiency Supply Side Efficiency

Demand Side EfficiencyEfficiency Efficiency

T l i W tWater Audit Energy Audit

Telescopic Water Tariff with cost

recoveryBilling & Collection

PumpingT

g

C tTreatmentTransportStorage

Customer Management &

Awarenessg

DistributionConsumer Slum Policy forConsumer Connection

Metering

Slum Policy for Water Supply

Reforms for Water SectorReforms for Water Sector

• FunctionalRing fencing

• FinancialBy formation of NESL

• Double entry• Accrual based accountingAccounting Accrual based accounting

U h f tCost recovery • User charges for cost recovery• Meterisation

Cost recovery By Rationalisation

of Tariff

NEED FOR REFORMS IN WATER SECTOR Annual expenditure of Municipal Corporation on water supply : Rs 106 crores

Total demand from consumers against water bills: Rs 70.7 crores(deficit of Rs 36.5 crores)g ( )

Total recovery against water bill : Rs 50 crores(arrears of Rs 20.70 crores)

STATEMENT OF WATER BILLING DEMAND TO CONSUMER AND IT’S RECOVERYSTATEMENT OF WATER BILLING DEMAND TO CONSUMER AND IT’S RECOVERYYEAR DEMAND RECEIPT % RECOVERY

(IN Rs. CRORES) (IN Rs. CRORES)

2001-2002 70 44 63 WATER SUPPLY370 MLD00 00 0 63

2002-2003 73.50 45 63 2003-2004 71.50 50 69

370 MLD370 MLD490 MLD

Municipal Corporation Makes Payment to Irrigation Department for : 540 ml/Day (annual avg.)Municipal Corporation Supplies Treated Water to City : 530 ml/DayMunicipal Corporation Billing to all consumers against water supply: 245 ml/Day (annual avg.)

Total Water Losses /UFW/ NRW are 291 ml/Day i.e. 54 % of supply.

OPEX is Rs 3.30/ 1000 ltrs. @ WTP ANNUAL ENERGY BILL OF Rs. 28 CRORE /YEAR

JNNURMProjects

CostIn Rs

Completion

Outcome to Improve Supply Side Efficiency

croreLeak Detection

3.30 March’2009

•Flow Meters from source to ESR•Reduction in BW –UFW to 2%Detection 09 Reduction in BW UFW to 2% from 23%

Water A dit

25.00 Feb’2010 •24x7 for 15000 connection by S ’09Audit Sep’09•Replacement of 20000 consumer meter•Reduction in UFW < 25% in Pilot

Energy Audit

28.79 July’2009 •Replacement of All Pumps installed prior to Year 2000 withAudit installed prior to Year 2000 with minimum efficiency of 70%•Reduction in system head by 12m for Pench 1for Pench-1•Centralized monitoring system•Infrastructure for equitable dist.

Expansion ofNetwork

43.49 Dec.’2010

•Connectivity to 572 layouts•Population over 2.0 lakhs will be covered in piped water network

JNNURMProjects

CostIn Rs

Completion

Outcome to Improve Supply Side EfficiencyProjects In Rs

croreetion Side Efficiency

Kanhan 87 65 March’ •New Plant of 240 mld andKanhanUp gradation

87.65 March2011

•New Plant of 240 mld and discarding the old plant of 120 mld with Pumps

Pench-4Part-1

211.58 March’2011

•Replacement of Canal by 2300 mm pipe•Additional Raw water of 115 mldAdditional Raw water of 115 mld from reduction in water losses in canal

Pench-4Part-2

79.74 March’2011

• New WTP of 115 mld at Godhani•Trunk main up to MBR

Pench 4 87 98 March’ Service Reservoirs 25 nosPench-4Part-3

87.98 March’2011

•Service Reservoirs 25 nos.•Feeder Mains 35 Km

Pench-4 174 00 March’ •Distribution system of 225 KmPench-4Part-4

174.00 March2011

Distribution system of 225 Km

Benefits of Sanctioned Projects jUnder JNNURM : Water Sector

CostIn Rs crore

Completion

Outcome to Improve Supply Side Efficiency

croreTotalJNNURMPh 1

1200

(250

March-2011

•Total Production Capacity 765 mld to meet demand up to 2021R h bilit ti f ld PPhase-1 (250 m

USD)•Rehabilitation of old Pumps and WTP and reduction in energy cost by 20%•10% of Area will be converted in to 24x7•NIT Phase-1 : Water Supply pp ycoverage to 1.5 lakhsPopulation (EWS/LIG)

NAGPUR WATER SUPPLY: Status After Implementation of approved ProjectsImplementation of approved Projects

under JNNURM Phase-1

Commercial losses/theft/metering error

Losses5 mld

265 mld

TREATMENT

theft/metering error

Raw water TREATMENT535 mld

Distribution530 mld

Recovery220 mld

Transmissionby Pipe

Physicallosses

Benefits after partial Implementation

Collection Losses 45mld

Benefits after partial Implementation•System Efficiency : 41% from 32%•Reduced financial losses by tariff revision•Increased water supply to distribution by 40 mld•Increased water supply to distribution by 40 mldNeed much more to improve technical & commercial efficiency in distribution system

Strategy For Water Loss ControlWater Audit (2004 -2006)

Identification of the Water Losses (Technical & C i l )

Leak Detection in Bulk water system (Supported by JNNURM)• Installation of Flow Meters (Supported by JNNURM)Commercial ) • Installation of Flow Meters (Supported by JNNURM)• Reduction in Raw water transmission losses (Supported by JNNURM)

Pilot & DMA for Leak Detection (2006-2010)Pilot of 24x7 water supply project to reduce UFW in

Distribution System (Supported by JNNURM)DMA for leak detection plan to identify the causes (Supported by

JNNURM)Distribution System (Supported by JNNURM) JNNURM)

Full City Rehabilitation Plan (2009-2014)

Rehabilitation Plan Based on Water Audit and Pilot /DMA studies (Approved by JNNURM)

O & M St t f S t i bilit (2010 2035)O & M Strategy for Sustainability (2010-2035)Telescopic Tariff for conservation and cost recovery (Revised

by General Body)PPP for Technical & Commercial Efficiency through 25 years O & M lease contract ( EOI received from 10 prospective bidders)

Pilot 24x7 Pilot ProjectPilot 24x7 Pilot Project

• Feature– 15000 Connection including slum15000 Connection including slum– 10 slum areas

P l ti 150 175– Population 150 – 175 • Contract

– Study, Rehabilitate, Operate contract with Private operatorPrivate operator.

– Penalty /bonus for targets in UFW, Quality Customer services and ContinuityQuality, Customer services and Continuity of supply

Temporary Solution by Temporary Contract

House Service Connection

Near GPO

HSC a Major source of Leakages

Breakdown of leakages

573, 37%

HSC

983 63%Pipes

983, 63%

Source of Losses (Physical + Commercial)

• House service connection : 63% of reported leak complaintp p

• Old conservancy lane / G I PipesOld L d J i t / V l l k• Old Lead Joints / Valve leaks

• 70% of non working meters0% o o o g ete s• Illegal connections• Poor quality of meters• Absence of water accountingAbsence of water accounting

Pilot 24x7 Project :Baseline for Private Operator

KPI Baseline KPI Target KPIUFW level The NRW is assessed at 50% UFW below 30% for

Private Operator

proportionate bonusIncrease of volumebilled compared to

Volume billed for FY 2006-07 = 21,7MLD on average.

Higher than baselines by10% for bonus

FY 2007-08 This value shall be used for the cost-benefit analysis of the rehabilitationplan.The baseline KPI for the assessment ofThe baseline KPI for the assessment ofbonus/penalties during O&M will bebased on FY 2007-08 data.

Continuity of 2 to 24 hours depending on the area of 24/7 throughout the zoneysupply

p gsupply

gwith minimum 2mpressure at customer tap

Water Quality 63% of samples tested had a residual Residual chlorine higherWater Quality 63% of samples tested had a residualchlorine level higher than 0,2 ppm

Residual chlorine higherthan 0,2 ppm

Time for handlingt

Not applicable Within 3 dayscustomercomplaints

Rehabilitation Plan for Pilot 24x7• Replacement of 100% House

service connection & Metersservice connection & Meters• Replacement of old conservancy

GI pipeGI pipe• Rehabilitation of Tertiary network• Hydraulic modeling as per Master

plan• Installation of new billing system• Customer Facility centreCustomer Facility centre

Water Efficiency TargetsWater Efficiency Targets

• Technical Efficiency : Ratio of Volume Billed & Volume Inputp

C i l Effi i C ll ti f t• Commercial Efficiency: Collection of water charges vs Billed volume

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Conversion in to 24Conversion in to 24

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NRW -44%NRW -44%

NRW -17%

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Project ResultsProject ResultsS D i ti B f Aft S 09 R kSrNo

Description Before(2006-07)

After-Sep09(2009-10)

Remark

1 Number of legal 12000 14000 Addition by connection slum + Survey

2 Water Supply in mld 43 mld 47.75 mld3 New meter installed 73003 New meter installed 73004 Unmetered Connection 1800 slum5 Volume billed 7236 14.35 20.57 43% increase6 Estimated UFW 44% 17%7 Converted in 24x7 nil 4300

It provide a Important base for fixing up benchmark for full city38

It provide a Important base for fixing up benchmark for full city

Improvement in Demand Side Efficiency :Water Tariff for Conservation and

SustainabilityW t T iff f f ll t f t i bl t b i• Water Tariff for full cost recovery for sustainable water business.

• Subsidized Tariff to Urban poor and low domestic consumption 55 lpcd

• Tariff at cost for domestic consumption up to 135 lpcd• Premium Tariff for domestic consumption beyond 135 lpcd and

non domestic usagenon domestic usage• Indexation with raw water and energy charges. It enable to pass

additional cost (70% of operating expenses) directly to consumer has surcharge.

• Tariffs are sufficient to meet Operating expenses.• Earning will be better with operational efficiency and reduction in g p y

Non Revenue Water.

Tariff RevisionCatagory Old Tariff /1000 Ltrs

New Tariff Remark

Residential Rs 3 to 4 Rs. 8 to 15 for > 8 units per month as per telescopic

•Minimum chargesReplaced by Monthly access p p

consumption charges (Rs 56 for 15mm)

Semi Residential NA Rs 8 to 18 >8 units Min access charges are Rs 100

Institutional Rs 12 Rs. 15 to 20C i l 1 R 20 R 25 100Commercial-1 Rs 20 Rs. 25 to 100Commercial-2 NA Rs 60 to 540 Mineral water +

Cold drink

Slum Rs 25 PM Rs. 30 to 80 PM Kaccha, Concrete, Multifloor

Inde ation NA Energ + Ra ater Directly passing toIndexation NA Energy + Raw water Directly passing to consumer as surcharge

l i i d N d lAnnual Revision NA 5% to MC and 10% to 25% to GB

No need to approval from GOM

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PPP For Rehabilitation Program for Full City ( 90 m USD)

• Public Private Partnership• Public Private Partnership • Partnership

– Ownership : NMC– Operation: Private– Investment: Both

• NMC to decide TariffNMC to decide Tariff• NMC to decide Development Plan for City

P i t P t t O t th t• Private Partner to Operate the system.• Private Operator to earn profit through p p g

efficiency in Implementation and operations

Visible Project Benefits

• Water Supply Hours• Water Supply Hours– Water supply hours was increased from 4.30 hours to 24 hours

• Water Consumption:p– The water consumption was 440m3/day for a Bajiprabhu nagar with

4.30 hrs has increased to 24 hrs with 520m3/day and now reduced to 450 m3 of water consumption With telescopic tariff and billingto 450 m3 of water consumption. With telescopic tariff and billing as per consumption will reduce.

• Pressure : – Before conversion the average pressure at consumer water taps

was 2-5 meters and now it reaches to 10-12 m. It resulted in to energy saving for consumers as water reaches directly to overhead water tank.

• Quality:The continuous pressurized network has avoided the contamination– The continuous pressurized network has avoided the contamination of water from leaking House service connections which were replaced under this project.

Vi ibl P j t B fitVisible Project Benefits • UFW:

– The average UFW was 69% in the zone was observed during base line study have been reduced to 33% in DMA of 144 regular connection and y gabout of 150 slum dweller in Bajiprabhu nagar DMA. The UFW will reduce further after completion of slum connection rehabilitation.

• Commercial losses:• Commercial losses:– Total billing volume was 137 m3/day has been increased to 338 m3/day

(286 m3/day to regular consumer and 52 m3/day to slum consumer i t billi t l li )against nn billing to slum earlier).

• Lessons learnt:– apart from technical lessons provided by demo zone a valuable– apart from technical lessons provided by demo zone a valuable

feedback on consumer handling was learnt from this project will be used in full city 24x7Water– Water

NMC Strategy for Reforms in W SWater Sector

• Fixing of Benchmarking and Performance indicators through Water audit• Fixing of Benchmarking and Performance indicators through Water audit, Energy audit & Financial reforms.

• UFW/NRW reduction program with investment plan• Assets Up gradation plan for better serviceability and efficiency• Assets Up gradation plan for better serviceability and efficiency• Cost reduction program (Energy, Water & O & M Cost)• Improvement in services to consumer special emphasis to urban poor

I l t ti f t ti l ith i b ilt ffi i i• Implementation of augmentation plans with inbuilt efficiencies.• Low cost Funds / Grant from Jn-NURM/ Tax free bonds/ PPP• Performance based contract with 5 to 25 years of O & M with private

ti i tiparticipation• Rationalization of Water Tariff and Billing with Meterisation.• Accountability of NMC towards consumer .• Review of water supply master plan with inclusion of water reuse option

……………….. Moving towards Continuous Water Supply in Nagpur

NMC Strategy

Inadequate maintenance of existing assetsLack of operational

Unsatisfied demand

Poor cost recovery

AUGMENTATION• Strain on water

resources Lack of operational expertiseHigh UFWStrain on Water R

• Additional capital expenditureSTRATEGY

• REFORMS IN WATER ResourcesTariffs not rational

SECTOR

• INVESTMENT SUPPORT FROM JNNURM

FUNDING

• IMPLEMENTATION THROUGH PPP MODE

CONSTRAINTS THROUGH

COMMERCIAL SOURCES

FUNDING BURDEN ON NMC/STATE

MISMATCH BETWEEN INCREASING NEEDS &

DECREASING RESOURCES

BWSSB-NOV '96

Implementation Optionsp p

• OPTION-1 : INVEST JNNURM MONEY KEEPING EXISTING MANAGEMENT PRACTICES AS IT IS WITH ASSUMPTION THAT ALL PROBLEMS ARE WITH PUMP AND PIPES.THAT ALL PROBLEMS ARE WITH PUMP AND PIPES.

• OPTION-2 : INVEST JNNURM FUND IN THE WATER SUPPLY SYSTEM AND IMPROVE THE MANAGEMENT & ACCOUNTABILITY.

ASSET UTILIZATION

24x7 WATER SUPPLY : OBJECTIVES24x7 WATER SUPPLY : OBJECTIVES

• Continuous water supply at desired “Water for all and 24 x 7 supplies with focus on safety, equity, and reliability”.

pp ypressure.

• No Contamination of waterNo Contamination of water• Reduction in water losses• Better Accountability• Better Service to Consumer• Sustainability of system

Why Continuous Water SupplyWhy Continuous Water Supply

W t S l HWater Supply Hours

Non Supply Hours

Investment for RehabilitationInvestment for Rehabilitation

• Replacement of House connection• Replacement of consumer metersReplacement of consumer meters• Replacement of deteriorated pipes and

fittifittings• Rehabilitation of ESR/GSR.e ab tat o o S /GS• Rehabilitation of Pench-II WTP• Rehabilitation of Misc component• Implementation of Slum PolicyImplementation of Slum Policy

Private Participation in Water Sector:Exist in NMC

• All new assets created since 1999 is managed though service contract.

• Existing assets also managed thru service contract forExisting assets also managed thru service contract for Pumping station/ WTP O&M / Valve operations/ Billing distribution/ Annual maintenance contract for Zonal level

• Disadvantages• Disadvantages– It is only a labor contract replacing retired employees.– No link with performance o t pe o a ce– No accountability towards consumer– Short term Contracts break up in small parts with no

f ibilit f i t i t tfeasibility for private investment– Contractor motivated for providing short term solution

NMC

Institutional ArrangementNMC

O&M

SubsidiesBylaws

Operator

O&MCustomer servicesRehabilitation NESLfees

Contract

per cumPaid volume

Tariff

ServiceNMC A/C

Water & Sewage Fund Tariff g

61Customers Assets

DevelopmentRaw waterElectricity

Strategy For Water Loss ControlWater Audit (2004 -2006)

Identification of the Water Losses (Technical & C i l )

Leak Detection in Bulk water system (Supported by JNNURM)• Installation of Flow Meters (Supported by JNNURM)Commercial ) • Installation of Flow Meters (Supported by JNNURM)• Reduction in Raw water transmission losses (Supported by JNNURM)

Pilot & DMA for Leak Detection (2006-2010)Pilot of 24x7 water supply project to reduce UFW in

Distribution System (Supported by JNNURM)DMA for leak detection plan to identify the causes (Supported by

JNNURM)Distribution System (Supported by JNNURM) JNNURM)

Full City Rehabilitation Plan (2009-2014)

Rehabilitation Plan Based on Water Audit and Pilot /DMA studies (Approved by JNNURM)

O & M St t f S t i bilit (2010 2035)O & M Strategy for Sustainability (2010-2035)Telescopic Tariff for conservation and cost recovery (Revised

by General Body)PPP for Technical & Commercial Efficiency through 25 years O & M lease contract ( EOI received from 10 prospective bidders)

Thank youThank youdinesh.nagpur@gmail.com

www.dineshrathi.comwww.dineshrathi.com

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Balancing service standards tariffs and subsidiesand subsidies

Specify Service Level

Estimate CostS i fi d

NO

Yes Estimate CostSatisfied

Set tariff and Subsidies

Subsidies in the form of

64Implement part of expenses

(electricity and or RW charges)/ sale of surplus bulk water to outside

Proposed Model

Type of Contract O & M Contract(Asset ownership and sovereign rigths remains with NMC)NMC)

Contracting Authority NMC / NESL

S f C t t I t t d O & M f t l f iliti f tScope of Contract Integrated O & M of water supply facilities from raw water to customer meters including• Water treatment• Transmission of treated water and distribution to customers• Full customer services including but not limited to: gmeter installation, reading, billing, revenue collection (and deposit in to NMC a/c) and customer complaints handling. •Inclusion : O & M, repairs, replacement, efficiency•Exclusions: Expansion, New Projects, Upgradations

Duration and possible 25 years65

Duration and possible extension

25 years. Extension subject to approval from General Body.

S i A Pi k i h i NMC li i C i i id

Proposed Model

Service Area • Pipe network with in NMC limits. Communities out side NMC on request of NMC/NESL

Integration of existing • Progressive full take-over of O&M over the first few years service contracts of the contract after completion of existing contracts

• For Kanhan & Pench IV, Operator will take over the responsibility of NMC for O & M.p y

Funding of the investments required • Funding of the initial 5-year investments under the lease

(Approx: 385 crores):(Approx: 385 crores):70% grant under JnNURM (if possible)30% balance from financial institutions and/or private

operatoroperator

Capital investments under the contract

• Managed by the operator/NMC

66Remuneration of the operator

• Fees for each unit (m3) paid by consumer or NMC (free supply, if any) through NESL

Services Standards, Tariff & Subsidies, Risks allocation (1/3)

Services Standards

Network Coverage : 100% coverage within two years for existing distribution area and expansion within NMC limitsStandards distribution area and expansion within NMC limits.

Water Quality: Potable water as per CPHEEO norms.

Continuity of Water Supply :• 12 hours within 3 years • 24 hrs within 5 years on a phased manner• 24 hrs within 5 years on a phased manner

UFW Target: >25%

Customer Complaints : To be attended within stipulated time.

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Allocation of Responsibilities and RisksBusiness R ibiliti

Operator : O&M, Management and partial InvestmentsResponsibilities NMC :

• Decide the level of subsidy versus tariff• Establish tariff structure• Establish tariff structure• Secure availability of raw water• Pay energy bills to energy providers• Manage existing JnNURM projects upto WTPs• Repay old loans and liabilities• Pay subsidies to NESLPay subsidies to NESL

Allocation of Risks

Operator : • Operational and commercial risks• Investments risks (partial)

NMC :f• Risk of volatility on energy and raw water Unit Prices

• Changes in law• Investments risks (partial)

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(p )

Institutional, legal and contractual issues (1/3)

NMC Act • Option 1: Make necessary amendments required (if any) to facilitate long term lease agreement • Option 2: Frame the agreement within NMC act to meet the desired objectives• NMC opted for Option 2 and O & M contract was p predrafted as per CNC act.

NESL set-up • Independent company to be 100% owned by NMC• Chairman Mayor MD Municipal Commissioner CEO• Chairman – Mayor, MD – Municipal Commissioner, CEO – Ex Engr WWD• Composition of Board of Director 6 each from officials and elected representativeand elected representative• Call for external assistance whenever required (tariff rebasing, auditing, monitoring…)

Role of the NESLWhen operator in place

• Monitor the key performance indicators• Monitor the operator technical and financial performance, its legal and contractual obligations

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p its legal and contractual obligations• Approve the rebasing of tariff as per contract• Make the decision regarding new projects

Institutional, legal and contractual issues (2/3)

Resolving disputes

• Procedures & time table shall be strictly regulated in the agreement.p g

• For minor dispute, the NESL may take up the decision.

A bit ti C t f L ill b t t• Arbitration or Court of Law will be next step. Tariff Adjustments

• Tariff to be determined by NMC• Tariff revision on yearly basis as per approved formulaey y p pp• No link of operator fees with slab and category of consumer.

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Institutional, legal and contractual issues (3/3)

Governing law The operator must comply with all Indian laws, regulations, orders and directives that may affect the lease contracty

Mechanism for compliance

• Penalties to be applied to the operator in the event of breach of its obligations.• Performance bond in favor of NMC to cover the performance failures with respect to the operator obligations.

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Human Resources issues

Transfer of • Subject to mutual consent of NMC staff and operator, NMC staff staff could be deputed to the operator for the first 120 days of the

contract for mobilization period. NO change in employment• Before the end of third 120 days, operator will offer regular employment to the selected staff of NMC within 90 days of Personnel integration period after one to one negotiations. •Employees will have option to go back to NMC within 180 days p y p g yof change consolidation period• If they do not accept the offer, they will go back to NMC.• During deputation of NMC staff to the operator they willDuring deputation of NMC staff to the operator, they will continue to hold their seniority and benefits as per their present employment terms with NMC.• During the term of deputation to the operator NMC staff will be• During the term of deputation to the operator, NMC staff will be paid by the operator and their salaries and benefits will not be inferior to their existing terms of employment with NMC.

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Operator • Quality Cost Based Selection with:

Selection of operator (1/2)

Operator selection

Quality Cost Based Selection with: - International pre-qualification process. - Competitive tender among pre-qualified bidders

• Technical proposal in two stage

• The technical proposal should include:- Methodology to improve efficiency to upgrade the system to 24x7- Proposed organization structure & human resources plan

Customer services- Customer services- Capital investment management- Operation & Maintenance plans

• Financial proposal after approved second stage technical proposal

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Selection of operator (2/2)

Operator • The Financial Proposal shall include for each bidder: selection - The fees on paid volume

• No link with water rate tariff slab and type of consumer• In absence of reliable consumer record and billing system (Avg• In absence of reliable consumer record and billing system (Avgbilling) NESL shall assure the minimum pay of 250 mld for first five years.

Sovereign Power will

• Disconnection of defaulters.• Deposit of revenue receipt ( water charges) in to a NMC acct

remain as function and responsibility

Deposit of revenue receipt ( water charges) in to a NMC acct.• Tariff decisions• Ownership of Municipal Assets

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p yof NMC • Development and Up gradation of facilities.