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Transcript of Presentation India Infrastructure
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Private Sector Participation inSewerage : Experiences in India
Presentation at
Second Annual Conference on Sewage Treatment
Plants: Opportunities, Issues, Projects,
Technologies,October, 17-18,2013
R.V. SINGHVice President & Head - Engineering
JITF WATER INFRASTRUCTURE LIMITED
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STRUCTURE OF PRESENTATION
Experience Of The Private Sector In Sewerage Management
Risks And Challenges Faced By Private Players
Expectations
Way Forward
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EXPERIENCE OF THE PRIVATE
SECTOR IN SEWERAGEMANAGEMENT
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SEWERAGE MANAGEMENT
It consists of :
Sewer Network
Sewage Treatment Plant With Or Without Reuse & Sludge Management
O &M
PPP in complete Value chain of Sewerage Management, in India, is yet to happen.
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PROCUREMENT STRUCTURE OF A
SEWERAGE PROJECT
There are mainly three elements in sewerage management:
SEWERAGE NETWORKING: Private sector is involved in construction as contractor.
contracts are awarded based on competitive bidding system and are of EPC
Turnkey or Item Rate type. O&M responsibility of network is of ULB beyond the
DLP or extended O&M period as per contract; Generally 1-7 years (vary contract to
contract)
O&M: Service Contract are not so common for sewerage networks & generally
undertaken by ULBs after end of DLP of the contractor.(Management contract in line with water supply, are yet to happen)
STP: Private sector is involved as EPC Contractor & Developer both.
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SEWERAGE NETWORK
EXPERIENCE CONSIDERING EPC/TURKEY CONTRACT:
Delay in approval of network design
House connection is responsibility of ULB which is done poorly byuntrained workers resulting into leakage of sewage
Generally S/W & RCC pipes are prescribed in bid documents which are
prone to breakage due to unequal settlement of soil below sewer owing to
ingress of rain water or any other reason
Least state level commitment or support
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STP/ETP/CETP
EXPERIENCES CONSIDERING BOT PROJECT:
Inadequate considerations for financial viability and lack of project development ability
Delay in appointment in independent engineer
Delay in approval due to prescriptive rather than participative technical specifications as well
ambiguity in specification & interpretation of codes
Sludge disposal mechanism not defined in contract
Reuse policy or facility not in place in time; often not in concession agreement
Industries discharge effluent in nearby natural course and least bother to take membership of CETP.
Projected revenue not realized as plant is ready but either sewer conveyance network is not readyor users not ready to connect with network/number of users substantially lower than projected atprocurement stage
Least involvement of employer during implementation
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CASE STUDY
CETP, SIDCUL INDUSTRIAL PARK, SITARGANJ ON
BOT
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CASE STUDY
Capacity of CETP in CA 8MLD with RO (for Reuse)
Plant capacity reduced to 4MLD during development stage & RO system procuredbut not installed owing to zero demand in local market of treated effluent forreuse
Plant is running under capacity as only 1.3MLD influent is available
Even BEP sale is not realizing
Though Tariff revision based on deviation in Base Effluent Parameters (pH, COD,
TDS) is permissible yet deviation measuring mechanism not in place. HenceTariff revision is always a conflict
Private developer is making loss
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RISKS AND CHALLENGES
FACED BY PRIVATEPLAYERS
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RISK & CHALLANGES
o The typical design & preparation process is still largely technically-
oriented with limited appreciation of the overall financial and
commercial risk issues involved.
o Often information distortions in the market have led to large variations
in the bids/offers received during the procurement process.o The procurement process is highly prescriptive, rather than
participative.
o The emphasis is on conforming to public sector requirements which
may not offer value for money and doesn't not encourage innovative
solutions
o While public sector dictating the terms, it is quite often not willing to
shoulder commitment risk and apportionment of risk, in some cases,
quite inefficient.
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EXPECTATIONS
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PRIVATE SECTOR EXPECTATIONS
o Incorporation Of State Asset Management Company Such As TNUIFSL (Tamil Nadu
Urban Infrastructure Financial Services Limited) to take the lead in preparing &
structuring the project and finance package in conjunction with multi-stake holder
committee to ensure sound and bankable project.
o There must be an agreement among the parties/stake holders for sharing
responsibilities to avoid confusion and delay in implementation stage of theproject.
o Transparent Lines Of Communication With BOT Operator/ Management
Contractor.
o PAYMENT ASSURANCE TO THE PRIVATE SECTOR PARTICIPANTS: ULB to provide
BOT Contractor a minimum level of revenue through a form of TAKE OR PAY
arrangement; ULB to guarantee to supply minimum level of raw sewage/effluent
to the plant and pay through a unit rate agreement at pre-determined annual fee.
Through this arrangement, ULB/ the city assume the risk of paying the fee if the
predetermined level sewage was not met. in turn, the private partner assumes all
responsibilities and risks for financing, constructing and operating the
STP/ETP/CETP for whole concession period.
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OUTLOOK GOING FORWARD
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PROJECTS; ENSURE FINANCIAL VIABILITY
AND DEVELOPERSS REPAYMENTS THROUGH
TAKE OR PAY CLAUSE IN CA. FURTHER, AS
LONG -TERM SUSTAINBILITY OF THEPROJECT IS THE ABILITY OF THE ULB TO
ASSUME RESPONSIBILTY FOR OPERATION &
MAINTENANCE OF THE PROJECT AFTER THE
END OF CONCESSION PERIOD ..FOR THIS ULB TO HAVE LONG-TERM PLAN THAT
SHOULD INCLUDE THE TRAINING AND STAFFING OF
MUNICPAL EMPLOYEES.
A VIABLE ALTERNATIVE TO THIS APPROACH
WOULD BE FOR THE ULB TO AWRAD A NEW
MANAGEMENT CONTRACT AND KEEP O&M
WITHIN THE PRIVATE SECTOR.
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THANKS
REFERENCES: Case studies of bankable water & sewerage projectfor USAID by ARD
Infrastructure In India: A Vast Land Of ConstructionOpportunities By PWC
R V SinghVice President & Head-Engineering
JITF WATER INFRASTRUCTURE LTD.
Jindal ITF Centre, 28 Shivaji Marg
New Delhi-110 015
Mob: +91 9910772779
email: [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]