Engaging Community

8/13/2019 Engaging Community

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Engaging the CommunityIndian examples

Seshadrinathan Prakash

Chief Operating Officer

IL&FS

India


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The context


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General Environment

Underdeveloped water and sanitation service

Capacity to pay

Conflicting interest household, agriculture, industry

Lack of singular responsibility (in Government)

Poor regulation


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INDIA

Location


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Tirupur An interlinked Cluster

Printing Units

Tirupur Cotton KnitwearProducers

25000 Knitting & Garmentsmaking units

Weaving &Knitting Units

GarmentProducers

SpecialistTailors

CottonSpinningunits

CottonGinningUnits

Ancillary Units MakingThreadButtonsElasticLabelsConesPackaging BagsPackaging Materials

Dyeing &

Bleaching

Units

ProcessingUnits

EmbroideryUnits

Bombay & Delhibased export

trading houses

Foreign Buyers

Local MarketTirupur Exporters Association

(T.E.A)

South Indian Research Allocation(S.I.T.R.A.)

Apparel Export Promotion Council

Local Support Institutions


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Two examples


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Two projects

Water

& Environment

Water

& Environment

Effluent

& Environment

Effluent

& Environment

Integrated

Water Project

IntegratedWater Project

Integrated Effluent

Reuse Project

Integrated Effluent

Reuse Project

IssueIssue SolutionSolution

USD 250 mn

USD 100 mn


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Water Project Scope

Source River, 60 kms away

Capacity 185 Mld (250 Mld)

Urban Population 3,46,551 (2001 Census Figure)

Rural/Semi Urban Population 4,00,266 (2001 Census Figure)

Industry 700 Units

Sanitation Coverage 60% of Households of Tirupur

Low Cost Sanitation for Slums

IL&FS Role : Investor, manager, client interface


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IL&FS

Project Sponsor

NTADCL

USERS

Water

ChargesService

The Water Project Structure

GoTNGrant of Concession

GoTN

Project Sponsor

Users

Other Investors


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The Water Project Design

Project Model Industrial users and Government shareholders in the Project SPV

All key decisions taken in consultation

Project Design Benefit community at large (185 Mld surface water + sanitation)

25% capacity for village drinking water 25% capacity for municipal drinking water

50% capacity for industries

Improving sanitation in slums and municipality part of the project

Indias first PPP Project How do we get it done?


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Water Project Benefits

Industry (700 bulk users)

Improvement in quality & availability of water leads to in process

improvements and competitiveness Responsible citizen

Public Health (700,000 population)

Improvement in health and hygiene due to availability of treated water

Environment

Recharging and regeneration of ground water aquifer

Reduction in TDS levels in effluent with improvements in quality of inputwater


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Water Project Lessons

Engaging with Government Support of Government crucial for project implementation

Can you strictly enforce contract conditions when Government isa partner? Eg: Ground water abstraction, reduction in subsidy

Engaging with Community

How do you engage with a community which has different benefitperceptions? (Eg: tariff, quality of water)

If industrial demand goes down, project becomes financiallyunsustainable

Engaging with Investors Heads I win, tails you lose

Short term orientation


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Industrial Waste Water Project

Problem

Over 700 industries engaged in dyeing & bleaching operations

Generates between 100-120 MLD of effluent, with a high content of salt,

color and suspended solids Existing treatment processes does not meet standards

Adversely affects quality of water in the Noyyal river and theOrathuplayam Dam, which services agricultural demand

Solution

The Madras High Court came down heavily on the industries andmandated that industrial units implement a zero liquid discharge system

IL&FS Role : Project Manager, arranger of finance and O&M


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Project Design

Project Model

Community Ownership, similar to SHG

Part leveraging on Government support

Project Design

Reuse of water essential To meet environmental obligation

Tariff sustainability

Engaging with Indian Courts


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Project structure for waste water

Special Purpose Vehicle

CETP 4CETP 3CETP 2CETP 1

21 MemberUnits

15 MemberUnits

17 MemberUnits

67 MemberUnits

Three such SPVs were created and financed under the project


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Waste Water Project - Lessons

Be transparent in dealings

How soon can we complete?

Admitting mistakes

Be prepared to go beyond normal duties

responding to litigation in the court, member grievance,regulatory authorities, Government

Short term financing

Willingness to engage Member meetings


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Why it worked?

Water Project

Criticality of water for process

Economic costs of the alternative very high Integrated project design

User participation

Effluent Project

Legal and environmental pressure on change

Economic costs of ZLD comparable with benefits

User participation


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Conclusions


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Summary

Select Project based on a clear demand and sustainability

A participative institutional structure for Project Implementation

Financial commitment from beneficiaries is necessary

Continuous communication with the stakeholders

Balance risks in a transparent manner amongst the stakeholders

Community behavior can be unpredictable


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Thank You

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Engaging Community

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