Public Private Partnership: 24x7 Water Supply Project in ... Public Private Partnership: 24x7 Water
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Public Private Partnership: 24x7 Water Supply Project in Mysore City
(Lessons from project operation)
Trigger Points of Public Private Participation
Key Questions for PPP Identification Benefits: Will the PPP unambiguously result in improved access to
services, better quality, and greater efficiency? Cost-Recovery: Is there a clearly identifiable revenue stream? In
what currency is it denominated? Demand: Is there a proven demand for the service, and is it
measurable from past records? Stakeholders: Which stakeholders will be affected by the PPP
project (consumers and labor are critical)? Dialog vs. Dictation Public Capacity: Is the public sector clearly committed to steering
instead of rowing, and does it have the institutional capacity to monitor, regulate, and commit to the partnership long-term?
Labor: Will new investments create new employment or would the PPP likely require reduction of overstaffing?
Technology: Is it tried, tested, and proven?
Options for PSP
Leases ConcessionBOT /DBOT
There is a range of options with increasing private sector responsibility
Increasing private sector risk, responsibility, and financing
FORMS OF PUBLIC PRIVATE PARTNERSHIPS: Allocation Of Key
ResponsibilitiesTypes of Contract
O & M Commercial Risk
Public Public Private &Public
Public Public Private Public 3-5
LeasePublic Public (with
Private Shared 8-15
Public Private Private Private 25-30
DivestiturePrivate or Private &
Private Private Private Indefinite (license may
Selecting the Most Appropriate Option for PSP
Current state and performance of enterprise
Is there enough reliable data to craft a good arrangement?
What is the nature of demand?
What is the condition of assets?
How much investment is required?
What are the (current and desired) performance standards and to what degree are they being achieved?
What is the status of the enterprises human resources?
To what degree is the enterprise recovering its costs (operations, maintenance, and depreciation)?
Is the service affordable now and will it be under PSP?
Nature and status of the regulatory framework
Is the current regulatory framework conducive to PSP?
If not, what elements require revision?
Is there a regulatory agency, and if so, is it savvy enough to
effectively regulate a private operator?
Will the PSP arrangement be regulated by a regulator or
through the contract?
To what degree does regulation need to be coordinated with
Private Sector Participation In Water in India
MoUDPA encouragement for PPP: Issue of Guidelines in 2004
JNNURM accords priority for projects with PSP over those
executed by ULBs to leverage private capital & bring in
First successful PPP to be implemented in water for 24x7 supply
in pilot areas in Karnataka
Many more cities looking at PPP options following Mysore &
Private Sector Participation In Water in India
Water Supply & Sewerage Project (Kolkata- Salt Lake, West Bengal)Water Supply Project (Chandrapur, Maharashtra)Seawater Desalination Project (Chennai, Tamil Nadu) Water Management Contract -Source to Tap (Latur, Maharasthra) Water Supply and Sewerage Project (Tirupur, Tamil Nadu) Water Supply Project (Nagpur, Maharasthra) Water Treatment & Supply Project (Haldia, West Bengal)
Private Sector Participation In Water in India by Jusco
Experience of Water management in Jamshedpur City (effective 2004)24x7 Water supply in Mysore City (effective 2008)Haldia Water supply Project (effective 2008)Sector - V, Salt Lake Water supply Project (effective 2007)
Existing Situation & Issues in MysoreIn spite of adequate water availability from a dependable source, citizens do not receive regular supply: water is supplied for a few hours on alternate days in many areasSignificant extraction of ground water from bore wells and mixing up supply with Cauvery water through the same networkAssociated services like Customer Complaint Management, Billing & Revenue Collection, Active Leakage, Asset & Inventory Management very poorNo bulk meters and very few working customer metersSignificant proportion of network comprises PVC pipes laid at shallow depths and solvent cement jointedLack of accountability of staff due to politicized systemSizeable expenditure from municipal budget with no tangible gains
MYSORE CITY WARDS / DMAS
Mysore 24x7 Water Supply ProjectName of Project 24X7 Water Supply performance based management contract in Mysore city
Job Description Conversion of intermittent to 24x7 continuous water supply system throughsystematic improvements and network rehabilitation
Client Mysore City Corporation & Karnataka Water Supply & Drainage Board (KUWSDB)
Salient Features Hydraulic modeling, Network design, preparation and implementation of Capital Investment Plan (CIP)
Rehabilitation of citywide water distribution network About 1766 km. of pipeline (dia. 65- 350mm), 14 Booster Pump houses, 14 substations & related electrical works
Providing house service connections 1,74,936 Operation & maintenance of citywide water distribution system for 6 years (2
years post rehabilitation & implementation of 24x7, with fixed & performance linked remuneration
Billing & Collection leading to increased revenue collections Establishment and Management of 24x7 Customer Complaint centers
Value [Existing Contract]
Rs. 1620 million
Completion Time 72 Months
Indias largest water management P-P-P Project till date covering one million plus population and 150,000 service connections
The Three Phases
Phase 112 Months
Phase 236 Months
Phase 324 Months
O&M Plan Take-over Operations Study & Survey Design & Engineering IMIS Capital Investment Plan
O&M Sustainability of operations
Implementation of CIP Rehabilitation works Metering program
er Support Systems
Project Structuring Summary Performance based Management
Phase 1: Study Phase (Baseline study)
Phase 2: Rehabilitation Phase
Phase 3: O&M Phase
Remodeling & Rehabilitation of distribution network, establishing DMAs to convert intermittent to 24/7 continuous water supply
Fixed & Performance based fees
Sharing of Risks between Operator and ULB
Revenue collection Risk with Operator (limited)
Performance Risk with Operator
Design & Construction Risk with Operator
Operation Risk with operator
1. Tariff to be fixed by MCC
2. Operator to bill, collect and pass on the revenues to MCC
24X7 WATER SUPPLY Our MethodologySystem Understand and baselining
- Asset Mapping
- Measuring bulk inputs and outputs
- Establishment of DMAs
- Water Balance
- Base lining of losses, existing service levels
- Demand assessment
System Improvement- Work break down packages for execution
- Priority works execution
- Implementation of Rehab plan
- Service level targets are delivered in stages
- Cost to benefit analysis
- Change supply pattern to 24X7 supply
System Maintenance - Standardization of O&M practices
- Active leakage management
- Incentive based billing and revenue collection
- Customer centre with SLGs
- Integration of mapping, billing, customer care system
Payment Structure1. Management fees: Lump sum in two parts.
o Fixed fees (50%), paid in 24 equal quarterly installments.
o Performance fees (50%), paid six monthly on achievement of targets over project period of 6 years as per performance chart
2. Operating Cost: Lump sum in two parts.
o Fixed fees (30 %), paid in 23 equal quarterly installments
o Performance fees (70%), paid six monthly on achievement of targets over project period of 6 years as per performance chart
3. Rehabilitation Cost:
o BOQ driven
o Based on Capital Investment Plan (CIP)
o Payable against invoice for completed works not less than Rs 10 lakhs
4. Provisional Items:
o Paid in same manner as rehabilitation costs.
Performance Parameter Weightage
Number of connections with 24x7 30%
Revenue Improvement 30%
Revenue Water in 24x7 area 10%
Resolution of Complaints on service in 24x7 area 10%
Resolution of Complaints in entire zone 5%
Leakage levels in 24x7 5%
Quality compliance in 24x7 area 5%
Pressure compliance in 24x7 area 5%
Problems in putting through a 24X7 contract Overall acceptance to PSP in water
Lack of ownership of initiative across different levels and hence resistance f