PPP Water Ind Bagus Banget

Too| Kit for Pub|icPrivate
Partnerships in Urban Water Supp|y

for the State of Maharashtra, India
Edited by
Anouj Mehta
PrinIed on recycled paper
20!! Asian DevelopmenI 8ank
All righIs reserved. Published 20!!.
PrinIed in Ihe Philippines
lS8N 978929092JJ8!
PublicaIion SIock No. PPT!0!972
CaIaloginglnPublicaIion DaIa
MehIa, Anouj
Tool kiI or publicprivaIe parInerships in urban waIer supply or Ihe SIaIe o MaharashIra, lndia.
Mandaluyong CiIy, Philippines: Asian DevelopmenI 8ank, 20!!.
!. PublicprivaIe parInership. 2. Urban waIer supply. J. lndia. l. Asian DevelopmenI 8ank.
The views expressed in Ihis publicaIion are Ihose o Ihe auIhors and do noI necessarily relecI Ihe views and
policies o Ihe Asian DevelopmenI 8ank (AD8) or iIs 8oard o Governors or Ihe governmenIs Ihey represenI.
AD8 does noI guaranIee Ihe accuracy o Ihe daIa included in Ihis publicaIion and accepIs no responsibiliIy or
any consequence o Iheir use.
8y making any designaIion o or reerence Io a parIicular IerriIory or geographic area, or by using Ihe Ierm
counIry in Ihis documenI, AD8 does noI inIend Io make any judgmenIs as Io Ihe legal or oIher sIaIus o any
IerriIory or area.
AD8 encourages prinIing or copying inormaIion exclusively or personal and noncommercial use wiIh proper
acknowledgmenI o AD8. Users are resIricIed rom reselling, redisIribuIing, or creaIing derivaIive works or
commercial purposes wiIhouI Ihe express, wriIIen consenI o AD8.
NoIe:
ln Ihis reporI, $ reers Io US dollars.
Asian DevelopmenI 8ank
6 AD8 Avenue, Mandaluyong CiIy
!550 MeIro Manila, Philippines
Tel 6J 2 6J2 4444
lax 6J 2 6J6 2444
www.adb.org
lor orders, please conIacI:
DeparImenI o LxIernal PelaIions
lax 6J 2 6J6 2648
adbpub_adb.org
The Asian DevelopmenI 8ank (AD8) engaged CPlSlL, a
leading consulIancy irm, aI Ihe requesI o Ihe GovernmenI
o MaharashIra, under Ihe GovernmenI o lndiaAD8
lniIiaIive or MainsIreaming PublicPrivaIe ParInerships
(PPPs), Io develop possible PPP soluIions or Ihe urban waIer
supply secIor in Ihe sIaIe. The DeparImenI o Lconomic
Aairs, PPP Cell (MaharashIra) and AD8 have worked closely
in Ihe developmenI o Ihis reporI. No parI o Ihis documenI
may be replicaIed, quoIed, or prinIed wiIhouI wriIIen
conirmaIion rom DeparImenI o Lconomic Aairs and
AD8 (lndia) PPP ocal poinIs.
iii
Contents
LisI o! 1ables ahd Figures vii
Foreword x
AckhowledgmehIs xi
AbbreviaIiohs xiii
3$57,3337RRO.LWIRUWKH:DWHU6XSSO\DQG6DQLWDWLRQ6HFWRU !
l lhIroducIioh J
8ackground and Scope o Work J
Process lollowed or Ihe Tool KiI 4
SIrucIure o Ihe Tool KiI 4
ConIexI o Ihe Tool KiI 5
Users o Ihe Tool KiI 6
Guidelines Io Ihe Tool KiI 6
ll PPP ih Ihe WaIer SecIor 8
General DeiniIion and Overview o PPP 8
PaIionale or PPP 8
The WaIer Supply and SaniIaIion SecIor in lndia 9
Trends in PPP in Ihe WaIer Supply and SaniIaIion SecIor in lndia !0
PPP ProjecIs in Ihe WaIer and SaniIaIion SecIor in lndia !2
lll lmplemehIihg PPP: Ah Overview !6
SIep !: ldenIiicaIion o Ihe Problem Areas !6
SIep 2: Choice beIween Public lunding and PPP !7
SIep J: Choice o PPP SIrucIure !7
SIep 4: ProcuremenI !7
lV SIep 1: ldehIi!icaIioh o! Ihe Problem Areas !8
AssessmenI o Ihe CurrenI WaIer Supply and SaniIaIion SysIem !8
Peview o ProjecIs wiIh Approved DeIailed ProjecI PeporIs 29
PrioriIizaIion o Key Areas o lnvesImenI J0
V Fihahcial FeasibiliIy J!
DeIerminaIion and Due Diligence o ProjecI CosI J!
ldenIiicaIion o ProjecI Pevenues J4
PreparaIion o Ihe linancial Model J6
Assessing Ihe ViabiliIy o Ihe PrivaIe lnvesImenI J7
ViabiliIy Gap lund 40
AssessmenI o WaIer PPPs NoI Pequiring PrivaIe lnvesImenI 40
Vl SIep 2: Choice beIweeh Public Fuhdihg ahd PPP 42
PaIionale or PPP 42
PrerequisiIes or PPP 45
Making Ihe Choice 46
iv
ConIenIs
Vll SIep 3: Choice o! PPP SIrucIure 47
ldenIiicaIion o Pisks 47
AllocaIion o Pisks 48
SelecIion o Possible PPP SIrucIures 50
PreparaIory DocumenIs and AcIiviIies Pequired Io be UnderIaken 52
MaIching o PPP SIrucIures wiIh Ihe Value Chain and PrioriIized ProjecIs 5J
Vlll SIep 4: ProcuremehI 56
TransacIion SIrucIure 56
DraIing Ihe PPP ConIracI 58
SelecIion o Ihe ProcuremenI SIraIegy 59
Design o Ihe ProcuremenI Process 59
Managing Ihe ProcuremenI Process 6!
3$57,,'HWDLOVRI3XEOLF3ULYDWH3DUWQHUVKLS6WUXFWXUHV 65
l 8ackgrouhd 67
ll Per!ormahce MahagemehI CohIracI !or OperaIioh ahd MaihIehahce
o! WaIer Supply SysIem 68
AbouI Ihe PPP SIrucIure 68
ApplicabiliIy o Ihe PPP SIrucIure 7!
lll Cohcessioh AgreemehI !or WaIer Supply ahd Sewerage Services 72
ApplicabiliIy o Ihe PPP SIrucIure 75
lV Cohcessioh AgreemehI !or CohsIrucIioh, OperaIioh, ahd MaihIehahce
o! 8ulk WaIer Supply SysIem 76
V Cohcessioh AgreemehI !or CohsIrucIioh, OperaIioh, ahd MahagemehI
o! Ihe DisIribuIioh SysIem 80
ApplicabiliIy o Ihe PPP SIrucIure 8J
Vl Cohcessioh AgreemehI !or DevelopmehI o! Ihe 8ulk WaIer Supply SysIem
ahd OperaIioh ahd MaihIehahce o! Ihe EhIire SysIem 84
3$57,,,&DVH6WXGLHVRI3XEOLF3ULYDWH3DUWQHUVKLSVLQ0DKDUDVKWUD 89
l lhIroducIioh 9!
ll Summary o! CiIy Ahalysis 92
lll Jalha 97
8rie lnIroducIion Io !alna 97
WaIer Supply SysIem aI !alna 97
SIep !: ldenIiicaIion o Ihe Problem Area 97
SIep 2: Choice beIween Public lunding and Ihe PPP OpIion !00
SIep 4: ProcuremenI !0J
v
ConIenIs
lV Sahgli-Miraj-Kupwad !04
8rie lnIroducIion Io SangliMirajKupwad !04
WaIer Supply SysIem aI SangliMirajKupwad !04
SIep !: ldenIiicaIion o Ihe Problem Area !04
SIep 4: ProcuremenI !!!
V Kolhapur !!2
8rie lnIroducIion Io Kolhapur !!2
WaIer Supply SysIem aI Kolhapur !!2
Sewerage SysIem aI Kolhapur !!2
SIep !: ldenIiicaIion o Ihe Problem Area !!2
SIep 2: Choice beIween Public lunding and Ihe PPP OpIion !!8
SIep J: Choice o PPP SIrucIure !!9
Vl Virar !2!
8rie lnIroducIion Io Virar !2!
WaIer Supply SysIem aI Virar !2!
Vll Navghar Mahikpur !26
8rie lnIroducIion Io Navghar Manikpur !26
LxisIing WaIer Supply SysIem !26
SIep J: Choice o PPP SIrucIure !J0
SIep 4: ProcuremenI !J0
Vlll Shirpur !J!
8rie lnIroducIion Io Shirpur !J!
LxisIing WaIer Supply SysIem aI Shirpur !J!
SIep !: ldenIiicaIion o Ihe Problem Area !J2
SIep 2: Choice beIween Public lunding and Ihe PPP OpIion !J2
lX AkoI !J5
8rie lnIroducIion Io AkoI !J5
LxisIing WaIer Supply SysIem !J5
SIep !: ldenIiicaIion o Ihe Problem Area !J6
SIep 2: Choice beIween Public lunding and Ihe PPP OpIion !J8
X Saoher !4!
8rie lnIroducIion Io Saoner !4!
LxisIing WaIer Supply SysIem !4!
SIep !: ldenIiicaIion o Ihe Problem Area !4!
Xl Chipluh !46
8rie lnIroducIion Io Chiplun !46
vi
ConIenIs
Xll Kulgaoh-8adlapur !5!
8rie lnIroducIion Io Kulgaon8adlapur !5!
WaIer Supply SysIem aI Kulgaon8adlapur !5!
SIep !: ldenIiicaIion o Ihe Problem Area !5!
SIep 2: Choice beIween Public lunding and Ihe PPP OpIion !5J
Xlll AmberhaIh !55
8rie lnIroducIion Io AmbernaIh !55
XlV Navi Mumbai !59
8rie lnIroducIion Io Navi Mumbai !59
AssessmenI o Ihe WaIer Supply SysIem !59
Proposed WaIer Supply ProjecI !6!
AbouI Ihe PPP SIrucIure !62
Key Poles and PesponsibiliIies o Ihe Navi Mumbai Municipal CorporaIion
and Ihe PrivaIe OperaIor !6J
Key leaIures o Navi Mumbai Municipal CorporaIion's
Perormance ManagemenI ConIracI !64
Pisk Sharing beIween Navi Mumbai Municipal CorporaIion and Ihe PrivaIe Developer !65
3$57,97HUP6KHHWV !67
l lhIroducIioh !69
ObjecIive o Ihe Term SheeI !69
ConIenIs o Ihe Term SheeI !69
ll 1erm SheeIs !70
Perormance ManagemenI ConIracI or Ihe LnIire WaIer Supply SysIem !70
lnIegraIed Concession and ManagemenI o Ihe LnIire WaIer Supply and Sewerage SysIem !70
ManagemenI ConIracI or MeIering, 8illing, and CollecIion !78
Concession AgreemenI or Ihe DevelopmenI, OperaIion, and MainIenance
o Ihe 8ulk WaIer Supply SysIem !9!
Concession AgreemenI or DevelopmenI o Ihe 8ulk WaIer Supply SysIem and OperaIion
and MainIenance o Ihe LnIire WaIer Supply SysIem 200
vii
Tables and Figures
7DEOHV
! SIages in Ihe DevelopmenI o Urban WaIer Supply and SaniIaIion ProjecIs 5
2 PepresenIaIive Sample o an AsseI lnvenIory LisI !9
J Key ParameIers or Assessing Ihe Perormance o WaIer Supply Services 22
4 Key ParameIers or Assessing Ihe Perormance o SaniIaIion Services 26
5 8road ComponenIs o Ihe CapiIal CosIs J2
6 8road ComponenIs o Ihe OperaIion CosIs JJ
7 PepresenIaIive VolumeIric Tari SIrucIure J5
8 PepresenIaIive Telescopic Tari SIrucIure J5
9 Generic Pisk CaIegories 47
!0 LisI o DocumenIs and AcIiviIies Io be Arranged by Ihe Urban Local 8ody
or SIaIe Agency 52
!! PPP MaIrix in Ihe ConIexI o Ihe Value Chain 5J
!2 Key Poles and PesponsibiliIies o Ihe PrivaIe Developer and Ihe Urban Local 8ody 69
!J Key Pisks, Poles, and PesponsibiliIies o Ihe PrivaIe Developer
and Ihe Urban Local 8ody 70
!4 Key Poles and PesponsibiliIies o Ihe PrivaIe Developer
and Ihe Urban Local 8ody 7J
!5 Key Pisks, Poles, and PesponsibiliIies o Ihe PrivaIe Developer
!6 Key Poles and PesponsibiliIies o Ihe PrivaIe Developer
!7 Key Pisks, Poles, and PesponsibiliIies o Ihe PrivaIe Developer
!8 Poles and PesponsibiliIies o Ihe DierenI lnsIiIuIions 8!
!9 Key Pisk Sharing 8J
20 Poles and PesponsibiliIies o Ihe DierenI lnsIiIuIions 85
2! Key Pisk Sharing 86
22 Summary o PPP SIrucIures or Sample CiIies 92
2J 8asic Proile o WaIer Supply Services in !alna 98
24 WaIer Supply lndicaIors and lnerences or !alna 98
25 Proposed WaIer Supply ProjecIs or !alna !00
26 Key AssumpIions !0!
27 lnvesImenI PequiremenI wiIh a PPP !02
28 8asic Proile o WaIer Supply Services in Sangli, Miraj, and Kupwad !05
29 WaIer Supply lndicaIors and lnerences or Sangli, Miraj, and Kupwad !05
J0 Proposed WaIer Supply ProjecIs or Sangli, Miraj, and Kupwad !08
J! AssumpIions o Preliminary linancial Analysis !09
J2 lnvesImenI PequiremenI wiIh a PPP !!0
JJ 8asic Proile o WaIer Supply Services in Kolhapur !!J
J4 8asic Proile o Sewerage lnrasIrucIure in Kolhapur !!J
J5 WaIer Supply lndicaIors or Kolhapur !!4
J6 Key Sewerage lndicaIors or Kolhapur !!6
J7 Proposed WaIer Supply and Sewerage ProjecIs or Kolhapur !!7
J8 Key AssumpIions !!8
viii
Tables and ligures
J9 lnvesImenI PequiremenI wiIh a PPP !!9
40 8asic Proile o WaIer Supply Services in Virar !2!
4! Key WaIer Supply lndicaIors or Virar !2J
42 Proposed WaIer Supply ProjecIs !24
4J Key AssumpIions !24
44 8asic Proile o WaIer Supply Services in Navghar Manikpur !26
45 Key WaIer Supply lndicaIors or Navghar Manikpur !27
46 Key WaIer Supply ProjecIs Planned and Proposed !28
47 Key AssumpIions !29
48 8asic Proile o WaIer Supply Services in Shirpur !J!
49 Key WaIer Supply lndicaIors or Shirpur !JJ
50 Key AssumpIions !J4
5! 8asic Proile o WaIer Supply Services in AkoI !J5
52 Key WaIer Supply lndicaIors or AkoI !J7
5J Proposed WaIer Supply ProjecIs or AkoI !J8
54 AssumpIions o Preliminary linancial Analysis !J9
55 lnvesImenI PequiremenI wiIh a PPP !J9
56 8asic Proile o WaIer Supply Services in Saoner !42
57 Key WaIer Supply lndicaIors or Saoner !42
59 AssumpIions o Preliminary linancial Analysis !45
60 8asic Proile o WaIer Supply Services in Chiplun !47
6! Key WaIer Supply lndicaIors or Chiplun !47
62 Key WaIer Supply ProjecI Planned and Proposed !49
6J AssumpIions o Preliminary linancial Analysis !50
64 8asic Proile o WaIer Supply Services in Kulgaon8adlapur !52
65 Key WaIer Supply lndicaIors or Kulgaon8adlapur !52
67 8asic Proile o WaIer Supply Services in AmbernaIh !55
68 WaIer Supply lndicaIors and lnerences !57
70 8asic Proile o WaIer Supply Services in Navi Mumbai !60
7! WaIer Supply lndicaIors and lnerences !60
7J Key Poles and PesponsibiliIies o Ihe PrivaIe Developer and Ihe Urban Local 8ody !6J
74 Key Pisk Sharing !65
)LJXUHV
! Value Chain o Ihe WaIer Supply and SaniIaIion SecIor 9
2 lnsIiIuIional SeIup or Ihe WaIer Supply and SaniIaIion SecIor !0
J PPP Timelines in Ihe WaIer and SaniIaIion SecIor in lndia !!
4 PPP ProjecIs lmplemenIed in lndia !2
5 Overview o SIages in DeIermining SuiIable PPP SIrucIures !6
6 Overview o SIages in AssessmenI o WaIer Supply and SaniIaIion Services !8
7 lndicaIive LisI o lssues in Ihe WaIer Supply and SaniIaIion Services 28
8 AssessmenI o ProjecI DeIailed ProjecI PeporIs 29
9 Process llow or ViabiliIy AssessmenI J8
!0 Pisk MiIigaIion Measures or Ihe Urban Local 8ody or SIaIe Agency
and Ihe PrivaIe Developer 49
ix
Tables and ligures
!! AlIernaIive ProcuremenI Process SIraIegieslmplemenIaIion 60
!2 AlIernaIive ProcuremenI Process SIraIegiesSelecIion CriIeria 60
!J Perormance ManagemenI ConIracI or OperaIion
and MainIenance o WaIer Supply Services 69
!4 SIrucIure o Concession AgreemenI or WaIer Supply and Sewerage Services 7J
!5 Concession AgreemenI or ConsIrucIion, OperaIion, and MainIenance
o 8ulk WaIer Supply SysIem 77
!6 Concession AgreemenI or ConsIrucIion, OperaIion, and MainIenance
o Ihe DisIribuIion SysIem 8!
!7 Concession AgreemenI or DevelopmenI o Ihe 8ulk WaIer Supply SysIem
and OperaIion and MainIenance o Ihe LnIire SysIem 85
!8 SIrucIure o WaIer Supply Perormance ManagemenI
ConIracI or OperaIion and MainIenance !64
x
Foreword
SusIained growIh o Ihe lndian economy is essenIial or allround developmenI o Ihe counIry. WiIhin Ihis
requiremenI, susIainable inrasIrucIure developmenI is criIical or providing Ihe backbone or economic
acIiviIies and or ensuring IhaI resources are conserved and used mosI eicienIly, given Ihe limiIed and
Ihe asI depleIing naIure o Ihese resources.
PublicprivaIe parInerships (PPPs) are seen as a key ingredienI in Ihis, or bringing in muchneeded
invesImenIs, as well as eiciencies in uIilizaIion and managemenI o resourceswheIher waIer, power,
or, indeed, money. Various esIimaIes indicaIe IhaI i Ihe economy is Io grow aI 8% per annum, more
Ihan $500 billion o invesImenI in inrasIrucIure is needed beIween 2007 and 20!2, abouI J0% o Ihis
requiremenI musI come rom Ihe privaIe secIor.
The GovernmenI o lndia is Ihereore Iaking a sIrucIured approach Io creaIing an enabling environmenI
or privaIe invesImenI and operaIions in inrasIrucIure. WiIh Asian DevelopmenI 8ank (AD8) assisIance,
a gradually ending seI o Iasks, including capaciIy building and insIiIuIionalizaIion o PPPs across Ihe
counIry, is being carried ouI under Ihe GovernmenI o lndiaAD8 lniIiaIive or MainsIreaming PPPs.
SIaIe PPP cells and deparImenIs, such as Ihe Urban DevelopmenI DeparImenI in MaharashIra, are being
supporIed in various sIaIespeciic acIiviIies.
TogeIher wiIh Ihe DeparImenI o Lconomic Aairs, sIaIe PPP cell, and relevanI deparImenIs, Ihe iniIiaIive
ocused on idenIiying and developing PPP sIrucIures, which can be implemenIed in waIer supply and
saniIaIion or Ihe ciIies o MaharashIra. Hence, various possible PPP sIrucIures or Ihe secIor were sIudied,
and Ihe applicabiliIy o Ihese sIrucIures assessed in Ihe conIexI o Ihe selecIed sample ciIies. ConsulIaIions
led Io developmenI o Ierm sheeIs or Ihese PPP sIrucIures, which are idenIiied as mosI suiIable and
easible or implemenIaIion.
The above exercise has led Io Ihe developmenI o Ihis reporI, which may be considered as a Iool kiI Io
assisI Ihe relevanI public enIiIies in MaharashIra sIaIe or developing PPPbased projecIs in waIer supply
and saniIaIion. The Iool kiI is also designed Io help decision makers decide wheIher a parIicular projecI
mighI be suiIable or Ihe PPP rouIe or noI. The Iool kiI can, Ihereore, be Ihe basis or approving a projecI
implemenIaIion sIrucIure as parI o Ihe overall projecI approval meIhodology.
We are conidenI IhaI Ihese Iool kiIs will be used by Ihe municipal commissioners and Ihe chie execuIive
oicers o Ihe urban local bodies, and oIher relevanI sIaIe governmenI oicials and decision makers while
considering PPPbased implemenIaIion o urban waIer supply and saniIaIion projecIs.
Govind Mohan
!oinI SecreIary
DeparImenI o Lconomic Aairs
MinisIry o linance
GovernmenI o lndia
Aparna 8haIia
DirecIor, PPP Cell
MinisIry o linance
GovernmenI o lndia
Manu Kumar SrivasIava
SecreIary, Urban DevelopmenI DeparImenI (ll)
GovernmenI o MaharashIra
Ashok Sharma
DirecIor, linancial SecIor, Public ManagemenI,
and Trade Division
SouIh Asia DeparImenI
Asian DevelopmenI 8ank
xi
Acknowledgments
Under Ihe Asian DevelopmenI 8ank (AD8) supporI or MainsIreaming PPPs in lndia, Ihe public
privaIe parInership (PPP) Ieam (under Ihe joinI guidance o AD8 and Ihe DeparImenI o Lconomic
Aairs |DLA, GovernmenI o lndia) and PPP ocal poinIs have developed a number o secIor
iniIiaIives leading Io knowledge building and disseminaIion. This reporI is an ouIcome o Ihis acIiviIy
and consIiIuIes a parI o Ihe PPP knowledge series emanaIing rom Ihe PPP lniIiaIive in lndia.
This Iool kiI would noI have been possible wiIhouI Ihe conIinuous and rigorous inpuIs by DLA
represenIed by Ms. Aparna 8haIia. The reviews and consulIaIions aciliIaIed by Ihe senior members
o Ihe GovernmenI o MaharashIra helped incorporaIe Ihe ground realiIies. The AD8 Ieam, led by
Mr. Anouj MehIa, has been parI o every sIep o Iool kiI preparaIion, providing Iheir insighIs Io
develop iI in a userriendly manner.
GovernmenI Aparna 8haIia, DirecIor, PPP Cell
DeparImenI o Lconomic Aairs, GovernmenI o lndia
AjiI Kumar !ain, lndian AdminisIraIive Service
Principal SecreIary Io Chie MinisIer, GovernmenI o MaharashIra
Manu Kumar SrivasIava, lndian AdminisIraIive Service
SecreIary, Urban DevelopmenI DeparImenI2, GovernmenI o MaharashIra
AD8 lndia Anouj MehIa
Senior lnrasIrucIure linance SpecialisI and local PoinI or PPPs (lndia)
Ajay Saxena, AD8 ConsulIanI
K. PurushoIama, AD8 ConsulIanI (PPP Ieam)
Devender PawaI, AdminisIraIive AssisIanI, AD8
CPlSlL Pisk and S.P. Pamanujam (Chie LxecuIive Oicer)
lnrasIrucIure Sanjay Sah (Head)
SoluIions LimiIed Salonee !ain (Team Leader)
Puhi Lal (Manager)
Padma Priya (Head)
xii
AcknowledgmenIs
Key ConIacIs
GovernmenI o! India AD
Govind Mohan
!oinI SecreIary
MinisIry o linance
GovernmenI o lndia
Tel 9! !! 2J09 J88!
govind.mohan_nic.in
Ashok Sharma
DirecIor, linancial SecIor, Public ManagemenI and
Trade Division
SouIh Asia DeparImenI
AD8
Tel 6J2 6J2 6755
asharma_adb.org
Aparna 8haIia
DirecIor, PPP Cell
MinisIry o linance
GovernmenI o lndia
Tel 9! !! 2J09 444J
aparna.bhaIia_nic.in
Anouj MehIa
Senior lnrasIrucIure linance SpecialisI
and local PoinI or PPPs (lndia)
4, San MarIin Marg, Chanakyapuri, New Delhi
Tel 9! !! 24!0 7200
anoujmehIa_adb.org
Web Iinks: www.pppinindia.com
www.adb.org
xiii
Abbreviations
AD8 Asian DevelopmenI 8ank
AMC AkoI Municipal Council
CMC Chiplun Municipal Council
CMWSS8 Chennai MeIropoliIan WaIer Supply and Sewerage 8oard
CPHLLO CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion
CPlSlL CPlSlL Pisk and lnrasIrucIure SoluIions LimiIed
DPP deIailed projecI reporI
LSP elevaIed sIorage reservoir
lY iscal year
lPP inIernal raIe o reIurn
!MC !alna Municipal Council
!NNUPM !awaharlal Nehru NaIional Urban Penewal Mission
!USCO !amshedpur UIiliIies and Services Company
K8MC Kulgaon8adlapur Municipal Council
kl kiloliIer
km kilomeIer
KMC Kolhapur Municipal Council
KUWASlP KarnaIaka Urban WaIer SecIor lmprovemenI ProjecI
lpcd liIer per capiIal per day
M!P MaharashIra !eevan Pradhikaran
MLD million liIers per day
MMPDA Mumbai MeIropoliIan Pegional DevelopmenI AuIhoriIy
NMMC Navi Mumbai Municipal CorporaIion
O&M operaIion and mainIenance
PPP publicprivaIe parInership
PlP requesI or proposal
PlQ requesI or qualiicaIion
Ps rupees
SMC Saoner Municipal Council
SMKMC SangliMirajKupwad Municipal CorporaIion
STP sewage IreaImenI planI
SWMC Shirpur Warvade Municipal Council
TA Iechnical assisIance
UlDSSMT Urban lnrasIrucIure DevelopmenI Scheme or Small and Medium Towns
UL8 urban local body
VGl ViabiliIy Gap lund
WACC weighIed average cosI o capiIal
WTP waIer IreaImenI planI
PART I
PPP Tool Kit for
the Water Supply
and Sanitation Sector
3
I Introduction
Background and Scope of Work
The Asian DevelopmenI 8ank (AD8) is supporIing
Ihe PublicPrivaIe ParInership (PPP) Cell o
Ihe Urban DevelopmenI DeparImenI and Ihe
WaIer Supply and SaniIaIion DeparImenI o Ihe
GovernmenI o MaharashIra in mainsIreaming
PPPs in selecI sample ciIies o Ihe sIaIe Ihrough
a Iechnical assisIance (TA) projecI. The projecI
aims Io idenIiy and develop PPP sIrucIures IhaI
can be implemenIed in Ihe waIer supply and
saniIaIion secIor or Ihe ciIies o MaharashIra.
As a parI o Ihis TA projecI, various possible PPP
sIrucIures in Ihe waIer supply and saniIaIion
secIor have been sIudied, and Iheir applicabiliIy
assessed in Ihe conIexI o Ihe sample ciIies.
Term sheeIs have been developed or Ihe PPP
sIrucIures idenIiied as mosI suiIable and
easible or implemenIaIion. The TA projecI was
sIrucIured inIo Ihe ollowing phases:
Phase l: Peview o PPP sIrucIures implemenIed
in lndia, preliminary assessmenI o waIer supply
and saniIaIion services in Ihe sample ciIies o
MaharashIra,
!
idenIiicaIion o probable PPP
sIrucIure or approved projecIs, and preparaIion
o Ierm sheeIs
Phase ll: DeIailed inancial analysis, easibiliIy
sIudies, and projecI sIrucIuring or selecIed ciIies
Phase lll: 8id process managemenI
This Iool kiI is an ouIpuI o Phase l o Ihe
TA projecI.
AD8, in discussion wiIh Ihe PPP nodal oicer
cum secreIary (Urban DevelopmenI DeparImenI)
and principal secreIary (WaIer Supply and
SaniIaIion DeparImenI), GovernmenI o
MaharashIra, idenIiied a sample o !2 ciIies or
Ihe idenIiicaIion o PPP sIrucIures. To ensure
IhaI a represenIaIive caIegory o sample ciIies
is represenIed in Ihe sIudy, ciIies wiIh varying
populaIion sizes and geographical seIIings were
selecIed. While a ew ciIies all in Ihe caIegory
o J0,000!00,000 populaIion size, a ew
are in Ihe !00,000J00,000 size, and Ihe resI
have a populaIion o more Ihan J00,000. The
selecIed ciIies are largely covered under Ihe
Urban lnrasIrucIure and DevelopmenI Scheme
or Small and Medium Towns (UlDSSMT) o Ihe
GovernmenI o lndia and/or are underIaking
a projecI under Ihe MaharashIra Sujal Nirmal
Abhiyaan scheme. WiIh eiIher o Ihese schemes
in place, mosI o Ihe sample Iowns already have
idenIiied some invesImenIs IhaI need Io be
underIaken Io improve Iheir waIer supply and
saniIaIion services. ln some o Ihe sample ciIies,
Ihe waIer supply is managed by Ihe urban local
body (UL8), whereas in some oIher Iowns, Ihe
insIiIuIion overseeing Ihe waIer supply scheme
is MaharashIra !eevan Pradhikaran (M!P). The
sampled ciIies include !alna, SangliMiraj
Kupwad, Virar, NavgharManikpur, Kulgaon
8adlapur, Chiplun, Kolhapur, AkoI, Saoner,
Shirpur, AmbarnaIh, and Navi Mumbai.
2
lor
idenIiying PPP opIions IhaI are besI suiIed or
implemenIaIion, Phase l was sIrucIured inIo Ihe
ollowing componenIs:
(i) DeIailed sIudy o PPP sIrucIures possible
in Ihe enIire chain o waIer supply
services.
(ii) Comprehensive review o Ihe waIer
supply siIuaIion in sample ciIies and
idenIiicaIion o areas or PPPbased
inIervenIion.
(iii) PreparaIion o Ierm sheeIs or Ihe PPP
sIrucIures IhaI have been idenIiied as
mosI suiIable or Ihe sample ciIies.
!
Only Ihe ciIy o Kolhapur is sIudied or Ihe applicabiliIy o PPP in Ihe saniIaIion secIor.
2
Since Navi Mumbai has already underIaken PPP in waIer supply, lessons are drawn rom Ihe exisIing sIrucIure.
4
Tool KiI or PublicPrivaIe ParInerships in Urban WaIer Supply or Ihe SIaIe o MaharashIra, lndia
Process Followed for the Tool Kit
The Iool kiI was iniIially conceived by AD8
in conjuncIion wiIh Ihe GovernmenI o
MaharashIra. The iniIial approach ollowed in
Ihe ormulaIion o Ihe Iool kiI included a review
o documenIaIion available on PPP in urban
waIer supply. This included case sIudies on Ihe
implemenIaIion o PPP in urban waIer supply
in lndia, such as LaIur, Chandrapur, Haldia,
Chennai DesalinaIion, SalI Lake CiIy, and Ihe
KarnaIaka Urban WaIer SecIor lmprovemenI
ProjecI (KUWASlP). OIher documenIs reviewed
were reporIs, arIicles, and presenIaIions on Ihe
implemenIaIion o PPP in Ihe urban waIer supply
secIor. The review o Ihis documenIaIion helped
Ihe Ieam undersIand Ihe currenI sIaIus o urban
waIer supply in lndia and gain an undersIanding
o Ihe dierenI means o implemenIing PPP in
Ihe urban waIer supply secIor. The Ieam drew
key lessons rom Ihe case sIudies iI reerred Io
in Ihe lndian conIexI. These lessons ocused on
Ihe dierenI PPP sIrucIures suiIed Io varying
urban waIer supply scenarios. ln addiIion,
Ihey highlighIed Ihe main hurdles IhaI privaIe
parIicipaIion would ace in Ihe urban waIer
supply secIor.
SubsequenIly, using Ihese key lessons, Ihe Ieam
idenIiied Ihe various projecI sIrucIuring opIions
IhaI could be used or implemenIing PPP in Ihe
urban waIer supply. These opIions were drawn
up on Ihe basis o Ihe currenI implemenIaIions
o PPP in Ihe secIor (e.g., Ihe opIion o using
Ihe ViabiliIy Gap lund as a source o projecI
unding or a waIer supply scheme). A projecI
sIrucIuring opIion or Ihe developmenI o bus
depoIs was also considered. The Ieam also
underIook a sIudy o PPP concession agreemenIs
or Ihe urban waIer supply secIor. The Ieam
sIudied Ihe concession conIracIs o LaIur, Haldia,
SalI Lake CiIy, Navi Mumbai, and KUWASlP. They
ormulaIed Ierm sheeIs or each PPP sIrucIure
based on Ihe lessons o Ihe documenIaIion
review and sIudy o concession conIracIs. Lach
Ierm sheeI conIains a brie reerence guide or
undersIanding Ihe key clauses applicable under
Ihe speciic PPP sIrucIure. The clauses presenIed
in Ihe Ierm sheeI would help Ihe waIer supply
service provider in draIing a conIracI or
Ihe PPP sIrucIure IhaI has been selecIed or
implemenIaIion o Ihe idenIiied projecIs in Ihe
urban waIer supply secIor.
NexI, a currenI assessmenI o Ihe sample
ciIies chosen by AD8 was underIaken using
documenIs, such as ciIy developmenI plans and
deIailed projecI reporIs. The Ieam also held
discussions wiIh urban waIer supply oicials o
Ihe sample ciIies Io obIain Ihe mosI upIodaIe
inormaIion on Ihe urban waIer supply siIuaIion.
Discussions included Ihe currenI sIaIe o Ihe
urban waIer supply secIor, problems beseIIing
Ihe urban waIer supply deparImenI, and uIure
plans and scope or PPP in urban waIer supply
in Ihe ciIy. The Ieams also obIained views
and suggesIions on Ihe various PPP sIrucIures
devised. These suggesIions were incorporaIed
inIo Ihe Ierm sheeIs. The Ieam also meI privaIe
developers who are involved in Ihe provision o
urban waIer supply services in various ciIies.
All Ihe insighIs obIained rom Ihe sIudy o PPP in
urban waIer supply was used in Ihe ormulaIion
o a sIepbysIep process or implemenIaIion o
a PPP lie cycle. SuggesIions were Iaken rom
inIernal PPP and urban waIer supply experIs.
The process was also discussed wiIh AD8, and
Ihe suggesIions received were incorporaIed in
Ihe Iool kiI. The enIire Iool kiI was subsequenIly
presenIed Io Ihe GovernmenI o MaharashIra,
AD8, and Ihe DeparImenI o Lconomic Aairs.
The commenIs and suggesIions received were
Ihen incorporaIed inIo Ihe inal reporI.
Structure of the Tool Kit
The Iool kiI comprises our volumes:
Volume !: PPP Tool KiI or Ihe WaIer
Supply and SaniIaIion SecIor
Volume 2: DeIails o PPP SIrucIures
Volume J: Case SIudies o Sample CiIies in
MaharashIra
Volume 4: Term SheeIs
Volume ! is a comprehensive Iool kiI, while Ihe
oIher volumes provide urIher deIail on speciic
secIions o Volume !.
5
lnIroducIion
Context of the Tool Kit
The purpose o Ihe Iool kiI is Io assisI
Ihe relevanI public enIiIies in Ihe sIaIe o
MaharashIra in developing PPPbased waIer
supply and saniIaIion projecIs. The projecI
developmenI process in Ihe urban waIer supply
and saniIaIion secIor involves mulIiple sIages
prior Io implemenIaIion, as shown in Table !.
The Iool kiI deIailed in Volume l o Ihe reporI
discusses Ihe assessmenI o waIer supply services
and deIails Ihe ormulaIion o projecI sIrucIure
or implemenIaIion i Ihe PPP rouIe is Io be
1abIe 1 5Iages in Ihe DeveIopmenI o! Urban WaIer 5uppIy and 5aniIaIion ProjecIs
5I No. 5Iage DescripIion LeveI
! DeIailed
assessmenI sIudy
A deIailed assessmenI o Ihe exisIing service delivery is Ihe
process o reviewing Ihe exisIing sIaIus o waIer supply
and saniIaIion services in Ihe ciIy compared wiIh Ihe
currenI demand based on sIandardized delivery norms.
Such sIudies include waIer audiI, leak deIecIion sIudy,
energy audiI, and consumer survey. The assessmenI is Io
be carried ouI across Ihe enIire value chain o waIer supply
services. The ouIpuI o Ihis sIudy is idenIiicaIion o all Ihe
areas o service delivery IhaI need improvemenI in Ierms o
augmenIaIion o services, rehabiliIaIion, repairs, eIc.
CiIy
2 AlIernaIive
analysis
AlIernaIive analysis is Ihe process o idenIiying Ihe possible
alIernaIives or resolving Ihe problems idenIiied in each
componenI o Ihe value chain, evaluaIing Ihe idenIiied
alIernaIives, and selecIing Ihe opIimum alIernaIives based
on mulIiple parameIers. The ouIpuI is a seI o deined
projecIs or each componenI in Ihe value chain.
Value chain
componenI
J Technoeconomic
easibiliIy or
projecI approval
Technoeconomic easibiliIy is Ihe process o assessing
wheIher Ihe idenIiied projecI is Iechnically and inancially
implemenIable.
ProjecI
4 DeIailed projecI
reporI
The deIailed projecI reporI (DPP) is a speciic projecI
blueprinI on Ihe basis o which Ihe projecI will be
implemenIed. lI includes deIailed Iechnical designs
cosIing. The DPP or urban waIer supply projecIs in lndia
needs Io be prepared as per Ihe 0DQXDORQ:DWHU6XSSO\
DQG7UHDWPHQW, published by CPHLLO, MinisIry o Urban
DevelopmenI. ln Ihe case o saniIaIion projecIs, Ihe
manual prepared by CPHLLO or saniIaIion services needs
Io be consulIed.
ProjecI
CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion, Sl ~ serial.
adopIed. The Iool kiI provides inormaIion
on how Io develop a projecI i a PPPbased
opIion is ound necessary and possible or
implemenIaIion.
Under Phase l o Ihe TA projecI, a broad
analysis has been underIaken or Ihe sample
ciIies o MaharashIra Io assess and deIermine
Ihe possibiliIy and suiIabiliIy o PPPbased
inIervenIion or waIer supply and saniIaIion
projecIs or Ihese ciIies. The deIailed analysis,
needed Io inalize Ihe PPP opIion, would have Io
be underIaken as a componenI o Phase ll o Ihe
TA projecI.
6
Users of the Tool Kit
Since Ihis Iool kiI covers a parI o Ihe projecI
developmenI process, iI may be used by
any enIiIy developing urban waIer supply or
saniIaIion projecIs and wishing Io explore Ihe
possibiliIy o implemenIing Ihe projecI Ihrough
Ihe PPP rouIe. ln lndia, organizaIions likely Io
be involved in Ihe projecI developmenI process
are (i) urban local bodies (UL8s), (ii) waIer supply
and sewerage boards, and (iii) public healIh and
engineering deparImenIs.
Thus, individuals mosI likely Io use Ihe Iool kiI
would be Ihe deparImenIal sIa o Ihe
above enIiIies wiIh projecI developmenI
responsibiliIies.
ln addiIion, Ihe Iool kiI will help deIermine
wheIher a parIicular projecI mighI be suiIable
or Ihe PPP rouIe. The Iool kiI can, Ihereore, be
Ihe basis o approving a projecI implemenIaIion
sIrucIure as parI o Ihe overall projecI approval
meIhodology. Usually, Ihe responsibiliIy or
approval o projecIs is vesIed in Ihe Iop decision
making auIhoriIy o Ihe enIiIy, which has Ihe
primary responsibiliIy or implemenIing and/or
inancing Ihe projecI. Thus, iI can be useul or
Ihe municipal commissioner and Ihe sIanding
commiIIee (being Ihe Iop decisionmaking
auIhoriIies in a UL8) in urban local bodies, Ihe
managing direcIor and Ihe uncIional direcIors
o Ihe waIer supply and saniIaIion board, and
Ihe sIaIe governmenI (in case o Ihe public
healIh and engineering deparImenI).
The Iool kiI would be uIilized or (i) approval o
projecI implemenIaIion sIrucIure or PPP
speciic urban waIer supply and saniIaIion
projecIs, (ii) overall projecI approval, and
(iii) consideraIion o ViabiliIy Gap lund supporI
or individual projecIs.
Guidelines to the Tool Kit
8road guidelines or use o Ihis Iool kiI are as
ollows:
(i) To undersIand Ihe concepI, purpose,
need, and raIionale or developing Ihe
projecIs on a PPP basis, reer Io SecIion ll
o Ihis Iool kiI or an inIroducIion Io
Ihe concepI o PPP in waIer supply and
saniIaIion services and insighIs inIo Ihe
overall Irend o PPP in waIer supply and
saniIaIion in Ihe counIry.
(ii) SecIion lll o Ihe Iool kiI provides Ihe user
wiIh inormaIion on Ihe overall process
involved in developing and implemenIing
a projecI on a PPP basis.
(iii) lor inormaIion on Ihe irsI sIeps Io be
underIaken in developing a projecI on a
PPP basis, Ihe user should reer Io
SecIion lV. This amiliarizes Ihe reader
wiIh Ihe meIhods o idenIiicaIion o Ihe
areas in Ihe waIer supply and saniIaIion
services where Ihere are service delivery
and inrasIrucIure gaps requiring
inIervenIion or improvemenI. This secIion
provides insighIs inIo Ihe various meIhods
o service delivery assessmenI and Ihe
perormance sIandards IhaI need Io
be meI.
(iv) l Ihe user has already idenIiied Ihe
projecIs required or improvemenIs in
Ihe waIer supply and saniIaIion secIor
and wanIs Io deIermine wheIher a PPP
rouIe can be Iried or developing and
implemenIing Ihe projecI, Ihe user musI
irsI underIake a inancial assessmenI.
SecIion V provides Ihe deIails and key
componenIs o Ihe inancial assessmenI
process. The secIion also explains Ihe
process by which a choice is made
beIween Ihe publicunded mode o
projecI developmenI and Ihe PPP rouIe,
based on Ihe inancial assessmenI.
SecIion Vl builds on Ihe inancial
viabiliIy assessmenI carried ouI and
provides insighIs inIo addiIional poinIs
o assessmenI, which are qualiIaIive in
naIure.
(v) lor users who need Io know some o Ihe
prerequisiIes or developing a projecI on
a PPP basis, Ihis inormaIion is lisIed in
SecIion Vl.
(vi) l Ihe assessmenIs carried ouI so ar
have sIrongly esIablished Ihe case or
developing a proposed projecI on a PPP
basis, Ihe user can reer Io SecIion Vll Io
deIermine whaI Iype o PPP sIrucIure is
besI suiIed Io implemenIing Ihe projecI.
The user will be amiliarized wiIh Ihe
various key acIors, such as risks involved,
7
lnIroducIion
and Iheir allocaIion, Io deIermine and
help selecI Ihe mosI suiIable opIion rom
Ihe various PPP sIrucIures.
(vii) lor users seeking inormaIion on Ihe
procuremenI process and procedures Io
be ollowed once Ihe PPP sIrucIure or a
projecI has been inalized, deIails o Ihe
bidding process, key acIors IhaI need
Io be considered, and Ihe meIhod or
inviIing bids, Ihis is given in SecIion Vlll.
8
II PPP in the Water Sector
General Denition and Overview
of PPP
Provision o public services and inrasIrucIure
has IradiIionally been Ihe exclusive domain
o Ihe governmenI. However, wiIh increasing
populaIion pressure, urbanizaIion, and oIher
developmenIal Irends, Ihe governmenI's abiliIy
Io adequaIely address public needs Ihrough
IradiIional means has been severely sIreIched.
This has led governmenIs across Ihe world Io
increasingly look Io Ihe privaIe secIor Io provide
supplemenIary inrasIrucIure invesImenIs
and public services Ihrough publicprivaIe
parInerships (PPPs).
A PPP IransacIion has been clearly deined by Ihe
DeparImenI o Lconomic Aairs (lnrasIrucIure
SecIion), MinisIry o linance, in iIs guideline
documenI, 6FKHPHIRU6XSSRUWWR3XEOLF3ULYDWH
3DUWQHUVKLSVLQ,QIUDVWUXFWXUH. This deiniIion
sIaIes IhaI PPP is a conIracIual arrangemenI
made by a governmenI or sIaIuIory enIiIy
and a privaIe secIor company Io provide an
inrasIrucIure service.
Thus, a PPP projecI is a projecI based on a
conIracI or concession agreemenI beIween a
governmenI or sIaIuIory enIiIy and a privaIe
secIor company or delivering an inrasIrucIure
service on paymenI o user charges.
Rationale for PPP
PPP oers a winwin soluIion or all
sIakeholdersIhe public secIor, Ihe privaIe
secIor, and Ihe general public.
PPPs allow Ihe public secIor Io derive beneiIs
Ihrough improved eiciency and eecIiveness.
This is possible because o Ihe ollowing acIors:
(i) lhhovaIioh. PPP allows Ihe governmenI
Io Iap Ihe privaIe secIor's capaciIy Io
innovaIe. The governmenI spells ouI
Ihe services iI needs, and Ihe desired
ouIcomes and/or ouIpuIs. The privaIe
secIor can Ihen inIroduce innovaIive
soluIions Io meeI Ihe governmenI's
objecIives.
(ii) Sharihg o! respohsibiliIies. ln a PPP
projecI, Ihe governmenI and Ihe privaIe
secIor share Ihe responsibiliIies o
delivering a service, depending on Ihe
experIise o each parIy.
(iii) Fihahce. ln a PPP projecI, access Io privaIe
capiIal rees governmenI capiIal Io be
used in projecIs wiIh higher public policy
objecIives.
The privaIe secIor derives Ihe ollowing beneiIs:
(i) 8usihess opporIuhiIies. Through PPP, Ihe
privaIe secIor can gain access Io business
opporIuniIies, which were IradiIionally
accessible only Io Ihe public secIor.
(ii) Desighihg ahd deliverihg ihhovaIive
soluIiohs. PPP also allows Ihe privaIe
secIor Io move rom merely consIrucIing
asseIs according Io clearly speciied
designs, Io designing and delivering
innovaIive soluIions. The privaIe secIor
has more room Io innovaIe and oer
eicienI soluIions or Ihe provision o
public services.
The general public also derives beneiIs:
(i) 1he combihihg o! Ihe experIise o! public
ahd privaIe ehIiIies. When sIrucIured
appropriaIely, PPPs will deliver public
services IhaI can beIIer meeI Ihe needs o
Ihe public wiIhouI compromising public
policy goals and needs.
(ii) ProIecIioh o! public ihIeresI. The
governmenI will ensure IhaI public
9
PPP in Ihe WaIer SecIor
inIeresI is proIecIed in all PPP projecIs
and IhaI service delivery will meeI public
needs aI Ihe besI value or money when
Ihe privaIe secIor is broughI in Io provide
governmenI services.
While service delivery Ihrough PPP changes Ihe
means o delivering services, iI does noI change
Ihe governmenI's accounIabiliIy or ensuring
IhaI Ihe services are delivered. The deparImenI's
ocus shiIs rom providing Ihe service Io
managing Ihe service provider.
The Water Supply and Sanitation
Sector in India
The Value Chain
ln lndia, urban waIer supply and saniIaIion
services are provided by Ihe sIaIe. The enIire
service, rom source Io consumer, is managed
by sIaIelevel public healIh and engineering
deparImenIs, by urban local bodies (UL8s), or
ciIy waIer supply and saniIaIion boards. WaIer
and saniIaIion services can be unbundled
inIo several componenIs, including raw waIer
producIion and IreaImenI, bulk waIer supply,
reIail disIribuIion, and saniIaIion collecIion,
IreaImenI, and disposal (ligure !).
The enIire process (shown in ligure !) is
reerred Io as Ihe value chain or waIer supply
and saniIaIion services. The unbundling o
waIer supply services is being increasingly
experimenIed wiIh, e.g., separaIing wasIewaIer
responsibiliIies rom waIer supply, separaIing
bulk waIer producIion and IreaImenI rom waIer
disIribuIion, separaIing wasIewaIer IreaImenI
and discharge rom collecIion, and separaIing
waIer Iransmission rom disIribuIion.
Institutional Setup for Water Supply
and Sanitation Service
The role played by Ihe cenIral governmenI in
urban waIer supply and saniIaIion services is
limiIed Io deining norms or Ihe secIor
J
and
providing guidelines and Iechnical assisIance
Io Ihe sIaIes. The cenIral governmenI also
inIervenes Ihrough some cenIrally unded special
programs o Ihe MinisIry o Urban DevelopmenI.
Similarly, Ihe Planning Commission plays a role
in evaluaIing inancial requiremenIs or iIs 5year
plans and plays an advisory role in policy making.
However, Ihe sIaIes are responsible or urban
waIer supply and saniIaIion services while Ihe
UL8s operaIe and mainIain Ihe waIer supply and
saniIaIion services. The role o UL8s in operaIion
and mainIenance (O&M) has been reinorced
wiIh Ihe 74Ih ConsIiIuIional AmendmenI.
CapiIal invesImenI or developmenI or Ihese
waIer supply projecIs has been Iypically unded
eiIher Ihrough Ihe inIernal unds o Ihe UL8s or
boards or by way o Ihe regional governmenI's
budgeIary supporI and donor supporI rom
mulIilaIeral agencies.
ligure 2 shows Ihe Ihree primary insIiIuIional
seIups engaged in Ihe provision and delivery
o waIer supply and saniIaIion services in Ihe
counIry.
J
These are deined by Ihe CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion (CPHLLO), MinisIry o Urban
DevelopmenI, GovernmenI o lndia.
Figure 1 VaIue Chain o! Ihe WaIer 5uppIy and 5aniIaIion 5ecIor
Source
augmehIaIioh
Raw waIer
Irahsmissioh
WaIer
IreaImehI
SIorage
reservoirs
DisIribuIioh Sewage
collecIioh
Sewage
IreaImehI ahd
disposal
10
ln Ihe irsI seIup, Ihe enIire value chain o
services o Ihe waIer supply and saniIaIion
secIor is underIaken ully by one o Ihe agencies,
i.e., Ihe municipal governmenI, a parasIaIal
agency, or Ihe sIaIe governmenI. ln Ihe case
o large ciIies, such as Mumbai, Pune, and
Ahmedabad, municipal corporaIions manage
all Ihe acIiviIies in Ihe secIor, including capiIal
invesImenI, and are also largely involved in Ihe
designing and planning sIages. ln Ihe case o
large meIropolises, parasIaIal agencies aI Ihe
sIaIe or ciIy level oversee Ihe enIire value chain
o waIer supply and sewage services, as can be
seen in OpIion ll. lor insIance, in ciIies o Delhi,
Chennai, Hyderabad, and 8angalore, waIer
supply and saniIaIion boards have been seI up Io
develop and manage waIer supply and saniIaIion
services. ln Ihe Ihird orm o insIiIuIional
arrangemenIOpIion lllIhe acIiviIies o
source developmenI and capiIal invesImenI
or neIwork developmenI are managed by Ihe
sIaIe deparImenI (in mosI cases, Ihe Public
HealIh Lngineering DeparImenI), while Ihe
managemenI o disIribuIion neIwork, O&M, and
revenue collecIion are overseen by Ihe municipal
governmenI.
Trends in PPP in the Water Supply
and Sanitation Sector in India
The overall service delivery levels in Ihe counIry
or Ihe waIer supply and saniIaIion secIor have
been assessed Io be largely inadequaIe. There
are large inrasIrucIural gaps, and waIer supply
and saniIaIion operaIions are plagued wiIh high
levels o ineiciencies. The per capiIa availabiliIy
o waIer in mosI urban cenIers o Ihe counIry
is signiicanIly less Ihan whaI is needed. Only
50% (!40 million) o Ihe urban populaIion is
direcIly connecIed Io Ihe disIribuIion neIworks.
4

The exisIing inrasIrucIure suers rom high
degree o operaIional ineiciencies. lor insIance,
approximaIely 40%50% o Ihe waIer pumped
inIo Ihe sysIem is losI in Iransmission, e.g., due
4
World 8ank. 2006. ,QGLD:DWHU6XSSO\DQG6DQLWDWLRQ%ULGJLQJWKH*DSEHWZHHQ,QIUDVWUXFWXUHDQG6HUYLFH
Figure 2 InsIiIuIionaI 5eIup !or Ihe WaIer 5uppIy and 5aniIaIion 5ecIor
O&M ~ operaIion and mainIenance.
OpIion lll
OpIion ll
OpIion l
Source
developmenI
Paw waIer
Iransmission
SIorage/
IreaImenI
DisIribuIion
neIwork
TreaImenI O&M
WaIer supply
Municipal governmenI/SIaIe deparImenI/MeIropoliIan agency
Municipal governmenI
SIaIe governmenI
ParasIaIal agency aI Ihe sIaIe or
ciIy level
Sewerage
11
Io IheI. On average, only 24% o all connecIions
in Ihe counIry are meIered.
5
ln addiIion, poor
collecIion pracIices by Ihe uIiliIies have resulIed
in low cosI recovery raIes aI 20%J0% o O&M
cosIs. The cosI o producIion o Ihese services
has been assessed Io be very high againsI Ihe
low level o recoveries, resulIing in limiIed unds
or rouIine mainIenance by Ihe service providers.
This evenIually causes poor inrasIrucIure
coverage, poor access, and low service qualiIy.
lurIhermore, service providers have been
incurring huge losses on Iheir services.
lmprovemenI in service delivery levels requires
huge invesImenIs or augmenIaIion and
improvemenIs o physical inrasIrucIure, and
signiicanI scaling up o operaIional eiciencies.
To meeI boIh Ihese requiremenIs, various UL8s
and parasIaIal agencies have explored Ihe opIion
o PPP or inrasIrucIure developmenI and O&M.
PPP eorIs in Ihe counIry have meI wiIh varying
success. While some iniIiaIives have compleIely
ailed, Ihere have been recenI insIances o
successul implemenIaIion. ligure J Iraces Ihe
evoluIion o PPP in Ihe waIer secIor in lndia.
Mid- Io laIe 1990s: PPP iniIiaIives were
aIIempIed in Goa, Pune, Hyderabad, and
8angalore, however, Ihey meI wiIh ailure or
mulIiple reasons. lor insIance, in Goa, a PPP
5
AD8. 2007. %HQFKPDUNLQJDQG'DWD%RRNRI:DWHU8WLOLWLHVLQ,QGLD.
iniIiaIive was aIIempIed or Ihe developmenI
o a bulk waIer supply sysIem, PPP was soughI
or invesImenI, design, consIrucIion, and O&M.
However, Ihough Ihe projecI was bid ouI, iI
was abandoned due Io issues o high bulk
Iari proposed by Ihe privaIe parIy and low
poliIical will. A similar projecI or bulk supply
was proposed in 8angalore, where again on
accounI o unaordable Iari levels and oIher
conIroversies, Ihe projecI was abandoned.
This phase o PPP iniIiaIives in Ihe counIry was
Ihereby largely unsuccessul due Io issues o
Iari seIIing and lack o poliIical supporI.
2000-2004: lewer projecIs involving PPP
were aIIempIed around Ihis Iime. NoIeworIhy
projecIs included Ihe developmenI o a waIer
IreaImenI planI (WTP) in Sonia Vihar, Delhi,
and Iwo oIher projecIs in SangliMiraj ciIy,
MaharashIra, and 8angalore. The Sonia Vihar
projecI soughI PPP or design, consIrucIion,
and O&M o a WTP. The projecI has been
implemenIed successully largely due Io
balanced allocaIion o risks beIween Ihe waIer
supply board (Delhi !al 8oard) and Ihe privaIe
developer. ln Sangli, however, Ihe PPP was
called or Ihe O&M o bulk waIer supply and
IreaImenI and disIribuIion operaIions only, buI
lack o poliIical supporI led Io Ihe projecI being
abandoned. The 8angalore iniIiaIive ollowed
Figure 3 PPP 1imeIines in Ihe WaIer and 5aniIaIion 5ecIor in India
NGO ~ nongovernmenI organizaIion, PPP ~ publicprivaIe parInership.
projecIs
High NGO opposiIioh
High pro!ile projecIs ruh
Several ohgoihg
ihiIiaIives
E!!orIs Io prepare
PPP projecIs
High NGO opposiIioh
High-pro!ile projecIs ruh
abahdohed
FirsI ihiIiaIives
High ihIerhaIiohal
ihIeresI
Poor resulIs
Success!ul projecIs
implemehIed
Few projecIs grouhded
Mid- Io laIe 1990s Arouhd 2000 Mid-2000 CurrehI Way Ahead
MomehIum subsides
12
a similar paIh. This phase, Ihereore, saw ew
iniIiaIives being proposed.
Arouhd 2005: This period was marked by Ihe
abandonmenI o several largescale PPP iniIiaIives,
such as a piloI projecI proposed by Delhi !al 8oard
in Delhi, and projecIs proposed by Ihe WaIer
Supply 8oard in 8angalore. These projecIs meI
wiIh sIrong poliIical and public opposiIion.
2005 ohwards: This period has seen several PPP
iniIiaIives being implemenIed successully. These
include PPPbased projecIs in Ihe ciIies o LaIur,
Chandrapur, Chennai, KolkaIa, Mysore, Madurai,
Haldia, and Nagpur. The various PPP opIions
and value chains in which Ihese have been
implemenIed are shown in ligure 4.
Several PPP iniIiaIives are being planned and
proposed in Ihe waIer supply and saniIaIion
secIor ollowing Ihe successul implemenIaIion
o ongoing projecIs in Ihe recenI pasI. This
Irend is also observed in Ihe several urban secIor
developmenI programs o Ihe cenIral and Ihe
sIaIe governmenIs, which are encouraging and
promoIing developmenI o waIer supply and
saniIaIion projecIs in a PPP mode. The overall
policy ramework or PPP projecIs in Ihe counIry
has seen signiicanI measures inIroduced Io
aciliIaIe increased PPP in projecI developmenI and
O&M. lor example, speciic urban inrasIrucIure
unds, such as Ihe ViabiliIy Gap lund (VGl)
scheme, have been developed by Ihe cenIral
governmenI Io provide inancial supporI Io
inrasIrucIure projecIs IhaI are Io be underIaken
Ihrough Ihe PPP mode. A special purpose vehicle,
Ihe lndia lnrasIrucIure linance Company,
has been consIiIuIed by Ihe GovernmenI o
lndia as a dedicaIed insIiIuIion Io assume an
apex role in Ihe inancing and developmenI o
inrasIrucIure projecIs in Ihe counIry. The cenIral
governmenI's urban developmenIal scheme, Ihe
!awaharlal Nehru NaIional Urban Penewal Mission
(!NNUPM), iniIiaIed in 2005, also encourages
urban inrasIrucIure projecIs Io be developed on a
PPP basis.
PPP Projects in the Water and
Sanitation Sector in India
This secIion provides a summary o Ihe PPP
sIrucIures implemenIed in Ihe ciIies o LaIur,
Chandrapur, SalI Lake CiIy, Chennai, and clusIers
in KarnaIaka and Haldia.
Distribution-cum-Revenue Collection
Contract at Latur and Chandrapur
The disIribuIioncumrevenue collecIion conIracI
implemenIed in LaIur and Chandrapur has
been classiied as a perormance managemenI
conIracI. These ciIies aced an acuIe shorIage o
waIer and required augmenIaIion o Ihe source.
ln addiIion, Ihe waIer supply operaIions, which
Figure 4 PPP ProjecIs ImpIemenIed in India
KUWASlP ~ KarnaIaka Urban WaIer SecIor lmprovemenI ProjecI, O&M ~ operaIion and mainIenance.
RehabiliIaIioh
8ulk waIer
1reaImehI
DisIribuIioh
lhvesImehI Desigh CohsIrucIioh
O&M CollecIioh 1ari!!
Chehhai desalihaIioh
plahI
KUWASlP
LaIur, Chahdrapur
Mysore
Madurai, SalI Lake
KolkaIa
Nagpur piloI
Haldia
13
were under UL8 managemenI, suered rom high
operaIional ineiciencies and resulIing poor cosI
recoveries. To improve waIer supply Io Ihese ciIies,
MaharashIra !eevan Pradhikaran (M!P) underIook
a source augmenIaIion projecI. However, Ihe UL8s
recognized Iheir inabiliIy Io eicienIly manage Ihe
waIer supply services and soughI privaIe secIor
inIervenIion in O&M o Ihe waIer supply sysIem.
ln LaIur, Ihe capiIal invesImenI or augmenIaIion
o Ihe bulk waIer supply sysIem has been borne
by M!P. PosIaugmenIaIion, Ihe enIire waIer
supply sysIem, rom source Io disIribuIion, has
been handed over Io Ihe privaIe developer or
O&M. ln Ihe case o LaIur, Ihe conIracI is being
execuIed by a special purpose vehicle, Ihe LaIur
WaIer ManagemenI Company, ormed by a
consorIium o Subhash ProjecIs and MarkeIing,
UPL LnvironmenIal Lngineers LId. (UPLLLL),
and Hydro Comp LnIerprises. The conIracI was
awarded or a period o 5 years. lor Chandrapur,
Ihe conIracI was handed over Io a privaIe
operaIor or a period o !0 years.
The primary purpose o Ihe conIracI has been
Io bring in operaIional eiciencies in Ihe enIire
waIer managemenI sysIem and, Ihereby,
reduce Ihe associaIed O&M cosI. ln addiIion,
Ihe privaIe developer is required Io increase
coverage o Ihe waIer supply services, increase
Ihe number o direcI connecIions, reduce illegal
connecIions, insIall meIers, generaIe bills, and
underIake collecIion. The conIracI deines speciic
perormance IargeIs or each acIiviIy underIaken
by Ihe privaIe developer. The privaIe developer has
been given Ihe righI Io levy Ihe Iari seI by M!P Io
collecI and reIain revenues rom Ihe consumers.
ln reIurn, Ihe privaIe developer is required Io pay
a ixed bimonIhly, biannual, or annual paymenI Io
M!P as a license ee. The inancial bid criIerion was
Ihe highesI licensee ee paymenI quoIed.
Water Supply and Sanitation Concession
Agreement for a Service Area,
Salt Lake City
A waIer supply and saniIaIion concession
agreemenI has been implemenIed in SecIor V
o SalI Lake CiIy, KolkaIa. This agreemenI is
in Ihe orm o a buildoperaIeIranser Iype
o PPP sIrucIure. The conIracI, implemenIed
by Ihe KolkaIa MeIropoliIan DevelopmenI
AuIhoriIy, requires privaIe secIor parIicipaIion
or Ihe developmenI o an underground
neIwork or waIer supply and sewage services
or Ihe Iownship o SecIor V, managed by Ihe
NabadiganIa lndusIrial Township AuIhoriIy.
The key bidding criIerion was Ihe lowesI waIer
cumsewage charge, which Ihe privaIe
developer would levy. The conIracI is or
J0 years.
The conIracI was handed over Io !amshedpur
UIiliIies and Services Company (!USCO) and
VolIas (a TaIa enIerprise) who ormed a joinI
venIure or underIaking Ihe conIracI. As per
Ihe conIracI, Ihe privaIe developer is required
Io underIake consIrucIion o inrasIrucIure
or waIer supply and saniIaIion services, and
Io operaIe and manage boIh Ihe sysIems or
Ihe concession period. The privaIe developer
levies a waIercumsaniIaIion charge or Ihe
services managed. AI Ihe end o Ihe concession
period, Ihe asseIs are Io be Iranserred Io Ihe
NabadiganIa lndusIrial Township AuIhoriIy.
ApproximaIely J5% o Ihe capiIal cosIs or Ihe
projecI would be passed on as a subsidy rom
Ihe GovernmenI o lndia (Ihrough Ihe !NNUPM)
Io Ihe privaIe developer.
All Ihe operaIional expenses or managing Ihe
waIer supply and saniIaIion services rom source
Io end consumer would have Io be borne by
Ihe privaIe developer during Ihe concession
period. ln addiIion Io Ihe waIercumsewage
charge, which Ihe privaIe developer can levy,
Ihe developer has been given Ihe righI Io levy
and collecI a oneIime connecIion charge rom
Ihe consumers. The Iari Io be charged and
Ihe exIenI and Iimeline or iIs escalaIion would
also be decided by Ihe privaIe developer, subjecI
Io approval rom Ihe KolkaIa MeIropoliIan
DevelopmenI AuIhoriIy and Ihe NabadiganIa
lndusIrial Township AuIhoriIy.
The special purpose vehicle ormed by Ihe
!USCOVolIas consorIium has already sIarIed
waIer supplyrelaIed work, ollowing approval o
Ihe working schemes by Ihe KolkaIa MeIropoliIan
DevelopmenI AuIhoriIy and NabadiganIa
lndusIrial Township AuIhoriIy. AbouI 25% o Ihe
work has been achieved Ioward Ihe sancIioned
waIer supply componenI o Ihe projecI.
14
Bulk Supply-cum-Operation and
Maintenance Contract, Chennai
The bulk supply and O&M conIracI is a PPP
agreemenI IhaI has been implemenIed or Ihe
developmenI o a !00 million liIers per day
(MLD) sea waIer desalinaIion planI in Chennai.
The PPP sIrucIure has been caIegorized as a
designbuildownoperaIeIranser model. The
projecI has been awarded Io Chennai WaIer
DesalinaIion, a special purpose vehicle loaIed by
lVPCL lnrasIrucIures and ProjecIs. The conIracI
was awarded Io Ihe Chennai MeIropoliIan WaIer
Supply and Sewerage 8oard (CMWSS8) or a
Ienure period o 25 years.
As sIipulaIed by Ihe conIracI, Ihe privaIe
developer is required Io design, engineer,
inance, and procure Ihe enIire inrasIrucIure
or oIake o waIer and Ihe Iransmission,
IreaImenI, and supply o IreaIed waIer Io
Ihe sIorage reservoir. ln addiIion, Ihe privaIe
developer is required Io operaIe and manage
Ihe aciliIy or Ihe concession period. The
privaIe developer is, Ihereore, required Io
supply IreaIed bulk waIer Io Ihe CMWSS8. The
privaIe developer is paid a waIer charge by Ihe
CMWSS8 or Ihe IreaIed waIer produced.
The unique eaIure o Ihis conIracI is Ihe privaIe
enIiIy is assured o a minimum ixed paymenI
by Ihe uIiliIy or all Ihe acIiviIies iI is required
Io underIake. This arrangemenI is also reerred
Io as a Iake or pay sysIem. The key bidding
criIerion was Ihe per uniI charge or IreaIed
waIer, which Ihe privaIe developer would collecI
rom Ihe CMWSS8.
Augmentation-cum-Operation and
Maintenance Contract for Distribution
System for a Cluster of Urban Local
Bodies, Karnataka
The augmenIaIioncumO&M conIracI or Ihe
disIribuIion sysIem is a perormancebased ee
model, implemenIed under Ihe KarnaIaka Urban
WaIer SecIor lmprovemenI ProjecI or Ihe Iowns
o 8elgaum, HubliDharwad, and Gulbarga.
This perormance conIracI is a PPP model wiIh
a !00% capiIal subsidy rom Ihe governmenI
agencyIhe KarnaIaka Urban lnrasIrucIure
DevelopmenI and linance CorporaIion.
These selecI ciIies o KarnaIaka aced problems
wiIh Iheir disIribuIion neIworks: Ihere was no
accuraIe esIimaIion o Ihe loss o waIer incurred
in Iransmission and disIribuIion, Ihe supply
hours were reporIed Io be irregular, and no
clear inormaIion was available wiIh Ihe UL8s on
Ihe sIaIus o waIer supply inrasIrucIure asseIs.
PrivaIe assisIance was soughI Io improve Ihe
waIer supply services.
Under Ihe PPP sIrucIure, Ihe privaIe developer
was required Io underIake rehabiliIaIion works
on Ihe disIribuIion neIwork o a clusIer o
Iowns and oversee Ihe O&M o Ihe disIribuIion
neIwork. The privaIe developer is, Ihereore, irsI
required Io underIake consIrucIion works or Ihe
disIribuIion neIwork and will be ully reimbursed
by Ihe sIaIe agency or Ihe rehabiliIaIion acIiviIy
iI underIakes. The privaIe developer is, Ihereore,
responsible only or waIer supply acIiviIies
aI Ihe disIribuIion end, including supplying
IreaIed waIer Io all Ihe connecIions, insIalling
meIers, generaIing bills, collecIing revenues, and
underIaking repair works.
The conIracI was awarded Io an inIernaIional
bidder, Veolia Lau Compagnie Generale des
Laux, based in Paris, lrance. The operaIor
is conIracIed Io operaIe and manage Ihe
disIribuIion neIwork in Ihe ciIies or 2 years,
ollowing !8 monIhs o disIribuIion neIwork
rehabiliIaIion.
The privaIe developer geIs ixed operaIor ees
rom Ihe UL8s or execuIing O&M. This ee,
which is Io be paid by Ihe UL8s Io Ihe privaIe
developer, is Ihe criIical bid parameIer.
Augmentation of Water Treatment
System-cum-Operation and
Maintenance Contract of the Water
Supply System, Haldia
A PPP arrangemenI was designed or Ihe
augmenIaIion o Ihe WTP and or operaIion
and managemenI o Ihe waIer supply sysIem
aI Ihe Haldia lndusIrial region. A concession
based PPP agreemenI has been implemenIed in
Haldia or Ihe developmenI o Ihe WTP sysIem
and or Ihe O&M works o Ihe waIer supply
sysIem. The agreemenI was implemenIed by
Ihe auIhoriIy Io meeI Ihe longIerm demand o
15
indusIrial consumers o Ihe region. Developed
as a greenield waIer supply projecI, iI envisages
Ihe developmenI o a 227 MLD WTP along wiIh
O&M o Ihe waIer supply sysIem.
The waIer supply sysIem or Ihe region was
earlier managed by Ihe WesI 8engal Public
HealIh and Lngineering DeparImenI on behal o
auIhoriIy. The waIer supply sysIem was plagued
wiIh several problems, including high producIion
and disIribuIion losses, poor service qualiIy,
poor O&M o Ihe WTP, and very high operaIion
cosIs. PrivaIe secIor parIicipaIion was, Ihereore,
soughI or Ihe developmenI o Ihe WTP and or
O&M o Ihe disIribuIion sysIem.
The conIracI has been handed over Io a consorIium
consisIing o !USCO, Panhill UIiliIies 8erhard o
Malaysia, and lnrasIrucIure DevelopmenI linance
Company. The IoIal Ienure o Ihe projecI is 25 years.
The projecI or raw waIer oIake, Iransmission, and
IreaImenI planI has been developed on a build
operaIeIranser basis.
The concession agreemenI requires Ihe privaIe
developer Io underIake Ihe consIrucIion o
Ihe raw waIer oIake sysIem and raw waIer
Iransmission lines, augmenIaIion Io Ihe exisIing
IreaImenI planI, and operaIion and managemenI
o Ihe waIer supply sysIem rom source Io end
consumer. Any expansion and rehabiliIaIion work
or Ihe disIribuIion neIwork would be managed
by Ihe auIhoriIy beore inviIing Ihe privaIe
developer Io operaIe and manage Ihe waIer
supply sysIem. The privaIe developer is required
Io make a ixed monIhly paymenI as a license
ee Io Ihe auIhoriIy or Ihe righI Io operaIe
Ihe exisIing waIer supply asseIs and Ihe enIire
sysIem. This highesI ixed monIhly paymenI was
seI as Ihe criIical inancial bid parameIer.
16
III Implementing PPP:
An Overview
This secIion provides an overview o Ihe sIeps
Io be ollowed in deIermining a suiIable
publicprivaIe parInership (PPP) sIrucIure or
an idenIiied projecI in Ihe waIer supply and
saniIaIion secIor, and ouIlines Ihe remaining
acIiviIies IhaI need Io be underIaken Io aciliIaIe
Ihe implemenIaIion o Ihe selecIed PPP sIrucIure
(ligure 5).
Compile key
parameIers
Review o! projecIs
wiIh available DPRs
ViabiliIy assessmehI
Choice beIweeh public
!uhdihg ahd PPP
ldehIi!y ahd allocaIe
risks
SelecI Ihe
cohIracI Iype
De!ihe
implemehIaIioh
sIrucIure
Plah ahd mahage
procuremehI
Assess, prioriIize, ahd
idehIi!y key area o!
ihIervehIioh
5Iep I
ldehIi!icaIioh o! Ihe
problem areas
5Iep II
Choice beIweeh public
!uhdihg ahd PPP
5Iep III
Choice o! PPP SIrucIure
5Iep IV
ProcuremehI
Figure 5 Overview o! 5Iages in DeIermining 5uiIabIe PPP 5IrucIures
PPP ~ publicprivaIe parInership.
Step 1: Identication of the
Problem Areas
The deIerminaIion o Ihe seI o projecIs required
Io improve Ihe exisIing waIer supply and
saniIaIion services is based on idenIiicaIion o
all Ihe areas o service delivery where some orm
17
lmplemenIing PPP: An Overview
o projecIbased inIervenIion is required. ln Ihis
conIexI, Ihe irsI sIep is Io lisI all Ihe issues in Ihe
currenI sysIem based on a deIailed assessmenI.
This deIailed assessmenI is Io be carried ouI by
Ihe urban local body (UL8) or sIaIe agency or
Ihe waIer supply and saniIaIion services across
iIs enIire value chain by underIaking sIudies,
such as consumer surveys, waIer audiI, leak
deIecIion, and energy audiIs. The resulIs o Ihese
assessmenIs should be compared wiIh Ihe key
perormance indicaIors and sIandards applicable
or each level o operaIions. The exisIing deIailed
projecI reporIs (DPPs) should be reviewed Io
check i Ihe proposed projecI componenIs
would adequaIely address Ihe issues idenIiied
and, i noI, wheIher Ihese would need Io be
recIiied. lI is imporIanI Io ensure IhaI even
Ihe DPPs, which have been sancIioned, are
assessed Io ensure IhaI i Ihe assessmenI
indicaIes IhaI urIher modiicaIions are required,
Ihey are pursued. The UL8s may Ihen explore
Ihe possibiliIy o modiying Ihe DPP Io ensure
IhaI Ihe relevanI areas o service delivery are
adequaIely addressed. l, on accounI o change
in scope, Ihe cosIs o Ihe projecI increase, Ihe
UL8 can consider approaching Ihe sIaIe or
cenIral governmenI or addiIional unding or
may explore Ihe PPP opIion. The ouIpuI o Ihe
assessmenI would indicaIe Ihe accuraIe sIaIus o
Ihe services, Ihe issues being aced in Ihe currenI
sysIem, and Ihe inIervenIions required.
Step 2: Choice between Public
Funding and PPP
Having idenIiied Ihe areas where inIervenIion
in Ihe orm o speciic projecIs is required, Ihe
nexI sIage is Io deIermine wheIher Ihe proposed
projecIs should be Iaken up enIirely Ihrough Ihe
UL8 or sIaIe agency or wheIher Ihey should be
developed on Ihe basis o a PPP rouIe. This choice
is largely guided by a deIailed projecI viabiliIy
assessmenI. This assessmenI would Ihen have Io
be ollowed up wiIh a qualiIaIive assessmenI Io
deIermine which o Ihe Iwo parIiesIhe privaIe
developer or Ihe public agencyis realisIically
besI suiIed Io underIake Ihe projecI.
Step 3: Choice of PPP Structure
l Ihe analysis underIaken in Ihe previous sIage
indicaIes IhaI Ihe PPP opIion is Io be pursued
or developing Ihe proposed projecI, Ihe nexI
logical acIiviIy is Io deIermine an appropriaIe
PPP sIrucIure. A hosI o PPP sIrucIures can be
developed and implemenIed, however, Ihe
choice o a parIicular sIrucIure rom among Ihe
various opIions is made based on Ihe projecI
characIerisIics and Ihe uniqueness o Ihe
conIexI. One o Ihe key parameIers deIermining
Ihe choice is Ihe exIenI and Iype o risks IhaI are
associaIed wiIh Ihe projecI and Ihe allocaIion o
Ihese risks beIween Ihe privaIe developer and
Ihe UL8 or sIaIe agency. Thereore, an exhausIive
lisI o risks associaIed wiIh Ihe projecI needs
Io be prepared and deliberaIed upon, and iIs
allocaIion duly considered Io deIermine Ihe
suiIabiliIy o Ihe various PPP sIrucIures. lrom
Ihe acIiviIies underIaken in sIages Iwo and
Ihree, Ihe mosI suiIable PPP sIrucIure would be
idenIiied.
Step 4: Procurement
Having idenIiied and inalized Ihe PPP
sIrucIure Io be adopIed Io develop, operaIe,
and mainIain Ihe proposed projecI, Ihe nexI
sIage is Io plan Ihe procuremenI process.
The conIracIual sIrucIure idenIiied needs
Io be IranslaIed inIo a workable acIion
plan wiIh clear and precise deiniIions o
Ihe responsibiliIies or Ihe Iwo conIracIing
parIiesIhe UL8 or sIaIe agency and Ihe
privaIe developer Io be idenIiied. The inancial
model prepared or Ihe projecI would Ihen be
urIher reined according Io Ihe requiremenIs
o Ihe IransacIion sIrucIure. 8ased on Ihe
IransacIion sIrucIure, Ihe conIracI or Ihe PPP
arrangemenI would need Io be drawn up.
linally, Ihe procuremenI plan would need Io
be inalized and puI inIo operaIion.
The remaining secIions o Volume l discuss Ihese
our main sIeps in greaIer deIail.
18
IV Step 1: Identification
of the Problem Areas
Assessment of the Current Water
Supply and Sanitation System
A deIailed assessmenI o Ihe exisIing sIaIus o
inrasIrucIure and service delivery across Ihe
value chain o Ihe waIer supply and saniIaIion
sysIem orms Ihe basis or idenIiicaIion o areas
o improvemenI (ligure 6). The ouIpuI o Ihe
assessmenI would indicaIe Ihe accuraIe sIaIus
o Ihe services and Ihe issues being aced in Ihe
currenI sysIem. lor successul implemenIaIion o
any orm o publicprivaIe parInership (PPP) in
Ihis secIor, Ihere needs Io be a wellmainIained,
accuraIe daIabase o exisIing services.
A combinaIion o physical assessmenIs and
servicelevel review needs Io be carried ouI
simulIaneously Io ascerIain Ihe issues and gaps
in Ihe exisIing waIer supply and saniIaIion
services. These assessmenIs are equally criIical
or issue idenIiicaIion. The comprehensive lisI
o assessmenIs IhaI musI be underIaken is now
described in deIail.
Asset Review
A review o Ihe exisIing waIer supply and
saniIaIion asseIs o Ihe urban local body (UL8)
orms an inIegral componenI o Ihe physical
inrasIrucIure assessmenI Io be underIaken
Figure 6 Overview o! 5Iages in AssessmenI o! WaIer 5uppIy
and 5aniIaIion 5ervices
AsseI review
AsseI ihvehIory lisIihg wiIh
deIails oh Ihe exisIihg sIaIus
DeIailed cohsumer survey
WaIer audiI
Leak deIecIioh sIudy
Ehergy audiI
CompilaIioh o! key per!ormahce
parameIers
IdenIi!icaIion o! issues in Ihe exisIing in!rasIrucIure and gaps in service deIivery
AssessmenIs Io be underIaken
19
SIep !: ldenIiicaIion o Ihe Problem Areas
by Ihe UL8 or sIaIe agency. The assessmenI
o exisIing physical inrasIrucIure needs Io be
carried ouI Io deIermine Ihe exisIing condiIion
o waIer supply and saniIaIion asseIs in Ihe
service area and Io idenIiy Ihose which need
Io be replaced or rehabiliIaIed on accounI o
Iheir poor condiIion or inadequacy. ln addiIion,
Iechnical issues o operaIion associaIed wiIh
Ihe asseIs can also be idenIiied as parI o Ihe
physical assessmenI.
The assessmenI is expecIed Io idenIiy
(i) Ihe sIaIus o availabiliIy and adequacy
o physical inrasIrucIure, such as IoileIs,
saniIaIion, sepIic Ianks, Variable Grade
Sewers (VGS), and Ihe (waIer) disIribuIion
neIwork in slums,
(ii) Ihe operaIional condiIion o Ihe
inrasIrucIure in Ihe waIer supply and
saniIaIion sysIem, and
(iii) Ihe inrasIrucIure componenIs IhaI
require augmenIaIion and/or replacemenI.
The UL8 or sIaIe agency may underIake Ihe asseI
review on iIs own or iI may obIain Iechnical
assisIance or Ihe review. The sIaIus o Ihe
currenI inrasIrucIure direcIly deIermines Ihe
level o services provided by Ihe UL8 or sIaIe
agency. lor insIance, i Ihe raw and/or pure
waIer Iransmission lines are corroded, Ihere will
be subsIanIial waIer loss during conveyance,
resulIing in reduced availabiliIy o poIable
waIer or consumers. Similarly, i Ihe sewage
IreaImenI planI is operaIing below sIandard, or
has ouIdaIed Iechnology, Ihis would resulI in
improper IreaImenI o Ihe sewage and polluIion
o naIural waIer bodies.
The UL8s and sIaIe agencies may noI have a
deIailed updaIed record o Ihe waIer supply
and saniIaIion inrasIrucIure. Poor or unreliable
inormaIion on Ihe sIaIus o asseIs means IhaI
an accuraIe picIure o Ihe exisIing sIaIus o Ihe
inrasIrucIure would noI emerge and, Ihereore,
Ihe inIervenIions required could noI be
idenIiied. lurIhermore, i Ihe PPPbased projecI
is idenIiied, Ihe ambiguous inormaIion abouI
currenI inrasIrucIure would make iI diiculI
Io correcIly rame perormance sIandards Io
measure Ihe eecIiveness o a privaIe developer
in operaIing and mainIaining Ihe sysIem.
Table 2 shows a represenIaIive orm rom Ihe
asseI invenIory lisI IhaI Ihe service provider
should mainIain. lI is a basic orm indicaIing
Ihe minimum componenIs o Ihe invenIory
lisI, and can be modiied or a comprehensive
compilaIion and presenIaIion o inormaIion.
AsseI invenIory lisIing may also be underIaken
or each value chain.
Parallel Io Ihe inrasIrucIure assessmenI
underIaken by Ihe UL8 or sIaIe agency, a review
o Ihe service delivery levels Io deIermine Ihe
currenI sIaIus o Ihe enIire sysIem is also criIical.
As a parI o Ihe service delivery assessmenI, iI is
imporIanI Io underIake (i) a deIailed consumer
survey, (ii) a waIer audiI and leak deIecIion
sIudy, (iii) an energy eiciency audiI, and (iv) a
waIer qualiIy audiI.
Detailed Consumer Survey
The UL8 or sIaIe agency, in mosI cases, has
been ound Io have inadequaIe or unreliable
inormaIion in areas, such as Ihe exIenI o
coverage o iIs services, Ihe number and Iype
o waIer supply connecIions, and Ihe exacI
consumpIion levels. WiIhouI such inormaIion,
iI is diiculI Io correcIly plan an improvemenI or
inIervenIion or hand over Ihe sysIem Io a privaIe
1abIe 2 epresenIaIive 5ampIe o! an AsseI InvenIory LisI
AsseI
5peci!icaIion
o! Ihe AsseI Age VaIue CondiIion emarks
5
A
M
P
L
F
20
developer or developmenI and/or operaIion and
managemenI o Ihe sysIem. lI would invariably
resulI in imbalanced allocaIion o responsibiliIies
and risks beIween Ihe sIakeholders. A basic
premise on which a PPP opIion is builI is Ihe
provision o good, reliable inormaIion abouI Ihe
exisIing sysIem by Ihe UL8 or sIaIe agency Io Ihe
privaIe developer. Thereore, iI is criIical IhaI Ihe
UL8 or sIaIe agency exploring Ihe PPP opIion or
developmenI and improvemenI o waIer supply
and saniIaIion services underIakes a deIailed
consumer survey on Ihe exisIing sIaIus o services
iI provides.
The Iime required Io carry ouI a consumer survey
varies, depending on Ihe populaIion and area
serviced. The consumer survey needs Io include a
good represenIaIive sample in Ierms o Ihe size
o populaIion or Ihe zones, so as Io yield accuraIe
inormaIion. The deIailed consumer survey would
address Ihe ollowing inormaIion gaps:
(i) WhaI is Ihe Iype o connecIion?
(ii) WhaI is Ihe requency o waIer supply?
(iii) How reliable are Ihe waIer supply services?
(iv) ls Ihe Iari level aordable?
(v) How oIen are Ihe sepIic Ianks cleaned?
A deIailed consumer survey would provide an
accuraIe picIure o Ihe sIaIus o waIer supply
and saniIaIion services Io help idenIiy areas o
inIervenIion required.
Water Audit and Leak Detection Study
A waIer audiI is a Ihorough examinaIion o
Ihe accuracy o waIer agency records and
sysIem conIrol equipmenI. Leak deIecIion is Ihe
sysIemaIic meIhod o surveying Ihe enIire sysIem
Io idenIiy leaks and precisely idenIiy Ihe poinIs
o leakage in Ihe waIer supply sysIem. The
primary objecIive o Ihis survey is Io assess Ihe
enIire waIer supply sysIem Io deIecI Ihe exIenI
o Iechnical and commercial losses. The audiI
would help Ihe service provider Io deIermine Ihe
eiciency o Ihe disIribuIion sysIem and Io selecI
and implemenI programs IhaI would reduce
waIer and revenue losses.
WaIer losses, wheIher due Io leakages, IheI,
underbilling o cusIomers, or aulIy sysIem
conIrols, represenI moneIary losses Io Ihe waIer
agency. This is waIer IhaI Ihe agency has already
paid Io obIain, IreaI, and pressurize. A waIer
audiI would provide answers Io Ihe ollowing
quesIions:
(i) Where are losses occurring wiIhin Ihe
sysIem?
(ii) How much waIer is losI in each problem
area idenIiied?
(iii) WhaI correcIive measures are needed Io
reduce Ihe waIer loss?
(iv) WhaI will be Ihe cosI o reducing Ihe
waIer loss?
(v) WhaI savings and beneiIcosI raIios
will resulI rom reducing Ihe waIer
loss?
(vi) When can Ihe correcIive measures be
implemenIed?
lI is imporIanI IhaI Ihe UL8 or sIaIe agency shares
Ihe laIesI updaIed version o Ihe waIer and leak
deIecIion sIudy wiIh Ihe privaIe developer.
Energy Audit Study
The UL8 or sIaIe agency musI also underIake
an energy audiI o Ihe enIire waIer supply and
saniIaIion operaIions Io deIermine Ihe currenI
level o energy consumpIion aI various sIages
o Ihe value chain and Io compare Ihis wiIh
Ihe sIandard benchmarks. The audiI measures
Ihe energy consumpIion aI poinIs where
waIer is pumped and reviews Ihe eiciency o
Ihe equipmenI being used. The energy audiI
underIaken generally covers
(i) a sIudy o Ihe exisIing sysIem and pasI
records,
(ii) Ihe seIIing o exisIing energy
consumpIion benchmarks,
(iii) a sIudy o sysIem energy eiciency rom
source Io consumer,
(iv) checking o equipmenI eiciency,
including pumps, and
(v) checking Ihe process losses or energy
eiciency.
This inormaIion would help Io accuraIely
idenIiy Ihe cosI reducIion eiciency benchmark
IhaI can be seI.
21
Water Quality Audit Study
When underIaking Ihe waIer qualiIy audiI, iI is
criIically imporIanI Io assess waIer qualiIy levels
Io ascerIain wheIher Ihe waIer being supplied
in Ihe UL8 is iI or poIable consumpIion. The
process requires samples o waIer Io be collecIed
and IesIed aI laboraIories Io ascerIain waIer
qualiIy.
Assessment of Future Demand
The assessmenIs described would highlighI
inrasIrucIure gaps in Ihe exisIing scenario.
WaIer availabiliIy under Ihe exisIing scenario
may meeI Ihe demands o Ihe currenI
populaIion buI may be inadequaIe or Ihe
expecIed rise in populaIion. Thereore, Ihe
deIailed assessmenI musI consider boIh Ihe
needs o Ihe currenI populaIion and Ihose o a
horizon plan period.
Compiling Key Parameters
Key perormance indicaIors are used Io
assess Ihe level o services and Io deIermine
inrasIrucIure gaps. Those mosI commonly
used are discussed on page 22. lor each
componenI o Ihe value chain, parameIers have
been idenIiied or evaluaIing perormance
levels. These parameIers include Iechnical and
qualiIy indicaIors. The perormance sIandards
or each o Ihe indicaIors are in accordance
wiIh Ihe guidelines menIioned in Ihe manual
o Ihe CenIral Public HealIh and LnvironmenIal
Lngineering OrganisaIion (CPHLLO), o Ihe
MinisIry o Urban DevelopmenI. Some o Ihe
key indicaIors or Ihe waIer supply secIor, which
need Io be assessed, are shown in Table J
IogeIher wiIh Iheir ormulas and raIionale.
22
1
a
b
I
e

3

K
e
y

P
a
r
a
m
e
I
e
r
s

!
o
r

A
s
s
e
s
s
i
n
g

I
h
e

P
e
r
!
o
r
m
a
n
c
e

o
!

W
a
I
e
r

5
u
p
p
I
y

5
e
r
v
i
c
e
s
I
n
d
i
c
a
I
o
r
U
n
i
I
N
o
r
m
F
o
r
m
u
I
a
D
e
!
i
n
i
I
i
o
n
a
I
i
o
n
a
I
e
e
m
a
r
k
s
S
e
r
v
i
c
e
-
L
e
v
e
l

P
e
r
!
o
r
m
a
h
c
e

P
a
r
a
m
e
I
e
r
s
P
e
r

c
a
p
i
I
a

q
u
a
n
I
u
m

o

w
a
I
e
r

s
u
p
p
l
i
e
d

(
o
r

c
i
I
i
e
s

w
i
I
h
o
u
I

a

d
e
v
e
l
o
p
e
d

u
n
d
e
r
g
r
o
u
n
d

s
y
s
I
e
m
)
l
p
c
d
7
0

l
p
c
d
~

|
Q
u
a
n
I
i
I
y

o

w
a
I
e
r

s
u
p
p
l
i
e
d

I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m
/

P
o
p
u
l
a
I
i
o
n

s
e
r
v
e
d
T
o
I
a
l

w
a
I
e
r

s
u
p
p
l
i
e
d

i
n
I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

(
e
x
I
r
e
a
I
m
e
n
I

p
l
a
n
I

a
n
d

i
n
c
l
u
d
i
n
g

p
u
r
c
h
a
s
e
d

w
a
I
e
r
,

i

a
n
y
)

e
x
p
r
e
s
s
e
d

b
y

p
o
p
u
l
a
I
i
o
n

s
e
r
v
e
d

p
e
r

d
a
y
l
n
d
i
c
a
I
e
s

I
h
e

a
d
e
q
u
a
c
y

o

I
h
e

w
a
I
e
r

s
u
p
p
l
i
e
d

o
r

c
o
n
s
u
m
p
I
i
o
n

a
I

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

e
n
d

l
o
r

c
i
I
i
e
s

w
i
I
h
o
u
I

a
n

u
n
d
e
r
g
r
o
u
n
d

s
a
n
i
I
a
I
i
o
n

s
y
s
I
e
m
,

a

p
e
r

c
a
p
i
I
a

w
a
I
e
r

a
v
a
i
l
a
b
i
l
i
I
y

s
h
o
u
l
d

i
d
e
a
l
l
y

b
e

7
0

l
p
c
d
O
n
l
y

I
r
e
a
I
e
d

w
a
I
e
r

i
n
p
u
I

i
n
I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

s
h
o
u
l
d

b
e

m
e
a
s
u
r
e
d
O
n
l
y

p
o
p
u
l
a
I
i
o
n

s
e
r
v
e
d

b
y

I
h
e

U
L
8

I
o

b
e

c
o
n
s
i
d
e
r
e
d
P
e
r

c
a
p
i
I
a

q
u
a
n
I
u
m

o

w
a
I
e
r

s
u
p
p
l
i
e
d

(
w
i
I
h

a

d
e
v
e
l
o
p
e
d

u
n
d
e
r
g
r
o
u
n
d

s
y
s
I
e
m
)

l
p
c
d
!
J
5

l
p
c
d
l
o
r

c
i
I
i
e
s

w
i
I
h

a

u
l
l
y

d
e
v
e
l
o
p
e
d

s
a
n
i
I
a
I
i
o
n

s
y
s
I
e
m
,

I
h
e

C
P
H
L
L
O

n
o
r
m

o

!
J
5

l
p
c
d

i
s

I
o

b
e

a
d
h
e
r
e
d

I
o
Q
u
a
l
i
I
y

o

w
a
I
e
r

s
u
p
p
l
i
e
d
A
s

p
e
r

8
u
r
e
a
u

o

l
n
d
i
a
n

S
I
a
n
d
a
r
d
s

n
o
r
m
s
~

|
(
N
u
m
b
e
r

o

s
a
m
p
l
e
s

I
h
a
I

m
e
e
I

I
h
e

s
p
e
c
i
i
e
d

p
o
I
a
b
l
e

w
a
I
e
r

s
I
a
n
d
a
r
d
s

i
n

a

m
o
n
I
h
/
T
o
I
a
l

n
u
m
b
e
r

o

w
a
I
e
r

s
a
m
p
l
e
s

i
n

a

m
o
n
I
h
)
*
!
0
0
P
e
r
c
e
n
I
a
g
e

o

w
a
I
e
r

s
a
m
p
l
e
s

I
h
a
I

m
e
e
I

o
r

e
x
c
e
e
d

I
h
e

s
p
e
c
i
i
e
d

p
o
I
a
b
l
e

w
a
I
e
r

s
I
a
n
d
a
r
d
s
,

a
s

d
e
i
n
e
d

b
y

C
P
H
L
L
O
.

S
a
m
p
l
i
n
g

r
e
g
i
m
e
n

s
h
o
u
l
d

b
e

a
s

p
e
r

s
I
a
n
d
a
r
d
s

a
n
d

n
o
r
m
s

l
a
i
d

d
o
w
n

o
r

I
h
e

s
a
m
e
P
o
o
r

w
a
I
e
r

q
u
a
l
i
I
y

c
a
n

p
o
s
e

s
e
r
i
o
u
s

p
u
b
l
i
c

h
e
a
l
I
h

h
a
z
a
r
d
s
l
I

i
s

h
i
g
h
l
y

c
r
i
I
i
c
a
l

I
o

m
o
n
i
I
o
r

I
h
e

q
u
a
l
i
I
y

o

I
h
e

w
a
I
e
r

s
u
p
p
l
i
e
d
S
a
m
p
l
e
s

s
h
o
u
l
d

b
e

d
r
a
w
n

a
I

b
o
I
h

p
o
i
n
I
s
o
u
I
l
e
I

o

I
r
e
a
I
m
e
n
I

p
l
a
n
I

a
n
d

a
I

c
o
n
s
u
m
e
r

e
n
d
A
l
l

p
a
r
a
m
e
I
e
r
s

o

I
h
e

q
u
a
l
i
I
y

s
I
a
n
d
a
r
d
s

s
h
o
u
l
d

b
e

m
e
I
l
r
e
q
u
e
n
c
y

o

w
a
I
e
r

s
u
p
p
l
y

H
o
u
r
s

p
e
r

d
a
y
2
4

h
o
u
r
s
~

|
A
v
e
r
a
g
e

n
u
m
b
e
r

o

h
o
u
r
s

o

p
r
e
s
s
u
r
i
z
e
d

w
a
I
e
r

s
u
p
p
l
y

p
e
r

d
a
y
T
h
e

n
u
m
b
e
r

o

h
o
u
r
s

i
n

a

d
a
y

d
u
r
i
n
g

w
h
i
c
h

p
r
e
s
s
u
r
i
z
e
d

w
a
I
e
r

i
s

a
v
a
i
l
a
b
l
e
l
n
I
e
r
m
i
I
I
e
n
I

s
u
p
p
l
y

r
e
s
u
l
I
s

i
n

I
h
e

n
e
e
d

o
r

i
n
d
i
v
i
d
u
a
l

h
o
u
s
e
h
o
l
d
s

I
o

c
r
e
a
I
e

a
d
d
i
I
i
o
n
a
l

s
I
o
r
a
g
e

r
e
q
u
i
r
e
m
e
n
I
s

a
n
d

o
I
h
e
r

i
n
c
o
n
v
e
n
i
e
n
c
e
s

T
h
e

n
u
m
b
e
r

o

h
o
u
r
s

o

s
u
p
p
l
y

i
n

e
a
c
h

o

I
h
e

o
p
e
r
a
I
i
o
n
a
l

z
o
n
e
s

s
h
o
u
l
d

b
e

m
e
a
s
u
r
e
d

c
o
n
I
i
n
u
o
u
s
l
y

o
r

a

p
e
r
i
o
d

o

7

d
a
y
s
T
h
e

z
o
n
e
w
i
s
e

i
g
u
r
e
s

s
h
o
u
l
d

b
e

a
v
e
r
a
g
e
d

o
u
I

I
o

g
e
I

c
i
I
y
w
i
s
e

d
a
I
a
F
R
Q
W
L
Q
X
H
G
R
Q
Q
H
[
W
S
D
J
H
23
I
n
d
i
c
a
I
o
r
U
n
i
I
N
o
r
m
F
o
r
m
u
I
a
D
e
!
i
n
i
I
i
o
n
a
I
i
o
n
a
I
e
e
m
a
r
k
s
S
e
r
v
i
c
e
-
L
e
v
e
l

P
e
r
!
o
r
m
a
h
c
e

P
a
r
a
m
e
I
e
r
s
W
a
I
e
r

I
r
e
a
I
m
e
n
I

p
l
a
n
I

c
a
p
a
c
i
I
y
%
!
0
0
%
~

|
(
Q
u
a
n
I
i
I
y

o

b
u
l
k

w
a
I
e
r

s
u
p
p
l
y
/
l
n
s
I
a
l
l
e
d

c
a
p
a
c
i
I
y

o

I
h
e

W
T
P
)
*
!
0
0
%
l
n
s
I
a
l
l
e
d

c
a
p
a
c
i
I
y

o

I
h
e

w
a
I
e
r

I
r
e
a
I
m
e
n
I

p
l
a
n
I
,

i
n

M
L
D

I
e
r
m
s
,

I
o

I
r
e
a
I

I
h
e

b
u
l
k

w
a
I
e
r

s
u
p
p
l
i
e
d

o
r

I
r
e
a
I
m
e
n
I
l
n
d
i
c
a
I
e
s

i

I
h
e

i
n
s
I
a
l
l
e
d

c
a
p
a
c
i
I
y

i
s

a
d
e
q
u
a
I
e

I
o

I
r
e
a
I

I
h
e

b
u
l
k

w
a
I
e
r

s
u
p
p
l
i
e
d
l

I
h
e

i
n
s
I
a
l
l
e
d

c
a
p
a
c
i
I
y

i
s

l
e
s
s

I
h
a
n

I
h
e

b
u
l
k

s
u
p
p
l
y
,

a

c
h
e
c
k

o
n

I
h
e

w
a
I
e
r

q
u
a
l
i
I
y

s
I
a
n
d
a
r
d
s

i
s

e
s
s
e
n
I
i
a
l

I
o

d
e
I
e
r
m
i
n
e

i

I
h
e
r
e

i
s

a
n
y

d
e
I
e
r
i
o
r
a
I
i
o
n

i
n

I
h
e

q
u
a
l
i
I
y

o

I
r
e
a
I
e
d

w
a
I
e
r

S
I
o
r
a
g
e

l
e
v
e
l
s
%
J
J
%
~
|
(
(
l
n
s
I
a
l
l
e
d

c
a
p
a
c
i
I
y
/

!

q
u
a
n
I
i
I
y

o

w
a
I
e
r

d
i
s
c
h
a
r
g
e
d

r
o
m

W
T
P
)
)
T
h
e

s
I
o
r
a
g
e

c
a
p
a
c
i
I
y

a
v
a
i
l
a
b
l
e

i
n

I
h
e

o
r
m

o

e
l
e
v
a
I
e
d

s
I
o
r
a
g
e

r
e
s
e
r
v
o
i
r
s

o
r

g
r
o
u
n
d
w
a
I
e
r

s
I
o
r
a
g
e

r
e
s
e
r
v
o
i
r
s

l
n
d
i
c
a
I
e
s

I
h
e

e
x
I
e
n
I

o

s
I
o
r
a
g
e

c
a
p
a
c
i
I
y

a
v
a
i
l
a
b
l
e

I
o

s
I
o
r
e

I
r
e
a
I
e
d

w
a
I
e
r

a
I

a
n
y

p
o
i
n
I

i
n

I
i
m
e

b
e
o
r
e

a
c
I
u
a
l

s
u
p
p
l
y

I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

i
s

u
n
d
e
r
I
a
k
e
n
g
r
o
u
n
d
w
a
I
e
r
C
o
v
e
r
a
g
e

o

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m
%
!
0
0
%
~

|
(
T
o
I
a
l

n
u
m
b
e
r

o

h
o
u
s
e
h
o
l
d
s

w
i
I
h

d
i
r
e
c
I

w
a
I
e
r

s
u
p
p
l
y

c
o
n
n
e
c
I
i
o
n
/
T
o
I
a
l

n
u
m
b
e
r

o

h
o
u
s
e
h
o
l
d
s

i
n

I
h
e

s
e
r
v
i
c
e

a
r
e
a
)
*
!
0
0
T
o
I
a
l

n
u
m
b
e
r

o

h
o
u
s
e
h
o
l
d
s

i
n

I
h
e

s
e
r
v
i
c
e

a
r
e
a

I
h
a
I

a
r
e

c
o
n
n
e
c
I
e
d

I
o

I
h
e

w
a
I
e
r

s
u
p
p
l
y

n
e
I
w
o
r
k

w
i
I
h

a

d
i
r
e
c
I

s
e
r
v
i
c
e

c
o
n
n
e
c
I
i
o
n
,

a
s

p
e
r
c
e
n
I
a
g
e

o

I
o
I
a
l

n
u
m
b
e
r

o

h
o
u
s
e
h
o
l
d
s

i
n

I
h
a
I

s
e
r
v
i
c
e

a
r
e
a
l
n
d
i
c
a
I
e
s

I
h
e

e
x
I
e
n
I

o

h
o
u
s
e
h
o
l
d
s

i
n

I
h
e

s
e
r
v
i
c
e

a
r
e
a
,

w
h
i
c
h

h
a
v
e

a

d
i
r
e
c
I

a
c
c
e
s
s

I
o

d
r
i
n
k
i
n
g

w
a
I
e
r

s
u
p
p
l
y

a
n
d
,

I
h
e
r
e
o
r
e
,

I
h
e

e
x
I
e
n
I

n
o
I

c
o
v
e
r
e
d

a
n
d

w
h
e
r
e

s
e
r
v
i
c
e
s

n
e
e
d

I
o

b
e

p
r
o
v
i
d
e
d
O
n
l
y

I
h
e

n
u
m
b
e
r

o

h
o
u
s
e
h
o
l
d
s

(
n
o
I

p
r
o
p
e
r
I
i
e
s
)

i
n

I
h
e

s
e
r
v
i
c
e

a
r
e
a

s
h
o
u
l
d

b
e

c
o
n
s
i
d
e
r
e
d
W
o
u
l
d

i
n
c
l
u
d
e

h
o
u
s
e
h
o
l
d
s

I
h
a
I

r
e
c
e
i
v
e

s
u
p
p
l
y

a
I

o
n
e

c
o
m
m
o
n

p
o
i
n
I
,

r
o
m

w
h
e
r
e

i
I

i
s

s
I
o
r
e
d

a
n
d

d
i
s
I
r
i
b
u
I
e
d

C
o
m
m
o
n

p
u
b
l
i
c

s
I
a
n
d

p
o
s
I
s

n
o
I

I
o

b
e

c
o
n
s
i
d
e
r
e
d
P
a
w

w
a
I
e
r

I
r
a
n
s
m
i
s
s
i
o
n

l
o
s
s

l
e
v
e
l
%
L
e
s
s

I
h
a
n

2
%
~

|
(
(
!

q
u
a
n
I
i
I
y

o

w
a
I
e
r

r
e
c
e
i
v
e
d

a
I

W
T
P
)
/
q
u
a
n
I
i
I
y

o

w
a
I
e
r

p
u
m
p
e
d

a
I

i
n
I
a
k
e

w
o
r
k
s
)
*
!
0
0
T
o
I
a
l

r
a
w

w
a
I
e
r

l
o
s
I

i
n

c
o
n
v
e
y
a
n
c
e

r
o
m

I
h
e

s
o
u
r
c
e

o
r

m
a
i
n

b
a
l
a
n
c
i
n
g

r
e
s
e
r
v
o
i
r

I
o

I
h
e

I
r
e
a
I
m
e
n
I

p
l
a
n
I

e
x
p
r
e
s
s
e
d

a
s

a

p
e
r
c
e
n
I
a
g
e

o

I
o
I
a
l

b
u
l
k

w
a
I
e
r

o
I
a
k
e

a
I

s
o
u
r
c
e
l
n
d
i
c
a
I
e
s

I
h
e

e
i
c
i
e
n
c
y

o

I
h
e

c
o
n
v
e
y
a
n
c
e

s
y
s
I
e
m

I
o

e
n
s
u
r
e

I
h
a
I

o
n
l
y

I
e
c
h
n
i
c
a
l

l
o
s
s

l
e
v
e
l
s

d
u
e

I
o

r
i
c
I
i
o
n

a
r
e

p
e
r
m
i
s
s
i
b
l
e
.

l
n

c
a
s
e

o

c
o
n
v
e
y
a
n
c
e

I
h
r
o
u
g
h

o
p
e
n

c
h
a
n
n
e
l
s
,

I
h
e

l
o
s
s

l
e
v
e
l

w
o
u
l
d

b
e

h
i
g
h
e
r

d
u
e

I
o

e
v
a
p
o
r
a
I
i
o
n

L
o
s
s

l
e
v
e
l

e
x
c
e
e
d
i
n
g

p
e
r
m
i
s
s
i
b
l
e

s
I
a
n
d
a
r
d
s

i
n
d
i
c
a
I
e

e
i
I
h
e
r

c
o
r
r
o
d
e
d

p
i
p
e
l
i
n
e
s

o
r

I
h
e
I

o

r
a
w

w
a
I
e
r
T
a
b
l
e

J

F
R
Q
W
L
Q
X
H
G
F
R
Q
W
L
Q
X
H
G
R
Q
Q
H
[
W
S
D
J
H
24
I
n
d
i
c
a
I
o
r
U
n
i
I
N
o
r
m
F
o
r
m
u
I
a
D
e
!
i
n
i
I
i
o
n
a
I
i
o
n
a
I
e
e
m
a
r
k
s
S
e
r
v
i
c
e
-
L
e
v
e
l

P
e
r
!
o
r
m
a
h
c
e

P
a
r
a
m
e
I
e
r
s
W
a
I
e
r

I
r
e
a
I
m
e
n
I

l
o
s
s
%
2
%
J
%
~

|
(
(
!

q
u
a
n
I
i
I
y

o

w
a
I
e
r

d
i
s
c
h
a
r
g
e
d

r
o
m

W
T
P
)
/
q
u
a
n
I
i
I
y

o

w
a
I
e
r

r
e
c
e
i
v
e
d

a
I

W
T
P
)
)
*
!
0
0
T
h
e

q
u
a
n
I
u
m

o

w
a
I
e
r

I
h
a
I

i
s

l
o
s
I

a
I

I
h
e

I
i
m
e

o

I
r
e
a
I
m
e
n
I

o
n

a
c
c
o
u
n
I

o

I
e
c
h
n
i
c
a
l

i
s
s
u
e
s
l
n
d
i
c
a
I
e
s

i

I
h
e

I
e
c
h
n
o
l
o
g
y

a
n
d

I
h
e

e
q
u
i
p
m
e
n
I

u
s
e
d

o
r

I
r
e
a
I
m
e
n
I

p
r
o
c
e
d
u
r
e

a
r
e

o
p
e
r
a
I
i
n
g

e
i
c
i
e
n
I
l
y

a
n
d

r
e
s
u
l
I

i
n

o
n
l
y

a
c
c
e
p
I
a
b
l
e

l
e
v
e
l
s

o

l
o
s
s
L
o
s
s

l
e
v
e
l
s

b
e
y
o
n
d

a
c
c
e
p
I
a
b
l
e

l
i
m
i
I
s

i
n
d
i
c
a
I
e

e
i
I
h
e
r

o
b
s
o
l
e
I
e

e
q
u
i
p
m
e
n
I

b
e
i
n
g

u
s
e
d

o
r

o
p
e
r
a
I
i
o
n
a
l

i
n
e
i
c
i
e
n
c
y
P
u
r
e

w
a
I
e
r

I
r
a
n
s
m
i
s
s
i
o
n

l
o
s
s
%
L
e
s
s

I
h
a
n

2
%
~

|
(
(
!

q
u
a
n
I
i
I
y

o

w
a
I
e
r

d
i
s
c
h
a
r
g
e
d

r
o
m

L
S
P
)
/
q
u
a
n
I
i
I
y

o

w
a
I
e
r

d
i
s
c
h
a
r
g
e
d

r
o
m

W
T
P
)
*
!
0
0
T
h
e

q
u
a
n
I
u
m

o

w
a
I
e
r

l
o
s
I

d
u
r
i
n
g

c
o
n
v
e
y
a
n
c
e

r
o
m

I
h
e

W
T
P

I
o

I
h
e

s
I
o
r
a
g
e

r
e
s
e
r
v
o
i
r
s
l
n
d
i
c
a
I
e
s

i

I
h
e

p
u
r
e

w
a
I
e
r

I
r
a
n
s
m
i
s
s
i
o
n

p
i
p
e
l
i
n
e

i
s

c
o
r
r
o
d
e
d

o
r

h
a
s

p
o
i
n
I
s

w
h
e
r
e

I
h
e
r
e

a
r
e

l
e
a
k
s
L
o
s
s

l
e
v
e
l
s

b
e
y
o
n
d

a
c
c
e
p
I
a
b
l
e

l
i
m
i
I
s

i
n
d
i
c
a
I
e

e
i
I
h
e
r

c
o
r
r
o
d
e
d

p
i
p
e
l
i
n
e
s
,

I
h
e
I

o

p
u
r
e

w
a
I
e
r

L
x
I
e
n
I

o

m
e
I
e
r
e
d

s
e
r
v
i
c
e

c
o
n
n
e
c
I
i
o
n
s
%
!
0
0
%
~

|
(
N
u
m
b
e
r

o

m
e
I
e
r
e
d

d
i
r
e
c
I

s
e
r
v
i
c
e

c
o
n
n
e
c
I
i
o
n
s

N
u
m
b
e
r

o

m
e
I
e
r
e
d

p
u
b
l
i
c

s
I
a
n
d

p
o
s
I
s
)
/

T
o
I
a
l

n
u
m
b
e
r

o

d
i
r
e
c
I

s
e
r
v
i
c
e

c
o
n
n
e
c
I
i
o
n
s

T
o
I
a
l

n
u
m
b
e
r

o

p
u
b
l
i
c

s
I
a
n
d

p
o
s
I
s
)
*
!
0
0
T
o
I
a
l

n
u
m
b
e
r

o
u
n
c
I
i
o
n
a
l

m
e
I
e
r
e
d

w
a
I
e
r

c
o
n
n
e
c
I
i
o
n
s

e
x
p
r
e
s
s
e
d

a
s

a

p
e
r
c
e
n
I
a
g
e

o

I
o
I
a
l

n
u
m
b
e
r

o

w
a
I
e
r

s
u
p
p
l
y

c
o
n
n
e
c
I
i
o
n
s
P
u
b
l
i
c

s
I
a
n
d

p
o
s
I

c
o
n
n
e
c
I
i
o
n
s

s
h
o
u
l
d

a
l
s
o

b
e

i
n
c
l
u
d
e
d
l
a
c
i
l
i
I
a
I
e
s

i
n

m
e
a
s
u
r
i
n
g

I
h
e

e
x
a
c
I

q
u
a
n
I
u
m

o

w
a
I
e
r

c
o
n
s
u
m
e
d

a
n
d

I
h
e
r
e
b
y

I
h
a
I

w
h
i
c
h

c
a
n

b
e

b
i
l
l
e
d

a
s

p
e
r

c
o
n
s
u
m
p
I
i
o
n

l
e
v
e
l
s
O

I
h
e

m
e
I
e
r
s

i
n
s
I
a
l
l
e
d
,

i
I

i
s

i
m
p
o
r
I
a
n
I

I
o

c
h
e
c
k

I
h
e

e
x
I
e
n
I

I
h
a
I

a
r
e

u
l
l
y

u
n
c
I
i
o
n
a
l

a
n
d

o
p
e
r
a
I
i
o
n
a
l
A
l
l

I
h
e

i
n
s
I
a
l
l
e
d

m
e
I
e
r
s

n
e
e
d

I
o

b
e

!
0
0
%

u
n
c
I
i
o
n
a
l
N
o
n
r
e
v
e
n
u
e

w
a
I
e
r

%
2
0
%
~

|
(
(
T
o
I
a
l

w
a
I
e
r

p
r
o
d
u
c
e
d

a
n
d

p
u
I

i
n
I
o

I
h
e

I
r
a
n
s
m
i
s
s
i
o
n

a
n
d

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

T
o
I
a
l

w
a
I
e
r

s
o
l
d
)
/
(
T
o
I
a
l

w
a
I
e
r

p
r
o
d
u
c
e
d

a
n
d

p
u
I

i
n
I
o

I
h
e

I
r
a
n
s
m
i
s
s
i
o
n

a
n
d

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m
)
)
*
!
0
0
%
L
x
I
e
n
I

o

w
a
I
e
r

p
r
o
d
u
c
e
d
,

w
h
i
c
h

d
o
e
s

n
o
I

e
a
r
n

I
h
e

U
L
8

o
r

s
I
a
I
e

a
g
e
n
c
y

a
n
y

r
e
v
e
n
u
e
P
e
d
u
c
I
i
o
n

i
n

n
o
n
r
e
v
e
n
u
e

w
a
I
e
r

l
e
v
e
l
s

i
s

v
i
I
a
l

o
r

I
h
e

i
n
a
n
c
i
a
l

s
u
s
I
a
i
n
a
b
i
l
i
I
y

o

I
h
e

U
L
8

o
r

s
I
a
I
e

a
g
e
n
c
y
O
n
l
y

I
r
e
a
I
e
d

w
a
I
e
r

i
n
p
u
I

i
n
I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

I
o

b
e

i
n
c
l
u
d
e
d
W
a
I
e
r

s
o
l
d

i
m
p
l
i
e
s

a
c
I
u
a
l

v
o
l
u
m
e

o

w
a
I
e
r

s
u
p
p
l
i
e
d

I
o

c
u
s
I
o
m
e
r
s

l
n

I
h
e

a
b
s
e
n
c
e

o
u
n
c
I
i
o
n
a
l
l
y

e
e
c
I
i
v
e

m
e
I
e
r
i
n
g

a
l
I
e
r
n
a
I
e

m
e
I
h
o
d
s

o

m
e
a
s
u
r
e
m
e
n
I

n
e
e
d
e
d
T
a
b
l
e

J

F
R
Q
W
L
Q
X
H
G
F
R
Q
W
L
Q
X
H
G
R
Q
Q
H
[
W
S
D
J
H
25
I
n
d
i
c
a
I
o
r
U
n
i
I
N
o
r
m
F
o
r
m
u
I
a
D
e
!
i
n
i
I
i
o
n
a
I
i
o
n
a
I
e
e
m
a
r
k
s
S
e
r
v
i
c
e
-
L
e
v
e
l

P
e
r
!
o
r
m
a
h
c
e

P
a
r
a
m
e
I
e
r
s
C
o
s
I

r
e
c
o
v
e
r
y

i
n

w
a
I
e
r

s
u
p
p
l
y

s
e
r
v
i
c
e
s
%
!
0
0
%
~

|
(
T
o
I
a
l

a
n
n
u
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s
/

T
o
I
a
l

a
n
n
u
a
l

o
p
e
r
a
I
i
n
g

e
x
p
e
n
s
e
s
)
*
!
0
0
T
o
I
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s

e
x
p
r
e
s
s
e
d

a
s

p
e
r
c
e
n
I
a
g
e

o

I
o
I
a
l

o
p
e
r
a
I
i
n
g

e
x
p
e
n
s
e
s

i
n
c
u
r
r
e
d

i
n

I
h
e

c
o
r
r
e
s
p
o
n
d
i
n
g

I
i
m
e

p
e
r
i
o
d
l
i
n
a
n
c
i
a
l

s
u
s
I
a
i
n
a
b
i
l
i
I
y

i
s

c
r
i
I
i
c
a
l

P
r
o
v
i
d
e
s

a

b
a
s
i
s

o
r

I
a
r
i
i
x
a
I
i
o
n
,

e
n
a
b
l
e
s

s
e
I
I
i
n
g

I
a
r
g
e
I
s

o
r

r
e
v
e
n
u
e

m
o
b
i
l
i
z
a
I
i
o
n

a
n
d

c
o
s
I

c
o
n
I
r
o
l

i
n

d
e
l
i
v
e
r
y

o

w
a
I
e
r

s
u
p
p
l
y

s
e
r
v
i
c
e
s
O
p
e
r
a
I
i
n
g

e
x
p
e
n
s
e

i
n
c
l
u
d
e
s

c
h
a
r
g
e
s

o
n

e
l
e
c
I
r
i
c
i
I
y
,

c
h
e
m
i
c
a
l
s
,

s
I
a
,

b
u
l
k

w
a
I
e
r

p
u
r
c
h
a
s
e

c
o
s
I
s
,

e
I
c
.
P
e
v
e
n
u
e
s

m
a
y

b
e

i
n

I
h
e

o
r
m

o

I
a
x
e
s
/

c
e
s
s
/
s
u
r
c
h
a
r
g
e
s
,

u
s
e
r

c
h
a
r
g
e
s
,

c
o
n
n
e
c
I
i
o
n

c
h
a
r
g
e
s
,

s
a
l
e

o

b
u
l
k

w
a
I
e
r
,

e
I
c
.
C
o
l
l
e
c
I
i
o
n

e
i
c
i
e
n
c
y
%
!
0
0
%
~

|
(
C
u
r
r
e
n
I

r
e
v
e
n
u
e
s

c
o
l
l
e
c
I
e
d

i
n

I
h
e

g
i
v
e
n

y
e
a
r
/
T
o
I
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s

b
i
l
l
e
d

d
u
r
i
n
g

I
h
e

g
i
v
e
n

y
e
a
r
)
*
!
0
0
i
c
i
e
n
c
y

i
n

c
o
l
l
e
c
I
i
o
n

i
s

I
h
e

c
u
r
r
e
n
I

y
e
a
r

r
e
v
e
n
u
e
s

c
o
l
l
e
c
I
e
d
,

e
x
p
r
e
s
s
e
d

a
s

a

p
e
r
c
e
n
I
a
g
e

o

I
h
e

I
o
I
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s
,

o
r

I
h
e

c
o
r
r
e
s
p
o
n
d
i
n
g

I
i
m
e

p
e
r
i
o
d
l
n
d
i
c
a
I
e
s

I
h
e

e
x
I
e
n
I

o

o
p
e
r
a
I
i
o
n
a
l

e
i
c
i
e
n
c
y

p
r
e
s
e
n
I

i
n

I
h
e

s
y
s
I
e
m

a
n
d

m
a
k
e
s

n
o
I
e

o

I
h
e

e
x
I
e
n
I

o

a
r
r
e
a
r
s
C
o
l
l
e
c
I
i
o
n

o

a
r
r
e
a
r
s

I
o

b
e

e
x
c
l
u
d
e
d
C
P
H
L
L
O

~

C
e
n
I
r
a
l

P
u
b
l
i
c

H
e
a
l
I
h

a
n
d

L
n
v
i
r
o
n
m
e
n
I
a
l

L
n
g
i
n
e
e
r
i
n
g

O
r
g
a
n
i
s
a
I
i
o
n
,

L
S
P

~

e
l
e
v
a
I
e
d

s
I
o
r
a
g
e

r
e
s
e
r
v
o
i
r
,

l
p
c
d

~

l
i
I
e
r
s

p
e
r

c
a
p
i
I
a

p
e
r

d
a
y
,

M
L
D

~

m
i
l
l
i
o
n

l
i
I
e
r
s

p
e
r

d
a
y
,

U
L
8

~

u
r
b
a
n

l
o
c
a
l

b
o
d
y
,

W
T
P

~

w
a
I
e
r

I
r
e
a
I
m
e
n
I

p
l
a
n
I
.
T
h
e

i
n
d
i
c
a
I
o
r
s

d
i
s
c
u
s
s
e
d

i
n

T
a
b
l
e

J

a
r
e

I
h
e

m
o
s
I

c
r
i
I
i
c
a
l

p
a
r
a
m
e
I
e
r
s

o
r

a
s
s
e
s
s
i
n
g

I
h
e

s
I
a
I
u
s

o

w
a
I
e
r

s
u
p
p
l
y

s
e
r
v
i
c
e
s

i
n

a

c
i
I
y

o
r

I
o
w
n
.

l
n

a
d
d
i
I
i
o
n

I
o

I
h
e
s
e

i
n
d
i
c
a
I
o
r
s
,

i
I

i
s

i
m
p
o
r
I
a
n
I

I
h
a
I

I
h
e

U
L
8

o
r

s
I
a
I
e

a
g
e
n
c
y

a
l
s
o

c
o
n
s
i
d
e
r

o
I
h
e
r

i
m
p
o
r
I
a
n
I

a
c
I
o
r
s

i
n

I
h
e

v
a
l
u
e

c
h
a
i
n
,

s
u
c
h

a
s

I
h
e

a
g
e

o

I
h
e

i
n
s
I
a
l
l
e
d

e
q
u
i
p
m
e
n
I

a
n
d

I
h
e

e
i
c
i
e
n
c
y

o

o
p
e
r
a
I
i
o
n
s
.

A
l
s
o
,

I
h
e

e
i
c
i
e
n
c
y

o

c
o
n
s
u
m
e
r

g
r
i
e
v
a
n
c
e

r
e
d
r
e
s
s

n
e
e
d
s

I
o

b
e

m
o
n
i
I
o
r
e
d

a
n
d

I
h
e

a
d
e
q
u
a
c
y

o

s
I
a

I
o

m
a
n
a
g
e

I
h
e

e
x
i
s
I
i
n
g

c
o
n
n
e
c
I
i
o
n
s

a
s
s
e
s
s
e
d
.
T
h
e

s
a
n
i
I
a
I
i
o
n

s
e
r
v
i
c
e
s

o

I
h
e

U
L
8

o
r

s
I
a
I
e

a
g
e
n
c
y

a
l
s
o

n
e
e
d

I
o

b
e

a
s
s
e
s
s
e
d
.

K
e
y

p
a
r
a
m
e
I
e
r
s

a
r
e

p
r
e
s
e
n
I
e
d

i
n

T
a
b
l
e

4
.
T
a
b
l
e

J

F
R
Q
W
L
Q
X
H
G
26
1
a
b
I
e

4

K
e
y

P
a
r
a
m
e
I
e
r
s

!
o
r

A
s
s
e
s
s
i
n
g

I
h
e

P
e
r
!
o
r
m
a
n
c
e

o
!

5
a
n
i
I
a
I
i
o
n

5
e
r
v
i
c
e
s
I
n
d
i
c
a
I
o
r
U
n
i
I
N
o
r
m
F
o
r
m
u
I
a
D
e
!
i
n
i
I
i
o
n
a
I
i
o
n
a
I
e
e
m
a
r
k
s
S
e
r
v
i
c
e
-
L
e
v
e
l

P
e
r
!
o
r
m
a
h
c
e

P
a
r
a
m
e
I
e
r
s
C
o
v
e
r
a
g
e

o

s
a
n
i
I
a
I
i
o
n

n
e
I
w
o
r
k
%
!
0
0
%
~

|
(
T
o
I
a
l

n
u
m
b
e
r

o

p
r
o
p
e
r
I
i
e
s

w
i
I
h

d
i
r
e
c
I

c
o
n
n
e
c
I
i
o
n

I
o

I
h
e

s
a
n
i
I
a
I
i
o
n

n
e
I
w
o
r
k
/

T
o
I
a
l

n
u
m
b
e
r

o

p
r
o
p
e
r
I
i
e
s

i
n

I
h
e

s
e
r
v
i
c
e

a
r
e
a
)
*
!
0
0
D
e
n
o
I
e
s

I
h
e

e
x
I
e
n
I

I
o

w
h
i
c
h

I
h
e

u
n
d
e
r
g
r
o
u
n
d

s
a
n
i
I
a
I
i
o
n

(
o
r

s
a
n
i
I
a
I
i
o
n

c
o
l
l
e
c
I
i
o
n
)

n
e
I
w
o
r
k

h
a
s

r
e
a
c
h
e
d

o
u
I

I
o

i
n
d
i
v
i
d
u
a
l

p
r
o
p
e
r
I
i
e
s

a
c
r
o
s
s

I
h
e

s
e
r
v
i
c
e

a
r
e
a
L
a
s
I

m
i
l
e

a
c
c
e
s
s

I
o

s
a
n
i
I
a
I
i
o
n

n
e
I
w
o
r
k
s

i
s

k
e
y

I
o

i
m
p
r
o
v
e
m
e
n
I

i
n

s
e
r
v
i
c
e

l
e
v
e
l
s

o

s
a
n
i
I
a
I
i
o
n

m
a
n
a
g
e
m
e
n
I
T
h
e

I
o
I
a
l

n
u
m
b
e
r

o

p
r
o
p
e
r
I
i
e
s

(
a
s

a
g
a
i
n
s
I

h
o
u
s
e
h
o
l
d
s
)

a
s

r
e
c
o
r
d
e
d

i
n

I
h
e

m
u
n
i
c
i
p
a
l

r
e
c
o
r
d
s

s
h
o
u
l
d

b
e

a
s
s
e
s
s
e
d
O
n
l
y

p
r
o
p
e
r
I
i
e
s

w
i
I
h

a
c
c
e
s
s

c
o
n
n
e
c
I
i
o
n

I
o

u
n
d
e
r
g
r
o
u
n
d

s
a
n
i
I
a
I
i
o
n

n
e
I
w
o
r
k

s
h
o
u
l
d

b
e

i
n
c
l
u
d
e
d
.

T
h
o
s
e

I
h
a
I

c
o
n
n
e
c
I

I
h
e
i
r

s
a
n
i
I
a
I
i
o
n

o
u
I
l
e
I

I
o

s
I
o
r
m
w
a
I
e
r

d
r
a
i
n
s

o
r

o
p
e
n

d
r
a
i
n
a
g
e

s
y
s
I
e
m
s

s
h
o
u
l
d

n
o
I

b
e

c
o
n
s
i
d
e
r
e
d
A
d
e
q
u
a
c
y

o

s
a
n
i
I
a
I
i
o
n

I
r
e
a
I
m
e
n
I

c
a
p
a
c
i
I
y
%
!
0
0
%
~

|
(
T
r
e
a
I
m
e
n
I

p
l
a
n
I

c
a
p
a
c
i
I
y
/
T
o
I
a
l

w
a
I
e
r

c
o
n
s
u
m
e
d

L
s
I
i
m
a
I
e
d

w
a
I
e
r

u
s
e

r
o
m

o
I
h
e
r

s
o
u
r
c
e
s
)
*
0
.
8
A
d
e
q
u
a
c
y

i
s

e
x
p
r
e
s
s
e
d

a
s

s
e
c
o
n
d
a
r
y

I
r
e
a
I
m
e
n
I

(
i
.
e
.
,

r
e
m
o
v
i
n
g

o
x
y
g
e
n

d
e
m
a
n
d

a
s

w
e
l
l

a
s

s
o
l
i
d
s
,

n
o
r
m
a
l
l
y

b
i
o
l
o
g
i
c
a
l
)

c
a
p
a
c
i
I
y

a
v
a
i
l
a
b
l
e

a
s

a

p
e
r
c
e
n
I
a
g
e

o

n
o
r
m
a
I
i
v
e

w
a
s
I
e
w
a
I
e
r

g
e
n
e
r
a
I
i
o
n
,

o
r

I
h
e

s
a
m
e

I
i
m
e

p
e
r
i
o
d
l
I

w
i
l
l

h
i
g
h
l
i
g
h
I

I
h
e

a
d
e
q
u
a
c
y

o

a
v
a
i
l
a
b
l
e

a
n
d

o
p
e
r
a
I
i
o
n
a
l

s
a
n
i
I
a
I
i
o
n

I
r
e
a
I
m
e
n
I

c
a
p
a
c
i
I
y
T
o

i
n
c
l
u
d
e

w
a
I
e
r

s
u
p
p
l
i
e
d

I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

e
x
I
r
e
a
I
m
e
n
I

p
l
a
n
I

a
n
d

i
n
c
l
u
d
i
n
g

p
u
r
c
h
a
s
e
d

w
a
I
e
r
,

i

a
n
y
,

a
n
d

w
a
I
e
r

s
u
p
p
l
i
e
d

I
h
r
o
u
g
h

a
n
y

d
e
c
e
n
I
r
a
l
i
z
e
d

s
y
s
I
e
m
C
o
l
l
e
c
I
i
o
n

e
i
c
i
e
n
c
y

o

s
a
n
i
I
a
I
i
o
n

n
e
I
w
o
r
k
%
!
0
0
%
~

|
(
W
a
s
I
e
w
a
I
e
r

c
o
l
l
e
c
I
e
d
/
(
(
T
o
I
a
l

w
a
I
e
r

p
r
o
d
u
c
e
d

L
s
I
i
m
a
I
e
d

w
a
I
e
r

u
s
e

r
o
m

o
I
h
e
r

s
o
u
r
c
e
s
)
*
0
.
8
)
T
h
e

q
u
a
n
I
u
m

o

w
a
s
I
e
w
a
I
e
r

c
o
l
l
e
c
I
e
d

a
s

a

p
e
r
c
e
n
I
a
g
e

o

n
o
r
m
a
I
i
v
e

s
a
n
i
I
a
I
i
o
n

g
e
n
e
r
a
I
i
o
n

i
n

I
h
e

u
r
b
a
n

l
o
c
a
l

b
o
d
y

(
U
L
8
)
S
i
g
n
i
i
e
s

I
h
e

e
e
c
I
i
v
e
n
e
s
s

o

I
h
e

n
e
I
w
o
r
k

i
n

c
a
p
I
u
r
i
n
g

w
a
s
I
e
w
a
I
e
r

a
n
d

c
o
n
v
e
y
i
n
g

i
I

I
o

I
h
e

I
r
e
a
I
m
e
n
I

p
l
a
n
I
s
T
o

i
n
c
l
u
d
e

w
a
I
e
r

s
u
p
p
l
i
e
d

I
o

I
h
e

d
i
s
I
r
i
b
u
I
i
o
n

s
y
s
I
e
m

e
x
I
r
e
a
I
m
e
n
I

p
l
a
n
I

a
n
d

i
n
c
l
u
d
i
n
g

p
u
r
c
h
a
s
e
d

w
a
I
e
r
,

i

a
n
y
,

a
n
d

w
a
I
e
r

s
u
p
p
l
i
e
d

I
h
r
o
u
g
h

a
n
y

d
e
c
e
n
I
r
a
l
i
z
e
d

s
y
s
I
e
m
F
R
Q
W
L
Q
X
H
G
R
Q
Q
H
[
W
S
D
J
H
27
I
n
d
i
c
a
I
o
r
U
n
i
I
N
o
r
m
F
o
r
m
u
I
a
D
e
!
i
n
i
I
i
o
n
a
I
i
o
n
a
I
e
e
m
a
r
k
s
S
e
r
v
i
c
e
-
L
e
v
e
l

P
e
r
!
o
r
m
a
h
c
e

P
a
r
a
m
e
I
e
r
s
L
x
I
e
n
I

o

r
e
u
s
e

a
n
d

r
e
c
y
c
l
i
n
g

o

s
a
n
i
I
a
I
i
o
n
%
M
i
n
i
m
u
m

o

2
0
%
~

|
(
W
a
s
I
e
w
a
I
e
r

r
e
c
y
c
l
e
d

o
r

r
e
u
s
e
d

a
I
e
r

a
p
p
r
o
p
r
i
a
I
e

I
r
e
a
I
m
e
n
I
/

W
a
s
I
e
w
a
I
e
r

r
e
c
e
i
v
e
d

a
I

I
h
e

I
r
e
a
I
m
e
n
I

p
l
a
n
I
s
)
*
!
0
0
P
e
r
c
e
n
I
a
g
e

o

w
a
s
I
e
w
a
I
e
r

r
e
c
e
i
v
e
d

a
I

I
h
e

I
r
e
a
I
m
e
n
I

p
l
a
n
I

I
h
a
I

i
s

r
e
c
y
c
l
e
d

o
r

r
e
u
s
e
d

a
I
e
r

a
p
p
r
o
p
r
i
a
I
e

I
r
e
a
I
m
e
n
I

o
r

v
a
r
i
o
u
s

p
u
r
p
o
s
e
s
l
o
r

s
u
s
I
a
i
n
a
b
l
e

w
a
I
e
r

m
a
n
a
g
e
m
e
n
I
,

i
I

i
s

d
e
s
i
r
a
b
l
e

I
h
a
I

w
a
s
I
e
w
a
I
e
r

s
a
n
i
I
a
I
i
o
n

i
s

r
e
c
y
c
l
e
d

o
r

r
e
u
s
e
d

a
I
e
r

a
p
p
r
o
p
r
i
a
I
e

I
r
e
a
I
m
e
n
I
.

T
o

m
a
x
i
m
i
z
e

I
h
e

s
a
m
e
,

i
I

i
s

i
m
p
o
r
I
a
n
I

I
h
a
I

I
h
i
s

i
n
d
i
c
a
I
o
r

i
s

m
e
a
s
u
r
e
d

a
n
d

m
o
n
i
I
o
r
e
d
l
n
d
i
c
a
I
o
r

s
h
o
u
l
d

b
e

r
e
p
o
r
I
e
d

a
I

I
h
e

c
i
I
y

o
r

U
L
8

l
e
v
e
l

a
s

a

w
h
o
l
e
T
h
i
s

s
h
o
u
l
d

o
n
l
y

c
o
n
s
i
d
e
r

w
a
I
e
r

I
h
a
I

i
s

d
i
r
e
c
I
l
y

c
o
n
v
e
y
e
d

o
r

r
e
c
y
c
l
i
n
g

o
r

r
e
u
s
e
,

s
u
c
h

a
s

u
s
e

i
n

g
a
r
d
e
n
s

a
n
d

p
a
r
k
s

o
r

o
r

i
r
r
i
g
a
I
i
o
n
Q
u
a
l
i
I
y

o

s
a
n
i
I
a
I
i
o
n

I
r
e
a
I
m
e
n
I
%
!
0
0
%
~

|
(
N
u
m
b
e
r

o

s
a
m
p
l
e
s

I
h
a
I

p
a
s
s

I
h
e

s
p
e
c
i
i
e
d

s
e
c
o
n
d
a
r
y

I
r
e
a
I
m
e
n
I

s
I
a
n
d
a
r
d
s
/
T
o
I
a
l

n
u
m
b
e
r

o

w
a
s
I
e
w
a
I
e
r

s
a
m
p
l
e
s

I
e
s
I
e
d

i
n

a

m
o
n
I
h
)
*
!
0
0
L
x
I
e
n
I

o

w
a
s
I
e
w
a
I
e
r

s
a
m
p
l
e
s

I
h
a
I

p
a
s
s

I
h
e

s
p
e
c
i
i
e
d

s
e
c
o
n
d
a
r
y

I
r
e
a
I
m
e
n
I

s
I
a
n
d
a
r
d
s
l
I

i
s

i
m
p
o
r
I
a
n
I

I
h
a
I

I
h
e

I
r
e
a
I
e
d

w
a
I
e
r

I
h
a
I

i
s

d
i
s
c
h
a
r
g
e
d

b
a
c
k

i
n
I
o

w
a
I
e
r

b
o
d
i
e
s
,

o
r

u
s
e
d

o
r

o
I
h
e
r

p
u
r
p
o
s
e
s

s
u
c
h

a
s

i
r
r
i
g
a
I
i
o
n
,

m
e
e
I
s

I
h
e

e
n
v
i
r
o
n
m
e
n
I
a
l

s
I
a
n
d
a
r
d
s

l
a
i
d

d
o
w
n
S
a
m
p
l
i
n
g

s
h
o
u
l
d

b
e

I
a
k
e
n

a
s

p
e
r

g
o
o
d

i
n
d
u
s
I
r
y

p
r
a
c
I
i
c
e
s

a
n
d

l
a
i
d

d
o
w
n

n
o
r
m
s

b
y

e
n
v
i
r
o
n
m
e
n
I
a
l

a
g
e
n
c
i
e
s
,

s
u
c
h

a
s

p
o
l
l
u
I
i
o
n

c
o
n
I
r
o
l

b
o
a
r
d
s

o

r
e
s
p
e
c
I
i
v
e

s
I
a
I
e
L
x
I
e
n
I

o

c
o
s
I

r
e
c
o
v
e
r
y

i
n

s
a
n
i
I
a
I
i
o
n

m
a
n
a
g
e
m
e
n
I
%
!
0
0
%
~

|
(
T
o
I
a
l

a
n
n
u
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s
/

T
o
I
a
l

a
n
n
u
a
l

o
p
e
r
a
I
i
n
g

e
x
p
e
n
s
e
s
)
*
!
0
0
L
x
I
e
n
I

o

c
o
s
I

r
e
c
o
v
e
r
y

i
s

e
x
p
r
e
s
s
e
d

a
s

w
a
s
I
e
w
a
I
e
r

r
e
v
e
n
u
e
s

a
s

a

p
e
r
c
e
n
I
a
g
e

o

w
a
s
I
e
w
a
I
e
r

e
x
p
e
n
s
e
s
,

o
r

I
h
e

c
o
r
r
e
s
p
o
n
d
i
n
g

I
i
m
e

p
e
r
i
o
d
l
o
r

e
n
s
u
r
i
n
g

i
n
a
n
c
i
a
l

s
u
s
I
a
i
n
a
b
i
l
i
I
y
,

i
I

i
s

n
e
c
e
s
s
a
r
y

I
o

e
n
s
u
r
e

I
h
a
I

c
o
s
I
s

i
n
c
u
r
r
e
d

a
r
e

u
l
l
y

r
e
c
o
v
e
r
e
d
A
l
l

o
p
e
r
a
I
i
n
g

e
x
p
e
n
s
e
s

a
n
d

r
e
v
e
n
u
e
s

o

I
h
e

r
e
v
e
n
u
e

a
c
c
o
u
n
I

o
n
l
y

I
o

b
e

i
n
c
l
u
d
e
d

a
n
d

i
n
c
o
m
e
s

a
n
d

e
x
p
e
n
s
e
s

o

c
a
p
i
I
a
l

a
c
c
o
u
n
I

I
o

b
e

e
x
c
l
u
d
e
d
L
i
c
i
e
n
c
y

i
n

c
o
l
l
e
c
I
i
o
n

o

s
a
n
i
I
a
I
i
o
n

c
h
a
r
g
e
s
%
!
0
0
%
~

|
(
C
u
r
r
e
n
I

r
e
v
e
n
u
e
s

c
o
l
l
e
c
I
e
d

i
n

I
h
e

g
i
v
e
n

y
e
a
r
/
T
o
I
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s

b
i
l
l
e
d

d
u
r
i
n
g

I
h
e

g
i
v
e
n

y
e
a
r
)
*
!
0
0
i
c
i
e
n
c
y

i
n

c
o
l
l
e
c
I
i
o
n

i
s

d
e
i
n
e
d

a
s

c
u
r
r
e
n
I

y
e
a
r

r
e
v
e
n
u
e
s

c
o
l
l
e
c
I
e
d
,

e
x
p
r
e
s
s
e
d

a
s

a

p
e
r
c
e
n
I

o

a
g
e

o

I
h
e

I
o
I
a
l

o
p
e
r
a
I
i
n
g

r
e
v
e
n
u
e
s

b
i
l
l
e
d
L
i
c
i
e
n
I

c
o
l
l
e
c
I
i
o
n

o

r
e
v
e
n
u
e
s

d
u
e

i
n

I
h
e

c
u
r
r
e
n
I

y
e
a
r

i
s

c
r
i
I
i
c
a
l

o
r

o
v
e
r
a
l
l

i
n
a
n
c
i
a
l

h
e
a
l
I
h

o

I
h
e

u
I
i
l
i
I
y
C
o
l
l
e
c
I
i
o
n

o

a
r
r
e
a
r
s

I
o

b
e

e
x
c
l
u
d
e
d
T
a
b
l
e

4

F
R
Q
W
L
Q
X
H
G
28
The indicaIors discussed in Table 4 are Ihe
mosI criIical parameIers or assessing Ihe
sIaIus o a ciIy's saniIaIion service. ln addiIion,
iI is imporIanI IhaI Ihe UL8 or sIaIe agency
considers oIher imporIanI acIors in Ihe
value chain, such as Ihe age o Ihe insIalled
equipmenI, and iIs operaIional eiciency, and
Ihe eiciency o Ihe consumer grievance redress
process needs Io be moniIored. lndicaIors IhaI
can eecIively capIure Ihe impacI on healIh
o Ihe consumers in Ihe service area, such as
Ihe incidence o waIerborne diseases, may also
be included. These indicaIors would provide a
baseline againsI which Io judge Ihe impacI o
improved saniIaIion services on Ihe healIh o
Ihe consumers in Ihe service area.
The abovemenIioned indicaIors would
aciliIaIe in assessing Ihe servicelevel sIaIus o
Ihe asseI. ln addiIion Io Ihese, Ihe qualiIy and
sIaIus o Ihe waIer supply and saniIaIion asseIs
would be relecIed in Ihe waIer audiI, leak
deIecIion audiI, and energy audiI, which are
also Io be carried ouI as parI o Ihe Iechnical
assessmenI.
Identication of Key Issues
The deIailed assessmenI underIaken would
help idenIiy Ihe major issues aced in Ihe waIer
supply and saniIaIion services in Ihe ciIy. These
may be caIegorized as Ihose relaIing Io Ihe
operaIional handling o Ihe sysIem and Ihose
relaIing Io Ihe physical inrasIrucIure (ligure 7).
The UL8 or sIaIe agency would need Io prepare
a seI o miIigaIion measures or remedial
acIions Io address each issue, irsI ocusing on
addressing Ihe operaIional issues IhaI require
minimal levels o capiIal invesImenIs, and
Ihen addressing Ihe physical inrasIrucIure
IhaI Iypically requires much greaIer capiIal
invesImenI. These measures may Iake Ihe orm
o inrasIrucIure developmenI projecIs where a
gap has been idenIiied, or sIeps or revision o
Iaris Io improve cosI recovery.
Figure 7 IndicaIive LisI o! Issues in Ihe WaIer 5uppIy
and 5aniIaIion 5ervices
O&M ~ operaIion and mainIenance, STP ~ sewage IreaImenI planI, WTP ~ waIer
IreaImenI planI.
OuIpuI o! key parameIers
Low coverage
Poor collecIioh e!!iciehcy
High O&M cosIs
Low O&M recovery
Poor grievahce redressal
Corroded pipelihes
resulIihg ih high levels
o! Irahsmissioh losses
Lower Ihah required
capaciIy o! Ihe W1P
lhadequaIe sIorage
capaciIy
Absehce o! meIers
Lack o! S1P
Opeh sewage draihs
PreparaIion o! miIigaIion measures Io address
Ihe idenIi!ied issues
OperaIionaI
issues
PhysicaI
in!rasIrucIure issues
29
Review of Projects with Approved
Detailed Project Reports
The ouIpuI o Ihe assessmenI process would be
Ihe key inpuI or any projecI Ihe UL8 or sIaIe
agency proposes Io develop Io improve waIer
supply and saniIaIion services. As a nexI sIep,
Ihe UL8 needs Io develop shorI, medium, and
longIerm projecIs IhaI would eecIively address
Ihe issues idenIiied. The UL8 or sIaIe agency
may develop deIailed projecI reporIs (DPPs),
which would lisI all Ihe componenIs IhaI need
Io be addressed in Ierms o augmenIaIion,
replacemenI, and rehabiliIaIion and Ihe
corresponding invesImenI requiremenI.
The UL8 needs Io adopI a dierenI approach,
depending on wheIher Ihe DPP has been
approved, or wheIher iI has been prepared buI
has yeI Io be approved and sancIioned by Ihe
concerned auIhoriIy.
lor projecIs wiIh approved DPPs, a urIher
assessmenI o Ihe sysIem should be underIaken
Io idenIiy any oIher improvemenIs IhaI are
needed in addiIion Io Ihose lisIed in Ihe
approved DPP. Thus, Ihe exisIing DPP may be
modiied Io incorporaIe iniIiaIives, which Ihe
UL8 mighI consider imporIanI, Io ensure IhaI all
issues idenIiied in Ihe assessmenI are included.
All such modiicaIions Io Ihe DPP should be
underIaken only beore Ihe period o projecI
Iendering. Also, Ihe UL8 should deIermine
wheIher Ihe addiIional capiIal invesImenI
required or Ihe new works idenIiied can be
meI wiIhin Ihe exisIing approved projecI cosI
or wheIher urIher governmenI assisIance is
needed. l addiIional assisIance is needed Io
pursue newly idenIiied iniIiaIives, Ihe UL8
may reverI Io Ihe projecI sancIioning auIhoriIy
o Ihe cenIral or sIaIe governmenI or urIher
invesImenI supporI.
lor projecIs where Ihe DPP has been prepared
buI awaiIs approval (under an exisIing scheme,
such as Ihe Urban lnrasIrucIure DevelopmenI
Scheme or Small and Medium Towns under
Ihe !awaharlal Nehru NaIional Urban Penewal
Mission sIaIe scheme), a Ihorough review o Ihe
componenIs o Ihe DPP needs Io be underIaken.
The review musI assess and esIablish Ihe need
or Ihe various proposals made in Ihe DPP, and
should criIically evaluaIe Ihe cosIs considered
or Ihe various acIiviIies. The UL8s would need
Io include any addiIional projecI, which is elI
Figure 8 AssessmenI o! ProjecI DeIaiIed ProjecI eporIs
DPP ~ deIailed projecI reporI, UL8 ~ urban local body.
DPs approved
eview o! projecI DPs
_
Review Io veri!y i! ahy
addiIiohal seI o! projecIs
heed Io be ihcluded
_
8e!ore projecI Iehderihg,
ihclude projecIs/measures
assessed Io be criIical
_
UL8 may reverI Io projecI
sahcIiohihg auIhoriIy !or
addiIiohal !uhds !or ihcreased
cosI
heed Io be ihcluded
Add oh projecIs Io address
issues idehIi!ied ih Ihe
assessmehI
UpdaIe DPR projecI cosI Io
re!lecI addiIiohs o! hew
projecIs
DPs yeI Io be submiIIed
!or approvaI
heed Io be ihcluded
8e!ore projecI Iehderihg,
ihclude projecIs/measures
assessed Io be criIical
UL8 may reverI Io projecI
sahcIiohihg auIhoriIy !or
addiIiohal !uhds !or ihcreased
cosI
30
necessary aIer Ihe assessmenI underIaken, and
Ihe cosIs o Ihe DPP would need Io be updaIed
correspondingly.
A deIailed lisI o Ihe acIiviIies Io be considered
while underIaking a due diligence review o Ihe
cosI componenIs has been elaboraIed upon in
SecIion V. ln addiIion Io Ihe cosIs, Ihe projecIed
revenue or Ihe proposed projecI musI also
be elaboraIed. The deIailed componenIs o
Ihe revenues, which would likely accrue Io Ihe
projecI, are also explained in SecIion V.
Any inrasIrucIurerelaIed and oIher issues noI
direcIly addressed in Ihe DPP should be added,
and Ihe corresponding invesImenI requiremenI
should be revisiIed.
Prioritization of Key Areas
of Investment
Having idenIiied Ihe projecIs IhaI need Io
be underIaken and Iheir associaIed cosIs and
expecIed revenues, Ihe projecIs should be lisIed
in order o prioriIy. The UL8 or sIaIe agency
would need Io look aI a hosI o criIeria Io
deIermine Ihe order o prioriIy. Typically, Ihe UL8
or sIaIe agency would noI necessarily have Ihe
capaciIy Io underIake Ihe idenIiied invesImenIs
across Ihe various projecIs simulIaneously, and
Iechnical skills and experIise may noI be readily
available. Some issues mighI require immediaIe
aIIenIion, while oIhers may be addressed aI a
laIer sIage.
The raIionale or prioriIizaIion o projecIs would
depend broadly on Ihe amounI o invesImenI
required and Ihe degree o urgency o Ihe
projecI. lor boIh Ihe parameIers, Ihe UL8 or
sIaIe agency would need Io underIake a deIailed
analysis Io deIermine projecI componenIs
across Ihe various value chains IhaI require
inIervenIion.
ldeally, Ihe UL8 should irsI Iake measures Io
address all Ihe issues o operaIional ineiciency
in Ihe enIire value chain o waIer supply
and saniIaIion services idenIiied during Ihe
assessmenI sIudy. The UL8 should Ihen address
inrasIrucIure deiciencies Ihrough augmenIaIion
works. lor insIance, i Ihe assessmenI o Ihe
chain o waIer supply services idenIiied IhaI Ihe
disIribuIion neIwork aces issues, such as large
disIribuIion losses and poor pressure levels, and
IhaI Ihe bulk waIer supply Io Ihe ciIy requires
augmenIaIion, Ihen Ihe UL8 should ideally
address Ihe disIribuIion neIwork issues beore
Iaking up projecIs or augmenIing Ihe bulk
supply. The raIionale behind Ihis sequence is
IhaI, i Ihe UL8 or sIaIe agency prioriIizes bulk
supply augmenIaIion over disIribuIion neIwork
improvemenI, Ihe UL8 or sIaIe agency would
pump addiIional waIer inIo a poorly perorming
disIribuIion sysIem, and Ihe addiIional waIer
supplied would be losI i Ihe disIribuIion
neIwork has corroded pipelines. Thereore, Ihe
UL8 or sIaIe agency should have compelling
reasons Io pursue a speciic projecI over oIher
projecIs idenIiied.
linancial consideraIions would also need Io be
considered when prioriIizing projecIs. AgainsI
Ihe projecIs and Iheir idenIiied cosIs, Ihe UL8
would need Io review Ihe possible alIernaIive
sources o unding or Ihe required invesImenI,
e.g., rom inIernal revenues o Ihe UL8 or sIaIe
agency or rom exIernal sources, such as granIs
and commercial borrowings. The abiliIy o Ihe
UL8 Io underIake and susIain Ihe required
invesImenI would have Io be assessed.
31
V Financial Feasibility
The assessmenI ouIlined would help Io
idenIiy Ihe projecIs required or improving
Ihe waIer supply and saniIaIion services. The
nexI imporIanI sIep is Io assess Iheir inancial
viabiliIy wiIh respecI Io Ihe cosIs involved and
Ihe alIernaIive sources o unding available. This
secIion describes Ihe process o underIaking a
inancial easibiliIy sIudy o a projecI and Ihe
acIors IhaI need Io be considered Io arrive aI a
decision on Ihe projecI's viabiliIy.
Determination and Due Diligence
of Project Cost
A deIailed inancial analysis is one o Ihe mosI
criIical acIiviIies Io deIermine Ihe possibiliIy
o developing a projecI in a publicprivaIe
parInership (PPP) mode. The inancial analysis
would deIermine Ihe viabiliIy o Ihe projecI
based on Ihe cosIs involved and Ihe expecIed
revenues.
The key inpuI or Ihe inancial easibiliIy analysis
is Ihe projecI cosI. Three broad caIegories o
cosIs need Io be considered: capiIal cosIs or
projecI developmenI, operaIion cosIs, and
mainIenance cosIs o Ihe inrasIrucIure or asseI
creaIed. The ollowing secIions deine Ihese
cosIs and guide Iheir idenIiicaIion by Ihe urban
local body (UL8).
Determination of Project Cost
Capital Costs
CapiIal cosIs or Ihe developmenI o waIer
supply and saniIaIion projecIs include basic
capiIal cosIs on buildings required or Ihe
projecI, including any iIouI cosIs required Io
converI an exisIing properIy Io Ihe required use.
Land acquisiIion cosIs include Ihe cosI o asseIs
IhaI need Io be acquired across Ihe value chain.
CosI esIimaIes should relecI Ihe ull resource
cosIs o Ihe projecI.
The componenIs o a bulk supply projecI include
expendiIure or Ihe inIake well, elevaIed sIorage
reservoirs, jack well, pump house, raw waIer
pumping machinery, raw waIer pumping main,
and approach bridge. Similarly, Ihe capiIal cosI
Io develop a waIer IreaImenI planI (WTP) would
include expendiIure on Ihe developmenI o a
pump house, WTP, sumps, and bulk meIers.
AI Ihe disIribuIion end, Ihe capiIal cosI largely
would be IhaI associaIed wiIh Ihe laying o pure
waIer pipelines and insIallaIion o bulk meIers. All
relevanI cosIs or each componenI o Ihe value
chain and parI o Ihe projecI are Io be considered
during Ihe esIimaIion o Ihe capiIal cosI.
The esIimaIion o capiIal cosIs should also
include Ihe opporIuniIy cosI o asseIs already
owned by Ihe insIiIuIion and which are Io be
used in Ihe projecI. l Ihe asseI could be sold or
used or anoIher purpose, Ihen Ihe use o IhaI
asseI in Ihe projecI has an opporIuniIy cosI.
The capiIal cosIs are idenIiied rom Ihe deIailed
projecI reporI.
Table 5 lisIs Ihe main componenIs o Ihe capiIal
cosI o a Iypical projecI.
Operating Costs
ln addiIion Io consideraIion o Ihe capiIal cosIs
Io be incurred or Ihe creaIion o an asseI, Ihe
projecI cosI esIimaIion should also include Ihe
cosIs on operaIion o Ihe asseIs creaIed
(ligure 6). ln Ihe case o waIer supply and
saniIaIion projecIs, Ihese cosIs include
(i) raw bulk waIer purchase charges,
(ii) power consumpIion charges,
(iii) inpuI cosIs, such as chemicals or waIer
IreaImenI, and sewage IreaImenI,
(iv) cosI o employees direcIly involved in service
delivery, including wages and salaries,
employee enIiIlemenIs, superannuaIion,
and Iraining and developmenI,
32
1abIe 5 road ComponenIs o! Ihe CapiIaI CosIs
5I No. ParIicuIars
CapiIaI CosI
(Rs10,000,000)
! Land acquisiIion cosI
WaIer supply services
2 ConsIrucIion cosI on
8ulk waIer supply sysIem
Paw waIer Iransmission pipelines
WaIer IreaImenI planI
DisIribuIion neIwork
SIorage reservoirs
LlecIric subsIaIions
Pump houses
J lnsIallaIion and addiIional cosIs on
8ulk meIers and consumer end meIers
lnormaIion Iechnology inrasIrucIure
Lnergysaving measures
SaniIaIion Services
ConsIrucIion cosI on
SaniIaIion pipeline
SaniIaIion IreaImenI planI
LlecIric subsIaIions
Pump houses
4 ConIingency reserve
5 Preliminary and preoperaIive expenses
6 lnIeresI during consIrucIion
7 OperaIions and mainIenance Io be capiIalized
1oIaI
Ps~ rupees, Sl ~ serial.
(v) adminisIraIion expenses, and
(vi) insurance cosIs.
The operaIing cosIs are idenIiied on Ihe basis
o Ihe demand projecIions presenIed in Ihe
deIailed projecI reporI and Ihe raIes o operaIing
cosIs idenIiied on Ihe basis o currenI markeI
raIes or raIes paid in recenI similar projecIs.
Maintenance Costs
ln addiIion Io considering Ihe operaIional cosIs
o Ihe asseIs, iI is equally imporIanI or Ihe UL8
Io Iake inIo accounI Ihe expenses relaIing Io Ihe
mainIenance o Ihe asseIs creaIed. These cosIs
largely relaIe Io Ihe regular civil works, e.g.,
repair works and minor replacemenIs, which
need Io be underIaken on a recurring basis Io
mainIain Ihe capaciIy and qualiIy o Ihe asseI.
MainIenance cosIs Iypically include raw maIerials
(spares), Iools and equipmenI, and employee
cosIs associaIed wiIh mainIenance work.
A combinaIion o Ihe capiIal cosIs and operaIion
and mainIenance (O&M) expenses or Ihe
proposed projecI indicaIe Ihe IoIal invesImenI
cosIs required.
33
linancial leasibiliIy
Due Diligence on Project Cost
This acIiviIy involves reviewing Ihe projecI cosIs
boIh capiIal and operaIionalIo ensure IhaI Ihey
conorm Io some minimum IesIs o reliabiliIy,
credibiliIy, and consisIency. This sIage is imporIanI
Io ensure IhaI Ihe esIimaIe o cosIs and revenues
are accepIable Io prospecIive bidders. A
descripIion o some o Ihe imporIanI parameIers
or Ihe review o projecI cosIs ollows.
6
Ination
The cosIs o individual iIems should relecI
currenI markeI prices. l Ihe cosIs are based
on sIandard hisIorical prices, Ihey should be
adjusIed Io relecI inlaIion, and Ihe assumed
raIe o inlaIion should be documenIed.
UnrealisIic assumpIions on inlaIion and/or
omission o inlaIion will resulI in cosI esIimaIes
IhaI are lower and do noI relecI prices. This, in
Iurn, will lead Io subsIanIial dierences beIween
Ihe cosIs planned or and Ihose acIually incurred.
1abIe 6 road ComponenIs o! Ihe OperaIion CosIs
5I No. ParIicuIars
CosI
(Rs10,000,000)
! AdminisIraIive expenses
WaIer supply services
2 OperaIion and mainIenance cosI on
Paw bulk waIer purchase
Power consumpIion
Chemicals uIilized
MeIers
ConnecIion cosIs
SaniIaIion Services
OperaIion and mainIenance cosI or
Lnergy
Chemicals
Sludge handling
ConnecIions
J Salaries and oIher esIablishmenI expendiIure
4 lnsurance cosIs
5 Any oIher miscellaneous expendiIure
1oIal
Ps~ rupees, Sl ~ serial.
Opportunity Cost
ln cases in which Ihe sponsor deploys iIs own
resources, such as sIa, machinery, or unds,
in Ihe projecI, Ihe opporIuniIy cosI (Ihe reIurn
orgone by Ihe sponsor by noI deploying Ihese
resources proiIably elsewhere, including iIs own
operaIions) will need Io be considered as Ihe
cosI o Ihe resource.
l opporIuniIy cosIs are omiIIed rom Ihe
cosI esIimaIes, Ihe cosI esIimaIes would be
underreporIed, inlaIing Ihe easibiliIy o
Ihe projecI, and Ihe projecI will Ihen noI be
comparable wiIh Ihe privaIe secIor reerence.
Basis for Estimation of Costs
The basis, or assumpIions, or Ihe esIimaIion
o Ihe cosIs needs Io be veriied. The cosIs o
individual iIems considered or arriving aI Ihe
inal cosI should be based on eiIher sIandard
cosIs, cosIing or similar projecIs in Ihe recenI
6
Please noIe IhaI Ihis is an indicaIive lisI o Ihe minimum required parameIers o Ihe review.
34
pasI, acIual markeI prices, or sIandard indusIry
norms.
All o Ihese abovemenIioned acIors need Io
be adjusIed or inlaIion. The implicaIions o
unrealisIic bases or Ihe esIimaIion o cosIs are
IhaI Ihe cosI esIimaIes would noI relecI Ihe
currenI level o prices. The esIimaIes would be
inconsisIenI and incomparable, Ihus disIorIing
Ihe easibiliIy analysis.
Identication of Project Revenues
The nexI imporIanI esIimaIion, which needs
Io be underIaken as a parI o Ihe inancial
easibiliIy analysis, is Ihe projecI revenues. ProjecI
revenues are Ihe income generaIed rom Ihe
provision o waIer supply and saniIaIion services
Io Ihe consumer. lI should be noIed IhaI inlows
o a revenue naIure will be considered as projecI
revenues. Any inlow o a capiIal naIure would
be added Io Ihe projecI unding or reduced rom
Ihe gross cosI o Ihe projecI, depending on iIs
accounIing naIure.
The revenues all inIo Iwo broad caIegories:
direcI revenues and indirecI revenues.
Direct Sources of Revenue from Water
Supply Service
Water Supply Charges
The single largesI and Ihe mosI imporIanI
componenI o revenue generaIed rom Ihe
provisioning o waIer supply services is IhaI
obIained rom a levy o waIer supply charges.
WaIer supply charges may be levied in Ihe orm
o laI raIe Iaris, volumeIric Iaris, or Ielescopic
Iaris.
FlaI raIe Iari!!. This reers Io a pricing sIrucIure
wherein Ihe cusIomers are charged a ixed
amounI o Iari based on Ihe size o pipe
connecIions aI cerIain inIervals, irrespecIive o
Ihe quanIiIy o waIer consumed. lI is, Ihereore,
a linear raIe, which may noI vary wiIh Ihe usage
o Ihe service or wiIh Ihe Iime o availing o Ihe
service. ln Ihe case o waIer supply services, Ihis
implies IhaI a ixed monIhly charge is levied or
dierenI caIegories o consumersresidenIial,
commercial, and indusIrial. Usually, wiIhin Ihese
caIegories, a dierenIial raIe is levied, depending
on Ihe Iype o individual uniI holding. lor
insIance, in Ihe residenIial user caIegory,
dierenI uniIs, such as residenIial houses,
slum dwellings, educaIional insIiIuIions, and
governmenI esIablishmenIs, are charged varying
raIes based on Ihe size o pipe connecIions.
Thereore, a residenIial uniI may be charged
Ps!20 per monIh or waIer supply services,
whereas a slum uniI may be charged Ps40 per
monIh, and an insIiIuIion may be charged
Ps200 per monIh. The raIes or commercial
esIablishmenIs and indusIrial uniIs are
generally much higher Ihan Ihe domesIic raIes.
lrrespecIive o Ihe quanIiIy o waIer used, Ihe
consumer would be charged only a ixed raIe.
Typically, such a pricing sIrucIure is ound in
ciIies where no meIers have been insIalled aI Ihe
consumer end.
VolumeIric Iari!!. This reers Io a pricing
sIrucIure wherein Ihe Iari raIe varies according
Io Ihe amounI o waIer used by Ihe consumer.
lI is, Ihereore, a variable raIe, where or
dierenI consumpIion levels, dierenI Iari
raIes are applicable. Such a Iari sIrucIure is
applicable in ciIies and Iowns where meIers
have been insIalled aI Ihe consumer end.
There are separaIe consumpIion brackeIs wiIh
corresponding per uniI charges. The broad
consumpIion caIegory remains Ihe same as
IhaI under Ihe laI raIe Iari sIrucIure, i.e.,
residenIial, commercial, and indusIrial. WiIhin
Ihese caIegories, slabs or dierenI consumpIion
levels exisI (Table 7).
WaIer meIer readings are recorded and,
depending on Ihe volume o waIer consumed,
Iari is levied.
1elescopic or ihcreasihg block Iari!!. ln Ihis
Iari sIrucIure, Ihere are Iwo or more prices
or waIer used, where each price applies Io a
cusIomer's use wiIhin a deined block. Prices
rise wiIh each successive block. Generally, under
such a pricing sIrucIure, Ihe irsI block price
is deliberaIely seI below cosI. A waIer user in
a parIicular use caIegory (e.g., residenIial) is
charged a uniI price or Ihe irsI uniIs absIracIed
35
up Io a speciied amounI, which deines Ihe end
o Ihe iniIial or irsI block. Above Ihis amounI,
Ihe user aces a higher price or addiIional uniIs
unIil a second speciied amounI is reached,
which deines Ihe end o Ihe second block, and
so on unIil Ihe highesI block in Ihe increasing
block sIrucIure is reached. The user can Iypically
absIracI as much waIer as desired in Ihis highesI
block, buI or each addiIional uniI o waIer, Ihe
bill increases by an amounI equal Io Ihe highesI
price in Ihe raIe sIrucIure.
Water Connection Charges
AnoIher componenI o Ihe revenue rom Ihe
provision o waIer supply services is Ihe waIer
connecIion charge. This is a oneIime paymenI
made by a consumer Io Ihe service provider or
accessing waIer supply services. The charge is
generally based upon Ihe size o Ihe connecIion,
user caIegory (e.g., domesIic or indusIrial),
locaIion o Ihe properIy (i.e., wiIhin or ouIside
ciIy limiIs), and Ihe disIance o Ihe properIy
rom Ihe nearesI waIer main. ConnecIion
charges usually include a basic connecIion ee
and various addon charges or physical aciliIies,
labor, adminisIraIive ees, and oIher cosIs.
Thereore, as a parI o Ihe IoIal projecIed
revenues, iI is imporIanI IhaI Ihe uIure demand
1abIe 7 epresenIaIive VoIumeIric 1ari!! 5IrucIure
esidenIiaI upees per kiIoIiIer
8elow !5 kl 6.0
!6 klJ0 kl 8.0
J! kl50 kl !5.0
5!kl!00 kl 20.0
kl ~ kiloliIer.
1abIe 8 epresenIaIive 1eIescopic 1ari!! 5IrucIure
esidenIiaI upees per IiIer
8elow !5 kl 2.5
!6 klJ0 kl 6.0
J! kl50 kl !2.0
5! kl!00 kl 20.0
kl ~ kiloliIer.
or Ihe waIer supply services is esIimaIed. 8ased
on Ihe anIicipaIed increase in Ihe number o
connecIions IhaI need Io be provided, Ihe
applicable waIer connecIion charges need Io be
applied and Ihe revenue rom Ihis source should
Io be esIimaIed.
Penalties
A small conIribuIor Io Ihe IoIal revenues
earned is Ihe penalIy imposed on consumers
who are illegally connecIed Io Ihe waIer supply
sysIem and Ihose who have noI paid Iheir
waIer bills. The revenue Io be earned rom Ihis
source may be esIimaIed on Ihe basis o Ihe
Irend in Ihe arrears in Ihe IoIal collecIions Io
be made.
Charge for Establishment of Meter
The cosI incurred by Ihe UL8 in purchasing
and insIalling meIers aI Ihe consumer end is
generally recovered as parI o Ihe IoIal waIer bill
generaIed. The revenue rom Ihis source is Io be
largely IreaIed as an inlow, inIended Io recover
Ihe cosIs already incurred by Ihe UL8. The cosIs
are generally recovered in insIallmenIs rom Ihe
consumers, and Ihis should also be accounIed
or in IoIal revenues.
5
A
M
P
L
F
5
A
M
P
L
F
36
Indirect Sources of Revenue
ln addiIion Io Ihe direcI sources o revenue, Ihe
UL8 should also explore Ihe indirecI revenue
sources or Ihe waIer supply secIor, such as
developmenI charges and real esIaIe revenues.
Development Charges
The UL8 should consider Ihe possibiliIy o
developing a special corpus und Io make
paymenIs Io Ihe privaIe developer or developing
Ihe waIer supply sysIem. A municipal und may
be creaIed wiIh revenue conIribuIions rom Ihe
developmenI charges, which are currenIly levied
under Ihe MaharashIra Pegional and Town
Planning AcI !966. ApproximaIely 50%, or a
predecided share o Ihe developmenI charges
so levied, may be consolidaIed Io orm Ihe und.
Real Estate Revenues
The UL8 may also explore Ihe possibiliIy o
unlocking Ihe real esIaIe value o Ihe municipal
land wiIhin iIs possession. As parI o Ihe
paymenI or compensaIion agreemenI beIween
Ihe UL8 and Ihe privaIe developer, Ihe UL8 may
consider Ihe opIion o providing Ihe developer
wiIh a Iranser o developmenI righI.
The sum IoIal o Ihe above revenue sIreams
would have Io be projecIed as parI o Ihe
inancial analysis or Ihe waIer supply services.
Direct Revenues for Sanitation Service
Sanitation Charge
SaniIaIion charges orm a signiicanI componenI
o Ihe IoIal revenues accruing rom Ihe provision
o saniIaIion services. SaniIaIion charges generally
are levied as a percenIage o waIer charges and
are collecIed rom all Ihe premises IhaI have
saniIaIion connecIions. Thereore, as parI o Ihe
IoIal projecIed revenues, Ihe income rom Ihe
saniIaIion charges should also be esIimaIed and
included in Ihe IoIal revenue sIream.
Sanitation Connection Charge
The saniIaIion connecIion charge is Ihe ee
IhaI Ihe UL8 or sIaIe agency levies as a one
Iime charge on consumers or provision o a
connecIion. The ee consisIs o a charge or
providing connecIions and a Iapping charge.
The IoIal revenue rom connecIion ees each
year depends on Ihe number o connecIions
provided in IhaI year. Thereore, Ihe IoIal
revenue or saniIaIion charges should also
accounI or Ihe income rom connecIion.
Penalties
A small componenI o Ihe revenue rom
saniIaIion services is rom imposiIion o
penalIies. Generally, penalIies are imposed on
Ihose consumers who have noI Iaken a legal
connecIion Io Ihe saniIaIion sysIem and are
dumping Iheir sewage in open drains. This
income componenI is compuIed on Ihe basis
o Ihe Irend o income rom penalIies in Ihe
previous years.
Indirect Revenues for Sanitation Service
Pevenues rom sale o IreaIed sewage need Io be
IreaIed as an indirecI source o revenue by Ihe
UL8. TreaIed sewage may generally be purchased
by manuacIuring or indusIrial uniIs IhaI have
a high use o waIer or Iheir acIiviIies. l Ihe
opIion exisIs, Ihe UL8 may idenIiy such uniIs and
guaranIee a predeIermined quanIiIy o IreaIed
sewage waIer in exchange or a cerIain price.
Preparation of the Financial Model
Once Ihe projecI cosIs and revenues are
idenIiied, Ihe nexI sIage in Ihe inancial analysis
is Io build Ihe inancial model o Ihe projecI.
This Iask involves
(i) idenIiying all Ihe inpuIs or Ihe inancial
model, including
(a) projecI cosI,
(b) projecI revenues,
(c) operaIion and mainIenance cosIs, and
(d) assumpIions or Ihe inancial model,
and
(ii) preparing Ihe inancial model, including
(a) calculaIion o projecI cash lows, and
(b) calculaIion o projecI inIernal raIe o
reIurn (lPP).
37
Inputs to the Financial Model
Some basic assumpIions and inpuIs Io be
considered when a inancial model is prepared
include Ihe ollowing:
(i) ProjecI cosI as derived rom Ihe deIailed
projecI reporI capiIal cosIs, preoperaIive
expenses (Io be capiIalized), ees o Ihe
IransacIion advisor (i any), and cosI o legal
approvals. ln addiIion, Ihe phasing o Ihe
capiIal expendiIure also needs Io be deined.
(ii) ProjecI revenues, including Ihe revenues IhaI
have been idenIiied rom all Ihe sources as
indicaIed in Ihe preceding secIions.
(iii) OperaIion and mainIenance cosIs as
derived rom Ihe deIailed projecI reporI as
per Ihe demand projecIions and esIimaIed
operaIing expenses.
(iv) CerIain assumpIions or projecIing Ihe
cash lows in Ihe uIure, e.g., longIerm
inlaIion raIes, longIerm inIeresI raIes,
and income Iax raIes in Ihe uIure.
All Ihese assumpIions will need Io be documenIed
as parI o Ihe inancial easibiliIy process.
Preparation of the Financial Model
The inancial viabiliIy o any capiIalinIensive
projecI is largely deined by Ihe reIurns on
invesImenI Ihe projecI is expecIed Io earn Ihe
invesIors. Thereore, one o Ihe key objecIives
behind Ihe preparaIion o a inancial model
is Io esIimaIe Ihe reIurns IhaI Ihe projecI
can generaIe in Ihe uIure. These reIurns are
calculaIed on Ihe basis o projecI cash lows,
which are available or boIh debI and equiIy
invesIors who have invesIed in Ihe projecI.
To calculaIe Ihe projecI cash lows, Ihe ollowing
key sIaIemenIs musI be prepared:
(i) projecIed proiI and loss accounI,
(ii) projecIed balance sheeI,
(iii) projecIed cash low sIaIemenI,
(iv) a sIaIemenI o Ihe assumpIions used
across Ihe inancial sIaIemenIs, and
(v) IoIal capiIal expendiIure and iIs phasing.
These ive inancial sIaIemenIs IogeIher
consIiIuIe Ihe basic inancial model o Ihe
projecI. Generally, Ihese inancial sIaIemenIs
are projecIed Io cover Ihe economic lie o Ihe
creaIed asseI so as Io consider Ihe cosIs o Ihe
compleIe projecI lie cycle. ln case Ihe economic
lie o Ihe projecI is longer Ihan J0 years, Ihe
UL8 can, aI Ihis sIage o preliminary inancial
easibiliIy, limiI Ihe duraIion o Ihe projecI Io
20J0 years.
Assessing the Viability
of the Private Investment
The specIrum o PPP conIracI sIrucIures can be
broadly classiied inIo
(i) conIracIs in which Ihe privaIe secIor
invesIs capiIal, eiIher Ihe whole projecI
cosI or a parI, and
(ii) conIracIs in which Ihe privaIe secIor does
noI invesI capiIal.
The ollowing discussion applies speciically Io
PPP conIracIs in which Ihe privaIe secIor invesIs
capiIal. Such PPP conIracIs can Iake Ihe orm o
concessions (e.g., buildoperaIeIranser, build
ownoperaIe, buildownoperaIeIranser,
and designbuildinanceoperaIe). The privaIe
secIor invesIs capiIal in Ihese conIracIs as a
business invesImenI. This means IhaI Ihe privaIe
invesIor expecIs aIIracIive reIurns rom Ihe
invesImenI made. Thereore, Ihe key quesIion
Io assess Ihe commercial viabiliIy o Ihe projecI
under consideraIion is wheIher Ihe reIurns rom
Ihe projecI are aIIracIive enough or a privaIe
invesIor. The ollowing secIions discuss Ihe
calculaIion and assessmenI o Ihe projecI reIurns
Io deIermine Iheir aIIracIiveness.
Principles and Risk Return Relationship
8ased on Ihe projecIed cash lows, which have
been esIimaIed in Ihe preceding sIep, Ihe nexI
acIiviIy Io be underIaken is Io compuIe Ihe lPP
o Ihe projecI. The lPP is Ihen compared againsI
a benchmark Io assess wheIher Ihe projecI
is commercially viable. Possible benchmarks
could be reIurns IhaI are generaIed Ihrough
similar projecIs or reIurns IhaI are assumed
Io be reasonable by a privaIe developer in Ihe
waIer supply and saniIaIion secIor. lI should be
noIed IhaI projecIs o largescale invesImenIs
would dier rom case Io case. lor insIance,
38
an onlybulksupply augmenIaIion projecI would
dier rom one IhaI requires developmenI,
operaIion, and mainIenance o boIh bulk waIer
supply and a disIribuIion sysIem. The UL8 or
sIaIe agency, Ihereore, cannoI assume an
arbiIrary raIe o reIurn. A suiIable raIe o reIurn
would have Io be clearly idenIiied.
ln order Io idenIiy wheIher a projecI is
commercially viable or noI, Ihe ollowing
ormula can be used:
ProjecI lnIernal PaIe o PeIurn ~ WeighIed
Average CosI o CapiIal
The weighIed average cosI o capiIal (WACC) is
a minimum reIurn IhaI a projecI musI earn on
iIs asseI base Io saIisy iIs crediIors, owners, and
oIher providers o capiIal. WACC is calculaIed as
WACC ~ (!I) (L/K)*C
e
(D/K)*C
d
Where,
I ~ amounI o Iax applicable
L ~ value o equiIy in Ihe projecI
D ~ value o debI in Ihe projecI
K ~ DL
C
e
~ cosI o equiIy/minimum reIurn expecIed
by equiIy invesIors
C
d
~ cosI o debI/minimum reIurn expecIed
by debI invesIors
The projecI lPP musI, aI leasI, be equal Io Ihe
WACC o capiIal or Ihe projecI Io be deemed
commercially viable. The value o Ihe WACC
would be direcIly relaIed Io Ihe risk perceived in
Ihe projecI by Ihe invesIors.
Process Flow of Viability Assessment
The sIeps Io be ollowed or underIaking Ihe
viabiliIy assessmenI are summarized in ligure 9.
The projecI lPP is deined as Ihe discounI raIe
IhaI makes Ihe neI presenI value o all cash
lows rom a parIicular projecI equal Io zero.
Generally speaking, Ihe higher a projecI's lPP,
Ihe more desirable Ihe projecI.
The projecI lPP is calculaIed using Ihe inpuIs o
projecI cash lows over Ihe economic lie o Ihe
Figure 9 Process FIow !or ViabiIiIy AssessmenI
lPP ~ inIernal raIe o reIurn, PPP ~ publicprivaIe parInership, VGl ~ ViabiliIy Gap lund.
yes
ho
yes
ho
Cohsider Ihe
revehues !rom
Ihe projecI
EsIimaIe Ihe
projecI lRR based
oh Ihe revehues
Are Ihe
reIurhs
aIIracIive?
QualiIaIive
assessmehI
Cohsider Ihe
alIerhaIive sources
o! grahI
Are Ihe
reIurhs
aIIracIive?
Apply Io relevahI auIhoriIy !or
addiIiohal cehIer/sIaIe VGF/
supporI
PPP opIioh
choseh
RaIiohale !or
PPP
PrerequisiIes
!or PPP
Assess Ihe projecI
lRR oh Ihe !ihahcial
comparaIor scale
Public !uhdihg
opIioh choseh
Cohsider Ihe
quahIum o!
addiIiohal grahI Io
be received
39
projecI. ln case Ihe economic lie o a projecI
exceeds Ihe Ienure or which Ihe cash lows
have been projecIed, Ihen or Ihe lasI year o Ihe
projecIed cash lows assume Ihe Ierminal value
o Ihe projecI as Ihe cash low.
Assessment of Project Internal Rate of
Return: Financial Comparator Scale
To assess Ihe commercial viabiliIy o Ihe projecI,
Ihe projecI lPP musI be compared wiIh a
series o benchmark reIurns. These include
comparisons wiIh Ihe ollowing:
(i) Risk-!ree raIe o! reIurh. The riskree
raIe o reIurn represenIs Ihe lowesI
possible reIurn or Ihe projecI, as
iI represenIs a riskree invesImenI.
Generally, a projecI being developed
as an invesImenI avenue would
have a subsIanIially higher degree
o risk in addiIion Io Ihe sovereign
risk (corresponding Io Ihe riskree
raIe o reIurn). Thereore, Ihe projecI
lPP should be greaIer Ihan Ihe risk
ree raIe o reIurn in Ihe markeI. lor
pracIical purposes, Ihe !0year yield on
governmenI securiIies is a reasonable
indicaIor o Ihe riskree raIe o reIurn.
(ii) AAA-raIed bohd yield. The AAAraIed
bond yield (over Ihe riskree raIe o
reIurn) represenIs Ihe reIurn on an
invesImenI, which is raIed by raIing
agencies as carrying Ihe lowesI risk or
Ihe invesIor among Ihe bonds available in
Ihe markeI. The risk o Ihe projecI under
developmenI will realisIically be equal
Io or higher Ihan IhaI o Ihe AAAraIed
bond. This means Ihe inIeresI on debI Io
Ihe projecI will be more Ihan Ihe AAA
raIed bond yield. l Ihe reIurn available
or equiIy shareholders is less Ihan Ihe
AAAraIed bond yield, an invesIor will
preer Io invesI in Ihe AAAraIed bond,
raIher Ihan in Ihe projecI. Thereore, in
such a case, Ihe public secIor should und
Ihe projecI compleIely as Ihe reIurns are
noI aIIracIive or a privaIe invesIor.
(iii) lhIeresI raIe aI which debI is available
Io Ihe UL8 or sIaIe agehcy. The projecI
lPP may also be compared wiIh Ihe long
Ierm inIeresI raIe aI which Ihe UL8 or
sIaIe agency can borrow unds rom Ihe
markeI or Ihe projecI. l Ihe projecI lPP
is equal Io or less Ihan Ihe inIeresI raIe aI
which debI is available Io Ihe UL8, Ihen
Ihe reIurn available or Ihe equiIy invesIors
would be Ihe same as Ihe cosI o debI.
However, since Ihe equiIy in Ihe projecI
would have higher risk Ihan Ihe projecI
debI, Ihe reIurn required by Ihe equiIy
invesIors would be correspondingly higher.
Thereore, Ihe reIurn available or Ihe
equiIy invesIors is noI adequaIe.
(iv) 1he markeI raIe o! reIurh. As a
represenIaIion o all business opporIuniIies
available Io Ihe invesIor, Ihe raIe o reIurn
o Ihe equiIy markeI over a long Ierm on
Ihe 8ombay SIock Lxchange SensiIiviIy lndex
(8SL Sensex) or Ihe NaIional SIock Lxchange
liIy (NSL NiIy) can be used Io compare
wheIher Ihe projecI lPP is aIIracIive or
noI. ln case Ihe reIurns available or Ihe
equiIy invesIors are equal Io or more Ihan
Ihe markeI raIe o reIurn, Ihe projecI can
be declared as commercially viable or
execuIion Ihrough privaIe invesImenI.
l Ihe projecI reIurns are ound aIIracIive or
privaIe invesImenI, Ihe ocus would shiI Io an
assessmenI o Ihe projecI on a speciied seI o
qualiIaIive parameIers or choosing beIween
public unding and PPP.
l Ihe projecI reIurns are noI ound Io be
aIIracIive wiIh Ihe projecIed revenues considered,
Ihe possibiliIy o obIaining a capiIal granI Io
und Ihe cosIs o Ihe projecI may be explored.
Typically, i Ihe reIurns on a projecI are ound Io
be unaIIracIive, Ihe viabiliIy o Ihe projecI may
be enhanced by considering Ihe opIion o Ihe
GovernmenI o lndia's ViabiliIy Gap lund (VGl)
scheme. Under Ihis scheme, where commercial
viabiliIy is low, viabiliIy gap unding may be
explored Io enhance Ihe viabiliIy o a PPP projecI
developed, inanced, consIrucIed, mainIained,
and operaIed by a privaIe secIor developer.
7

7
Peer Io The Scheme or SupporI Io PublicPrivaIe ParInerships in lnrasIrucIure, DeparImenI o Lconomic Aairs, MinisIry
o linance.
40
ViabiliIy gap unding is Iypically provided in Ihe
orm o a capiIal granI, which reduces Ihe gross
cosI o Ihe projecI by Ihe granI amounI. ln cerIain
cases, viabiliIy gap unding can also be provided
in Ihe orm o deerred granI, or revenue granI,
in which case iI becomes an addiIional source o
revenue or Ihe projecI.
Where Ihe acIual projecI lPP lies in comparison
Io Ihe range o benchmarks will inorm Ihe
ollowing decisions Io be Iaken by Ihe UL8 or
sIaIe agency:
(i) wheIher Ihe projecI reIurns are aIIracIive
enough or a privaIe invesIor Io pursue iI,
and
(ii) wheIher Ihe projecI would require VGl
supporI Io make iI commercially viable.
Viability Gap Fund
The VGl scheme o Ihe GovernmenI o lndia was
esIablished Io lend inancial supporI Io Ihose
inrasIrucIure projecIs developed on a PPP basis.
However, Io aIIracI a VGl granI, basic guidelines
need Io be adhered Io:
(i) The scheme provides VGl granIs Io PPP
projecIs in speciic secIors, sponsored by
any level o adminisIraIioncenIral, sIaIe,
or local governmenI.
(ii) VGl supporI is issued only aIer Ihe
oIher opIions o enhancing viabiliIy are
exhausIed or are noI possible in Ihe case
o a speciic projecI, i.e., i Ihe UL8 or
sIaIe agency has explored all available
opIions or unding a proposed waIer
supply and saniIaIion projecI and would
need addiIional invesImenI supporI Io
make iI suicienIly commercially viable Io
aIIracI privaIe secIor invesImenI.
(iii) VGl supporI is capped aI 20% o Ihe
projecI cosI. An addiIional VGl granI,
capped aI 20%, can be given by Ihe
governmenI agency sponsoring Ihe
projecI.
(iv) The VGl scheme provides a oneIime
granI or deerred granIs or Ihe exclusive
reason o making Ihe projecI viable. lI is
generally in Ihe orm o a capiIal granI aI
Ihe sIage o projecI consIrucIion.
(v) To be eligible, Ihe projecI should involve
provision o a service againsI Ihe paymenI
o user charge.
(vi) The approved amounI o VGl granI or a
projecI is released in iIs enIireIy Io Ihe lead
inancial insIiIuIion (lead member o Ihe
consorIium inancing Ihe projecI). The lead
inancial enIiIy releases Ihe granI aIer Ihe
equiIy o Ihe privaIe parIner is exhausIed.
The release o Ihe granI Io Ihe projecI is in
Ihe raIio o release o Ihe debI.
The exIenI o VGl supporI IhaI would be
required Io make Ihe projecI aIIracIive or
privaIe invesImenI would, Ihereore, have Io be
assessed.
Assessment of Water PPPs Not
Requiring Private Investment
ln accordance wiIh inancial principles, a service
should be ouIsourced when Ihe markeI price
o Ihe service is lower Ihan Ihe variable cosIs o
providing Ihe service inhouse. Variable cosIs
are direcI operaIing cosIs, which are direcIly
proporIional Io Ihe level o operaIions. These
cosIs increase in Ihe same percenIage as Ihe
level o operaIions increase. lor Ihe waIer supply
and saniIaIion secIor, Ihe variable cosIs would
include Ihe raw waIer charges, elecIriciIy cosIs,
and chemical cosIs. The ollowing sIeps would
help Ihe UL8 or sIaIe agency choose beIween
a privaIelyoperaIed, ouIsourced service and a
governmenIoperaIed, inhouse service:
(i) 8ased on Ihe service componenI (or
componenIs) being considered or
ouIsourcing Ihrough a PPP arrangemenI,
Ihe UL8 or sIaIe agency will need Io lisI
all Ihe cosIs or Ihe service. The lisI o Ihe
service cosIs should be segregaIed inIo
ixed and variable cosIs.
(ii) SeparaIe Ihe cosIs, boIh ixed and
variable, inIo cosIs IhaI will be reIained by
Ihe UL8 or sIaIe agency and cosIs IhaI will
be Iranserred Io Ihe privaIe parIy (based
on risk allocaIion).
41
(iii) Price Ihe service IhaI is being considered
or ouIsourcing, Iaking Ihe cosIs IhaI will
be shiIed Io Ihe privaIe operaIor. Price
Ihe service on Ihe basis o Ihe service
being done inhouse. The UL8 or service
auIhoriIy will have Io assume a level o
operaIions Io price Ihe variable cosIs, while
Ihe ixed cosIs can be Iaken as Ihey are.
(iv) LsIimaIe Ihe price or Ihe oerings o Ihe
privaIe secIor. l Ihe esIimaIed price or
Ihe privaIe secIor oering is lower Ihan
Ihe cosI calculaIed or Ihe governmenI
service, Ihe PPP arrangemenI can be
considered or urIher acIion.
42
VI Step 2: Choice between
Public Funding and PPP
The inancial viabiliIy assessmenI underIaken
would deIermine wheIher Ihe proposed waIer
supply and saniIaIion projecI oers enough
invesImenI reIurns Io be aIIracIive enough or
Ihe privaIe secIor. The reIurns expecIed on Ihe
projecI would be Ihe key indicaIor Io Ihe urban
local body (UL8) or sIaIe agency regarding
Ihe commercial viabiliIy o Ihe projecI. Once iI
has been clearly esIablished IhaI Ihe proposed
projecI oers adequaIe reIurns Io aIIracI a
privaIe developer Io Ihe projecI, Ihe UL8 or
sIaIe agency would have Io decide wheIher Ihe
projecI is Io be Iaken up Ihrough Ihe public
privaIe parInership (PPP) rouIe or Ihrough
compleIe public unding. This secIion discusses
Ihe key parameIers Ihe UL8 or sIaIe agency
needs Io consider beore a inal decision is made
on Ihe involvemenI o Ihe privaIe secIor in Ihe
projecI. The decision needs Io consider Ihe
ollowing parameIers:
(i) lhhovaIioh. The UL8 or sIaIe agency
needs Io review wheIher Ihe privaIe
developer would be able Io provide Ihe
same seI o services eicienIly. Generally,
Ihe privaIe developer would be able Io
bring in innovaIive pracIices IhaI would
help in improving Ihe eiciency o
operaIions o Ihe service. Since earnings
made by Ihe privaIe developer are largely
linked Io how besI Ihe services are
provided, Ihe developer has an incenIive
Io Iry and reduce cosIs and improve Ihe
revenues on Ihe projecI.
(ii) RespohsibiliIy ahd risk sharihg. lI is
imporIanI IhaI each risk in a projecI be
allocaIed Io IhaI parIy which is besI able
Io manage Ihe risk aI leasI possible cosI.
Thereore, iI needs Io be assessed as Io
wheIher a parIicular risk can be managed
beIIer by Ihe privaIe developer aI a lesser
cosI or noI. l Ihe case is IhaI Ihe privaIe
developer would be able Io handle Ihe
idenIiied risk beIIer, iI is recommended
IhaI Ihe same be handed over Io iI.
ln addiIion, iI needs Io be assessed i
Ihe privaIe developer can also Iake up
some o Ihe responsibiliIies o Ihe UL8
or sIaIe agency and handle Ihe same
eicienIly. Doing so would make some o
Ihe resources o Ihe UL8 or sIaIe agency
available Io underIake oIher higher
prioriIy projecIs and/or works.
(iii) Sharihg ih !uhdihg. One o Ihe imporIanI
and major beneiIs o privaIe secIor
parIicipaIion is IhaI Ihe privaIe developer
would parIake in some o Ihe capiIal
invesImenI or Ihe idenIiied projecI.
Thereore, Ihe UL8 or sIaIe agency is in
a posiIion Io access some o Ihe privaIe
secIor unds or developing Ihe projecIs in
Ihe waIer supply and saniIaIion secIor.
Rationale for PPP
The choice o a PPPbased rouIe or execuIion o
Ihe idenIiied projecI would be dependenI on a
seI o key parameIers. These parameIers jusIiy
Ihe use o PPPs or Ihe creaIion o an asseI in
Ihe waIer supply and saniIaIion secIor and may
be Iermed Ihe raIionale or PPP. To esIablish Ihe
raIionale or PPP, Ihe UL8 or sIaIe agency would
need Io assess Ihe projecI on Ihe basis o Ihe
ollowing indicaIors.
Resource Constraint in the Way of Public
Sector Providing the Service
The UL8 or sIaIe agency will need Io assess
wheIher Ihere are any consIrainIs currenIly
43
SIep 2: Choice beIween Public lunding and PPP
aced IhaI hinder eicienI service provisioning.
These consIrainIs may be in areas, such as Ihe
capabiliIies o Ihe exisIing work orce, cosI
recovery, inaccessibiliIy o beIIer Iechnology,
and limiIed resources. The UL8 or sIaIe agency
will need Io assess wheIher iI can remove Ihese
consIrainIs inIernally.
l Ihe consIrainIs cannoI be removed inIernally
by Ihe UL8 or sIaIe agency, Ihe argumenI
supporIing Ihe involvemenI o Ihe privaIe secIor
Ihrough PPP can be iniIiaIed, and Ihe UL8 or
sIaIe agency musI Ihen deIermine wheIher
privaIe secIor supporI would be essenIial in
aciliIaIing eicienI service delivery.
l iI is clearly esIablished IhaI privaIe secIor
assisIance would be necessary, Ihen Ihe PPP
opIion can be urIher explored by Ihe UL8 or
sIaIe agency. ln Ihis conIexI, Ihe ollowing
criIical quesIions need Io be answered.
Ability of the Private Developer to Create
the Asset and Provide the Service
An assessmenI needs Io be underIaken Io
deIermine wheIher Ihe privaIe secIor has Ihe
capabiliIy Io innovaIe and provide an eicienI
service. PPP conIracIs should be explored
only i Ihe privaIe secIor, wheIher domesIic
or inIernaIional, has Ihe Iechnical skill and
managemenI capaciIy Io perorm Ihe service
IhaI Ihe UL8 or sIaIe agency inIends Io carry ouI
Ihrough PPP. OIherwise, Ihe UL8 or sIaIe agency
would have Io procure Ihe requisiIe skills and
upgrade iIs inIernal capaciIy Io provide Ihe service.
ln Ihis conIexI Ihe ollowing quesIions may be
deliberaIed upon by Ihe UL8 or sIaIe agency.
! WhaI are Ihe resources IhaI are required Io
creaIe Ihe asseI or provide Ihe service?
LisI all Ihe areas o operaIion, Ihe cosIs involved,
Ihe recoveries made againsI Ihe cosIs, Ihe
eiciency levels, eIc.
2 Are Ihere any consIrainIs or Ihe urban local
body or sIaIe agency in arranging all Ihe
resources iIsel?
Deine Ihe consIrainI, i any, in Ihe provision o
any or all Ihe above resources.
J WhaI is Ihe naIure o Ihe consIrainI? ls Ihe consIrainI a sIaIuIory consIrainI, a budgeI
consIrainI, a managemenI capabiliIy consIrainI,
or consIrainI o available skills?
4 Can Ihe consIrainI be removed? ls Ihere a possibiliIy o removing Ihe consIrainI?
Does removal o Ihe consIrainI require legislaIive
changes?
! Does Ihe urban local body (UL8) recognize IhaI
exIernal experIise is essenIial or compeIenI and
eicienI managemenI o services?
Has iI been clearly esIablished IhaI Ihe privaIe
secIor would be able Io manage and provide Ihe
waIer supply and saniIaIion services beIIer?
2 WhaI are Ihe capabiliIies wiIhin Ihe UL8 or
operaIion and mainIenance, procuremenI, or
inancial managemenI?
LisI Ihe inIernal skills available wiIh Ihe UL8 or
sIaIe agency in Ihe area o everyday operaIions
and managemenI o inrasIrucIure, inancial
managemenI, accounIing, procuremenI
handling, eIc. 8ased on Ihe lisI, idenIiy gaps.
J WhaI are Ihe privaIe secIor's sIrengIhs which
Ihe UL8 is proposing Io explore?
Will Ihe privaIe developer be able Io operaIe
Ihe sysIem beIIer by using beIIer Iechnology or
sysIem undersIanding?
44
Efciency in Managing the Overall Costs
One o Ihe criIical parameIers Io be assessed
concerns Ihe eiciency in managing Ihe
overall cosIs involved in Ihe developmenI
and operaIion and mainIenance (O&M) o
Ihe waIer supply and saniIaIion services.
The UL8 or sIaIe agency would need Io
underIake an analysis Io deIermine wheIher
Ihere is scope or cosI savings in developing
and provisioning Ihe service i Ihe privaIe
secIor is involved. To do Ihis, Ihe UL8 or
sIaIe agency would need Io irsI assess Ihe
IoIal cosIs involved. This can be derived rom
Ihe inancial analysis already been carried
ouI Io deIermine Ihe inancial viabiliIy o
Ihe projecI. The cosI Io be considered here
is Ihe IoIal O&M cosI IhaI is required Io be
incurred or provisioning o waIer supply and
saniIaIion services.
The IoIal O&M cosI so obIained needs Io be
compared wiIh IhaI which Ihe privaIe developer
would incur or operaIing and managing
Ihe same seI o waIer supply and saniIaIion
services. This comparison would be made once
Ihe inancial model prepared in Ihe preceding
Iask is reined according Io Ihe suiIable PPP
model. ThaI exercise would generaIe Ihe service
cosIs or Ihe PPP arrangemenI or comparison
wiIh Ihe public secIor cosIs calculaIed earlier.
Depending upon Ihe ouIpuI o Ihe analysis, iI
can be seen wheIher Ihe cosI savings under Ihe
privaIe developer are subsIanIial or noI. Some
o Ihe key poinIs or quesIions which need Io be
considered are as ollows:
Overall Level of Competition
in the Market
lrom Ihe perspecIive o Ihe UL8 or sIaIe
agency, iI is desirable IhaI Ihere is a subsIanIial
number o privaIe developers on Ihe markeI
wiIh Ihe skills and Ihe inancial wherewiIhal Io
provide Ihe waIer supply and saniIaIion services
eicienIly. The exisIence o mulIiple players puIs
Ihe UL8 or sIaIe agency in a beIIer posiIion in
Ierms o asking or Ihe besI o Iechnical and
operaIional experIise rom Ihe privaIe secIor Io
provide Ihe services idenIiied. Thereore, Ihe UL8
or sIaIe agency would have Io also underIake
an assessmenI o Ihe markeI Io deIermine
Ihe exIenI, number, and Iype o privaIe secIor
players currenIly engaged in Ihe creaIion o Ihe
waIer supply and saniIaIion services and in a
posiIion Io operaIe and manage Ihe services.
Having adequaIe compeIiIion in Ihe markeI
would also help in obIaining compeIiIive quoIes
or Ihe conIracI. Some o Ihe key quesIions Io
look inIo are indicaIed below.
! Are Ihe cosIs or public service known? Has Ihe urban local body (UL8) or sIaIe agency
calculaIed Ihe cosI Io enable comparison wiIh
Ihe cosI o Ihe privaIe secIor?
Does Ihe UL8 have Ihe accounIing inormaIion
Io deIermine wheIher privaIe secIor parIicipaIion
would oer service delivery aI equivalenI or lower
cosIs?
2 ls Ihere scope or Ihe privaIe developer Io
innovaIe and improve Ihe eiciencies o
operaIion?
Will Ihe privaIe developer be allowed Io bring in
innovaIions in service provisioning?
J Would Ihe innovaIions idenIiied be able
Io bring down Ihe currenI operaIion and
mainIenance cosIs subsIanIially, or will Ihe
saving be only marginal?
Has Ihere been suicienI sIraIegic planning
and have easibiliIy sIudies been conducIed Io
benchmark wheIher Ihe price or Iechnology
oered by Ihe privaIe secIor would resulI in
savings?
45
SIep 2: Choice beIween Public lunding and PPP
Prerequisites for PPP
Extent of Public and Political Support
The UL8 or sIaIe agency would be able Io Iake a
inal decision on wheIher privaIe secIor parIicipaIion
is required or providing waIer supply and saniIaIion
services based on Ihe views o Ihe public and Ihe
supporI exIended by poliIical represenIaIives.
Given IhaI Ihe provision o Ihe waIer supply and
saniIaIion services has IradiIionally been Ihe domain
o Ihe public secIor, Ihe inclusion o privaIe secIor
in Ihe secIor is a sensiIive maIIer. The UL8 or sIaIe
agency would Ihereore need Io consulI Ihe various
sIakeholders who are direcIly or indirecIly involved
in Ihe provision o waIer supply and saniIaIion
services. A deIailed process o consulIaIion wiIh Ihe
end consumers and Ihe members o Ihe municipal
councils or corporaIions would be necessary Io
creaIe awareness o Ihe proposed change o
hands in service provision, and Ihe concerns o
Ihe sIakeholders would need Io be gauged in Ihe
inIeracIions held.
lor Ihe PPP opIion Io be implemenIed
successully, iI is imporIanI IhaI Ihere is
! WhaI is Ihe poIenIial capaciIy and sIrengIh o
Ihe markeI?
LisI Ihe number o privaIe players who have Ihe
experience in providing Ihe idenIiied seI o services.
2 ls Ihe privaIe secIor adequaIely developed so as
Io ensure compeIiIion among privaIe irms?
Assess Ihe experience o Ihe privaIe players who
are currenIly engaged in Ihe provision o waIer
supply and saniIaIion services.
UnderIake a review o Ihe qualiIy o work being
provided aI various locaIions.
consensus among Ihe general public and Ihe
poliIical represenIaIives regarding conIracIing
ouI o Ihe creaIion and provision o service Io
Ihe privaIe developer.
Legal Capacity of Urban Local Body
or State Agency to Contract Out
ln addiIion Io considering acIors, such as
eiciency in operaIion and savings in cosIs, iI is
imporIanI Io ascerIain wheIher Ihe UL8 or sIaIe
agency has Ihe righI Io appoinI a privaIe parIy
Ihrough a PPP conIracI, including concessions
or providing a service or which iI has Ihe legal
mandaIe. The UL8 or sIaIe agency needs Io be
clear abouI Ihe legal conIexI in which privaIe
secIor parIicipaIion is possible. ln addiIion, iI
needs Io assess wheIher approvals are required
rom higher auIhoriIies Io be able Io involve a
privaIe parIy in Ihe provision o waIer supply
and saniIaIion services. The UL8 will also
assess wheIher Ihere is a need or an enabling
provision in Ihe auIhoriIy's bylaws or oIher
legislaIion Io provide an environmenI suiIable
or PPP arrangemenIs. The ollowing quesIions,
Ihereore, need Io be answered:
! Does Ihe urban local body (UL8) have Ihe righI
Io award concessions or enIer inIo conIracIual
license agreemenIs wiIh Ihe privaIe secIor Io
essenIially deliver municipal services?
ls Ihe UL8 clear on iIs righI Io ouIsource
provisioning o waIer supply and saniIaIion
services Io a privaIe developer?
2 WhaI sIaIuIory permissions does iI need Io
do so?
Does Ihe UL8 or sIaIe agency know o all Ihe
permissions, approvals, and relaIing procedures,
which may be needed Io aciliIaIe inclusion o a
privaIe developer in Ihe provision o waIer supply
and saniIaIion services?
J WhaI are Ihe enabling provisions or
amendmenIs in Ihe exisIing legal ramework
IhaI would be necessary Io make such
arrangemenIs enorceable?
l Ihe exisIing legal ramework does noI permiI
inclusion o a privaIe developer in Ihe provision
o waIer supply and saniIaIion services, are
amendmenIs possible Io aciliIaIe privaIe secIor
parIicipaIion?
46
Making the Choice
The inal decision on wheIher Io execuIe Ihe
projecI Ihrough Ihe publicly unded rouIe or
Ihrough PPP arrangemenIs would have Io be
Iaken aIer Ihe ollowing assessmenIs have been
made:
(i) Assess wheIher Ihe projecIed reIurns rom
Ihe proposed invesImenI are aIIracIive
enough or a privaIe enIiIy Io enIer inIo
a conIracIual relaIionship. l Ihe projecI
reIurns are aIIracIive, Ihen Ihe projecI
would be suiIable Io be considered or
execuIion Ihrough PPP.
(ii) Assess wheIher Ihe policy and
adminisIraIive environmenI is suiIable or
PPP, wheIher Ihe privaIe secIor is capable
o providing Ihe service IhaI is inIended,
and wheIher involving Ihe privaIe secIor
will generaIe savings in Ihe service cosI.
(iii) Assess Ihe degree o accepIance among
all Ihe key sIakeholders regarding Ihe
likely decision. SIakeholders musI include
prospecIive users, employees o Ihe UL8
or sIaIe agency currenIly managing Ihe
service (i any), and public represenIaIives.
Concerns o Ihese sIakeholders should be
addressed beore Iaking Ihe inal decision.
The UL8 or sIaIe agency would Ihen need Io
inalize Ihe choice beIween public unding and
PPP. The inal decision will be inluenced by
Ihe public policy mandaIe o Ihe UL8 or sIaIe
agency in addiIion Io Ihe above parameIers.
The decision and raIionale or Ihe subsequenI
procedure should be documenIed.
47
VII Step 3: Choice of PPP
Structure
Having decided IhaI Ihe UL8 or sIaIe agency
would develop Ihe projecI on a publicprivaIe
parInership (PPP) basis, Ihe nexI sIep would be
Io idenIiy Ihe appropriaIe PPP sIrucIure. This
involves (i) idenIiying all Ihe risks associaIed
wiIh Ihe projecI, (ii) allocaIing risk beIween Ihe
privaIe developer and Ihe UL8 or sIaIe agency,
(iii) selecIing a seI o appropriaIe PPP conIracI
opIions, and (iv) choosing Ihe mosI suiIable PPP
conIracI sIrucIure.
These acIiviIies are now discussed in greaIer deIail.
Identication of Risks
A componenI criIical Io any PPP sIrucIure is Ihe
risks involved in Ihe developmenI o Ihe projecI.
Successul implemenIaIion o a PPP conIracI
is, Ihereore, dependenI on how Ihe risks
associaIed wiIh Ihe projecI are allocaIed. 8eore
Ihe risks are allocaIed, Ihey musI be idenIiied.
Hence, as a sIep Ioward making a choice abouI
Ihe PPP opIion Io be implemenIed, all Ihe risks
associaIed wiIh Ihe projecI musI be lisIed.
1abIe 9 Generic isk CaIegories
isk CaIegory DescripIion o! isk DirecI Consequence
Commissioning risk The risk IhaI Ihe inrasIrucIure will noI
receive all approvals Io saIisy an ouIpuI
speciicaIion, such as expecIed changes
in legislaIion which allow or a speciic
ouIpuI speciicaIion noI maIerializing
AddiIional rampup cosIs, cosI o mainIaining
exisIing inrasIrucIure, or providing a
Iemporary alIernaIive soluIion where Ihis
leads Io a delay in Ihe provision o Ihe service
ConsIrucIion risk The risk IhaI Ihe consIrucIion o Ihe
asseIs required or Ihe projecI will noI
be compleIed on Iime, wiIhin budgeI,
or Io speciicaIion
AddiIional raw maIerials and labor cosIs,
cosI o mainIaining exisIing inrasIrucIure,
or providing a Iemporary alIernaIive soluIion
where Ihis leads Io a delay in Ihe provision o
Ihe service
Demand (usage)
risk
The risk IhaI Ihe acIual demand or a
service is lower Ihan planned
Peduced revenue
Design risk The risk IhaI Ihe proposed design will
be unable Io meeI Ihe perormance
and service requiremenIs in Ihe ouIpuI
speciicaIions
CosI o modiicaIion, redesign cosIs
LnvironmenIal risk The risks IhaI Ihe projecI could have an
adverse environmenIal impacI, which
aecIs projecI cosIs noI oreseen in Ihe
environmenIal impacI assessmenI
AddiIional cosIs incurred Io recIiy an
adverse environmenIal impacI on Ihe projecI
incurred rom Ihe consIrucIion or operaIion
o Ihe projecI or preexisIing environmenIal
conIaminaIion
linancial risk The risk IhaI Ihe privaIe secIor over
sIresses a projecI Ihrough inappropriaIe
inancial sIrucIuring
AddiIional unding cosIs or increased
margins or unexpecIed reinancing cosIs
FRQWLQXHGRQQH[WSDJH
48
isk CaIegory DescripIion o! isk DirecI Consequence
lorce majeure risk An acI occasioned by an unanIicipaIed,
unnaIural or naIural disasIer, such
as war, earIhquake, or lood, o such
magniIude IhaI iI delays or desIroys Ihe
projecI and cannoI be miIigaIed
AddiIional cosIs Io recIiy
lndusIrial relaIions
risk
The risk IhaI indusIrial relaIions issues
will adversely aecI consIrucIion cosIs,
IimeIable, and service delivery
lncreased employee cosIs, losI revenue,
or addiIional expendiIure during delay
in consIrucIion or service provision
(posIconsIrucIion)
LaIenI deecI risk The risk IhaI an inherenI deecI exisIs in
Ihe sIrucIure being builI or equipmenI
used, which is noI idenIiied up ronI
and which will inhibiI provision o Ihe
required service
CosI o new equipmenI or modiicaIion Io
exisIing inrasIrucIure
OperaIing
risk (service
underperormance)
The risks associaIed wiIh Ihe daily
operaIion o Ihe projecI, including an
unexpecIed change in operaIing cosIs
over budgeI
lncreased operaIing cosIs or reduced revenue
over Ihe projecI Ierm
Perormance risk The risk IhaI Ihe operaIor will noI
perorm Io Ihe speciied service
level, such as Ihe WaIer Pesources
DeparImenI permiIIing oIake o less
Ihanrequired demand
CosI o ailing Io comply wiIh perormance
sIandards
Change in law risk The risk IhaI Ihe currenI regulaIory
regime will change maIerially over Ihe
projecI or produce unexpecIed resulIs
CosI o complying wiIh new regulaIions
Pesidual value risk The risk relaIing Io dierences rom
Ihe expecIed realizable value o Ihe
underlying asseIs aI Ihe end o Ihe
projecI
Lower realizable value or underlying asseIs aI
Ihe end o Ihe projecI Ierm
Technology
obsolescence risk
The risk IhaI Ihe Iechnology used will
be unexpecIedly superseded during Ihe
Ierm o Ihe projecI and will noI be able
Io saIisy Ihe requiremenIs in Ihe ouIpuI
speciicaIion
CosI o replacemenI Iechnology
Upgrade risk The risks associaIed wiIh Ihe need or
upgrading Ihe asseIs over Ihe Ierm
o Ihe projecI Io meeI perormance
requiremenIs
AddiIional capiIal cosIs required Io mainIain
speciied service
Table 9 FRQWLQXHG
An illusIraIive lisI o risks associaIed wiIh a projecI
and Iheir consequences is presenIed in Table 9.
The lisI o risks presenIed in Table 9 is generic
and indicaIive in naIure. DeIailed projecIspeciic
risks would have Io be idenIiied and deIailed in
addiIion Io Ihose lisIed above by Ihe urban local
body (UL8) or sIaIe agency. lI is imporIanI IhaI
Ihe lisI is as exhausIive as possible.
Allocation of Risks
The balanced allocaIion o all Ihe risks
idenIiied plays a criIical role in Ihe successul
implemenIaIion o any PPP sIrucIure. ln Ihis
conIexI, Ihe general principle governing risk
Iranser is IhaI each risk should be allocaIed Io
whoever is besI able Io manage iI aI Ihe leasI
49
SIep J: Choice o PPP SIrucIure
cosI, Iaking inIo accounI Ihe public inIeresI.
Thereore, an opIimal, raIher Ihan a maximum,
Iranser o risk needs Io be underIaken.
The imporIanI acIors Io be considered during
risk allocaIion include
(i) Ihe naIure o Ihe projecI,
(ii) Ihe sIrengIhs and abiliIy o each parIy
Io manage a risk (Ihis may change over
Iime as each parIy's risk miIigaIion skills
improve),
(iii) Ihe lexibiliIy o Ihe ouIpuI speciicaIion
(wheIher any consIrainIs exisI, which
inluences Ihe meIhod or managing risk),
(iv) previous levels o risk Iranser (Ihis
indicaIes Ihe hisIorical success o each
parIy in managing parIicular risks and
Iheir poIenIial abiliIy Io manage risks in
Ihe uIure),
(v) prevailing markeI aIIiIudes Ioward risk,
(vi) public inIeresI acIors,
(vii) oIher policy consideraIions, and
(viii) aspecIs relaIing Io Ihe projecI
environmenI, Ihe prevailing and expecIed
economic siIuaIion, Ihe appeIiIe or risk
Iaking by oreign insIiIuIions, eIc.
Once Ihe risks have been idenIiied and
allocaIed appropriaIely, Ihe nexI acIiviIy Io be
underIaken is Ihe developmenI o probable
risk miIigaIion sIraIegies. Pisk miIigaIion
sIraIegies are developed wiIh Ihe inIenIion
o reducing each parIy's exposure Io Ihe
risk. SimulIaneously, iI inherenIly increases
Ihe likelihood o achieving (or beIIering) Ihe
projecI's base case scenario. An indicaIive lisI
o risk miIigaIion sIraIegies or measures or
boIh Ihe UL8 or sIaIe agency and Ihe privaIe
developer is given in ligure !0.
ln addiIion Io idenIiying and allocaIing risks
and developing miIigaIion measures, iI is
recommended IhaI Ihe UL8 or sIaIe agency also
develop a dispuIe resoluIion mechanism. Once
Ihe projecI implemenIaIion begins under Ihe
privaIe developer, iI is necessary Io ensure IhaI
a regulaIory body, which would ormally look
inIo Ihe dispuIes IhaI mighI arise during Ihe
concession period, is ormed.
Figure 10 isk MiIigaIion Measures !or Ihe Urban LocaI ody or 5IaIe Agency
and Ihe PrivaIe DeveIoper
UL8 ~ urban local body.
PrivaIe Developer UL or sIaIe agency PrivaIe deveIoper
PreparaIioh o! comprehehsive
documehIs
CorrecI ahd appropriaIe bid process
Reduce possibiliIy o! scope rollback
CohIihgehcy plah
lhsurahce
lhsurahce
Fihahcial markeI ihsIrumehIs
Diversi!icaIioh o! projecI porI!olio
Arrahge !or a pass Ihrough
50
Selection of Possible PPP Structures
The acIiviIies and Ihe sIeps Iaken so ar have
creaIed Ihe conIexI or implemenIaIion o a
PPPbased model or Ihe developmenI o Ihe
proposed projecI. The nexI sIage in Ihis process
is Io deIermine which o Ihe PPP sIrucIures
is besI suiIed Io addressing Ihe needs o
Ihe proposed projecI. live such possible PPP
sIrucIures are now discussed. These are based
on PPP sIrucIures IhaI have been successully
implemenIed in Ihe counIry.
Performance-Based
Management Contract
ln Ihe perormancebased managemenI
conIracI, Ihe privaIe developer is required Io
underIake operaIion and mainIenance (O&M)
o Ihe enIire waIer supply sysIem rom source
Io consumer, including meIering, billing, and
collecIing revenues. l saniIaIion services are Io
be also included as parI o Ihe PPP conIracI,
Iheir operaIion and managemenI would also
have Io be managed by Ihe privaIe operaIor. ln
Ihis conIracI, all Ihe major capiIal cosIs, which
are required or improving Ihe service, be Ihey
or service level augmenIaIion, expansion, eIc.,
would have Io be borne by Ihe UL8 or sIaIe
agency. Under Ihis PPP sIrucIure, Ihe privaIe
developer is given Ihe righIs Io levy and collecI
Ihe user charges seI by Ihe UL8. As per Ihe
inancial easibiliIy, Ihe privaIe developer may
be given Ihe righI Io reIain Ihe revenues againsI
paymenI o a ixed license ee Io Ihe UL8 or sIaIe
agency. ln oIher cases, Ihe privaIe developer may
be required Io hand over Ihe revenues collecIed
Io Ihe UL8 or sIaIe agency, and in reIurn or
acIiviIies underIaken iI will be paid an operaIor's
ee by Ihe UL8 or sIaIe agency.
l Ihe UL8 or sIaIe agency inIends Io implemenI
a perormancebased managemenI conIracI
or iIs waIer supply and saniIaIion services, iI
is imporIanI IhaI iI should have underIaken a
waIer and energy audiI. Since Ihe perormance
criIeria or Ihe privaIe developer would be
deined on Ihe basis o Ihe exisIing scenario
o Ihe waIer supply and saniIaIion services, iI
is imporIanI IhaI Ihe waIer and energy audiI
be underIaken on a prioriIy basis. The ouIpuI
rom Ihe audiI would help Ihe UL8 idenIiy Ihe
areas o operaIional improvemenI IhaI would be
required, and Ihe privaIe developer would use
Ihe resulIs o Ihe audiI Io gauge Ihe acIual level
o Ihe services. The UL8 or sIaIe agency should
Ihen deine required perormance IargeIs or Ihe
privaIe developer.
Concession Agreement for Water Supply
and Sanitation Services
A concession agreemenI or waIer supply and
saniIaIion services is a PPP conIracI wherein
Ihe privaIe developer would be required Io
underIake invesImenIs Io creaIe asseIs in Ihe
waIer supply and saniIaIion value chain and
would also be required Io underIake Ihe O&M
o Ihe enIire sysIem or Ihe period o Ihe
concession. This concession agreemenI would
require Ihe privaIe developer Io design, inance,
consIrucI, operaIe, and manage Ihe waIer
supply and saniIaIion services or Ihe concession
period. The capiIal invesImenI required or
underIaking Ihe augmenIaIion works would be
meI wholly or parIly by Ihe privaIe developer.
ln addiIion, all operaIional expenses or
managing Ihe waIer supply and saniIaIion
services, such as elecIriciIy charges, bulk waIer
charges, esIablishmenI expenses, and repair and
mainIenance, would have Io be borne by Ihe
privaIe developer. The privaIe developer would
recover Ihe invesImenIs made by collecIing and
reIaining user charges levied on consumers. Any
change Io Ihe Iari, Ihe raIe o escalaIions, eIc.,
would be deIermined by Ihe UL8. Typically, Ihe
Ienure o such a conIracI ranges rom !5 years
Io J0 years and is dependenI on Ihe inancial
easibiliIy o Ihe proposed projecI.
Concession Agreement for Construction,
Operation, and Maintenance of Bulk
Water Supply System
The concession agreemenI or Ihe consIrucIion
and O&M o Ihe bulk waIer supply sysIem
is a Iypical PPP sIrucIure under Ihe design
buildownoperaIeIranser model. As per
Ihis sIrucIure, Ihe privaIe developer is required
Io consIrucI Ihe bulk supply inrasIrucIure
Io provide IreaIed waIer up Io Ihe poinI
51
o Ihe sIorage reservoir. lrom Ihe sIorage
reservoir Io Ihe disIribuIion neIwork Io Ihe
consumer, Ihe waIer supply responsibiliIy
resIs wiIh Ihe UL8. The capiIal invesImenI
required or Ihe augmenIaIion works needs
Io be borne by Ihe privaIe developer. The
operaIion and managemenI o Ihese asseIs
during Ihe concession period resIs wiIh Ihe
privaIe developer. Thereore, all Ihe associaIed
operaIing expenses, including Ihe purchase
o bulk waIer, paymenI o elecIriciIy charges,
purchase o chemicals or waIer IreaImenI, and
esIablishmenI expenses including labor charges,
are Ihe responsibiliIy o Ihe privaIe developer.
lor Ihe IreaIed waIer produced, Ihe privaIe
developer is paid a waIer charge by Ihe UL8. The
Iypical Ienure o Ihis conIracI is 20J0 years.
Concession Agreement for Construction,
Operation, and Maintenance of the
Distribution System
ln Ihis orm o concession agreemenI, Ihe design
and inance o Ihe idenIiied augmenIaIion
works would be underIaken Ihrough a capiIal
granI o !00% rom Ihe governmenI. As per Ihe
conIracI, Ihe privaIe developer is required Io irsI
underIake Ihe consIrucIion and rehabiliIaIion
works or Ihe idenIiied secIion o Ihe waIer
sysIem, and urIher Io Ihe consIrucIion acIiviIy,
underIake Ihe O&M o Ihe enIire waIer supply
sysIem. The privaIe developer would geI ull
capiIal reimbursemenI rom Ihe UL8 or any oIher
governmenI agency or Ihe rehabiliIaIion works
underIaken. Once Ihe consIrucIion is compleIe,
Ihe privaIe developer alone is responsible
or O&M o Ihe enIire waIer supply sysIem,
including Ihe supply o IreaIed waIer Io all Ihe
connecIions, insIallaIion o meIers, generaIion
o bills, and collecIion o revenues. The cosIs o
any major expansion, which may be required
Io Ihe exisIing inrasIrucIure, would have Io be
borne by Ihe UL8.
A seI o perormance IargeIs would be seI by Ihe
sIaIe nodal agency or by Ihe UL8s in Ihe clusIer
or Ihe O&M acIiviIy. lor O&M underIaken by
Ihe privaIe developer, an operaIor ee is paid
by Ihe UL8s or Ihe sIaIe nodal agency or Ihe
period o Ihe conIracI based on Ihe achievemenI
o perormance sIandards. The Ienure o such
conIracIs can range beIween 5 years and !0
years.
Concession Agreement for Development
of the Bulk Water Supply System and
Operation and Maintenance of the Entire
System
The concession agreemenI or Ihe developmenI
o Ihe bulk waIer supply sysIem, including Ihe
O&M o Ihe enIire waIer supply sysIem, is a PPP
sIrucIure developed on a buildoperaIeIranser
basis. According Io Ihe concession agreemenI,
Ihe privaIe developer is required Io underIake
Ihe consIrucIion o Ihe bulk waIer supply sysIem,
including Ihe raw waIer oIake sysIem, raw waIer
Iransmission lines, and waIer IreaImenI planI.
The privaIe developer will also be responsible or
O&M o Ihe waIer supply sysIem rom source Io
Ihe end consumer. The privaIe developer is given
Ihe righI Io levy, collecI, and reIain revenues rom
Ihe consumers or Ihe acIiviIies underIaken. The
privaIe developer is required Io make a ixed
monIhly paymenI as license ee Io Ihe UL8 or Ihe
righI Io operaIe Ihe exisIing waIer supply asseIs
and Ihe enIire sysIem. The Iypical concession
period would range rom 20 years Io J0 years.
Service Management Contract: Metering,
Billing, and Collection
Under Ihe service managemenI conIracI or
meIering, billing, and collecIion, Ihe privaIe
developer would be required Io underIake
invesImenIs or insIallaIion o meIers aI Ihe
consumer end, oversee O&M, mainIain a
compuIerized daIa recording sysIem, generaIe
bills, and collecI user charges rom Ihe
consumers. The privaIe developer would noI
be required Io underIake any oIher acIiviIy
in Ihe enIire chain o waIer supply services.
The Iype o meIer Io be insIalled and Ihe
number o connecIions where Ihe meIer is Io
be insIalled would be speciied by Ihe UL8 or
sIaIe agency. The Iari Io be levied would also
be deIermined by Ihe UL8 or sIaIe agency. The
perormance sIandards laid ouI by Ihe UL8 or
sIaIe agency would speciy aspecIs, such as
Ihe revenue collecIions IargeI Io be achieved
and Ihe exIenI o meIer uncIional levels IhaI
52
need Io be mainIained. The cosI o purchase
and insIallaIion o Ihe meIer would generally
be recovered by Ihe privaIe developer rom Ihe
consumers as parI o Ihe waIer supply service
bills. Pecovery is generally in insIallmenIs.
The UL8 or sIaIe agency pays a ixed annuiIy or
Ihe O&M underIaken by Ihe privaIe developer.
This annuiIy amounI would generally be Ihe
bidding parameIer.
Preparatory Documents and Activities
Required to be Undertaken
8eore any PPP conIracI is implemenIed, Ihe UL8
or sIaIe agency needs Io underIake a number o
imporIanI acIiviIies and make available criIical
documenIs Io Ihe privaIe developer (as shown in
Table !0).
Matching of PPP Structures with the
Value Chain and Prioritized Projects
ln addiIion Io Ihe PPP opIions described,
Ihere may be oIher PPP sIrucIures, which
may be developed Io suiI Ihe speciic projecI
requiremenIs o Ihe UL8 or sIaIe agency. AIer
idenIiying Ihe projecIs Io be implemenIed
and Ihe value chain or which Ihey are besI
suiIed, Ihe UL8 or sIaIe agency would nexI
need Io review Ihe PPP alIernaIives in Ihe
conIexI o Ihe projecI requiremenIs in order
Io deIermine Ihe besI suiIed PPP opIion. The
1abIe 10 LisI o! DocumenIs and AcIiviIies Io be Arranged by Ihe Urban LocaI ody
or 5IaIe Agency
5I No. DocumenIs AcIiviIies
! ConIracI/AgreemenI
documenI
Paw bulk waIer purchase conIracI wiIh WaIer Pesources DeparImenI
or waIer source supply rom _____source_ river
Power purchase agreemenI wiIh Ihe concerned elecIriciIy
deparImenIs elecIriciIy board or supplying power Io Ihe waIer supply
sysIem and Ihe proposed Iari deIails
2 SiIe and asseI
inormaIion
ConIour maps, neIwork maps, and neIwork survey on a geographic
inormaIion sysIems plaIorm
AsseI invenIory wiIh Iechnical speciicaIion
SiIe deIails in Ierms o land area, asseIs, eIc.
Number and Iype o waIer supply connecIions
Number and Iype o bulk meIers
J PeporIs WaIer audiI
Leak deIecIion
Lnergy audiI
WaIer qualiIy sIandards
Consumer sIudy
WaIer demand projecIion
CapiIal invesImenI plan
4 User charges Tari levels, escalaIion raIe, and schedule
ConnecIion charges
LlecIriciIy charges escalaIion raIe and schedule
PenalIies
5 Manuals ConsIrucIion guidelines, debris disposal guidelines
WasIe disposal guidelines
LnvironmenIal regulaIions
QualiIy conIrol guidelines
Sl ~ serial.
53
UL8 or sIaIe agency would need Io clearly
undersIand Ihe projecI requiremenIs across
Ihe value chain o waIer supply and saniIaIion
services, and review Ihese in Ihe conIexI o
Ihe possible PPP opIions. The UL8 or sIaIe
agency Ihen needs Io idenIiy Ihe PPP opIion
rom among Ihe suiIable sIrucIures, which
would ully address Ihe projecI requiremenIs.
An indicaIive PPP sIrucIure maIrix, along wiIh
dierenI scenarios o Ihe prevailing value chain
o services, is given in Table !!. 8ased on Ihe
assessmenI, Ihe besI suiIed PPP arrangemenI
would have Io be inalized by Ihe UL8 or sIaIe
agency.
1abIe 11 PPP MaIrix in Ihe ConIexI o! Ihe VaIue Chain
ParameIers
Concession
AgreemenI
!or InIegraIed
WaIer 5uppIy
5ysIem
Per!ormance
ManagemenI
AgreemenI !or
O&M o! FnIire
WaIer 5uppIy
5ervices
5ervice
AgreemenI !or
OnIy MeIering,
iIIing, and
CoIIecIion
Concession
AgreemenI !or
uIk 5uppIy
5ysIem
Concession
AgreemenI !or
DisIribuIion
5ysIem
Low bulk waIer
supply
High raw waIer
Iransmission loss
lnadequaIe
capaciIy o WTP
ObsoleIe WTP
High WTP
operaIional losses
Low disIribuIion
neIwork coverage
Low meIering
Low O&M
recoveries
High invesImenI
need
J
Low bulk waIer
supply
High raw waIer
Iransmission loss
lnadequaIe
capaciIy o WTP
ObsoleIe WTP
High WTP
operaIional losses
High invesImenI
need or bulk
supply and WTP
J
SaIisacIory
disIribuIion
neIwork
operaIion
FRQWLQXHGRQQH[WSDJH
54
ParameIers
Concession
AgreemenI
!or InIegraIed
WaIer 5uppIy
5ysIem
Per!ormance
ManagemenI
AgreemenI !or
O&M o! FnIire
WaIer 5uppIy
5ervices
5ervice
AgreemenI !or
OnIy MeIering,
iIIing, and
CoIIecIion
Concession
AgreemenI !or
uIk 5uppIy
5ysIem
Concession
AgreemenI !or
DisIribuIion
5ysIem
AdequaIe bulk
waIer supply
ModeraIe
raw waIer
Iransmission
losses
AdequaIe WTP
capaciIy, low
losses
Low disIribuIion
neIwork coverage
High disIribuIion
losses
Low meIering
High invesImenI
need or
improvisaIion
o disIribuIion
neIwork
J
AdequaIe bulk
waIer supply
ModeraIe
raw waIer
Iransmission loss
AdequaIe WTP
capaciIy, low
losses
High disIribuIion
neIwork losses
UnIimely repairs
and mainIenance
o disIribuIion
neIwork
Minimum
coverage o
meIers or number
o meIers
Low O&M
recoveries
No invesImenI
need
J
Table !! FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
55
ParameIers
Concession
AgreemenI
!or InIegraIed
WaIer 5uppIy
5ysIem
Per!ormance
ManagemenI
AgreemenI !or
O&M o! FnIire
WaIer 5uppIy
5ervices
5ervice
AgreemenI !or
OnIy MeIering,
iIIing, and
CoIIecIion
Concession
AgreemenI !or
uIk 5uppIy
5ysIem
Concession
AgreemenI !or
DisIribuIion
5ysIem
AdequaIe bulk
waIer supply
Low Iransmission
losses
AdequaIe WTP
capaciIy, low
losses
High disIribuIion
neIwork coverage
Minimum
coverage o
meIers or no
meIers
Low collecIion
eiciency
J
O&M ~ operaIion and mainIenance, WTP ~ waIer IreaImenI planI.
Table !! FRQWLQXHG
56
VIII Step 4: Procurement
ProcuremenI is Ihe inal phase in developing and
implemenIing a projecI in Ihe waIer supply and
saniIaIion secIor on a publicprivaIe parInership
(PPP) basis. A deIailed implemenIaIion plan or
Ihe conIracIual sIrucIure needs Io be prepared,
including clear and precise deiniIions o Ihe
scope o work and Ihe roles and responsibiliIies
o Ihe Iwo conIracIing parIiesIhe urban local
body (UL8) or sIaIe agency and Ihe privaIe
developer. This is Iermed as Ihe IransacIion
sIrucIure. The inancial model prepared or Ihe
projecI would Ihen be reined according Io Ihe
requiremenIs o Ihe inancial sIrucIure. 8ased
on Ihe IransacIion sIrucIure, Ihe conIracI or Ihe
PPP arrangemenI would need Io be drawn up.
linally, Ihe procuremenI plan will be inalized
and puI inIo operaIion.
Transaction Structure
The implemenIaIion sIrucIure would deine Ihe
conIexI o dealings and Ihe relaIionship beIween
Ihe privaIe developer and Ihe UL8 or sIaIe
agency. ln preparing Ihe IransacIion sIrucIure,
Ihe ollowing consideraIions need Io be kepI in
mind.
(i) The IransacIion sIrucIure should be wiIhin
Ihe deiniIion o Ihe legal and public
mandaIe o Ihe UL8 or sIaIe agency, i.e.,
iI should noI diluIe Ihe legal responsibiliIy
o Ihe UL8 or sIaIe agency.
(ii) The IransacIion sIrucIure should be
responsive Io Ihe inIeresIs o Ihe privaIe
secIor and should promoIe compeIiIion
wiIhin Ihe privaIe secIor.
(iii) The IransacIion sIrucIure should allocaIe
risks and responsibiliIies Io ensure IhaI
Ihe parIy mosI capable o managing
parIicular risks and responsibiliIies is
enIrusIed wiIh Ihose.
The IransacIion sIrucIure would be legally
ormalized in Ihe orm o Ihe PPP conIracI.
Under Ihe IransacIion sIrucIure, Ihe ollowing
inormaIion would have Io be provided:
(i) Ihe parIies involved in Ihe conIracI,
(ii) Ihe conIracIual relaIionship beIween Ihe
parIies,
(iii) Ihe naIure o Ihe agreemenI,
(iv) Ihe key risks and Iheir allocaIion,
(v) Iari,
(vi) governmenI commiImenI,
(vii) duraIion o conIracI,
(viii) perormance indicaIors,
(ix) paymenI Ierms,
(x) award criIeria, and
(xi) conIracI managemenI sIraIegy.
These key poinIs are now urIher elaboraIed.
Dene the Parties Involved
in the Contract
The IransacIion sIrucIure would clearly
idenIiy and deine Ihe parIies involved in Ihe
proposed conIracIual agreemenI. lor insIance,
in Ihe waIer supply and saniIaIion services, a
conIracIual agreemenI would Iypically involve
a compeIenI auIhoriIy, a UL8 (municipal
corporaIion or council), cusIomers, Ihe
developer or privaIe developer, subconIracIors,
eIc. This lisI is only indicaIive and would vary
across Ihe various conIracIs.
The IransacIion sIrucIure would need Io sIaIe
Ihe conIracIual relaIionship beIween Ihe parIies
involved. The conIracIual relaIionship would
be largely deined on Ihe grounds o services
and/or acIiviIies Io be underIaken by boIh Ihe
parIies, and paymenIs IhaI would be made or
Ihe services.
The IransacIion sIrucIure should clearly sIaIe
which parIy is underIaking whaI acIiviIy in Ihe
waIer supply and saniIaIion service value chain.
lor insIance, a perormance managemenI
conIracI or operaIion and mainIenance (O&M)
57
SIep 4: ProcuremenI
o Ihe waIer supply services should clearly sIaIe
wheIher Ihe UL8 or sIaIe agency is responsible
or Ihe purchase o raw bulk waIer rom Ihe
waIer resources deparImenI and providing iI aI
no cosI Io Ihe privaIe developer or IreaImenI
and disIribuIion, or wheIher Ihe privaIe
developer would also have Io bear Ihe expenses
on Ihe purchase o Ihe bulk waIer. Similarly,
each o Ihe acIiviIies in Ihe value chain needs
Io be mapped and responsibiliIies among Ihe
parIies clearly sIaIed in Ihe IransacIion sIrucIure.
The conIracIual relaIionship would also be
deined in Ierms o Ihe paymenI arrangemenIs
beIween Ihe Iwo parIies. lor insIance, Ihe
IransacIion sIrucIure should sIaIe wheIher
Ihe UL8 or sIaIe agency is required Io make
any paymenI Io Ihe privaIe developer or Ihe
acIiviIies iI is enIrusIed wiIh, or i Ihe privaIe
developer is required Io make a ixed license ee
paymenI Io Ihe UL8 or sIaIe agency, or i Ihere
is a revenuesharing arrangemenI beIween
Ihe parIies.
State the Nature or Type of Contractual
Agreement
The IransacIion sIrucIure would need Io sIaIe
Ihe Iype o agreemenI being developed, e.g.,
concession agreemenI, perormancebased
managemenI agreemenI, or service conIracI.
The Iype o PPP conIracI proposed would be
clear rom Ihe analysis and acIiviIies previously
underIaken. The Iype o conIracIual agreemenI
should be sIaIed and a broad explanaIion o
and a brie on Ihe acIiviIies involved should be
presenIed.
State the Key Commercial Risk
and its Allocation
The seI o possible key risks involved in Ihe
provision o waIer supply and saniIaIion
services has already been discussed. However,
Ihe commercial risks acing Ihe projecI may
be expliciIly sIaIed as parI o Ihe IransacIion
sIrucIure. lor insIance, in a concession
agreemenI or Ihe developmenI, operaIion,
and managemenI o waIer supply services, Ihe
commercial risk may be Ihe collecIion o revenue
risk IhaI Ihe privaIe developer would have Io
bear. lI is possible IhaI some o Ihe cusIomers
mighI reuse Io pay Ihe privaIe developer or
waIer supplied. Such a scenario would resulI in
lower revenue realizaIions Ihan IhaI esIimaIed
by Ihe privaIe developer and would give rise Io
problems in Ihe smooIh operaIion o services.
AnoIher Iype o revenue risk is associaIed wiIh
Ihe projecIed demand or waIer supply services
in a greenield projecI. l Ihe acIual demand or
Ihe waIer supply services is signiicanIly less Ihan
IhaI esIimaIed, Ihis would again pose a huge
risk in Ihe operaIions o Ihe services. Hence, Ihe
commercial risks on Ihe projecI should be sIaIed
in Ihe IransacIion sIrucIure.
Set the Tariff to be Levied
Various approaches or Iari seIIing exisI. Taris
are perhaps Ihe mosI poliIically sensiIive aspecI
o a PPP conIracI, parIicularly or waIer supply
services. lI is imporIanI Io ensure IhaI Ihe Iari
seI by Ihe UL8 is deIermined aIer gaining a
compleIe undersIanding o cosIs, which are
incurred Io provide IhaI service. The sIrucIure o
Ihe Iari should be made IransparenI such IhaI
Ihe cross subsidies provided Io users are clearly
known. The UL8 or sIaIe agency should accounI
or Ihe ollowing consideraIions beore deining
Ihe Iari:
(i) SIaIe o! compeIiIioh. Where markeI
compeIiIion or Ihe service is sIrong,
Ihe privaIe secIor is usually given
considerable scope Io seI Iheir own Iaris,
alIhough Ihey may be subjecI Io uIiliIy
raIe regulaIions. Where some degree o
monopoly power exisIs, Iaris Iend Io be
regulaIed, and where Ihe governmenI seIs
Ihem, mechanisms or changes musI be
clearly arranged.
(ii) Public accepIahce o! PPP. Where PPPs
have been in exisIence or a subsIanIial
period o Iime and Ihe users accepI Ihem
and are comorIable wiIh Ihem, iI is easier
Io delegaIe Ihe righI o deining ares
Io Ihe privaIe secIor. This will be more
diiculI Io do in a scenario where Ihe
public auIhoriIy is in a IransiIion phase
o moving Ioward PPP rom IradiIional
public procuremenI.
(iii) Social objecIives. Where Ihe UL8 or
sIaIe agency wanIs Io proIecI Ihe weaker
secIions o Ihe socieIy rom compleIely
58
markeIbased Iaris, iI is desirable IhaI
iI reIains Ihe righI Io deine ares. lI is
Io be noIed here IhaI Ihe consumers
are, in mosI insIances, willing Io pay or
improved waIer supply services. Any Iari
charged should be in line wiIh Ihe qualiIy
o Ihe service delivered. An increase in
Iari levels wiIhouI a corresponding
improvemenI in Ihe waIer supply services
would noI be accepIable Io consumers.
Government Commitment
The IransacIion sIrucIure should sIaIe Ihe
governmenI's commiImenI Io Ihe process o
PPPled projecI developmenI. SupporI rom Ihe
governmenI is crucial in Ihe implemenIaIion
and running o Ihe projecI. PoIenIial privaIe
developers are always concerned abouI Ihe
exIenI o poliIical will and supporI or Ihe
developmenI o a projecI on a PPP basis, and
Ihis area is considered Io be highly sensiIive.
Performance Indicators/Parameters
The IransacIion sIrucIure would have Io
sIaIe, in clear Ierms, Ihe various sIandards
o perormance IhaI would be applicable Io
Ihe privaIe developer. These would largely
relaIe Io Ihe consIrucIion sIandards, which
Ihe privaIe developer would have Io adhere Io
and Ihe O&M sIandards or Ihe waIer supply
and saniIaIion services during Ihe lie o Ihe
conIracIual agreemenI. ln addiIion, Ihe sIandard
o Ihe asseIs aI Ihe Iime o Iheir Iranser back
Io Ihe UL8 or sIaIe agency should also be
menIioned.
Payment Terms
PaymenIs in PPP conIracIs can be made eiIher
rom Ihe privaIe developer Io Ihe UL8 or vice
versa. lor insIance, in a conIracIual agreemenI,
Ihe privaIe developer would pay Ihe UL8 or sIaIe
agency, on a bimonIhly basis, a ixed license
ee or Ihe righI Io operaIe and mainIain Ihe
waIer supply and saniIaIion services. Conversely,
in a service agreemenI, Ihe UL8 would make
paymenIs Io Ihe privaIe developer Io underIake
Ihe required acIiviIies. The Ierms and mode
o paymenI should be clearly speciied in Ihe
IransacIion sIrucIure.
Duration of the Contract
The Iime period or which Ihe conIracI is
applicable would have Io be speciied in Ihe
IransacIion documenI. This generally varies,
depending on Ihe Iype o PPP conIracI. ln PPP
sIrucIures where Ihe privaIe developer is required
Io invesI and also operaIe and manage Ihe
services, Ihe Iime span o Ihe conIracI would
generally be longer. The conIracI duraIion is
largely guided by Ihe Iime iI would Iake Ihe
privaIe developer Io recover invesImenIs made
on Ihe projecI. lor insIance, a PPP projecI, which
requires Ihe privaIe developer Io underIake
invesImenIs in Ihe developmenI o a waIer
IreaImenI planI and bulk waIer pipelines
and also Io Iake care o Ihe operaIion and
managemenI o Ihe enIire sysIem rom source Io
disIribuIion end, would generally have a Ienure
o 25J0 years. Conversely, a PPP conIracI in
Ihe orm o a managemenI conIracI or a service
agreemenI would Iypically be o shorIer duraIion.
Award Criteria
The award criIeria and Iheir relaIive weighI
would need Io be speciied in advance o
bidding, since Ihis helps poIenIial bidders
undersIand Ihe selecIion mechanism and
reduces Ihe risk o allegaIions o corrupI
governmenI pracIices. The criIeria largely
deIermine Ihe allocaIion o beneiIs beIween
governmenI and consumer. lor insIance, one o
Ihe key award criIeria in a PPP agreemenI or a
perormancebased managemenI conIracI would
be Ihe highesI license ee sum agreed Io be
paid by Ihe privaIe developer Io Ihe UL8 or sIaIe
agency or Ihe righI Io operaIe and mainIain
Ihe waIer supply and saniIaIion services. ln
cases where a viabiliIy gap undingbased
granI is being explored Io make Ihe proposed
projecI commercially viable, Ihe award criIerion
would be Ihe lowesI viabiliIy gap unding granI
requesIed by Ihe privaIe developer.
Drafting the PPP Contract
The PPP conIracI puIs Ihe implemenIaIion
sIrucIure inIo a legal documenI IhaI can be
enorced. The conIracI agreemenI is Ihe mosI
59
SIep 4: ProcuremenI
imporIanI documenI in Ihe IransacIion as
iI regulaIes Ihe IransacIion during iIs enIire
Ienure. lI deines Ihe righIs and obligaIions
o Ihe conIracIing parIies and Ihe Ierms and
condiIions under which Ihe obligaIions would
be discharged. lI also regulaIes enorcemenI
o Ihe Ierms and condiIions and speciies Ihe
consequences o deaulI by a conIracIing parIy.
The PPP conIracI would need Io be draIed by
Ihe UL8 or sIaIe agency beore iI iniIiaIes Ihe
procuremenI process, as during Ihe procuremenI
process Ihe prospecIive bidders would need
Io be made aware o Ihe conIracI condiIions
subjecI Io which Ihey would be required Io bid.
A Iypical conIracI would have Ihe ollowing
componenIs:
(i) reciIals,
(ii) deiniIions and inIerpreIaIions,
(iii) righIs o Ihe parIies,
(iv) consideraIion o Ihe conIracI,
(v) commencemenI o operaIions,
(vi) obligaIions o Ihe parIies Io Ihe conIracI,
(vii) paymenI mechanism,
(viii) perormance managemenI,
(ix) deaulIs and consequences o deaulIs,
(x) sIepin and subsIiIuIion righIs,
(xi) dispuIe resoluIion, and
(xii) IerminaIion o Ihe conIracI.
Selection of the Procurement Strategy
lI is criIical IhaI Ihe procuremenI sIraIegy
chosen is IransparenI and suiIed Io Ihe Iype o
conIracI selecIed or Ihe PPP arrangemenI. The
Iwo procuremenI sIraIegies, which are broadly
ollowed, are
(i) 1he compeIiIive procuremehI sIraIegy.
CompeIiIive procuremenI sIraIegies are
Ihe mosI eicienI sIraIegy in case Ihe
conIracI size is large and iI is expecIed
IhaI Ihe number o prospecIive bidders
would be large. CompeIiIive sIraIegies
are seen as Ihe preerred procuremenI
sIraIegy when Ihe conIracIing parIy is
iniIiaIing Ihe procuremenI process Io
idenIiy Ihe privaIe parIner or a PPP
arrangemenI. The generic compeIiIive
sIraIegies include meIhods, such as
inIernaIional compeIiIive bidding,
naIional compeIiIive bidding, limiIed
compeIiIive bidding, and shopping
(inIernaIional or domesIic markeIs).
(ii) 1he VXRPRWR, or uhsoliciIed sIraIegy.
ln excepIional cases, Ihe conIracIing
parIy mighI noI ollow Ihe compeIiIive
bidding rouIe or procuremenI o Ihe
privaIe parIy. The alIernaIive procuremenI
sIraIegies are noI sIricIly compeIiIive,
Ihey may be compleIely VXRPRWR, as in
direcI conIracIing, or Ihey mighI have
induced compeIiIion. The dierenI orms
o Ihis sIraIegy include direcI conIracIing,
Swiss challenge, and margin preerence
procuremenI sIraIegies.
Depending on Ihe speciic need and onsiIe
siIuaIion, Ihe UL8 will selecI one o Ihese
procuremenI sIraIegies. The procuremenI
sIraIegy selecIed would have Io be approved
by Ihe relevanI auIhoriIy beore iI could be
implemenIed urIher.
Design of the Procurement Process
Several alIernaIive procuremenI processes can be
implemenIed, as shown in ligure !!.
The selecIion would be based on Ihe maIrix o
criIeria represenIed by Ihe ollowing schemaIic
(ligure !2).
60
Figure 11 AIIernaIive ProcuremenI Process 5IraIegies-ImpIemenIaIion
LOl ~ expression o inIeresI, PlP ~ requesI or proposal, PlQ ~ requesI or qualiicaIion.
S
i
h
g
l
e

s
I
a
g
e
Submissioh o! proposal
ShorI lisIihg
1echhical proposal
Fihal commercial o!!er
Submissioh o! proposal
OpIioh 1
(RFP)
OpIioh 2
(RFQ + RFP)
OpIioh 3
(EOl + RFQ
+ RFP)
ElimihaIioh
EOl
lssue o! EOl ReceipI o! EOl/
lssue RFQ
CohsorIium !ormaIioh
1echhical proposal
ProjecI scope
CohIracIs
ElimihaIioh
lssue o! RFP Submissioh o! proposal
ElimihaIioh
lssue o! RFQ
M
u
l
I
i
p
l
e

s
I
a
g
e
ReceipI o! RFQ/
lssue o! RFP
ShorI lisIihg
ProjecI scope
CohIracIs
ShorI lisIihg
ProjecI scope
CohIracIs
1echhical proposal
Figure 12 AIIernaIive ProcuremenI Process 5IraIegies-5eIecIion CriIeria
LOl ~ expression o inIeresI, PlP ~ requesI or proposal, PlQ ~ requesI or qualiicaIion.
ProjecI characIerisIics
ProjecI scope is uhambiguous
ExecuIioh opIiohs well de!ihed
ProjecI scope is ambiguous,
requires exIehsive discussioh
ProjecI scope is ambiguous,
requires iIeraIive discussioh
8idders characIerisIics
8idder uhiverse is well
ahd limiIed
8idder uhiverse is well
Number o! bidders is large ahd
heeds Io be limiIed
Cohsiderable e!!orI required by
bidders Io submiI proposals
Number o! bidders is large ahd
heeds Io be limiIed
8idder pro!ile heeds sharpehihg
Cohsiderable e!!orI required by
bidders Io submiI proposals
OpIioh 1
RFP
OpIioh 2
RFQ + RFP
OpIioh 3
EOl + RFQ + RFP
-de!ihed
de!ihed - -
61
SIep 4: ProcuremenI
Managing the Procurement Process
Various alIernaIive procuremenI processes may
be pursued. Depending upon Ihe requiremenIs
and characIerisIics o Ihe projecI, Ihe mosI
suiIable procuremenI process can be selecIed.
This secIion discusses Ihe process based on a
IwosIage requesI or qualiicaIionrequesI or
proposal (PlQPlP) approach, and provides
an overview o Ihe procuremenI process and
inormaIion on Ihe basic requiremenIs or each
sIage.
Undertake Pre-Bid Activities
Review and Update Project Information
One o Ihe basic requiremenIs here is IhaI Ihe
UL8 or sIaIe agency should organize and puI
IogeIher all Ihe projecIspeciic inormaIion
collecIed and deIailed in Ihe earlier phases. ln
doing so, Ihe ollowing should be reviewed and
analyzed:
(i) ProjecI de!ihiIioh, objecIive, ahd scope.
As an inIroducIion Io Ihe procuremenI
documenI, iI is suggesIed IhaI Ihe overall
projecI deiniIion, objecIive, and scope
are sIaIed clearly and precisely in Ierms o
business ouIcomes and expecIed ouIpuIs.
(ii) ProcuremehI plah. UpdaIed projecI
Iimelines, processes, and deliverables
based on Ihe laIesI available inormaIion
should be sIaIed.
(iii) NaIure o! projecI ahd sIrucIurihg. The
UL8 or sIaIe agency's views on projecI
sIrucIuring and unding should be sIaIed.
However, poIenIial bidders should also
be given Ihe opIion Io provide innovaIive
soluIions.
(iv) 1hird-parIy cohIracIs. The procuremenI
plan should provide deIails on Ihe Iiming
and signing o Ihe IhirdparIy conIracIs.
DraI conIracIs providing Ihe criIical
inormaIion need Io be prepared.
(v) PaymehI mechahism. DeIails o Ihe
paymenI mechanism, as idenIiied and
deined by Ihe UL8 or sIaIe agency, would
have Io be clearly sIaIed.
(vi) Risk maIrix. The risks idenIiied in Ihe
analysis sIage should be requenIly
reviewed, and Ihe laIesI updaIed version
would need Io be provided as parI o
Ihe procuremenI documenIaIion. lI is
imporIanI IhaI risks are clearly sIaIed so
IhaI Ihe bidders can consider Ihem while
preparing bid proposals.
Key Considerations in the Procurement
Process
Some o Ihe criIical areas IhaI need Io be
adequaIely deliberaIed upon by Ihe UL8 or sIaIe
agency during Ihe procuremenI sIage are as
ollows:
(i) 8iddihg Iime !rames. lI is necessary IhaI
an appropriaIe lengIh o Iime is provided
Io Ihe bidders or submission o Iheir
bids. Generally, Ihe Iime period required
or bidders Io prepare and submiI bids is
direcIly linked Io Ihe size o Ihe projecI
being bid and direcIly aecIs Ihe qualiIy
o Ihe bid. SuiIable Iime rames can be
deIermined by gauging Ihe percepIions
and opinions o Ihe bidders aI or during
Ihe PlQ sIage.
(ii) lh!ormaIioh relaIed Io ihsIiIuIiohal
asseIs. All inormaIion regarding Ihe
asseIs Io be used by Ihe privaIe developer
as parI o Ihe projecI would have Io be
provided, i.e., inormaIion on all Ihe
equipmenI used, such as pipelines, jack
wells, valves, waIer IreaImenI planIs, and
meIers.
(iii) Labor issues. ln case Ihe PPP projecI
requires modiicaIions Io exisIing labor or
sIa, Ihe bidders should be provided wiIh
suicienI inormaIion Io accounI or such
projecI cosIs and risks.
(iv) CompeIiIioh ahd regulaIory issues. All
Ihe requisiIe approvals or compliance
need Io be expliciIly sIaIed. Also, Ihe
compeIiIion laws should be examined and
appropriaIe procedural and/or approval
requiremenIs should be doveIailed inIo
Ihe PPP process.
(v) 8id cosIs. The cosIs o due diligence by
privaIe parIies may be signiicanI. Where
possible, and where bidders agree,
survey cosIs may be shared beIween
prequaliied bidders. The cosIs Io Ihe
deparImenI or UL8 o providing survey
62
inormaIion Io Ihe bidder could be
capiIalized inIo Ihe projecI cosI aI a laIer
sIage.
Prepare Request for Qualication
and Pre-Qualify Bidders
During Ihe PlQ sIage, Ihe inIenIion is IhaI only
Ihose bidders who are Iechnically and inancially
qualiied and Ihose possessing requisiIe skill seIs
or implemenIaIion o Ihe projecI submiI bids
or Ihe projecI and conIinue inIo Ihe remaining
sIages o Ihe PPP procuremenI process.
While prequaliicaIion should noI be
underIaken solely Io limiI Ihe number o bidders
Io a prespeciied or IargeIed number, iI is
advisable Io have aI leasI Ihree prequaliied
bidders Io ensure compeIiIive bidding and
achieve value or money Ihrough Ihe bidding
process. The sIages are as ollows:
(i) PreparaIioh o! Ihe RFQ documehI. The
PlQ documenI would need Io clearly
communicaIe Io Ihe privaIe bidders Ihe
requisiIe delivery speciicaIions o Ihe
projecI. All Ihe necessary inormaIion
regarding Ihe projecI should be provided
Io Ihe bidders. The documenI should
also clearly lay down Ihe PlQ evaluaIion
criIeria and any speciic requiremenIs o
Ihe insIiIuIion.
(ii) AdverIise ahd disIribuIe Ihe RFQ
documehI. Once Ihe PlQ documenI
has been inalized, iI would have Io be
disIribuIed. The UL8 or sIaIe agency
would be required Io adverIise Ihe PlQ
in Ihe orm o a public adverIisemenI
in aI leasI one newspaper o naIional
circulaIion and aI leasI one newspaper o
regional circulaIion. ln addiIion, any oIher
medium o communicaIion, such as an
oicial porIal o Ihe UL8 or sIaIe agency,
could be used or adverIising.
(iii) Receive queries ahd give clari!icaIiohs.
Generally, Ihe bidders would have some
clariicaIions and oIher prebid queries
on Ihe inormaIion provided. Once Ihese
queries are received by Ihe UL8 or sIaIe
agency, iI is mandaIory IhaI Ihey respond
Io Ihe clariicaIions soughI. Typically, Ihe
UL8 or sIaIe agency is required Io respond
Io all clariicaIions soughI 2 weeks prior
Io Ihe daIe o Ihe inal bid. l required,
Ihe insIiIuIion could also consider
organizing a prebid conerence aI which
Ihe issues raised by Ihe bidders could be
collaIed and addressed. However, Ihis
should be in addiIion Io providing wriIIen
communicaIion Io Ihe bidders.
(iv) EvaluaIioh o! respohses. The responses
received Io Ihe PlQ documenI should
be evaluaIed based on Ihe evaluaIion
criIeria speciied in Ihe PlQ documenI.
The evaluaIion criIeria should consider Ihe
Iechnical and inancial capabiliIy o Ihe
privaIe parIy, Iheir undersIanding o Ihe
projecI, and Iheir skill seIs Io deliver Ihe
commiIIed ouIpuIs wiIhin Ihe required
Iime rames.
(v) Publish lisI o! pre-quali!ied bidders.
lirms meeIing Ihe prequaliicaIion
criIeria and approval by Ihe appropriaIe
Iender board musI be so noIiied by Ihe
insIiIuIion and inviIed Io Iender. The
noIiicaIion musI indicaIe Ihe Ierms and
condiIions under which Iender documenIs
shall be obIained, as well as Ihe daIe,
hour, and place or laIesI delivery o
Ienders by Ihe Ienderer, and o Ihe Iender
opening.
ApplicanIs who are noI successul in Ihe
prequaliicaIion musI be inormed by Ihe
insIiIuIion wiIhin a week aIer receipI o all
Ihe required approvals Io Ihe prequaliicaIion.
Only bidders IhaI have been prequaliied are
enIiIled Io parIicipaIe urIher in Ihe procuremenI
proceedings.
Prepare Request for Proposal
AI Ihe PlP sIage, a preerred bidder is selecIed
based on an objecIive, comprehensive, and
IransparenI selecIion process. The PlP documenI
(including Ihe draI PPP agreemenI) is Ihe ormal
bid documenI issued by Ihe insIiIuIion. lIs issue
Io shorIlisIed parIies signals a commiImenI Io
deliver Ihe projecI, subjecI Io Ihe deined hurdles
being cleared. The PlP documenI should also
be sIrucIured in such a manner IhaI iI clearly
lays down Ihe inormaIional requiremenIs o Ihe
bidders. The orm and manner o submission
o inormaIion should be clear and concise Io
63
SIep 4: ProcuremenI
assisI Ihe evaluaIion commiIIee in selecIing Ihe
appropriaIe bidder. The ollowing should be
presenI in Ihe PlP documenI:
(i) a disclaimer,
(ii) an ouIline o Ihe conIenIs o Ihe PlP,
(iii) Ihe purpose o issuing Ihe PlP,
(iv) Ierms and condiIions o issuance o PlP
and bid ormaliIies,
(v) general lnormaIion Io bidders,
(vi) minimum essenIial requiremenIs,
(vii) service requiremenIs,
(viii) sIandard speciicaIion,
(ix) paymenI mechanism and penalIies,
(x) legal requiremenI and draI PPP
agreemenI,
(xi) commiImenIs required rom bidders, and
(xii) Ihe evaluaIion process.
PART II
Details of PublicPrivate
Partnership Structures
67
I Background
This secIion provides key inormaIion relaIing
Io Ihe ive publicprivaIe parInership (PPP)
sIrucIures ouIlined in SecIion Vll o Ihe irsI parI
o Ihis Iool kiI. The overall sIrucIure o each PPP,
Ihe obligaIions o Ihe parIies involved, and Ihe
naIure and Iype o risk allocaIions
!
beIween Ihe
public and privaIe enIiIies and oIher key eaIures
are presenIed. The ive PPP sIrucIures are
(i) Ihe perormance managemenI conIracI
or operaIion and mainIenance o waIer
supply sysIem,
!
The risk allocaIion, as menIioned in Ihis parI, is Io provide a perspecIive Io Ihe user o Ihe Iool kiI. DeIails o Ihe risk
allocaIion are in ParI lV o Ihe Iool kiI.
(ii) Ihe concession agreemenI or waIer
supply and sewerage services,
(iii) Ihe concession agreemenI or
consIrucIion, operaIion, and mainIenance
o bulk waIer supply sysIem,
(iv) Ihe concession agreemenI or
consIrucIion, operaIion, and managemenI
o Ihe disIribuIion sysIem, and
(v) Ihe concession agreemenI or
developmenI o Ihe bulk waIer supply
sysIem and operaIion and mainIenance o
Ihe enIire sysIem.
68
II Performance Management
Contract for Operation
and Maintenance of
Water Supply System
Under Ihis arrangemenI, Ihe privaIe developer
is required Io underIake Ihe operaIion and
mainIenance (O&M) o Ihe enIire waIer supply
sysIem rom source Io consumer, including
meIering, billing, and collecIing revenues. The
primary purpose o Ihe conIracI is Io bring
in operaIional eiciencies in Ihe enIire waIer
managemenI sysIem and Ihereby reduce
associaIed O&M cosIs.
About the PPP Structure
ln Ihis agreemenI, Ihe privaIe developer would
be required Io Iake over Ihe operaIion and
managemenI o Ihe exisIing asseIs o Ihe waIer
supply scheme, comprising oIake wells wiIh
all pumping sIaIions, elecIrical insIallaIions,
waIer IreaImenI planIs (WTPs), waIer sIorage
reservoirs, Iransmission pipelines, and Ihe
disIribuIion sysIem up Io Ihe consumer end. The
operaIion and managemenI o Ihe waIer supply
services would maIch Ihe perormance sIandards
speciied by Ihe urban local body (UL8) in Ihe
agreemenI wiIh Ihe privaIe developer. The
perormance sIandards have primarily Iwo
componenIs: coverage and qualiIy. Coverage
sIandards will include Ihe number o households
wiIh direcI connecIions. QualiIy sIandards will
include availabiliIy o service, pressure, waIer
qualiIy, eluenI IreaImenI, and cusIomer service.
The sIandards would include speciicaIions, such
as Ihe number o meIers Io be insIalled wiIhin
a speciic Iime period and operaIional eiciency
levels Io be mainIained.
Under Ihis publicprivaIe parIicipaIion (PPP)
sIrucIure, Ihe privaIe developer is given Ihe
righIs Io levy Ihe user charges seI by Ihe UL8,
collecI Ihe charges, and reIain Ihe revenue or
Ihe period o Ihe conIracI. The responsibiliIy o
Ihe privaIe developer also includes Ihe purchase
o bulk waIer rom Ihe DeparImenI o WaIer
Pesources or lrrigaIion, Iransmission Io Ihe
WTP, and Ihe supply o IreaIed waIer Io Ihe
end consumers. ln addiIion Io providing waIer
Io exisIing consumers, Ihe privaIe developer
would be required Io provide Ihese services Io
all new connecIions, insIall bulk meIers aI all
source and consumer poinIs, generaIe bills,
and collecI user charges rom Ihe consumers.
The periodic repair and relaIed mainIenance o
Ihese asseIs would have Io be underIaken by
All Ihe operaIional expenses would have Io
be borne by Ihe privaIe developer, including
paymenI Io Ihe DeparImenI o WaIer Pesources
or lrrigaIion or purchase o raw bulk waIer,
and paymenI Io Ihe SIaIe LlecIriciIy 8oard or
uniIs consumed. Since Ihe privaIe developer
is given Ihe righI Io Iake over Ihe enIire waIer
supply services and operaIe and manage iI or
a ixed Iime period, a license ee is required Io
be paid by Ihe privaIe developer Io Ihe UL8
in reIurn. This ee may be paid aI muIually
agreed inIervals (e.g., monIhly, bimonIhly,
or annually). The composiIion o revenue
accruing Io Ihe privaIe developer includes
waIer charges collecIed rom users, ees rom
new connecIions, penalIy charges and, as Ihe
case may be, rom Ihe sale o surplus waIer.
Perormance ManagemenI ConIracI or OperaIion and MainIenance o WaIer Supply SysIem
69
The highesI ixed ee quoIed by Ihe privaIe
developer Io be paid Io Ihe UL8 would be Ihe
key inancial bid criIerion.
Typically, Ihe Ienure o such a conIracI ranges
beIween J years and 5 years and is dependenI
on Ihe inancial easibiliIy o Ihe proposed
projecI. ligure !J presenIs a holisIic view o
Ihe enIire IransacIion under a perormance
managemenI conIracI or O&M. The key roles
and responsibiliIies o Ihe sIakeholders are
given in Table !2.
1abIe 12 Key oIes and esponsibiIiIies o! Ihe PrivaIe DeveIoper
and Ihe Urban LocaI ody
ParIicuIars PrivaIe DeveIoper Urban LocaI ody
Primary Iask OperaIes and manages Ihe waIer supply
sysIem rom source Io consumer
SeIs perormance sIandards
Provides new waIer service connecIions Handover o waIer asseIs Io Ihe privaIe
developer Io operaIe and manage
lnsIalls bulk and consumer meIers,
generaIes bills, collecIs revenues
CoordinaIes and oversees works o Ihe
privaIe developer
Tari Levies Iari, generaIes bills as per Iari,
collecIs and reIains revenue
SeIs Ihe Iari, deIermines Ihe revision raIe
and period
OperaIing expense lnsIalls meIers Oversees Ihe operaIion and mainIenance
(O&M) expenses
8ears expense on repairs Io asseIs
Pays or raw waIer purchase and elecIriciIy
consumpIion
Figure 13 Per!ormance ManagemenI ConIracI !or OperaIion
and MainIenance o! WaIer 5uppIy 5ervices
Fixes Iari!!
Household
Fixed paymenIs
Sources
bulk waIer
8uilds 8uilds 8uilds
Muhicipal
agehcy
OperaIes OperaIes OperaIes
DisIribuIes
CollecIs
revehue
!rom households
PrivaIe
developer
1reaIs
FRQWLQXHGRQQH[WSDJH
70
A deIailed lisI o Ihe obligaIions and responsibiliIies
o Ihe sIakeholders is presenIed in ParI lV o Ihis
Iool kiI.
8eore such a conIracI comes inIo eecI, Ihe
privaIe developer and Ihe UL8 need Io underIake
cerIain preparaIory acIiviIies. To seI reasonable
perormance IargeIs or Ihe privaIe developer,
Ihe UL8 would need Io
(i) carry ouI consumer surveys and waIer
and energy audiIs Io accuraIely ascerIain
Ihe exisIing sIaIus o Ihe waIer asseIs and
supply services,
(ii) aciliIaIe Ihe Iakeover o asseIs by Ihe
privaIe developer or Ihe period o Ihe
conIracI by enIering inIo necessary
agreemenIs and/or negoIiaIions o waIer
purchase wiIh Ihe lrrigaIion DeparImenI
and elecIriciIy purchase wiIh Ihe SIaIe
LlecIriciIy 8oard,
(iii) provide Ihe righIs and permiIs Io Ihe privaIe
developer Io be able Io Iake over Ihe asseIs
and discharge Ihe Iasks as required,
(iv) provide land lease righIs Io Ihe privaIe
developer or operaIing Ihe waIer supply
sysIems, eIc., and
(v) make available Io Ihe privaIe developer
all deIails on Ihe currenI connecIions,
neIwork maps, applicable acIs and
bylaws, waIer demand projecIions, waIer
qualiIy levels, eIc.
The key risks, which need Io be borne by Ihe
privaIe developer and Ihe UL8, are shown in
Table !J.
FRQWLQXHGRQQH[WSDJH
OperaIing expense Labor charges, chemical charges
Any oIher O&M expense
CapiIal expense No capiIal expense borne All capiIal augmenIaIion works Io be
underIakensource, waIer IreaImenI
planI, neIwork augmenIaIion, eIc.
AsseI ownership Transers asseIs and operaIional righIs Io
Ihe urban local body aI Ihe end o Ihe
conIracI
PeIains ownership Io all waIer asseIs,
including Ihe meIers insIalled
Table !2 FRQWLQXHG
1abIe 13 Key isks, oIes, and esponsibiIiIies o! Ihe PrivaIe DeveIoper
5I No. isks
PrivaIe
DeveIoper
Urban LocaI
ody CommenI
! CommencemenI risk
9
The urban local body (UL8) will be responsible
or Iranserring exisIing asseIs Io Ihe privaIe
developer.
2 OperaIions risk 9 The operaIion and mainIenance (O&M) o Ihe
enIire waIer supply sysIem shall be done by
Ihe privaIe enIiIy. All cosIs or Ihe same shall
be incurred by such privaIe enIiIy.
J linancial risk 9 All cosIs or O&M o Ihe enIire waIer
supply sysIem and meeIing o perormance
benchmarks shall be meI by Ihe privaIe enIiIy.
The inances or such operaIions shall have Io
be arranged by Ihe privaIe enIiIy.
Perormance ManagemenI ConIracI or OperaIion and MainIenance o WaIer Supply SysIem
71
Table !J FRQWLQXHG
5I No. isks
PrivaIe
DeveIoper
Urban LocaI
ody CommenI
4 PaymenI risk 9 The risk o collecIing revenues rom Ihe
ciIizens may also reside wiIh Ihe privaIe
enIiIy. This shall be projecIspeciic and
decided by Ihe UL8.
5 Perormance risk 9 The risk IhaI Ihe waIer supply sysIem
perorms such IhaI Ihe perormance criIeria
are meI shall reside wiIh Ihe privaIe enIiIy.
6 Change in law risk 9 9 Any addiIional cosI incurred by any parIy due
Io change in law shall have Io be borne by
Ihe respecIive parIy.
7 lorce majeure risk 9 9 Any addiIional cosI incurred by any parIy due
Io orce majeure shall have Io be borne by
Applicability of the PPP Structure
This kind o PPP sIrucIure is applicable where
(i) Ihe currenI operaIional eiciencies o
Ihe waIer supply sysIem are poor, e.g.,
Ihe sysIem has nonrevenue waIer losses
(above 25%J0%) due Io a high number
o illegal connecIions, poor collecIion
eiciencies, low per uniI cosI recoveries,
and/or lack o meIering, and
(ii) Ihe UL8 has underIaken major capiIal
improvemenI works beore handing
over Ihe sysIem Io Ihe privaIe developer
or improvisaIion o operaIional
eiciencies, and no signiicanI capiIal
expense needs Io be made by Ihe
privaIe developer.
Sl ~ serial.
72
III Concession Agreement
for Water Supply and
Sewerage Services
AIer consIrucIion o Ihe sysIems, O&M o Ihe
waIer supply and sewerage sysIems would
have Io be managed by Ihe privaIe developer,
including Ihe generaIion o bills and collecIion
o user charges rom consumers. ln addiIion, all
operaIional expenses or managing Ihe waIer
supply and sewerage services, such as elecIriciIy
charges, bulk waIer charges, esIablishmenI
expenses, and repair and mainIenance, would
have Io be borne by Ihe privaIe developer.
ln Ihe concession agreemenI, Ihe urban local
body (UL8) would speciy Ihe augmenIaIion
works and design speciicaIions or Ihe
consIrucIion acIiviIy Io be underIaken and
Ihe Iime schedule or compleIion o works,
and would provide inormaIion relaIing Io Ihe
exisIing level o waIer supply and sewerage
operaIions. The privaIe developer would be
required Io purchase bulk waIer, IreaI Ihe
raw waIer, and supply IreaIed waIer Io all
Ihe speciied connecIions. ln addiIion, i Ihe
sewerage inrasIrucIure is also Io be managed
by Ihe privaIe developer, Ihe sewage rom
all connecIions would have Io be carried Io
Ihe sewage IreaImenI planI and Ihe IreaIed
wasIewaIer disposed o. The privaIe developer
would recover Ihe invesImenIs made by
collecIing and reIaining user charges rom
consumers. Any change Io Ihe Iari, Ihe raIe
o escalaIions, eIc., would be deIermined by
Ihe UL8. Typically, Ihe Ienure o such a conIracI
ranges beIween !5 years and J0 years and is
dependenI on Ihe inancial easibiliIy o Ihe
proposed projecI.
A concession agreemenI or waIer supply and or
sewerage servicing is a buildoperaIeIranser
Iype o publicprivaIe parInership (PPP) sIrucIure.
ln Ihis concession agreemenI, Ihe privaIe
developer would be required Io design, inance,
consIrucI, operaIe, and manage Ihe waIer
supply and sewerage services or Ihe concession
period.
2
Under Ihis PPP sIrucIure, Ihe privaIe
developer would underIake Ihe consIrucIion o
inrasIrucIure or waIer supply and sewerage
services, and operaIe and manage boIh Ihe
sysIems during Ihe concession period. The
capiIal invesImenI required or underIaking
Ihe augmenIaIion works would be meI wholly
or parIly by Ihe privaIe developer. The privaIe
consIrucIion and/or augmenIaIion works or
some or all o Ihe ollowing works or Ihe waIer
supply and sewerage secIor and underIake
operaIion and mainIenance (O&M):
(i) waIer supply Iransmission pipelines (raw
and/or pure waIer),
(ii) waIer IreaImenI planI,
(iii) underground and/or elevaIed sIorage
reservoirs,
(iv) laying o disIribuIion neIwork pipelines,
(v) sewage IreaImenI planI, and
(vi) drainage pipelines.
2
This may also include Ihe Iakeover, operaIion, and mainIenance o Ihe exisIing waIer asseIs. However, Ihis shall be projecI
speciic and a decision o Ihe urban local body.
Concession AgreemenI or WaIer Supply and Sewerage Services
73
ligure !4 presenIs a holisIic view o Ihe enIire
IransacIion under a concession agreemenI or
waIer supply and sewerage. The key roles and
responsibiliIies o Ihe sIakeholders are given in
Table !4.
Primary Iask Designs, plans, consIrucIs waIer disIribuIion
and sewerage inrasIrucIure
Provides permiIs, righIs o operaIion
OperaIes and manages Ihe waIer supply and
sewerage inrasIrucIure
laciliIaIes negoIiaIions or bulk waIer
and elecIriciIy purchase
Levies user charge, generaIes bills, collecIs
and reIains revenues
Oversees consIrucIion, and operaIion
and mainIenance (O&M) acIiviIy
Tari Levies Iari seI by Ihe urban local body DeIermines Ihe Iari level, schedule or
changes, escalaIion acIor, eIc.
OperaIing expense Pays or raw waIer purchase and elecIriciIy
consumpIion
Oversees Ihe O&M expenses
8ears expense on repairs Io asseIs
lnsIalls meIers
Labor charges, chemical charges
CapiIal expense 8ears capiIal expendiIure or works idenIiied,
escalaIion in cosIs o raw maIerial inpuIs
AsseI ownership PeIains ownership during concession period and
hands over asseIs aI Ihe end o conIracI Ierm
Takes over asseIs aI Ihe end o Ihe
concession period
A deIailed lisI o obligaIions, responsibiliIies
o Ihe sIakeholders is presenIed in ParI lV o
Ihis Iool kiI.
Figure 14 5IrucIure o! Concession AgreemenI !or WaIer
5uppIy and 5ewerage 5ervices
Fixes Iari!!
Household
Fixed annuaI paymenIs
Sources
bulk waIer
8uilds ahd/or
augmehI
8uilds ahd/or
augmehI
8uilds ahd/or
augmehI
8uilds ahd/or
augmehI
8uilds ahd/or
augmehI
8uilds ahd/or
augmehI
Muhicipal
agehcy
OperaIes OperaIes OperaIes OperaIes OperaIes OperaIes
DisIribuIes Sewer lihes 1reaIs Disposal
U
s
e
r

c
h
a
r
g
e
s
PrivaIe
developer
1reaIs
74
lor such an agreemenI Io come inIo eecI,
Ihe privaIe developer and Ihe UL8 need Io
underIake preparaIory acIiviIies. ln order Io seI
reasonable perormance IargeIs or Ihe privaIe
developer, Ihe UL8 would need Io accomplish
Ihe ollowing:
(i) Carry ouI consumer surveys, and waIer
and energy audiIs Io accuraIely ascerIain
Ihe exisIing sIaIus o Ihe waIer asseIs and
sewage asseIs and waIer supply services.
(ii) Provide Ihe design speciicaIions or
Ihe asseIs Io be augmenIed and/or
consIrucIed, procuremenI process, raw
maIerial uIilizaIion, eIc.
(iii) Provide land lease righIs Io Ihe privaIe
developer Io underIake consIrucIion.
The Ierms o lease would have Io be
clearly sIaIed as a parI o Ihe concession
agreemenI.
(iv) laciliIaIe Ihe Iakeover o asseIs by Ihe
LlecIriciIy 8oard.
(v) Provide Ihe righIs and permiIs Io Ihe
privaIe developer Io enable iI Io Iake
over Ihe asseIs and discharge Ihe Iasks as
required.
(vi) Make available Io Ihe privaIe developer
all deIails on Ihe currenI connecIions,
neIwork maps, Ihe applicable acIs and
bylaws, waIer demand projecIions, waIer
qualiIy levels, eIc.
The composiIion o revenue accruing Io Ihe
privaIe developer includes waIer charges
collecIed rom users, ees rom new connecIions,
penalIy charges and, as Ihe case may be, sale o
surplus waIer.
privaIe developer and Ihe UL8, are sIaIed in
Table !5.
5I No. isks
PrivaIe
DeveIoper
Urban
LocaI
ody CommenI
! CommencemenI risk
9
The urban local body (UL8) will be responsible
or Iranserring Ihe exisIing asseIs Io Ihe privaIe
developer.
2 ConsIrucIion risk
9
The consIrucIion, and operaIion and mainIenance
(O&M) o Ihe waIer supply and sewerage asseIs
shall be done by Ihe privaIe enIiIy. All cosIs or Ihe
same shall be incurred by such privaIe enIiIy.
J Design risk
9 9
The design risk shall be shared by Ihe UL8 and
Ihe privaIe enIiIy. The speciicaIions o Ihe asseIs
shall be menIioned by Ihe UL8 in Ihe requesI or
proposal documenI. The design shall be proposed
by Ihe developer in line wiIh such speciicaIions.
4 OperaIions risk 9 The O&M o Ihe enIire waIer supply and sewerage
sysIem shall be done by Ihe privaIe enIiIy. All cosIs
or Ihe same shall be incurred by such privaIe
enIiIy.
5 linancial risk 9 All cosIs or Ihe O&M o Ihe enIire waIer supply
sysIem and meeIing Ihe perormance benchmarks
shall be meI by Ihe privaIe enIiIy. The inances or
such operaIions shall have Io be arranged by Ihe
privaIe enIiIy.
FRQWLQXHGRQQH[WSDJH
Concession AgreemenI or WaIer Supply and Sewerage Services
75
5I No. isks
PrivaIe
DeveIoper
Urban
LocaI
ody CommenI
6 PaymenI risk 9 The risk o collecIing revenues rom Ihe ciIizens
may also reside wiIh Ihe privaIe enIiIy. This shall
be projecIspeciic and decided by Ihe UL8. ln
addiIion Io Ihis, all paymenIs Io conIracIors,
suppliers, eIc., shall have Io be borne by Ihe
privaIe enIiIy.
7 Perormance risk 9 The risk IhaI Ihe waIer supply sysIem perorms
such IhaI Ihe perormance criIeria are meI shall
reside wiIh Ihe privaIe enIiIy.
Io change in law shall have Io be borne by Ihe
respecIive parIy.
Io orce majeure shall have Io be borne by Ihe
respecIive parIy.
Sl ~ serial.
Table !5 FRQWLQXHG
This PPP sIrucIure is applicable i
(i) Ihe PPP sIrucIure is suiIable or
greenield projecIs requiring large capiIal
invesImenIs or inrasIrucIure creaIion
(Ihis is ideal in a scenario where no
inrasIrucIure aciliIy is available and
where a large number o rehabiliIaIion
and replacemenI o Ihe exisIing
inrasIrucIure services would have Io be
carried ouI),
(ii) Ihe UL8 does noI have Ihe inancial
capaciIy Io underIake Ihe required capiIal
invesImenIs and has poor operaIional
eiciencies, and/or
(iii) Ihe per uniI operaIion cosI o Ihe uIiliIy
would be higher wiIhouI PPP and Ihe
cosIs could be reduced.
76
IV Concession Agreement
for Construction, Operation,
and Maintenance of Bulk
Water Supply System
o bulk waIer, paymenI o elecIriciIy charges,
purchase o chemicals or raw waIer IreaImenI,
and esIablishmenI expenses including labor
charges, are Ihe responsibiliIy o Ihe privaIe
developer.
The UL8 would speciy Ihe quanIiIy o IreaIed
waIer IhaI would have Io be made available by
Ihe privaIe developer aI all Iimes. The privaIe
developer is paid a waIer charge by Ihe UL8
or Ihe IreaIed waIer produced. The unique
eaIure o Ihis conIracI is IhaI Ihe uIiliIy assures
a ixed paymenI or all Ihe acIiviIies required
Io be underIaken by Ihe privaIe enIiIy. This
arrangemenI is also reerred Io as a Iake or
pay sysIem. ligure !5 presenIs a holisIic view
o Ihe enIire IransacIion under a bulk supply
cumoperaIion and mainIenance (O&M)
conIracI. The key responsibiliIies o Ihe privaIe
developer and UL8 are lisIed in Table !6.
A deIailed lisI o obligaIions and responsibiliIies
o Ihe sIakeholders is presenIed in ParI lV o Ihis
Iool kiI.
The preparaIory acIiviIies, which Ihe UL8
and Ihe privaIe developer need Io underIake,
largely perIain Io Ihe esIimaIion o Ihe
quanIiIy o IreaIed bulk waIer IhaI needs Io
be made available. Thereore, accuraIe waIer
demand projecIions need Io be made. The
privaIe developer would need Io conducI
Ihe necessary IesIs Io ascerIain Ihe raw
waIer qualiIy sIandards and deIermine Ihe
appropriaIe waIer IreaImenI Iechnology. The
The concession agreemenI or Ihe consIrucIion,
operaIion, and mainIenance o Ihe bulk
waIer supply sysIem is a Iypical publicprivaIe
parInership (PPP) sIrucIure under Ihe design
buildownoperaIeIranser model.
According Io Ihis concession agreemenI, Ihe
privaIe developer is required Io underIake Ihe
design, consIrucIion, inance, operaIion, and
managemenI o waIer supply services rom Ihe
raw waIer source Io Ihe disIribuIion poinI. The
augmenIaIion acIiviIy includes consIrucIion o
Ihe raw waIer oIake machinery, insIallaIion o
elecIrical subsIaIions and raw waIer Iransmission
lines, and Ihe consIrucIion o waIer IreaImenI
planIs (WTPs), pure waIer Iransmission lines up
Io Ihe poinI o Ihe sIorage reservoir, and sIorage
Ianks. The capiIal invesImenI required or Ihe
augmenIaIion works needs Io be borne by
Ihe privaIe developer. The privaIe developer is,
Ihereore, required Io consIrucI Ihe bulk supply
inrasIrucIure or Ihe provision o IreaIed waIer
up Io Ihe poinI o Ihe sIorage reservoir. lrom Ihe
poinI o Ihe sIorage reservoir Io Ihe disIribuIion
neIwork up Io Ihe consumer, Ihe waIer supply
responsibiliIy resIs wiIh Ihe urban local body (UL8).
The operaIion and managemenI o Ihese asseIs
during Ihe concession period resIs wiIh Ihe
privaIe developer. Thereore, all associaIed
operaIing expenses, including Ihe purchase
Concession AgreemenI or ConsIrucIion, OperaIion, and MainIenance o 8ulk WaIer Supply SysIem
77
Primary Iask Provides IreaIed waIer supply SeIs IreaIed waIer level requiremenIs,
speciies waIer qualiIy levels
Designs, plans, consIrucIs raw waIer oIake
inrasIrucIure, raw waIer Iransmission
pipelines, and waIer IreaImenI planIs
Deines Ihe Iechnical speciicaIions or Ihe
inrasIrucIure Io be creaIed
OperaIes and manages Ihe waIer supply
inrasIrucIure, including waIer IreaImenI
planIs
Provides permiIs, righIs o operaIion
Oversees consIrucIion, and operaIion and
mainIenance (O&M)
Tari SeIs Ihe Iari or IreaIed waIer supplied
OperaIing
expense
Pays or raw waIer purchase and elecIriciIy
consumpIion
Oversees O&M expenses
8ears expense on repairs Io asseIs laciliIaIes negoIiaIions or bulk waIer and
elecIriciIy purchase
Labor charges, chemical charges
CapiIal expense 8ears capiIal expendiIure or works
idenIiied, escalaIion in cosIs o raw
maIerial inpuIs
AsseI ownership PeIains ownership during concession period
and hands over asseIs aI Ihe end o conIracI
Ierm
Takes over asseIs aI Ihe end o Ihe
concession period
Figure 15 Concession AgreemenI !or ConsIrucIion, OperaIion,
and MainIenance o! uIk WaIer 5uppIy 5ysIem
FixesIheperuniIIreaIedwaIerIari!!
MakespaymenIIoIheprivaIedeveIoper
Sources
bulkwaIer
8uildsih!rasIrucIure 8uilds 8uilds
Muhicipal
agehcy
DisIribuIes
PrivaIe
developer
1reaIs
78
UL8 in such an agreemenI would need Io
underIake Ihe ollowing:
(i) Provide land lease righIs Io Ihe privaIe
developer Io underIake consIrucIion
acIiviIy. The Ierms o lease would have
Io be clearly sIaIed as a parI o Ihe
concession agreemenI.
(ii) DeIail design speciicaIions, procuremenI
process, raw maIerial uIilizaIion, eIc.
(iii) laciliIaIe Ihe Iakeover o asseIs by Ihe
5I No. isks
PrivaIe
DeveIoper
Urban
LocaI ody CommenI
! CommencemenI
risk
9 The urban local body (UL8) will be responsible or Ihe
Iranser o exisIing asseIs Io Ihe privaIe developer.
2 ConsIrucIion
risk
9 The consIrucIion, and operaIion and mainIenance
(O&M) o Ihe waIer supply and sewerage asseIs shall
be done by Ihe privaIe enIiIy. All cosIs or Ihe same
shall be incurred by Ihe privaIe enIiIy.
J Design risk 9 9 The design risk shall be shared by Ihe UL8 and Ihe
privaIe enIiIy. The speciicaIions o Ihe asseIs shall
be menIioned by Ihe UL8 in Ihe requesI or proposal
documenI. The design shall be proposed by Ihe
developer in line wiIh such speciicaIions.
4 OperaIions risk 9 9 The O&M o Ihe enIire waIer supply sysIem shall be
done by Ihe privaIe enIiIy. All cosIs or Ihe same shall
be incurred by such privaIe enIiIy.
5 linancial risk 9 All cosIs or Ihe consIrucIion and O&M o Ihe bulk
waIer supply sysIem shall be meI by Ihe privaIe enIiIy.
The inances or such consIrucIion and operaIions
shall have Io be arranged by Ihe privaIe enIiIy.
6 PaymenI risk 9 The risk o collecIing revenues rom Ihe ciIizens may
also reside wiIh Ihe privaIe enIiIy. This shall be projecI
speciic and decided by Ihe UL8. ln addiIion, all
paymenIs Io conIracIors, suppliers, eIc., shall have Io
be borne by Ihe privaIe enIiIy.
7 Perormance risk 9 The risk IhaI Ihe waIer supply sysIem perorms such
IhaI Ihe perormance criIeria are meI shall reside wiIh
Ihe privaIe enIiIy. Any addiIional cosI incurred by any
parIy due Io change in law shall have Io be borne by
8 Change in law
risk
9 9 Any addiIional cosI incurred by any parIy due
respecIive parIy.
9 lorce majeure
risk
9 9 Any addiIional cosI incurred by any parIy due
respecIive parIy.
Sl ~ serial.
LlecIriciIy 8oard. Also, all Ihe righIs and
permiIs given Io Ihe privaIe developer
need Io be sIaIed clearly.
The key risks, which need Io be borne by Ihe privaIe
developer and Ihe UL8, are sIaIed in Table !7.
Concession AgreemenI or ConsIrucIion, OperaIion, and MainIenance o 8ulk WaIer Supply SysIem
79
(i) Ihe exisIing bulk supply sysIem is
inadequaIe and needs augmenIaIion and
rehabiliIaIion,
(ii) Ihe exIenI o raw waIer Iransmission
and IreaImenI losses is high, requiring
inrasIrucIure replacemenI and improved
operaIions and managemenI, and
(iii) Ihe UL8 does noI have Ihe inancial
capaciIy Io underIake Ihe required capiIal
invesImenIs.
80
V Concession Agreement for
Construction, Operation,
and Management of the
Distribution System
(ii) moniIoring o pressurized and conIinuous
supply o waIer,
(iii) leakage reducIion,
(iv) all meIering or consumer connecIions,
(v) managemenI o waIer qualiIy aI various
disIribuIion poinIs, and
(vi) developmenI o a sysIem or billing and
moniIoring o Ihe same.
ln such a conIracI Ihereore, depending upon
Ihe inancial easibiliIy o Ihe projecI, Ihe
responsibiliIy o Ihe purchase o raw waIer and
iIs supply Io Ihe waIer IreaImenI planI would
resI eiIher wiIh Ihe privaIe developer or wiIh Ihe
UL8. However, any major expansion IhaI may
be required Io Ihe exisIing inrasIrucIure would
have Io be borne by Ihe UL8.
The purpose o involving a privaIe developer aI
Ihe disIribuIion end is Io bring in operaIional
eiciencies IhaI Ihe exisIing sysIem lacks. Such a
conIracI can be implemenIed or a single UL8 or
or a clusIer o UL8s, which may have a common
raw waIer source and ace similar issues o
operaIional ineiciencies aI Ihe disIribuIion end.
A nodal agency would be involved in overseeing
Ihe waIer supply services Io Ihe clusIer.
A seI o perormance IargeIs or Ihe O&M
acIiviIy would be seI by Ihe sIaIe nodal agency
or by Ihe UL8s in Ihe clusIer. An operaIor ee
is paid by Ihe UL8s or Ihe sIaIe nodal agency
or Ihe O&M acIiviIy underIaken by Ihe privaIe
developer or Ihe period o Ihe conIracI based
on Ihe achievemenI o perormance sIandards.
The concession agreemenI or Ihe consIrucIion,
operaIion, and managemenI o Ihe waIer
disIribuIion sysIem is a publicprivaIe
parInership (PPP) sIrucIure along Ihe lines o a
buildoperaIeIranser module.
ln Ihis orm o concession agreemenI, Ihe design
and inance o Ihe idenIiied augmenIaIion works
would be underIaken Ihrough a !00% capiIal
granI rom Ihe governmenI. The privaIe developer
is required Io irsI underIake Ihe consIrucIion
and/or rehabiliIaIion works or Ihe idenIiied
secIion o Ihe waIer sysIem, and urIher Io Ihe
consIrucIion acIiviIy, underIake Ihe operaIion and
mainIenance (O&M) o Ihe enIire waIer supply
sysIem. The privaIe developer would geI ull
capiIal reimbursemenI rom Ihe urban local body
(UL8) or any oIher governmenI agency or Ihe
rehabiliIaIion works underIaken.
Once consIrucIion is compleIe, Ihe privaIe
developer alone is responsible or Ihe O&M
o Ihe enIire waIer supply sysIem, including
Ihe supply o IreaIed waIer Io all connecIions,
insIallaIion o meIers, generaIion o bills, and
collecIion o revenues. The privaIe developer is,
Ihereore, responsible or
(i) creaIion o idenIiied asseIs in Ihe waIer
supply sysIem and operaIe and mainIain
Ihe enIire sysIem,
Concession AgreemenI or ConsIrucIion, OperaIion, and ManagemenI o Ihe DisIribuIion SysIem
81
1abIe 18 oIes and esponsibiIiIies o! Ihe Di!!erenI InsIiIuIions
ParIicuIars PrivaIe DeveIoper 5IaIe or NodaI Agency Urban LocaI ody
Primary Iask Designs, plans, consIrucIs
disIribuIion pipelines
SeIs perormance sIandards Supply o IreaIed bulk waIer
or disIribuIion
OperaIes and mainIains Ihe
disIribuIion neIwork
OperaIes and manages Ihe
waIer supply sysIem up Io
Ihe disIribuIion poinI
Provides new waIer supply
connecIions
Deines Ihe Iechnical
speciicaIions or Ihe
rehabiliIaIion works
lnsIalls meIers, generaIes
bills, collecIs revenues
Oversees Ihe operaIion and
managemenI (O&M) works
o Ihe disIribuIion neIwork
Handover o disIribuIion
sysIem or operaIion and
mainIenance by Ihe privaIe
developer
Tari CollecIs revenues as per Iari
seI, hands over Ihe collecIions
Io urban local body
SeIs Iari Io be seI,
escalaIion acIor
Figure 16 Concession AgreemenI !or ConsIrucIion, OperaIion,
and MainIenance o! Ihe DisIribuIion 5ysIem
5eIsIari!!
CapiIaIcosIsreimbursed!romIhesIaIeagency
MakespaymenIIoprivaIedeveIoper
Sources
bulkwaIer
Muhicipal
agehcy
DisIribuIes
PrivaIe
developer
CollecIs
revehue
!rom
households
1reaIs
FRQWLQXHGRQQH[WSDJH
82
IransacIion under Ihe augmenIaIioncum
disIribuIion neIwork expansion conIracI. The key
roles and responsibiliIies are lisIed in Table !8.
Under such a PPP agreemenI, Ihe sIaIe agency
and Ihe UL8 need Io deIermine i Ihe privaIe
developer's services need Io be exIended Io Ihe
enIire ciIy or wheIher Ihey should be ocused
iniIially on a ew demonsIraIion zones and
Ihen exIended Io Ihe remaining zones based
on perormance resulIs. A perormancebased
Iimeline can be seI Io analyze Ihe ouIcome o
Ihe conIracI or Ihe demonsIraIion zones.
8eore Ihe conIracI is implemenIed, Ihe UL8
or UL8 clusIer (as Ihe case may be) needs Io
underIake Ihe ollowing sIeps:
(i) UnderIake an assessmenI Io ascerIain Ihe
exIenI o rehabiliIaIion works IhaI needs Io
be consIrucIed by Ihe privaIe developer.
(ii) DeIail Ihe design speciicaIions,
procuremenI process, raw maIerial
uIilizaIion, eIc., however, all Ihe
procuremenI acIiviIy will have Io be
managed by Ihe privaIe developer.
(iii) UnderIake a waIer audiI Io ascerIain Ihe
exIenI o losses aI Ihe disIribuIion end.
(iv) DeIermine Ihe Iari Io be charged and
prepare an acIion plan or Ihe IransiIion
period rom laI raIe Io volumeIric Iari.
(v) Provide Ihe privaIe developer wiIh accuraIe
inormaIion on Ihe poinIs o bulk waIer
supply, Ihe sIaIus on exisIing connecIions
and properIies, Ihe number and Iype o
connecIions Io be served, Ihe number and
Iype o meIers Io be insIalled, eIc.
(vi) Provide land lease righIs Io Ihe privaIe
developer Io underIake consIrucIion acIiviIy.
(vii) laciliIaIe Ihe Iakeover o asseIs by Ihe
conIracI by enIering inIo Ihe necessary
agreemenIs and/or negoIiaIions o
elecIriciIy purchase wiIh Ihe SIaIe LlecIriciIy
8oard. The UL8 will have Io provide iIs own
employees or a limiIed period o Iime Io
assisI Ihe privaIe developer.
ParIicuIars PrivaIe DeveIoper 5IaIe or NodaI Agency Urban LocaI ody
OperaIing
expense
Pays or elecIriciIy
consumpIion or disIribuIion
o IreaIed waIer
OperaIing expenses unIil
disIribuIion poinI, including
bulk waIer purchase,
operaIion o waIer IreaImenI
planI, Iransmission, eIc.
OperaIing
expense
8ears expenses on insIallaIion
o meIers, O&M o meIers
8ears escalaIions on inpuI
cosIs or rehabiliIaIion works
beyond permissible levels
8ears expense on repairs Io
asseIs
Oversees Ihe O&M expenses
Labor charges, chemical
charges
laciliIaIes negoIiaIions or
bulk waIer and elecIriciIy
purchase
CapiIal
expense
UnderIakes iniIial capiIal
expense or rehabiliIaIion
works and be reimbursed
CapiIal expendiIure
reimbursemenI Io privaIe
developer
AsseI
ownership
Only given righI Io operaIe
and mainIain Ihe asseIs.
PeIurns asseI aI Ihe end o
Ihe conIracI period
Takes over asseIs aI Ihe end
o Ihe concession period
Table !8 FRQWLQXHG
Concession AgreemenI or ConsIrucIion, OperaIion, and ManagemenI o Ihe DisIribuIion SysIem
83
privaIe developer and Ihe UL8 or sIaIe agency,
are sIaIed in Table !9.
(i) a ciIy or a clusIer o ciIies aces similar
waIer supplyrelaIed issues o operaIional
ineiciencies aI Ihe disIribuIion end,
(ii) no augmenIaIion or capiIal works need
Io be underIaken or raw waIer bulk
supply and IreaImenI by Ihe privaIe
developer, and
(iii) Ihe capiIal cosIs or Ihe rehabiliIaIion
acIiviIy are Io be ully unded as a granI
rom Ihe sIaIe nodal agency or UL8.
1abIe 19 Key isk 5haring
5I No. isks
PrivaIe
DeveIoper
UL or UL
CIusIer CommenI
! Commissioning risk 9 The urban local body (UL8) will be responsible
or Ihe Iranser o exisIing disIribuIion asseIs,
i any, Io Ihe privaIe developer.
2 ConsIrucIion risk 9 The consIrucIion, and operaIion and
mainIenance (O&M) o Ihe waIer supply
disIribuIion asseIs shall be done by Ihe privaIe
enIiIy. All cosIs or Ihe same shall be incurred
by Ihe privaIe enIiIy.
J Design risk 9 The design risk shall be shared by Ihe UL8 and
Ihe privaIe enIiIy. The speciicaIions o Ihe
asseIs shall be menIioned by Ihe UL8 in Ihe
requesI or proposal documenI. The design
shall be proposed by Ihe developer in line wiIh
such speciicaIions.
4 OperaIions risk 9 9 The O&M o Ihe disIribuIion neIwork shall be
done by Ihe privaIe enIiIy. All cosIs or Ihe
same shall be incurred by such privaIe enIiIy.
5 linancial risk 9 All cosIs or Ihe consIrucIion and O&M o Ihe
enIire disIribuIion neIwork shall be meI by Ihe
privaIe enIiIy. The inances or such operaIions
shall have Io be arranged by Ihe privaIe enIiIy.
6 PaymenI risk 9 All paymenIs Io conIracIors, suppliers, eIc.,
shall have Io be borne by Ihe privaIe enIiIy.
7 Perormance risk 9 The risk IhaI Ihe disIribuIion sysIem perorms
such IhaI Ihe perormance criIeria are meI
shall reside wiIh Ihe privaIe enIiIy.
respecIive parIy.
respecIive parIy.
Sl ~ serial.
84
VI Concession Agreement
for Development of
the Bulk Water Supply
System and Operation
and Maintenance of the
Entire System
The concession agreemenI or Ihe developmenI
o Ihe bulk waIer supply sysIem, including
Ihe operaIion and mainIenance (O&M) o Ihe
enIire waIer supply sysIem, is a publicprivaIe
parInership (PPP) sIrucIure developed on a
buildoperaIeIranser basis.
ln Ihis concession agreemenI, Ihe privaIe developer
is required Io underIake consIrucIion o Ihe bulk
waIer supply sysIem, including Ihe raw waIer
oIake sysIem and raw waIer Iransmission lines.
The privaIe developer will also be responsible or
Ihe augmenIaIion or creaIion o a IreaImenI planI
and Ihe operaIion and managemenI o Ihe waIer
supply sysIem rom source Io Ihe end consumer.
AugmenIaIion works are Io be carried ouI by Ihe
privaIe developer only or Ihe bulk supply sysIem,
whereas any expansion o Ihe disIribuIion sysIem
is Ihe sole responsibiliIy o Ihe urban local body
(UL8). Thereore, any expansion or rehabiliIaIion
work or Ihe disIribuIion neIwork is Io be managed
by Ihe UL8 beore inviIing Ihe privaIe developer Io
operaIe and manage Ihe waIer supply sysIem.
The privaIe developer would also be required Io
underIake Ihe necessary capiIal invesImenIs or
Ihe consIrucIion works idenIiied. The privaIe
developer would be required Io oIake raw
waIer, supply iI Io Ihe IreaImenI planI, and
IransmiI Ihe IreaIed waIer Ihrough Ihe exisIing
disIribuIion neIwork Io Ihe consumers. All Ihe
operaIing expenses, including procuremenI o
raw maIerials, deploymenI o labor, paymenI or
elecIriciIy charges, and repair and mainIenance,
need Io be managed by Ihe privaIe developer.
The privaIe developer would also have Io
ollow all saeIy norms or disposal o Ihe wasIe
generaIed rom all Ihe waIer IreaImenI planIs,
and would noI be enIiIled Io charge exIra ees
or Ihe same. All Ihe new asseIs creaIed by Ihe
UL8 would also have Io be managed by Ihe
privaIe developer.
The privaIe developer is given Ihe righI Io levy,
collecI, and reIain revenues rom Ihe consumers
or Ihe acIiviIies underIaken. The privaIe developer
is required Io make a ixed monIhly paymenI as
license ee Io Ihe UL8 or Ihe righI Io operaIe Ihe
exisIing waIer supply asseIs and Ihe enIire sysIem.
The highesI monIhly paymenI quoIed would be
Ihe key inancial bid parameIer.
Concession AgreemenI or DevelopmenI o Ihe 8ulk WaIer Supply SysIem and OperaIion and MainIenance o Ihe LnIire SysIem
85
Under such PPP agreemenIs, Ihe privaIe developer
may also be given Ihe righI Io sell surplus waIer
Io consumers oIher Ihan Ihose idenIiied by Ihe
UL8. However, only limiIed surplus sales can be
underIaken, and a revenue share in Ihe earnings
rom Ihe surplus waIer is Io be provided Io Ihe
UL8. The Iypical concession period would range
rom !0 years Io !5 years.
DeIails o Ihe conIracI sIrucIure are given in Ihe
Ierm sheeI presenIed in ParI lV.
IransacIion under Ihe augmenIaIioncum
disIribuIion neIwork expansion conIracI. The
key roles and responsibiliIies under such a PPP
arrangemenI are lisIed in Table 20.
1abIe 20 oIes and esponsibiIiIies o! Ihe Di!!erenI InsIiIuIions
Primary Iask Designs, plans, and consIrucIs raw waIer
oIake sysIem, augmenIs raw waIer
Iransmission lines and waIer IreaImenI sysIem
UnderIakes rehabiliIaIion and/or expansion
works, i any, Io Ihe disIribuIion neIwork
OperaIes and manages Ihe enIire waIer
supply sysIem rom source Io end consumer
Oversees Ihe operaIion and mainIenance
(O&M) works underway
Levies and collecIs user charges
Tari Levies and collecIs user charges as per seI
Iari
SeIs Ihe Iari levels, sIrucIure, and
escalaIion acIor
OperaIing
expense
8ears elecIriciIy consumpIion charges Oversees O&M acIiviIy underIaken
Civil works, repairs Io Ihe asseIs
Labor charges and any oIher O&M
Figure 17 Concession AgreemenI !or DeveIopmenI o! Ihe uIk WaIer 5uppIy 5ysIem
and OperaIion and MainIenance o! Ihe FnIire 5ysIem
5eIsIari!!
MakesIicense!eepaymenIIourbanIocaIbody
Sources
bulkwaIer
Muhicipal
agehcy
DisIribuIes
PrivaIe
developer
CollecIs
revehue
!rom
households
1reaIs
FRQWLQXHGRQQH[WSDJH
86
8eore Ihe conIracI comes inIo orce, Ihe UL8
would have Io underIake Ihe ollowing acIiviIies:
(i) Assess Ihe bulk supply sysIem Io
accuraIely ascerIain Ihe exIenI o
rehabiliIaIion works IhaI needs Io be
carried ouI by Ihe privaIe developer.
(ii) DeIail Ihe design and Iechnical
speciicaIions o Ihe inrasIrucIure asseI Io
be developed.
(iii) AscerIain waIer demand projecIions and
provide Ihe privaIe developer wiIh Ihe
schedule o projecIion. AIer enorcemenI
o Ihe conIracI, any change Io Ihe parI
o waIer required Io be drawn rom Ihe
source would be subjecI Io approvals
rom Ihe UL8.
(iv) UnderIake inancial and commercial
viabiliIy assessmenI or Ihe projecI Io
deIermine wheIher Ihe privaIe developer
would need Io bear Ihe expense o Ihe
bulk waIer purchase or wheIher Ihis may
be paid or by Ihe UL8.
(v) DeIermine Ihe Iari Io be charged and
prepare an acIion plan or IransiIion
rom laI raIe Io volumeIric (i applicable)
raIes and share Ihese wiIh Ihe privaIe
developer.
CapiIal expense 8ears all Ihe consIrucIion work capiIal cosI
AsseI ownership PeIains Ihe righI Io operaIe Ihe asseIs or Ihe
concession period and hands over asseIs aI
Ihe end o Ihe conIracI period
Takes over asseIs aI Ihe end o Ihe conIracI
period.
Table 20 FRQWLQXHG
5I No. isks
PrivaIe
DeveIoper
Urban LocaI
ody CommenI
! Commissioning risk 9 The urban local body (UL8) will be responsible
or Ihe Iranser o exisIing asseIs, i any, Io
2 ConsIrucIion risk 9 The consIrucIion o Ihe bulk waIer supply
sysIem and Ihe operaIion and mainIenance
(O&M) o Ihe waIer supply sysIem shall be
done by Ihe privaIe enIiIy. All cosIs or Ihe
same shall be incurred by Ihe privaIe enIiIy.
J Design risk 9 The design risk shall be shared by Ihe UL8 and
Ihe privaIe enIiIy. The speciicaIions o Ihe
asseIs shall be menIioned by Ihe UL8 in Ihe
requesI or proposal documenI. The design
shall be proposed by Ihe developer in line
wiIh such speciicaIions.
4 OperaIions risk 9 9 The O&M o Ihe enIire waIer supply sysIem,
as per Ihe prespeciied perormance
benchmarks, shall be done by Ihe privaIe
enIiIy. All cosIs or Ihe same shall be incurred
by such privaIe enIiIy.
FRQWLQXHGRQQH[WSDJH
Concession AgreemenI or DevelopmenI o Ihe 8ulk WaIer Supply SysIem and OperaIion and MainIenance o Ihe LnIire SysIem
87
(vi) Develop and mainIain accuraIe
inormaIion on Ihe poinIs o bulk
waIer supply, Ihe sIaIus o exisIing
connecIions and properIies, Ihe number
and Iype o connecIions Io be served,
Ihe number and Iype o meIers Io be
insIalled, eIc.
The risks Io be borne by Ihe UL8 and Ihe privaIe
developer are sIaIed in Table 2!.
(i) only augmenIaIion and improvemenIs
Io Ihe disIribuIion neIwork are required,
and/or
(ii) Ihe exisIing disIribuIion neIwork coverage
is low, disIribuIion losses are high, and
O&M recoveries are low.
Table 2! FRQWLQXHG
5I No. isks
PrivaIe
DeveIoper
Urban LocaI
ody CommenI
5 linancial risk 9 All cosIs or Ihe consIrucIion o Ihe bulk
waIer supply sysIem and Ihe O&M o Ihe
enIire waIer supply sysIem and meeIing
Ihe perormance benchmarks shall be meI
by Ihe privaIe enIiIy. The inances or such
operaIions shall have Io be arranged by Ihe
privaIe enIiIy.
6 PaymenI risk 9 The risk o collecIing revenues rom Ihe
ciIizens may also reside wiIh Ihe privaIe
enIiIy. This shall be projecIspeciic and
decided by Ihe UL8. ln addiIion, all paymenIs
Io conIracIors, suppliers, eIc., shall have Io be
borne by Ihe privaIe enIiIy.
7 Perormance risk 9 The risk IhaI Ihe waIer supply sysIem
perorms such IhaI Ihe perormance criIeria
are meI shall reside wiIh Ihe privaIe enIiIy.
Io change in law shall have Io be borne by
respecIive parIy.
Sl ~ serial.
PART III
Case Studies of
PublicPrivate Partnerships
in Maharashtra
9!
I Introduction
The overall process o idenIiicaIion o Ihe
publicprivaIe parInership (PPP) sIrucIure
and Ihe process o implemenIaIion has been
described in ParI l o Ihis Iool kiI. A preliminary
assessmenI o Ihe sample ciIies was underIaken
on Ihe basis o Ihis Iool kiI.
The irsI sIep in deIermining a suiIable
PPP sIrucIure or Ihe waIer supply sysIem
and sewerage services in Ihe ciIy was Ihe
idenIiicaIion o Ihe problem areas in Ihe exisIing
sysIem. A seI o perormance assessmenI
parameIers was compiled Io deIermine Ihe
sIaIus o Ihe services. The ouIpuI rom Ihis
process was compared wiIh waIer supply
improvemenI projecIs already idenIiied by Ihe
ciIy and or which deIailed projecI reporIs (DPPs)
were also available Io veriy i Ihe currenI issues
in Ihe sysIem have been adequaIely addressed in
Ihe proposed projecI.
ln Ihe second sIep, Ihe choice beIween a public
mode o unding and a PPPbased mode o
projecI developmenI was assessed or Ihe waIer
supply projecIs already idenIiied in Ihe ciIy.
A preliminary viabiliIy assessmenI based on
inancials or Ihe projecIs idenIiied was carried
ouI. 8ased on Ihe ouIpuI o Ihe preliminary
assessmenI, an appropriaIe choice o opIion
beIween public and privaIe modes o developing
Ihe projecI was made.
ln Ihe Ihird sIep in Ihe process o PPP
deIerminaIion and implemenIaIion, a suiIable
PPP sIrucIure or Ihe waIer supply and sewerage
services was recommended. The risks o Ihis
sIrucIure and Iheir allocaIion beIween Ihe
parIies were idenIiied.
As a inal sIep in Ihe process, Ihe key bidding
parameIer or Ihe speciic PPP opIion was
indicaIed.
ln Ihis parI, Ihe broad assessmenI o Ihe waIer
supply services or Ihe selecI sample ciIies
ollowed by Ihe preliminary inancial analysis
and Ihe recommendaIion or Ihe suiIable PPP
opIion are presenIed. This is inIended Io provide
Ihe user o Ihis Iool kiI wiIh a broad idea o
Ihe process and Ihe sIeps Io be ollowed in
idenIiying and inalizing a suiIable PPP sIrucIure
or Ihe developmenI o projecIs in Ihe waIer
supply and sewerage services.
92
II Summary of City Analysis
1abIe 22 5ummary o! PPP 5IrucIures !or 5ampIe CiIies
CiIy or 1own
CapiIaI CosI
(Rs millioh)
InvesImenI
equired
(Rs millioh) 1ype o! PPP 5IrucIure CommenI
!alna J,J!0 !,960 Perormance
managemenI conIracI
or operaIion and
mainIenance (O&M)
o Ihe enIire waIer
supply services rom
source Io consumer
A PPP opIion or design,
inance, and consIrucIion o
Ihe proposed waIer supply
projecI is noI easible since
iI requires ViabiliIy Gap lund
(VGl) supporI or approximaIely
85% o Ihe projecI cosI. WiIh
such high unding assisIance
required rom Ihe governmenI,
Ihe projecI cannoI be packaged
under a publicprivaIe
parInership (PPP) module.
The sIaIe governmenI would
need Io assisI in meeIing
Ihe capiIal requiremenI o
Ps!,960 million Io augmenI Ihe
proposed works and Ihen hand
over Ihe sysIem Io a privaIe
developer or O&M.
SangliMiraj
Kupwad
2,540 !,J70 lnIegraIed waIer
supply conIracI
only or design and
consIrucIion o Ihe
proposed projecIs
Perormancebased
managemenI conIracI
or Ihe enIire waIer
supply sysIem
l Ihe opIion o an inIegraIed
concession agreemenI or
design, inance, consIrucIion,
and O&M o waIer supply
neIworks is handed over as a
single conIracI Io Ihe privaIe
developer, Ihe IoIal governmenI
supporI, including granIs and
VGl assisIance, would be more
Ihan 65% o IoIal projecI cosI.
Given Ihe high granI assisIance,
Ihe projecI would noI be viable
as a single PPP module.
This secIion presenIs a broad assessmenI o
Ihe waIer supply and sewerage services o a
sample o !2 selecIed ciIies o MaharashIra:
!alna, SangliMirajKupwad, Kolhapur, Virar,
Navghar Manikpur, Chiplun, AkoI, Saoner,
Shirpur, Kulgaon8adlapur, AmbernaIh,
and Navi Mumbai. The assessmenI provides
insighIs inIo Ihe sIaIus o waIer supply and
sewerage services in Ihe chosen ciIies. 8ased
on Ihe assessmenI, a preliminary inancial
analysis was underIaken Io assess Ihe viabiliIy
o Ihe waIer supply and sewerage services
projecIs idenIiied or developmenI on a
publicprivaIe parInership (PPP) basis. The
objecIive o Ihe preliminary analysis is Io assess
Ihe scope or a PPPbased inIervenIion in
Ihe provision o waIer supply and sewerage
services in Ihe selecIed ciIies. A summary o
Ihe ouIpuI rom Ihe preliminary inancial
analysis is given in Table 22.
FRQWLQXHGRQQH[WSDJH
Summary o CiIy Analysis
93
CiIy or 1own
CapiIaI CosI
(Rs millioh)
InvesImenI
equired
SangliMiraj
Kupwad
PPP or Ihe proposed projecI
may be divided inIo Iwo
separaIe conIracIs:
PrivaIe developer is required
Io underIake design,
inance, and consIrucIion,
Ihe developer will reIain
revenues rom users or Ihe
concession period Io recover
invesImenIs.
A separaIe perormance
managemenI conIracI or
only O&M o Ihe waIer
supply sysIem would be
made in reIurn or annual
paymenIs by Sangli
MirajKupwad Municipal
CorporaIion.
Kolhapur 2,808 !,989 lnIegraIed concession
agreemenI or design,
inance, consIrucIion,
and O&M o Ihe
waIer supply and
sewerage sysIem
The privaIe developer would
be able Io design, inance, and
consIrucI Ihe required projecIs
and earn Ps650 million (neI
presenI value: !4%) againsI
a requiremenI o Ps!,J40
million by Kolhapur Municipal
CorporaIion due Io signiicanI
operaIional eiciencies broughI
in by Ihe privaIe developer.
Virar 52 52 Service managemenI
conIracI or meIering,
billing, and collecIion
CurrenI waIer supply operaIions
are assessed Io be saIisacIory.
No major invesImenI is
required.
The scope or PPP in meIering
and billing collecIion is high
since privaIe operaIor can bring
in high eiciency, resulIing in
addiIional waIer revenue.
Given Ihe limiIed inancial
capabiliIy o Ihe urban local
body (UL8), iI need noI
underIake lump sum invesImenI
in meIers buI pay an annuiIy Io
Ihe privaIe operaIor.
FRQWLQXHGRQQH[WSDJH
Table 22 FRQWLQXHG
94
CiIy or 1own
CapiIaI CosI
(Rs millioh)
InvesImenI
equired
Navghar
Manikpur
60 60 PPP noI applicable CurrenI waIer supply operaIions
required.
There is limiIed scope or PPP in
meIering and billing collecIion
since UL8 is highly eicienI in
iIs billing and collecIion.
The limiIed invesImenI needed
or meIering can be obIained
Ihrough governmenI granIs.
Chiplun !50 70 Perormance
managemenI conIracI
or O&M o waIer
supply services
The capiIal requiremenIs or
Ihe ongoing projecI are being
arranged by Ihe council, and
Ihus do noI demand any PPP
inIervenIion or Ihe proposed
projecI.
The exisIing Iari would require
revision and posIrevision, a
privaIe operaIor can be broughI
in Io only operaIe and manage
Ihe waIer supply services on an
annuiIy basis.
AkoI 5J0 J60 Perormance
managemenI conIracI
or O&M o waIer
supply services
l Ihe opIion o an inIegraIed
concession agreemenI or
developing, operaIing, and
managing Ihe waIer supply
services is considered, Ihe VGl
requiremenI is esIimaIed Io
be approximaIely 76% o Ihe
capiIal cosI aIer considering
unding rom Ihe Urban
lnrasIrucIure DevelopmenI
Scheme or Small and Medium
Towns. This deeaIs Ihe purpose
o underIaking Ihe projecI on a
PPP basis.
The UL8, wiIh supporI rom
Ihe sIaIe governmenI, should
invesI in Ihe proposed physical
inrasIrucIure.
A PPP opIion or operaIing and
managing Ihe waIer supply
services on an annuiIy basis
can be explored by Ihe AkoI
Municipal Council.
FRQWLQXHGRQQH[WSDJH
Table 22 FRQWLQXHG
95
CiIy or 1own
CapiIaI CosI
(Rs millioh)
InvesImenI
equired
Saoner 7J.9 7.J
a
PPP noI applicable LxisIing invesImenI needs o
Saoner Municipal Council are
being arranged inIernally and
Ihe projecI consIrucIion has
commenced. ln such a scenario,
Ihere is no scope or a privaIe
developer Io underIake Ihe
proposed projecI.
PPP in O&M o Ihe waIer supply
sysIem has limiIed scope since
Ihe Iown is small and Ihe
exisIing collecIion eiciency is
high. Thereby, Ihere is limiIed
value addiIion, which Ihe
privaIe operaIor can provide Io
Ihe UL8.
Shirpur 52 52 PPP noI applicable CurrenI waIer supply operaIions
required.
There is limiIed scope or PPP in
meIering and billing collecIion
since Ihe UL8 is highly eicienI
in iIs billing and collecIion.
ShirpurWarvade Municipal
Council has Ihe inancial
capaciIy Io insIall and mainIain
meIers.
Kulgaon
8adlapur
268.5 26.8 PPP noI applicable The scheme is currenIly
managed by MaharashIra
!eevan Pradhikaran.
No need or huge capiIal
invesImenI currenIly.
The exisIing level o services
has been largely assessed Io
be saIisacIory, and Ihe currenI
issues are being addressed in
Ihe projecI proposed.
Kulgaon8adlapur Municipal
Council has Ihe inancial abiliIy
Io underIake Ihe proposed
capiIal invesImenI and would
noI require privaIe parIicipaIion
Io underIake capiIal invesImenI.
Given Ihe exisIing level o
services, Ihere is no scope or a
PPP inIervenIion.
FRQWLQXHGRQQH[WSDJH
Table 22 FRQWLQXHG
96
CiIy or 1own
CapiIaI CosI
(Rs millioh)
InvesImenI
equired
AmbernaIh 48 !2 The scheme is currenIly
managed by MaharashIra
!eevan Pradhikaran.
There is currenIly no need or
huge capiIal invesImenI.
The exisIing level o services
has been largely assessed Io
be saIisacIory, and Ihe currenI
issues are being addressed in
Ihe projecI proposed.
Given Ihe exisIing level o
services, Ihere is no scope or a
PPP inIervenIion.
Ps ~ rupees.
a
The Saoner Municipal Council has arranged or Ihis invesImenI rom inIernal unds and debI.
Table 22 FRQWLQXHG
97
III Jalna
Brief Introduction to Jalna
!alna, Ihe headquarIers o Ihe !alna disIricI,
encompasses an area o 70.87 square kilomeIers
and has a populaIion o J00,000 (2J5,000 aI
Ihe 200! census). There are 48,000 households
in Ihe ciIy. The ciIy is managed by Ihe !alna
Municipal Council (!MC), wiIh a revenue budgeI
o Ps29!.J million (iscal year 2007) and a
revenue surplus o Ps!!.5 million.
!MC manages Ihe ciIy's waIer supply sysIem
and incurs a deiciI o PsJ!.5 million on iIs
waIer supply operaIions. The council has
liabiliIies o approximaIely Ps!,5J0 million
Ioward iIs waIer supply operaIions. Thus, Ihe
ciIy has no invesImenI capaciIy Io underIake
new projecIs.
Water Supply System at Jalna
!alna draws a IoIal waIer supply o !9 million
liIers per day (MLD). The ciIy has Iwo waIer
sources: Ghanewadi Lake (7 kilomeIers |km
rom Ihe ciIy) and Shahgad in Godavari Piver
(60 km rom Ihe ciIy). The majoriIy o Ihe
waIer (!J MLD) is sourced rom Ihe Shahgad
headwork scheme, which has been joinIly
developed and operaIed or !alna and Ambad
by MaharashIra !eevan Pradhikaran (M!P).
Paw waIer rom Shahgad headworks is supplied
Io Ihe waIer IreaImenI planI aI Ambad, and
IreaIed waIer is IransmiIIed Ihrough 26 km o
pure waIer Iransmission mains Io !alna.
!alna receives a IreaIed waIer supply o
approximaIely J8 liIers per capiIa per day (lpcd)
aI Ihe consumpIion poinI. WaIer is available or
! hour on alIernaIe days and is supplied Ihrough
individual connecIions and public sIandposIs. A
basic proile o Ihe waIer supply sysIem o !MC
is presenIed in Table 2J.
Problem Area
As a irsI sIep in assessing Ihe sIaIus o waIer
supply services in Ihe ciIy o !alna, a survey o
problem areas o Ihe exisIing sysIem's services
needs Io be carried ouI. This would highlighI Ihe
inIervenIions required Io improve Ihe level o
services. The irsI acIiviIy Io underIake is a service
assessmenI againsI a ew key perormance criIeria.
On Ihe basis o Ihe assessmenI, Ihe key issues in
Ihe currenI sysIem would need Io be idenIiied
and exisIing projecIs reviewed. The assessmenI
presenIed or !alna is based on only a ew key
parameIers. lor Ihe deIailed review discussed in
ParI l o Ihe Iool kiI, Ihe urban local body (UL8)
would be required Io carry ouI a consumer survey,
waIer audiI, leak deIecIion, and energy audiI or
Ihe enIire value chain o waIer supply services.
8ased on Ihe preliminary analysis o Ihe waIer
supply service daIa
!
and discussions wiIh !MC
oicials, CPlSlL Pisk and lnrasIrucIure SoluIions
LimiIed (CPlSlL) assessed Ihe currenI waIer
supply sysIem in !alna. Table 24 presenIs Ihe key
indicaIors or assessing Ihe waIer supply sysIem
aI !alna and Iheir inerences.
!
ln Ihe absence o a waIer or energy audiI reporI, Ihe daIa provided by Ihe municipal represenIaIives has been considered
or all Ihe assessmenIs. The acIual Iechnical losses may be more or less Ihan Ihose sIaIed and can be veriied only i a
waIer audiI is underIaken along wiIh consumer survey.
98
1abIe 23 asic Pro!iIe o! WaIer 5uppIy 5ervices in JaIna
JaIna UIiIiIy Pro!iIe
Key
ih!rasIrucIure
compohehIs
8ulk supply !9 MLD
Shahgad headworks !J MLD
Ghanewadi Lake 6 MLD
WaIer IreaImenI capaciIy !5 MLD
TreaIed waIer available or consumpIion J8 lpcd
SIorage capaciIy 9 elevaIed sIorage
reservoirs
!0.! MLD
(LquivalenI Io 0.6 days
o consumpIion)
DisIribuIion neIwork 22 kilomeIers
DirecI connecIions !6,8!4 (J5% o IoIal households)
WaIer supply
!ihahcials
(FY2007) 1ari!!
WaIer accounI revenue Ps!0.9 million
Annual operaIion and
mainIenance cosIs
Ps42.4 million
llaI Iari 0.5 inch Ps806 per annum
20 mm Ps!,555 per annum
! inch PsJ,662 per annum
lY ~ iscal year, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, mm ~ millimeIer, Ps ~ rupees.
Source: !alna Municipal Council.
1abIe 24 WaIer 5uppIy IndicaIors and In!erences !or JaIna
Per!ormance Area Norm JaIna Key In!erence
8ulk WaIer
Supply (per capiIa IreaIed
waIer available or
consumpIion)
!J5 lpcd J8 lpcd !alna needs Io have minimum waIer supply
o !J5 lpcd available or consumpIion as
per Ihe CPHLLO norms, Ihe waIer available
aI consumpIion poinI in !alna is J8 lpcd
(!4.2 MLD).
a
l Ihe exisIing Iransmission
and disIribuIion losses are reduced rom
Ihe currenI level o 45% Io an average o
20%, Ihe waIer available would increase by
J.5 MLD and raise per capiIa availabiliIy or
consumpIion Io 50 lpcd. Thus, improvemenI
in operaIional eiciency would help increase
Ihe supply Io a limiIed exIenI. However, in
order Io solve Ihe issue in Ihe long Ierm, Ihe
ciIy needs Io augmenI iIs waIer supply.
Paw waIer Iransmission loss 2% !0% LxIremely high raw waIer Iransmission loss
owing Io corroded pipelines and IheI.
1reaImehI
CapaciIy uIilizaIion o waIer
IreaImenI planI
!00% !00% WiIhin Ihe norms
TreaImenI qualiIy Good No improvemenI needed
TreaImenI loss Less Ihan J% 2% As per norms
FRQWLQXHGRQQH[WSDJH
!alna
99
Per!ormance Area Norm JaIna Key In!erence
1rahsmissioh ahd DisIribuIioh
Losses Less Ihan
!5%
J5% ApproximaIely !5% is losI in pure waIer
Iransmission. ln addiIion, a 20% loss occurs
during disIribuIion.
b
Cohsumer
Coverage (connecIions/IoIal
households)
!00% 70% Assuming IhaI one connecIion caIers Io
Iwo households, Ihe ciIy should ideally have
24,000 connecIions.
MeIering !00% 0% ln Ihe absence o meIering, !MC cannoI
realisIically esIimaIe Ihe losses in Ihe sysIem
and Ihe consumpIion paIIern. Also, in order
Io ensure IhaI Ihe Iari paid by Ihe consumer
is in line wiIh consumpIion, !MC needs Io
inIroduce a volumeIric Iari sysIem. Hence,
all Ihe waIer connecIions need Io be meIered.
DuraIion o waIer supply 24 hours ! hour on
alIernaIe days
The currenI supply hours and requency are
noI adequaIe.
OperaIion and mainIenance
cosI recovery
!00% 26% The cosI recovery levels are highly inadequaIe.
!MC noI only needs Io improve iIs operaIional
and collecIion eiciency, buI also Io revise iIs
Iari Io cover aI leasI Ihe operaIions cosIs.
UniI producIion cosI
UniI income
Ps6.!2/kl
Ps!.58/kl
The revenue demand raised by !MC covers
jusI 26% o iIs waIer producIion cosI.
CollecIion eiciency !00% 56%
c
Poor level o collecIion eiciency.
CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion, !MC ~ !alna Municipal Council, kl ~ kiloliIer,
lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
a
Per capiIa waIer consumpIion calculaIions are rough esIimaIes based on analysis o daIa made available by !MC oicials.
ln Ihe absence o waIer audiI reporI, or esIimaIes on Ihe number o households being supplied wiIh direcI service
connecIions, Ihese are, aI besI, approximaIe esIimaIes.
b
The esIimaIe on losses is as per inormaIion provided by !MC oicials.
c
ligure reers Io currenI revenue collecIions againsI currenI demand raised.
Source: CPlSlL analysis as provided by !alna Municipal Council.
Table 24 FRQWLQXHG
AIer Ihe assessmenI o Ihe waIer supply services
in !alna, Ihe nexI sIep is or Ihe UL8 Io clearly lisI
all Ihe service and inrasIrucIurerelaIed issues
being aced by Ihe currenI waIer supply sysIem
in Ihe ciIy. 8ased on Ihe sIaIus o Ihe waIer
supply sysIem, key indicaIors, and Ihe resulIanI
inerences, Ihe ollowing areas appear Io need
invesImenI on a prioriIy basis:
(i) augmenIaIion o bulk waIer source Io meeI
Ihe currenI and uIure demand o waIer,
(ii) rehabiliIaIion and/or replacemenI o
exisIing Iransmission and disIribuIion
inrasIrucIure Io reduce Iechnical losses Io
minimum accepIable sIandards,
(iii) insIallaIion o meIers aI all poinIs o
bulk disIribuIion and consumpIion and
adopIion o a volumeIricbased Iari
sysIem, and
(iv) improvemenI in Ihe inancial sIaIus o
waIer accounI o !MC Ihrough revision
o Iari raIe and sIrucIure, increase in
coverage, and improvemenI in collecIion
eiciencies.
100
Review of Water Supply Projects with
Approved Detailed Project Reports
Having idenIiied Ihe key issues in Ihe exisIing
sIaIus o provisioning o waIer supply services
in Ihe ciIy, Ihe nexI acIiviIy is Io underIake a
brie review o Ihe projecIs IhaI have already
been idenIiied or !alna under various schemes
or improvemenI o Ihe waIer supply services.
Table 25 lisIs Ihe projecIs !MC has idenIiied or
Ihe waIer supply secIor.
2
Funding and the PPP Option
Having underIaken Ihe assessmenI o Ihe exisIing
sIaIus o Ihe waIer supply services in Ihe ciIy,
idenIiied key issues, and briely reviewed Ihe projecIs
idenIiied by Ihe ciIy, Ihe nexI sIage involves choosing
beIween public unding and implemenIaIion o Ihe
proposed projecI and Ihe privaIe or publicprivaIe
parInership (PPP)based mode o developing and
implemenIing Ihe projecI. This decision requires a
viabiliIy assessmenI Io be underIaken.
A preliminary inancial analysis has already been
underIaken Io assess Ihe commercial viabiliIy o
Ihe projecIs idenIiied Io deIermine wheIher Ihey
are Io be developed in a PPP mode. The viabiliIy
assessmenI underIaken in Ihe ollowing secIions
has largely ocused on deIermining wheIher Ihe
public secIor, i.e., !MC, or Ihe privaIe secIor has
Ihe inancial means Io underIake Ihe projecI.
The invesImenI required under each scenario
has been looked aI. ln addiIion, Ihe opIion o
supporI rom Ihe ViabiliIy Gap lund (VGl) has
been considered Io help assess Ihe viabiliIy o
Ihe projecI rom Ihe privaIe secIor perspecIive.
2
lor Ihe purpose o Ihis assessmenI, a due diligence on Ihe projecI componenIs and cosIs was noI underIaken.
1abIe 25 Proposed WaIer 5uppIy ProjecIs !or JaIna
PoIenIiaI Area o! InvesImenI 5cheme Proposed DeIaiIs
AugmenIaIion o waIer drawn
rom !aikwadi Dam
Proposed under UlDSSMT scheme
lI includes a source augmenIaIion
o 65 MLD, raw waIer rising main
o 46 km, and a waIer IreaImenI
planI capaciIy o 24 MLD.
CapiIal expendiIure required (DPP):
Ps2,000 million
CapiIal expendiIure required
(escalaIed cosI): Ps2,600 million
GranI: Ps!,!!0 million
a
!MC's conIribuIion is Ps!20 million
conIribuIion plus an escalaIion o
Ps!,J60 million
PehabiliIaIion and expansion o
Ihe disIribuIion neIwork
M!P Scheme approved by Ihe sIaIe
governmenI
lI includes rehabiliIaIion and
expansion o !70 km o disIribuIion
pipeline.
Ps570 million
LscalaIed cosI: Ps7!0 million
GranI: Ps2J0 million
!MC's conIribuIion: PsJ40 million
conIribuIion plus an escalaIion o
Ps!40 million
DPP ~ deIailed projecI reporI, km ~ kilomeIer, lpcd ~ liIer per capiIa per day, M!P ~ MaharashIra !eevan Pradhikaran,
MLD ~ million liIers per day, Ps ~ rupees, UlDSSMT ~ Urban lnrasIrucIure DevelopmenI Scheme or Small and Medium
Towns.
a
The granI is 80% o an approved cosI o Ps!,2J0 million.
Source: ProjecI inormaIion as provided by !alna Municipal Council.
!alna
101
The seI o key assumpIions used in underIaking
Ihe inancial analysis is shown in Table 26.
lrom Ihe deIailed projecI reporI (DPP) review
presenIed, iI can be observed IhaI !alna plans
Io underIake projecIs worIh PsJ,J!0 million
by iscal year 20!!. lor Ihese projecIs, !alna
needs Io arrange or a capiIal invesImenI o
Ps!,960 million. The key assumpIions o Ihe
analysis are ouIlined in Table 26.
8ased on Ihe assumpIions in Table 26, Ihe
preliminary inancial assessmenI has been
underIaken Io review Ihe viabiliIy o underIaking
Ihe projecI under Iwo scenarios: OpIion !, where
Ihe invesImenIs idenIiied or Ihe proposed
projecIs is made by !MC, and OpIion 2, where
projecIs is Io be ully unded by Ihe privaIe
developer.
Under OpIion !, !MC would have Io invesI
Ps!,960 million o capiIal (excluding granI
amounI) and, in addiIion, incur Ihe operaIions
cosI o an average o Ps2J0 million per
annum. This resulIs in a neI cash ouIlow o
Ps!,940 million considering Ihe waIer supply
charges, which would accrue Io !MC and
Ihe operaIional eiciencies o !MC. However,
!MC generaIes a revenue surplus o only
Ps!!.5 million and already has a huge liabiliIy
o Ps!,5J0 million. ln such a scenario, !MC
would noI be able Io underIake Ihe projecI in an
inIegraIed manner on iIs own.
Under OpIion 2, i Ihe enIire invesImenI gap
o Ps!,960 million and Ihe operaIions cosI o
an average o Ps!60 million per annum
J
up Io
20J0 is incurred by Ihe privaIe operaIor, Ihen
in spiIe o Ihe privaIe operaIor reIaining Ihe
waIer supply revenues, Ihe operaIor would
need Io obIain VGl supporI o Ps!,4!0 million.
This is in spiIe o Ihe improved operaIional and
managerial eiciencies o Ihe privaIe operaIor.
The IoIal granI o Ps!,J40 million, coupled wiIh
VGl supporI o Ps!,4!0 million, would resulI
in 8J% o Ihe IoIal cosI being unded by Ihe
governmenI. This would deeaI Ihe purpose
o implemenIing Ihe projecI on a PPP basis.
Hence, iI is noI inancially easible Io implemenI
and operaIe Ihe waIer supply sysIem on an
inIegraIed basis Ihrough PPP.
Table 27 presenIs Ihe invesImenI requiremenIs
under each opIion.
J
The operaIions cosI incurred by privaIe operaIor is lower compared Io !MC since he or she brings in cosI eiciency o
20%.
1abIe 26 Key AssumpIions
ParIicuIars AssumpIions
Phasing o capiIal expendiIure Over a period o 4 years
Paw waIer Iransmission losses 2%
TreaImenI losses 2%
DisIribuIion losses 20% in case o !MC
!5% in case o privaIe operaIor
Tari
a
A volumeIric Iari o Ps6.42/kl, wiIh a revision o J%
every year. The Iari is ixed such IhaI iI covers Ihe
minimum producIion cosI.
CollecIion eiciency Phasing rom 56% Io 70% in case o !MC
Phasing rom 70% Io 95% in case o privaIe operaIor
CosI reducIion eiciency 0% in case o !MC
20% in case o privaIe operaIor Io 20!2
!MC ~ !alna Municipal Council, kl ~ kiloliIer, Ps ~ rupees.
a
The weighIed volumeIric Iari calculaIed on Ihe basis o Ihe currenI Iari sIrucIure.
102
The analysis clearly shows IhaI Ihe opIion o
developing Ihe projecI on a ully governmenI
unded mode is noI viable given Ihe huge
invesImenI need and Ihe limiIed und availabiliIy
aI !MC. Also, Ihe opIion o privaIe secIor
invesImenI is assessed Io be noI viable in iIs
presenI orm o PPP sIrucIure. lI is, Ihereore,
prudenI Io assess wheIher Ihe PPP opIion can
be sIill pursued under a modiied orm o PPP
arrangemenI. The alIernaIive PPP sIrucIuring
opIions are now explored.
Having assessed Ihe viabiliIy o developing Ihe
proposed projecI Ihrough a publicunded or PPP
mode, Ihe nexI sIep is Io deIermine Ihe choice
o PPP sIrucIure IhaI is besI suiIed Io address Ihe
overall needs o Ihe proposed projecI.
Since Ihe projecI cannoI be underIaken on a
PPP basis, OpIion 2Ihe PPP scenariohas
been urIher reviewed, and Iwo alIernaIive
PPP sIrucIuring opIions evaluaIed: OpIion 2(a)
capiIal invesImenI by Ihe privaIe developer and
revenue Io be reIained by Ihe privaIe developer,
and OpIion 2(b): operaIion and mainIenance
(O&M) o Ihe projecI under PPP on an annuiIy
basis.
Under OpIion 2(a), Ihe waIer supply projecI
would be designed, inanced, and consIrucIed
on a PPP basis by Ihe privaIe developer. ln
reIurn, Ihe privaIe developer would geI Ihe
revenues earned rom Ihe consumers as user
charges or a ixed number o years. However,
preliminary analysis shows IhaI Ihis will noI be
inancially easible, and Ihe developer will need
addiIional VGl supporI (in addiIion Io Ihe granI)
o Ps760 million.
4
Under OpIion 2(b), !MC would conIracI
anoIher privaIe parIy or Ihe operaIion and
managemenI o Ihe waIer supply sysIem. This
privaIe parIy would be given an annual ixed
paymenI Io operaIe Ihe waIer supply sysIem
o Ihe Iown. The privaIe operaIor would
underIake all Ihe operaIion and managemenI
acIiviIy aI a predeIermined cosI bill and collecI
and Iranser Ihe revenues Io !MC.
lrom an analysis o opIions 2(a) and 2(b), iI
can be concluded IhaI PPP or Ihe design,
inance, and consIrucIion o Ihe proposed waIer
supply projecIs is noI easible. Thus, Ihe sIaIe
governmenI would have Io provide addiIional
inancial supporI o Ps!,960 million Io !MC
and puI in place Ihe physical inrasIrucIure
or Ihe projecI. Then a privaIe developer can
be appoinIed under OpIion 2(b) Io operaIe
and mainIain Ihe projecI or a ixed paymenI.
However, i !MC is insisIenI on ensuring capiIal
4
This is assuming IhaI Ihe Iari would be a volumeIric Iari covering Ihe producIion cosI.
1abIe 27 InvesImenI equiremenI wiIh a PPP
ParIicuIars
CapiIaI
FxpendiIure
(Rs millioh)
In Case o! InvesImenI
by JMC (Rs millioh)
by PrivaIe OperaIor
(Rs millioh)
DPP cosI 2,570
LscalaIed cosI J,J!0
GranI !,J40
lnvesImenI gap !,960
ToIal invesImenI required by
!MC ViabiliIy Gap lund supporI
Io privaIe secIor
(NeI presenI
value:!4%)
!,990 !,480
DPP ~ deIailed projecI reporI, !MC ~ !alna Municipal Council, kl ~ kiloliIer, PPP ~ publicprivaIe parInership, Ps ~ rupees.
Source: Preliminary inancial analysis.
!alna
103
invesImenI rom Ihe privaIe operaIor, iI would
have Io increase Ihe Iari, or !MC would need
Io revisiI Ihe projecI cosI o Ihe proposed waIer
supply sysIem and underIake projecIs IhaI need
immediaIe aIIenIion only.
Thereore, as per Ihe assessmenI underIaken
above, Ihe choice o PPP opIion or overseeing
Ihe operaIions and managemenI o Ihe waIer
supply services or !MC is IhaI o a perormance
based managemenI conIracI.
The perormancebased managemenI conIracI
is one where Ihe privaIe developer is required Io
meIering, billing, and collecIion o revenues. All
capiIal invesImenIs needed or improvemenI Io
Ihe waIer supply and sewerage services would
have Io be borne by Ihe public secIor. The
operaIing sIandards are as prescribed by Ihe
UL8. The privaIe developer is given Ihe righIs Io
levy Ihe user charges seI by Ihe UL8, collecI Ihe
charges, and hand Ihem over Io Ihe UL8. The
UL8 would make a perormancebased paymenI
Io Ihe privaIe developer or Ihese acIiviIies.
The deIails o Ihe obligaIions, risks, and
paymenI arrangemenIs under Ihe perormance
based managemenI conIracI, as menIioned in
OpIion 2(b), are provided in ParI ll o Ihis reporI,
and Ihe Ierm sheeI or Ihis conIracI sIrucIure is
provided in ParI lV.
Step 4: Procurement
Having idenIiied and inalized Ihe PPP sIrucIure
Io be adopIed or operaIing and mainIaining
Ihe proposed projecI, Ihe nexI sIage is Io
plan Ihe procuremenI process. To iniIiaIe Ihe
procuremenI process, !MC would need Io
develop a IransacIion sIrucIure IhaI covers
aspecIs relaIing Io deIails on Ihe parIies involved
in Ihe conIracI. These include Ihe conIracIual
relaIionship beIween Ihe parIies, naIure o Ihe
arrangemenI, risk allocaIion, Iari Io be levied,
conIracI duraIion, perormance indicaIors,
paymenI Ierms, award criIeria, and conIracI
managemenI sIraIegy. DeIails are given in Ihe
Ierm sheeI in ParI lV.
!04
IV Sangli-Miraj-Kupwad
Brief Introduction to
Sangli-Miraj-Kupwad
ln !998, Ihe Iowns o Sangli, Miraj, and Kupwad
(SMK) were merged Io orm a single enIiIy,
called Ihe SangliMirajKupwad Municipal
CorporaIion (SMKMC). lI encompasses an
area o !!8.!8 square kilomeIers and has an
esIimaIed !06,000 households. The SMKMC
has a IoIal revenue budgeI o Ps9J0 million and
generaIes a revenue surplus o Ps50 million.
The waIer supply works are managed by Ihe
SMKMC, and Ihere is a deiciI o Ps!0 million in
Ihe waIer accounI. Thus, Ihe ciIy has very limiIed
invesImenI capaciIy Io underIake new projecIs.
Water Supply System at
Sangli-Miraj-Kupwad
SMK draws a IoIal waIer supply o 66 million
liIers per day (MLD), o which 2 MLD is
purchased rom Ihe MaharashIra lndusIrial
DevelopmenI CorporaIion or Ihe Kupwad
region. The presenI source o waIer supply Io
Ihe ciIy is Ihe Krishna Piver.
There are Ihree waIer IreaImenI planIs in Ihe
ciIy based aI Hirabaug, Malbungalow, and
Miraj. The waIer available aI Ihe Ihree planIs
is 7!.4 MLD. The ciIy receives IreaIed waIer
o abouI !06 liIers per capiIa per day aI Ihe
consumpIion poinI.
The supply hours vary, rom an average
o J hours Io 4 hours a day in Sangli and
Miraj Io an hour a day in Kupwad. There are
48,000 direcI connecIions in Ihe ciIy, o which
85% are meIered. A basic proile o Ihe waIer
supply sysIem o SMK is presenIed in Table 28.
Problem Area
As a irsI sIep Io assessing Ihe sIaIus o Ihe
waIer supply services in SMK, an assessmenI
o Ihe problem areas in Ihe exisIing sysIem's
services needs Io be carried ouI. Doing Ihis
would highlighI Ihe inIervenIions required in
improvemenI Io Ihe level o services. The irsI
acIiviIy Io underIake is a service assessmenI
againsI a ew key perormance criIeria. On Ihe
basis o Ihe assessmenI, Ihe key issues in Ihe
currenI sysIem would need Io be idenIiied
and Ihe exisIing projecIs reviewed. lI should be
noIed IhaI Ihe assessmenI presenIed here or
SMK is based on only a ew key parameIers.
lor Ihe deIailed review discussed in ParI l o Ihe
Iool kiI, Ihe urban local body (UL8) would be
required Io carry ouI a consumer survey, waIer
audiI, leak deIecIion, and energy audiI or Ihe
enIire value chain o waIer supply services.
The key perormance parameIers used are as
ollows.
supply service daIa
5
and discussions wiIh
SMKMC oicials, CPlSlL Pisk and lnrasIrucIure
SoluIions LimiIed (CPlSlL) assessed Ihe currenI
waIer supply sysIem in SMK. Table 29 presenIs
Ihe key indicaIors or assessing Ihe waIer supply
sysIem aI SMK and Iheir inerences.
5
or all Ihe assessmenIs. The acIual Iechnical losses may be more or less Ihan IhaI sIaIed and can be veriied only i waIer
audiI is underIaken along wiIh consumer survey.
SangliMirajKupwad
105
1abIe 28 asic Pro!iIe o! WaIer 5uppIy 5ervices in 5angIi, Miraj, and Kupwad
5angIi-Miraj-Kupwad UIiIiIy Pro!iIe
Key
ih!rasIrucIure
compohehIs
8ulk supply 66 MLD
Sangli 48 MLD
Miraj !6 MLD
Kupwad 2 MLD
WaIer IreaImenI capaciIy Malbungalow J6.0 MLD
Hirabaug !6.2 MLD
Miraj !9.2 MLD
1oIal 71.4 MLD
TreaIed waIer available or consumpIion !06 lpcd
SIorage capaciIy !5 elevaIed sIorage
reservoirs
!8.5 MLD
DisIribuIion neIwork 240 km
ConnecIions 48,000 (45% o IoIal households)
WaIer supply
!ihahcials
(FY2007)
WaIer accounI revenue Ps!50 million
Annual operaIion and mainIenance
cosIs
Ps!60 million
1ari!! llaI Iari PsJ20 per monIh
VolumeIric Iari DomesIic Ps8/kl
NondomesIic PsJ0/kl
Special caIegories Ps!2/kl
lY ~ iscal year, kl ~ kiloliIer, km ~ kilomeIer, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
Source: SangliMirajKupwad Municipal CorporaIion.
1abIe 29 WaIer 5uppIy IndicaIors and In!erences !or 5angIi, Miraj, and Kupwad
Per!ormance Area
1ypicaI
Norm
5angIi-
Miraj-
Kupwad Key In!erence
8ulk WaIer
waIer available or
consumpIion)
!J5 lpcd !06 lpcd As per CPHLLO norms, Ihe IoIal waIer
supplied Io consumers aIer IreaImenI
should be !J5 lpcd. SMKMC, aI Ihe Iime o
survey, supplies !06 lpcd (47 MLD). l Ihe
Iransmission losses are reduced rom Ihe
exisIing level o J0% Io an average o 20%,
Ihe waIer supply available or consumpIion
would increase by 5.! MLD, and raise Ihe per
capiIa availabiliIy o waIer Io !!8 lpcd aI Ihe
consumers' end. This indicaIes IhaI Ihe ciIy
has an immediaIe need o augmenIaIion o iIs
bulk waIer supply.
FRQWLQXHGRQQH[WSDJH
106
Per!ormance Area
1ypicaI
Norm
5angIi-
Miraj-
QualiIy PoIenIial
need or
improvemenI
in qualiIy
The banks aI Ihe upsIream o Ihe Krishna Piver
house several sugarcane indusIries, which
release a huge amounI o unIreaIed indusIrial
wasIe inIo Ihe river. Thus, Ihe waIer rom Ihe
Krishna Piver, especially during Ihe summer,
is highly polluIed due Io high algae conIenI.
This resulIs in poor qualiIy o waIer Io Ihe ciIy
and overloading o Ihe waIer IreaImenI planI.
Hence, Ihere is a need Io change Ihe waIer
source.
1reaImehI
lnsIalled capaciIy o Ihe
waIer IreaImenI planI
!00% !00% The insIalled capaciIy available is suicienI or
IreaImenI o Ihe currenI bulk supply. Also, Ihe
exisIing IreaImenI planI is uIilized aI 92% o
capaciIy, indicaIing IhaI Ihere is no immediaIe
need or augmenIaIion o Ihe waIer IreaImenI
planI.
TreaImenI loss Less Ihan J% As per norms
Losses Less Ihan
!5%
J0% Transmission losses are very high due Io
leakages rom old corroded pipes.
Cohsumer
Coverage (connecIions/IoIal
households)
!00% 9!% Assuming IhaI one connecIion caIers Io
Iwo households, Ihe ciIy should ideally
have 5J,000 connecIions. AddiIional direcI
connecIions need Io be provided, and Ihe
public sIandposIs should be removed.
MeIering/ToIal connecIions !00% 85 % Only 60% o Ihe meIers are uncIional. Thus,
meIers need Io be replaced.
DuraIion o waIer supply 24 hours Panges rom
! hour Io
4 hours a day
This is noI suicienI and needs Io be
improved. Losses need Io be reduced and
operaIions made more eicienI.
Nonrevenue waIer Less Ihan
20%
4J% AgainsI a revenue poIenIial o Ps250 million,
a

SMKMC raises a waIer demand o only
Ps!40 million. Thus, a reducIion in Iechnical
and commercial losses can generaIe addiIional
revenue o Ps!!0 million.
cosI recovery
!00% 9J% The Iari in SMK is already high compared Io
IhaI in oIher ciIies. There is a need Io increase
operaIional eiciency and reduce energy cosIs
Io improve cosI recovery.
FRQWLQXHGRQQH[WSDJH
Table 29 FRQWLQXHG
SangliMirajKupwad
107
AIer Ihe assessmenI o Ihe waIer supply services
in SMK, Ihe nexI sIep is or Ihe UL8 Io clearly lisI
Ihe key service and inrasIrucIurerelaIed issues
aced by Ihe Iowns. 8ased on Ihe sIaIus o Ihe
waIer supply sysIem, key indicaIors, and Ihe
resulIanI inerences, Ihe ollowing areas appear
Io need invesImenI on a prioriIy basis:
(i) shiIing o raw waIer source rom Krishna
Piver Io Warna Io improve waIer qualiIy,
(ii) rehabiliIaIion and/or replacemenI o
minimum accepIable sIandards, and
(iii) insIallaIion o meIers.
in Ihe Iowns, Ihe nexI acIiviIy is Io underIake
a brie review o Ihe projecIs IhaI have already
been idenIiied or SMK under various schemes
The SMKMC has idenIiied Ihe ollowing projecIs
or Ihe waIer supply secIor (see Table J0).
6
Table 29 FRQWLQXHG
Having underIaken Ihe assessmenI o Ihe
exisIing sIaIus o Ihe waIer supply services in
Ihe Iowns, idenIiied key issues, and briely
reviewed Ihe projecIs idenIiied by Ihe municipal
corporaIion, Ihe nexI sIage involves choosing
beIween public unding and implemenIaIion o
Ihe proposed projecI and Ihe privaIe or Ihe PPP
based mode o developing and implemenIing
Ihe projecI. This decision requires a viabiliIy
assessmenI Io be underIaken.
underIaken Io assess Ihe commercial viabiliIy
o Ihe projecIs idenIiied Io deIermine wheIher
Ihey are Io be developed in a publicprivaIe
parInership (PPP) mode. The viabiliIy assessmenI
underIaken in Ihe ollowing secIions has largely
ocused on deIermining wheIher Ihe public
secIor, i.e., Ihe SMKMC, or Ihe privaIe secIor
has Ihe inancial means Io underIake Ihe
projecI. The invesImenI required under boIh
scenarios has been looked aI. ln addiIion, Ihe
opIion o Ihe ViabiliIy Gap lund (VGl) has been
considered Io help assess Ihe viabiliIy o Ihe
projecI rom a privaIe secIor perspecIive.
Per!ormance Area
1ypicaI
Norm
5angIi-
Miraj-
UniI income
Ps6.48/kl
Ps6.02/kl
There is a need Io increase operaIional
eiciency and reduce energy cosIs Io improve
cosI recovery.
CollecIion eiciency !00% 82% There is scope or improvemenI in collecIion
eiciency.
CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion, DPP ~ deIailed projecI reporI, kl ~ kiloliIer,
km ~ kilomeIer, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees, SMK ~ Sangli, Miraj, and
Kupwad, SMKMC ~ SangliMirajKupwad Municipal CorporaIion, UlDSSMT ~ Urban lnrasIrucIure Scheme or Small and
Medium Towns.
a
The revenue poIenIial has been esIimaIed by acIoring in quanIum o waIer supplied or disIribuIion visavis Ihe cosI
involved in per uniI producIion o waIer supply.
Source: CPlSlL analysis on Ihe basis o daIa provided by SangliMirajKupwad Municipal CorporaIion.
6
lor Ihe purpose o Ihis assessmenI, a deIailed review o Ihe projecIs proposed has noI been underIaken.
108
The seI o key assumpIions used in underIaking
Ihe inancial analysis is shown in Table J!. lrom
Ihe DPP review presenIed, iI can be observed
IhaI Sangli plans Io underIake projecIs worIh
Ps2,540 million up Io lY20!!. lor Ihese
projecIs, Sangli needs Io arrange or a capiIal
invesImenI o Ps!,J70 million.
CPlSlL underIook a preliminary inancial analysis
Io undersIand Ihe applicabiliIy o PPP or Ihe
abovemenIioned projecIs. The key assumpIions
o Ihe analysis are ouIlined in Table J!.
8ased on Ihe assumpIions sIaIed in Table J!,
Ihe preliminary inancial assessmenI has been
Ihe projecI under Iwo scenarios: OpIion !,
where Ihe invesImenIs idenIiied or Ihe
proposed projecIs are made by Ihe SMKMC, and
OpIion 2, where Ihe invesImenIs idenIiied or
Ihe proposed projecIs are Io be ully unded by
Under OpIion !, Ihe SMKMC would have Io
invesI a IoIal o Ps!,J70 million (excluding granI
cosI o an average o PsJ70 million per annum.
7

This resulIs in a neI cash low o Ps!,2J0 million
(neI presenI value), considering IhaI Ihe revenue
rom Ihe waIer supply would accrue Io Ihe
1abIe 30 Proposed WaIer 5uppIy ProjecIs !or 5angIi, Miraj, and Kupwad
ShiIing o raw waIer source rom
Krishna Piver Io Warna Io improve
waIer qualiIy
ProjecI !: lor Sangli and Kupwad:
comprising o source augmenIaIion
o 58 MLD, disIribuIion neIwork
o !00 km, upgrading o waIer
IreaImenI planI, eIc.
ProjecI 2: lor Miraj: comprising o
pumping sIaIion, elevaIed sIorage
reservoir, disIribuIion neIwork,
headworks aI Krishna Piver and
waIer IreaImenI planI
Ps!,450 million
(escalaIed): Ps!,820 million
!NNUPM GranI: Ps!,000 million
SMKMC conIribuIion:
Ps!!0 million and escalaIion
o Ps7!0 million
PehabiliIaIion and/or replacemenI
o exisIing Iransmission and
disIribuIion inrasIrucIure
Io reduce Iechnical losses Io
minimum accepIable sIandards
Under Sujal Nirmal Abhiyan
Scheme: includes a disIribuIion
neIwork or Ihe Kupwad region,
consIrucIion o LSPs aI Sangli
and Miraj, upgrading o waIer
IreaImenI planI, and consIrucIion
o pumping sIaIions
Ps280 million.
(escalaIed): PsJ20 million
GranI: Ps!68 million
SMK conIribuIion: Ps!52 million
SMKMC would need Io invesI
an addiIional Ps400 million or
rehabiliIaIion o Ihe disIribuIion
neIwork aI Sangli
No proposed scheme
DPP ~ deIailed projecI reporI, LSP ~ elevaIed sIorage reservoir, !NNUPM ~ !awaharlal Nehru NaIional Urban Penewal
Mission, km ~ kilomeIer, MLD ~ million liIers per day, Ps ~ rupees, SMK ~ Sangli, Miraj, and Kupwad, SMKMC ~ Sangli
MirajKupwad Municipal CorporaIion, UlDSSMT ~ Urban lnrasIrucIure Scheme or Small and Medium Towns.
Source: ProjecI inormaIion as provided by SangliMirajKupwad Municipal CorporaIion.
7
The operaIions cosI incurred by Ihe SMKMC is higher Ihan Ihe esIimaIe or privaIe operaIor. This is since, iI is assumed
IhaI cosI eiciency levels would be low on SMKMC's side.
SangliMirajKupwad
109
SMKMC and Ihe operaIional eiciencies be aI
a moderaIe raIe, as menIioned in Table J!.
However, Ihe SMKMC generaIes a revenue
surplus o Ps50 million every year. Thus, iI is noI
in a posiIion Io underIake Ihe invesImenI on iIs
own.
Under OpIion 2, i Ihe enIire capiIal gap o
Ps!,J70 million (including Ihe SMKMC's
conIribuIion) and Ihe operaIions cosI o
Ps280 million per annum up Io 20J0 is incurred
by Ihe privaIe operaIor, Ihen iI would need
viabiliIy gap unding o Ps500 million. This is in
spiIe o improved operaIional and managerial
eiciencies broughI in by Ihe developer, as
menIioned in Table J!, and Ihe revenue being
reIained by Ihe developer. The IoIal granI o
Ps!,!60 million, along wiIh Ihe viabiliIy gap
requiremenI o Ps500 million, would resulI in
65% o Ihe IoIal capiIal cosI being unded by
Ihe governmenI. This would deeaI Ihe purpose
o underIaking Ihe projecI on a PPP basis.
Hence, iI is noI inancially easible or a privaIe
operaIor Io invesI and operaIe an inIegraIed
waIer supply projecI.
Table J2 presenIs Ihe invesImenI requiremenIs
under each opIion.
The analysis clearly shows IhaI Ihe SMKMC
cannoI implemenI Ihe projecI on iIs own as
iI does noI have Ihe invesImenI capaciIy o
Ps!,2J0 million. Also, Ihe inIegraIed waIer
supply projecI and operaIions cannoI be done
on a PPP basis, since iI resulIs in 60% o unding
rom Ihe governmenI. This opIion o PPP
sIrucIure has been assessed Io be noI viable.
lI is, Ihereore, prudenI Io assess wheIher Ihe
PPP opIion can sIill be pursued under a modiied
orm o PPP arrangemenI. The alIernaIive PPP
sIrucIuring opIions are now explored.
Having assessed Ihe viabiliIy o developing
Ihe proposed projecI Ihrough a publicunded
or PPP mode, Ihe nexI sIep is Io deIermine
Ihe choice o PPP sIrucIure IhaI is besI suiIed
Io address Ihe overall needs o Ihe proposed
projecI.
Since Ihe projecI cannoI be underIaken on a
PPP basis, OpIion 2Ihe PPP scenariohas
been urIher reviewed, and Iwo alIernaIive PPP
sIrucIuring opIions evaluaIedOpIion 2(a):
capiIal invesImenI by privaIe developer and
revenue Io be reIained by privaIe developer and
OpIion 2(b): operaIion and mainIenance (O&M)
o projecI under PPP on an annuiIy basis.
1abIe 31 AssumpIions o! PreIiminary FinanciaI AnaIysis
TreaImenI losses 2%
DisIribuIion losses 20% in case o SMKMC
Tari
a
A currenI weighIed average Iari o Ps!2.04/kl, wiIh
J% revision every year
CollecIion eiciency 82% in case o SMKMC
90% in case o privaIe operaIor
CosI reducIion eiciency 0% in case o SMKMC
kl ~ kiloliIer, SMKMC ~ SangliMirajKupwad Municipal CorporaIion.
a
lI is Ihe weighIed volumeIric Iari calculaIed on Ihe basis o Ihe currenI Iari sIrucIure.
110
Under OpIion 2(a), Ihe waIer supply projecI
would be designed, inanced, and consIrucIed
on a PPP basis by a privaIe developer. The
privaIe developer would underIake a neI
invesImenI o Ps!,J70 million. This is inclusive
o Ihe !awaharlal Nehru NaIional Urban
Penewal Mission (!NNUPM) granI Io be
made available Io such a privaIe operaIor.
Preliminary analysis shows IhaI over a period
o 20 years, Ihe privaIe operaIor would earn
Ps950 million in such a scenario. Thus, Ihe
bidding parameIer would be Ihe annuiIy
paymenI, which Ihe privaIe developer would
make Io Ihe SMKMC.
The SMKMC would appoinI a privaIe operaIor
under a perormance managemenI conIracI
or Ihe O&M o Ihe enIire waIer supply sysIem.
The privaIe operaIor would be paid a ixed
amounI on an annual basis.
ln Ihis way, Ihe SMKMC would have Iwo
PPP conIracIs: (i) an inIegraIed waIer supply
conIracI wiIhouI an O&M conIracI, wherein
Ihe developer would invesI in Ihe sysIem and
Ihe waIer supply revenues would accrue Io Ihe
privaIe operaIor, and (ii) a perormancebased
managemenI conIracI or Ihe enIire waIer
supply sysIem, wherein Ihe privaIe developer
would operaIe Ihe enIire waIer supply sysIem,
esIablish meIers, and underIake billing and
collecIion. The privaIe developer would be paid
on an annuiIy basis by Ihe SMKMC.
Under Ihe inIegraIed waIer supply conIracI,
Ihe privaIe developer would make invesImenIs
in Ihe projecIs idenIiied by Ihe UL8. However,
Ihe privaIe developer would noI be required
Io underIake Ihe operaIion and managemenI
or Ihe waIer supply operaIions. ln reIurn or
Ihe invesImenI made by Ihe privaIe developer,
Ihe revenues, which accrue Io Ihe UL8 rom
Ihe consumers as per Ihe Iari levied, would
accrue Io Ihe privaIe developer during Ihe
Ienure o Ihe conIracI. The responsibiliIy o
seIIing Iari, levying Iari, and collecIion o
Ihe user charges would remain wiIh Ihe UL8.
The perormancebased managemenI conIracI
is one where Ihe privaIe developer is required Io
meIering, billing, and collecIion o revenues.
All Ihe capiIal invesImenIs needed or
ParIicuIars
CapiIaI
FxpendiIure
(Rs millioh)
and OperaIions by
5MKMC
and OperaIions by
PrivaIe OperaIor
DPP CosI !7J
LscalaIed cosI 254
GranI !!7
SMKMC share (expecIed) buI envisaged
Io be sourced rom PrivaIe operaIor (A)
!8
ViabiliIy gap rom privaIe secIor (8) !!9 (NeI presenI value: !4%) (NeI presenI value: !4%)
ToIal invesImenI required (A8) !J7 Ps!,2J2.2 million Ps500.8 million
DPP ~ deIailed projecI reporI, PPP ~ publicprivaIe parInership, Ps ~ rupees, SMKMC ~ SangliMirajKupwad Municipal
CorporaIion.
SangliMirajKupwad
111
improvemenI Io Ihe waIer supply and sewerage
services would have Io be borne by Ihe public
secIor. The operaIing sIandards are as prescribed
by Ihe UL8. The privaIe developer is given Ihe
collecI Ihe charges, and hand Ihem over Io
Ihe UL8. The UL8 would make a perormance
based paymenI Io Ihe privaIe developer or Ihe
acIiviIies carried ouI.
The deIails o Ihe obligaIions, risks, and
paymenI arrangemenIs under Ihe perormance
based managemenI conIracI, as menIioned
in OpIion 2(b), are provided in ParI ll, and Ihe
Ierm sheeI or Ihis conIracI sIrucIure is aIIached
in ParI lV.
Step 4: Procurement
procuremenI process, Ihe SMKMC would need
Io develop a IransacIion sIrucIure IhaI covers
!!2
V Kolhapur
Brief Introduction to Kolhapur
Kolhapur ciIy, popularly known as Ihe Door o
Konkan, is Ihe disIricI headquarIers o Kolhapur
disIricI in Ihe SIaIe o MaharashIra. lI covers an
area o 66.82 square kilomeIers and has a currenI
populaIion o 564,000 (485,000 aI Ihe 200!
census). There are !20,000 households in Ihe ciIy.
The ciIy is managed by Ihe Kolhapur Municipal
CorporaIion (KMC), which had a IoIal revenue
budgeI o Ps!,050 million in iscal year 2007
and an overall revenue surplus o Ps70 million.
The IoIal liabiliIies o KMC are esIimaIed Io be
Ps!,000 million.
KMC manages Ihe waIer supply works or
Ihe ciIy, generaIing a revenue surplus o
Ps!5.J million rom iIs waIer supply services.
KMC has unpaid liabiliIies o approximaIely
Ps500 million or iIs waIer supply operaIions.
Water Supply System at Kolhapur
Kolhapur sources !52 million liIers per day
(MLD) o waIer rom Ihe rivers o Panchaganga
and 8hogoIi, and rom Kalmba Lake. These
sources are less Ihan !0 kilomeIers rom Ihe
ciIy. WaIer rom Ihese sources is supplied Io Ihe
our waIer IreaImenI planIs locaIed aI Pulkhadi,
8auda, 8alinga, and Kalmba, and pure waIer is
IransmiIIed Io Ihe dierenI zones o Ihe ciIy.
Kolhapur receives IreaIed waIer supply o
approximaIely !0J liIers per capiIa per day (lpcd)
aI Ihe consumpIion poinI. O Ihe !27 MLD
o waIer IhaI is available or disIribuIion, only
58.5 MLD is available or consumpIion since
Ihe resI is losI due Io Iechnical and commercial
leakages in Ihe disIribuIion sysIem.
WaIer supply hours vary beIween Ihe inner core
o Ihe ciIy and Ihe peripheral areas. While Ihe
main parIs o Ihe ciIy receive waIer supply or
!5 hours on average, Ihe peripheral areas receive
waIer or only 2 hours. This supply is received
Ihrough individual connecIions and Ihrough
public sIandposIs. A basic proile o Ihe waIer
supply sysIem o KMC is presenIed in Table JJ.
Sewerage System at Kolhapur
KMC manages Ihe sewerage sysIem in Kolhapur.
The ciIy generaIes 80 MLD o sewage, which is
carried Ihrough Ihe open channels, or QDOODKV
(drains IhaI carry a mixIure o naIural runo,
sewage, and indusIrial wasIe), o Dudhali and
!ayanIi, pumped Io Ihe sewage IreaImenI planI
(STP) aI Kasaba 8awada, and urIher disposed o
inIo Ihe Panchganga Piver.
The exisIing sewerage neIwork measures
50 kilomeIers and primarily caIers Io Ihe needs
o Ihe core ciIy areas. The peripheral areas o
Ihe ciIy are largely dependenI on sepIic Ianks
rom which sewage is carried Io Ihe nallahs. A
brie proile o Ihe sewerage sysIem in Ihe Iown
is presenIed in Table J4, and Ihe key inerences
are discussed.
Problem Area
As a irsI sIep Io assessing Ihe sIaIus o Ihe waIer
supply services in Ihe ciIy o Kolhapur, a survey
o problem areas in Ihe exisIing sysIem's services
assessmenI againsI a ew key perormance
criIeria. On Ihe basis o Ihe assessmenI, Ihe key
issues in Ihe currenI sysIem would need Io be
idenIiied and Ihe exisIing projecIs reviewed. lI
Kolhapur
113
1abIe 33 asic Pro!iIe o! WaIer 5uppIy 5ervices in KoIhapur
KoIhapur UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply !52 MLD
WaIer IreaImenI capaciIy !5J MLD
SIorage capaciIy !8 elevaIed sIorage
reservoirs
J0 MLD (equivalenI Io
J0% o IreaIed supply)
5 ground sIorage
reservoirs
!5.! MLD
ConnecIions 8J,000 (69% o IoIal households)
WaIer supply
!ihahcials (FY2007)
WaIer accounI revenue Ps2!!.! million
mainIenance cosIs
Ps!95.8 million
1ari!! VolumeIric Iari Up Io 20,000 liIers
consumpIion
Ps!40 bimonIhly
20,00040,000 liIers
consumpIion
Ps8/kl
>40,000 liIers
consumpIion
Ps9/kl
lY ~ iscal year, kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
Source: Kolhapur Municipal CorporaIion.
1abIe 34 asic Pro!iIe o! 5ewerage In!rasIrucIure in KoIhapur
KoIhapur UIiIiIy Pro!iIe-5ewerage 5ysIem
Key ih!rasIrucIure
compohehIs
Sewage generaIed 80 MLD
Sewerage IreaImenI capaciIy Kasaba 8awada 45 MLD
Sewerage neIwork 50 km
CurrenI disposal pracIice TreaIed and unIreaIed wasIe is dumped inIo Ihe
Panchganga Piver
Fihahcials (FY2007) Sewerage revenues No revenues rom sewerage
Sewerage annual operaIion
and mainIenance cosIs
(lY2007)
Ps! million per annum
Sewerage charges Tari No sewerage charge levied
lY ~ iscal year, km ~ kilomeIer, MLD ~ million liIers per day, Ps ~ rupees.
should be noIed IhaI Ihe assessmenI presenIed
here or Kolhapur is based only on a ew key
would be required Io carry ouI a consumer
survey, waIer audiI, leak deIecIion, and energy
audiI or Ihe enIire value chain o waIer supply
services.
114
Water Supply
supply service daIa
8
1abIe 35 WaIer 5uppIy IndicaIors !or KoIhapur
Per!ormance Area Norm KoIhapur Key In!erence
8ulk WaIer
waIer available or
consumpIion)
!J5 lpcd !0J lpcd AlIhough Kolhapur sources !52 MLD
(269 lpcd) o waIer, Ihe amounI available
or consumpIion is jusI !0J lpcd as a resulI
o high Iransmission and disIribuIion losses.
l Ihe exisIing Iransmission and disIribuIion
losses are reduced rom Ihe currenI level o
7!% Io an average o 22%, Ihe waIer available
would increase by 64 MLD and raise per capiIa
availabiliIy or consumpIion Io 2!7 lpcd.
Thus, in order Io increase Ihe waIer supply,
Ihe ciIy does noI need Io augmenI Ihe
source buI ocus on reducIion o Ihe exisIing
Iransmission, IreaImenI, and disIribuIion
losses in Ihe sysIem.
QualiIy Poor waIer
qualiIy
AbouI hal o Ihe populaIion o Kolhapur
receives polluIed waIer since Ihe presenI
source is locaIed downsIream o Ihe sewage
discharge. This is primarily because major
polluIed nallahs, such as !ayanIhi and
Dhudhali, carry wasIewaIer and sewage rom
Ihe unsewered parIs o Ihe ciIy and dump
iI inIo Ihe Panchganga Piver. This has been
causing polluIion o Ihe river downsIream.
Paw waIer Iransmission Less Ihan 2% !!% Paw waIer Iransmission losses IhaI are
exIremely high owing Io corroded pipelines
and IheI.
1reaImehI
WTP capaciIy !00% 99% The exisIing insIalled capaciIy o Ihe WTPs
is suicienI and caIers Io Ihe enIire waIer
supply. However, Ihe WTP aI 8awada is noI
uncIioning properly as iI is obsoleIe and
requires upgrading.
TreaImenI loss Less Ihan J% 6% The IreaImenI loss is high on accounI o an
obsoleIe IreaImenI planI, resulIing in more
Ihan accepIable levels o losses.
8
KMC oicials, CPlSlL Pisk and lnrasIrucIure
SoluIions LimiIed (CPlSlL) assessed Ihe currenI
waIer supply sysIem in Kolhapur. Table J5
presenIs Ihe key indicaIors or assessing Ihe
waIer supply sysIem aI Kolhapur and Iheir
inerences.
FRQWLQXHGRQQH[WSDJH
Kolhapur
115
Losses Less Ihan
!5%
54%
a
The Iransmission losses are exIremely high due
Io corroded waIer Iransmission pipelines and
illegal connecIions approximaIing Io !0% o
Ihe IoIal connecIions.
The losses are aI alarming levels and
require immediaIe inIervenIion in Ierms o
replacemenI, rehabiliIaIion o pipelines,
improved operaIional eiciencies, and
reducIion o illegal connecIions.
Cohsumer
Coverage 95%!00% !00%
b
Assuming IhaI one connecIion caIers Io
Iwo households, Ihe ciIy should ideally have
60,000 connecIions. The ciIy has 2J,000
more connecIions Ihan Ihe ideal number o
connecIions, in addiIion Io Ihe J,000 public
sIandposIs.
MeIering !00% !00% All Ihe connecIions are meIered, however, only
80% are uncIional, indicaIing commercial loss
due Io incorrecI readings and approximaIions
rom Ihe aulIy meIers.
DuraIion o waIer supply 24 hours 2!5 hours
each day
c
The supply hours vary across Ihe ciIy. LorIs
Io increase Ihe currenI supply hours across Ihe
ciIy need Io be made.
cosI recovery
!00% !00%
d
The waIer accounI o KMC showed a surplus
o Ps!5.J million in lY2007. A ullcosI
recovery indicaIes Ihe implemenIaIion o
raIional Iari levels.
UniI income
PsJ.5J/kl
PsJ.80/kl
The currenI per uniI (kl) revenue realizaIion is
aI saIisacIory levels.
e
CollecIion eiciencies are low. KMC has
arrears amounIing Io Ps60 million. The
overall eiciency levels, Ihereore, need Io be
improved subsIanIially.
lY ~ iscal year, kl ~ kiloliIer, KMC ~ Kolhapur Municipal CorporaIion, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per
day, Ps ~ rupees, WTP ~ waIer IreaImenI planI.
a
The loss levels here Iake inIo accounI Iransmission loss, IreaImenI loss, and disIribuIion loss. TreaImenI and raw waIer
Iransmission losses have been esIimaIed Io be aI minimal accepIable levels, as undersIood rom KMC oicials.
b
ln Ihe absence o accuraIe inormaIion on Ihe number o households served by each connecIion, iI has been assumed IhaI
one connecIion serves Iwo households.
c
ln some zones o Kolhapur, waIer is supplied or only 2 hours in a day while ew oIher zones in Ihe ciIy receive supply or
!5 hours in a day.
d
Though a !00% O&M cosI recovery is indicaIive o eicienI managemenI o waIer supply sysIem, in Ihe case o KMC,
Ihis does noI depicI a correcI picIure owing Io Ihe high Iransmission and disIribuIion (T&D) losses, commercial losses, and
Ihe high nonrevenue waIer loss levels.
e
Source: CPlSlL analysis and daIa provided by Kolhapur Municipal CorporaIion.
Table J5 FRQWLQXHG
116
AIer Ihe assessmenI o Ihe waIer supply
services in Kolhapur, Ihe nexI sIep is or Ihe UL8
Io clearly lisI all Ihe service and inrasIrucIure
relaIed issues being aced by Ihe currenI waIer
supply sysIem in Ihe ciIy. 8ased on Ihe sIaIus o
Ihe waIer supply sysIem, key indicaIors, and Ihe
(i) rehabiliIaIion and/or replacemenI o
minimum accepIable sIandards,
(ii) augmenIaIion or improvemenIs Io
Ihe exisIing IreaImenI planI Io reduce
IreaImenI losses,
(iii) improvemenI in Ihe waIer qualiIy o Ihe
ciIy by esIablishing an adequaIe sewerage
sysIem and improving iIs eiciencies, and
(iv) improved managemenI o Ihe disIribuIion
neIwork, including insIallaIion and
mainIenance o Ihe insIalled meIers.
Since Ihe polluIion o Ihe raw waIer source in
Ihe ciIy is direcIly linked Io Ihe exisIing sIaIus o
Ihe sewerage inrasIrucIure, iI has been judged
prudenI Io address Ihe issues o Ihe sewerage
secIor o Ihe ciIy. A review o Ihe sewerage
inrasIrucIure has been carried ouI. A brie
on Ihe sewerage secIor and iIs assessmenI is
presenIed in Ihe ollowing subsecIions.
Sewerage Sector
8ased on Ihe preliminary analysis o sewerage
service daIa
9
and discussions wiIh KMC
oicials, CPlSlL assessed Ihe currenI sewerage
sysIem in Kolhapur. Table J6 presenIs Ihe key
9
1abIe 36 Key 5ewerage IndicaIors !or KoIhapur
Sewerage lh!rasIrucIure
Coverage 95%!00% J5% The currenI sewerage pipelines cover only J5% o Ihe
IoIal exIenI o Ihe ciIy. The pipelines are presenI only in
Ihe core parIs o Ihe ciIy, leaving Ihe peripheral and newly
developed areas unsewered. Also, Ihe exisIing pipelines
are approximaIely 40 years old and corroded, requiring
rehabiliIaIion or replacemenI.
TreaImenI capaciIy !00% J8% The exisIing STP has an insIalled IreaImenI capaciIy o
45 MLD. However, because Ihe STP is obsoleIe, iI IreaIs a
very small quanIiIy o sewage. There is an immediaIe need
Io upgrade and augmenI Ihe IreaImenI capaciIy o Ihe
STP Io ensure !00% IreaImenI.
Disposal UnIreaIed
sewage
disposed o
in Ihe river
This conIaminaIes Ihe river, leading Io healIh problems
and violaIion o environmenIal norms.
Cohsumer
OperaIion and
mainIenance cosI
recovery
!00% 0% Since KMC does noI levy sewerage charges, Ihe operaIions
cosIs are meI rom Ihe general budgeI o KMC.
KMC ~ Kolhapur Municipal CorporaIion, MLD ~ million liIers per day, STP ~ sewage IreaImenI planI.
Source: CPlSlL analysis on Ihe basis o daIa provided by Kolhapur Municipal CorporaIion.
Kolhapur
117
indicaIors or assessing Ihe sewerage sysIem
aI Kolhapur.
8ased on Ihe sIaIus o Ihe sewerage sysIem,
and key indicaIors and inerences, Ihe ollowing
areas have been earmarked or invesImenI on a
prioriIy basis:
(i) augmenIaIion o Ihe STP,
(ii) expansion o Ihe sewerage neIwork in Ihe
ciIy, and
(iii) rehabiliIaIion or replacemenI o exisIing
rising mains and pipelines.
sIaIus o provisioning o waIer supply and
sewerage services in Ihe ciIy, Ihe nexI acIiviIy is
Io underIake a brie review o Ihe projecIs IhaI
have already been idenIiied or Kolhapur under
various schemes or improvemenI o Ihe waIer
supply and sewage IreaImenI services. Table J7
lisIs Ihe projecIs KMC has idenIiied.
!0
1abIe 37 Proposed WaIer 5uppIy and 5ewerage ProjecIs !or KoIhapur
Proposed Area o! InvesImenI 5cheme Proposed DeIaiIs
AugmenIaIion o capaciIy o waIer
IreaImenI planI and rehabiliIaIion
o Iransmission lines
lI includes Ihe augmenIaIion
o Ihe waIer IreaImenI planI
by J6 MLD, 60 kilomeIers o
disIribuIion neIwork, !0 kilomeIers
o raw waIer rising main and
pumping machinery.
Ps590 million
(escalaIed cosI): Ps700 million
UlDSSMT granI: Ps5J! million
KMC's conIribuIion: Ps59 million
and escalaIion cosI o
Ps!20 million
Sewage IreaImenI planI
augmenIaIion and expansion o
Ihe sewerage neIwork
UlDSSMT:
80 MLD sewage IreaImenI planI,
pumping sIaIions, and disIribuIion
neIwork
Ps!,750 million
(escalaIed cosI): Ps2,!00 million
UlDSSMT granI: Ps288 million
a
KMC's conIribuIion: PsJ2 million
Plus escalaIion and unapproved
cosI o Ps!,780 million
DPP ~ deIailed projecI reporI, KMC ~ Kolhapur Municipal CorporaIion, MLD ~ million liIers per day, Ps ~ rupees,
UlDSSMT ~ Urban lnrasIrucIure DevelopmenI Scheme or Small and Medium Towns.
a
The approved cosI is PsJ20 million only.
!0
lor Ihe purpose o Ihis assessmenI, a due diligence on Ihe projecI componenIs and cosIs has noI been underIaken.
118
exisIing sIaIus o Ihe waIer supply services in Ihe
ciIy, idenIiied key issues, and briely reviewed
Ihe projecIs idenIiied by Ihe ciIy, Ihe nexI sIage
involves choosing beIween Ihe public mode
o unding and implemenIing o Ihe proposed
projecI and Ihe privaIe or publicprivaIe
parInership (PPP) based mode o developing
and implemenIaIion o Ihe projecI. The decision
requires a viabiliIy assessmenI Io be underIaken.
As menIioned earlier, a preliminary inancial
analysis has been underIaken Io assess
Ihe viabiliIy o Ihe projecIs idenIiied. This
assessmenI has been or Ihe purpose o
assessing Ihe commercial viabiliIy o Ihe projecI
i iI is Io be developed on a PPP mode. The
viabiliIy assessmenI underIaken in Ihe ollowing
secIions have largely ocused on deIermining
wheIher Ihe public secIor, i.e., KMC, or Ihe
privaIe secIor has Ihe inancial wherewiIhal Io
underIake Ihe projecI. The invesImenI need
under boIh scenarios has been looked aI.
AddiIionally, or assessing Ihe viabiliIy o Ihe
projecI, rom Ihe privaIe secIor perspecIive, Ihe
opIion o ViabiliIy Gap lund (VGl) supporI has
also been considered.
lrom Ihe preceding analysis, iI can be observed
IhaI Kolhapur plans Io underIake projecIs
worIh Ps2,800 million by lY20!!. Kolhapur
needs Io arrange or a capiIal invesImenI o
Ps!,980 million Io execuIe Ihese projecIs.
A preliminary inancial analysis has been
underIaken in Ihe conIexI o exploring a PPP
based alIernaIive Io und Ihe projecI requiremenI
aI Kolhapur. The key assumpIions, which have
been considered, are presenIed in Table J8.
8ased on Ihe assumpIions in Table J8, Ihe
underIaken Io review Ihe viabiliIy, i underIaking
where Ihe invesImenI idenIiied or Ihe projecIs
is made by KMC, and OpIion 2, where Ihe
invesImenIs idenIiied or Ihe proposed projecIs
are Io be ully unded by Ihe privaIe developer.
Under OpIion !, KMC would have Io invesI
a IoIal o Ps!,989 million (excluding granI
cosI o an average o Ps460 million per
annum.
!!
This resulIs in a neI cash ouIlow o
Ps!,J40 million (neI presenI value) considering
IhaI Ihe revenue rom Ihe waIer supply and
sewerage would accrue Io KMC and Ihe
operaIional eiciencies aI a moderaIe raIe,
as menIioned in Table J8. AlIhough, KMC
TreaImenI losses 2%
DisIribuIion losses J0%, i managed by KMC
!5%, i managed by privaIe developer
Tari
a
Ps7.95 per kiloliIer,
b
wiIh J% revision every year
CollecIion eiciency Phased rom 67% Io 80%, i managed by KMC
Phased rom 80% Io 90%, i managed by privaIe developer
0%, i managed by KMC
CosI reducIion eiciency 20%, i managed by privaIe parIy up Io 20!!
KMC ~ Kolhapur Municipal CorporaIion, Ps ~ rupees.
a
The Iari assumed is Ihe weighIed volumeIric Iari calculaIed on Ihe basis o Ihe currenI Iari sIrucIure.
b
The operaIions cosI incurred by KMC is higher Ihan IhaI incurred by Ihe privaIe operaIor as iI does noI bring cosI eiciency.
!!
The operaIions cosI incurred by KMC is higher Ihan IhaI incurred by Ihe privaIe operaIor as iI does noI bring cosI eiciency.
Kolhapur
119
generaIes a revenue surplus o Ps70 million,
iI has liabiliIies o more Ihan Ps!,000 million.
ln such a scenario, KMC is noI in a posiIion Io
invesI in Ihis projecI.
Under OpIion 2, i Ihe enIire capiIal gap o
Ps!,989 million (including KMC's conIribuIion)
and Ihe operaIions cosI o Ps280 million per
annum up Io 20J0 are incurred by Ihe privaIe
operaIor, Ihe privaIe operaIor would earn
PsJ00 million (neI presenI value). This is
primarily due Io Ihe improved operaIional and
managerial eiciencies broughI and Ihe revenue
reIained by Ihe developer. Thereore, Ihe projecI
can be underIaken on a PPP basis.
Table J9 presenIs Ihe invesImenI requiremenIs
under each opIion.
The analysis clearly shows IhaI Ihe opIion o
developing Ihe projecI on a ully governmenI
unded mode is noI viable given Ihe huge
invesImenI need and Ihe limiIed und availabiliIy
aI KMC. However, Ihe second opIion o
Ihe invesImenI being made by Ihe privaIe
developer, who also underIakes operaIions
and managemenI o Ihe services, is assessed
Io be a viable opIion. This is because o Ihe
high operaIional eiciencies IhaI Ihe privaIe
developer would bring Io Ihe waIer supply and
sewerage service, which would also make iI
viable or Ihe privaIe developer.
mode o unding, Ihe nexI sIep is Io deIermine
Ihe choice o PPP sIrucIure IhaI is besI suiIed Io
address Ihe overall needs o Ihe proposed projecI.
Since Ihe abovemenIioned sIrucIure involves
Ihe privaIe developer making invesImenIs
in Ihe developmenI o Ihe waIer supply and
sewerage services and overseeing Ihe operaIions
and managemenI o Ihe sewerage services,
Ihe easible PPP sIrucIure or Kolhapur is IhaI
o an inIegraIed concession agreemenI or
waIer supply and sewerage services, including
operaIions and managemenI o Ihe sysIem.
An inIegraIed concession agreemenI or waIer
supply and sewerage services is a PPP conIracI in
which Ihe privaIe developer would be required
Io underIake invesImenIs or creaIion o asseIs
in Ihe waIer supply and sewerage value chain
and would also be required Io underIake Ihe
O&M o Ihe enIire sysIem or Ihe period o Ihe
ParIicuIars
CapiIaI
FxpendiIure
(Rs millioh)
In Case o! InvesImenIs
and OperaIions by KMC
In Case o! InvesImenIs
and OperaIions by
PrivaIe OperaIor
DPP cosI 2,J40
LscalaIed cosI 2,8!0
GranI 820
KMC share (expecIed) buI
envisaged Io be sourced
rom PrivaIe OperaIor |A
9!0
Gap rom PrivaIe SecIor |8 !,898 (NeI presenI value: !4%) (NeI presenI value: !4%)
ToIal invesImenI required
ParIy A8
!,989 Ps!,J40 million PsJ0!.5 million
DPP ~ deIailed projecI reporI, KMC ~ Kolhapur Municipal CorporaIion, PPP ~ publicprivaIe parInership, Ps ~ rupees.
120
concession. ln Ihis concession agreemenI, Ihe
privaIe developer would be required Io design,
inance, consIrucI, operaIe, and manage Ihe
waIer supply and sewerage services or Ihe
concession period. The capiIal invesImenI
required or underIaking Ihe augmenIaIion
works would be meI wholly or parIly by Ihe
privaIe developer. The privaIe developer would
recover Ihe invesImenIs made by collecIing and
reIaining user charges levied on consumers. Any
change Io Ihe Iari, Ihe raIe o escalaIions, eIc.,
would be deIermined by Ihe UL8.
The deIails o Ihe obligaIions, risks, and paymenI
arrangemenIs under Ihis perormancebased
managemenI conIracI are provided in ParI ll o
Ihis Iool kiI, and Ihe Ierm sheeI or Ihis conIracI
sIrucIure is provided in ParI lV.
Step 4: Procurement
procuremenI process, KMC would need Io
!2!
VI Virar
Brief Introduction to Virar
Virar is a suburban ciIy Io Ihe norIh o Mumbai.
lI is locaIed in Ihe Thane disIricI o MaharashIra
and covers an area o !9.6 square kilomeIers.
The currenI populaIion o Ihe ciIy is 246,000
(!!9,000 aI Ihe 200! census), and Ihere
are 99,740 households. The ciIy is governed
by Ihe Virar Municipal Council (VMC). VMC
has a IoIal revenue budgeI o Ps700 million
(iscal year 2007) and a revenue surplus o
PsJ.9 million. 8esides, VMC has liabiliIies o
approximaIely Ps!70 million.
WaIer supply works (rom source augmenIaIion
Io IreaImenI) or Virar is managed as parI o
a joinI scheme wiIh Ihree oIher ciIiesVasai,
NavgharManikpur, and Nalasopara. The scheme
is managed by a joinI commiIIee ormed by
Ihe our urban local bodies (UL8s), and a joinI
accounI is mainIained.
Water Supply System at Virar
Virar's IoIal waIer supply o 27 million liIers per
day (MLD) is drawn rom Iwo sources: Surya
headworks (!7 kilomeIers |km) and Ihe Uzgaon
headworks (60 km). Under a joinI scheme, a
IoIal o !00 MLD waIer is supplied Io our ciIies,
including Virar. lrom Ihe Surya headworks, Virar
is supplied 20 MLD. The ciIy also receives 7 MLD
rom Ihe Uzgaon headworks.
The IoIal IreaIed waIer supply available or
consumpIion is 2! MLD (85 liIers per capiIa
per day |lpcd). WaIer is available or J hours
every day and is supplied Ihrough individual
1abIe 40 asic Pro!iIe o! WaIer 5uppIy 5ervices in Virar
Virar UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply 27 MLD
WaIer availabiliIy or consumpIion 85 lpcd
WaIer IreaImenI capaciIy Surya headworks
(joinI scheme)
!00 MLD
Uzgaon 20 MLD
reservoirs
4.9 MLD
2 ground sIorage
reservoirs
2.75 MLD
ConnecIions 9,200
WaIer supply
!ihahcials
(FY2007)
WaIer accounI revenue Ps82.6 million
Annual operaIion and mainIenance cosIs Ps88.0 million
1ari!! llaI Iari sIrucIure PaIe diers depending upon Iype o properIy
and Iype o connecIion, e.g., Ps40 per monIh
or slums, Ps!20 per monIh or laIs, eIc.
lY ~ iscal year, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
Source: Virar Municipal Council.
122
connecIions and public sIandposIs. The IoIal
number o direcI connecIions is 9,200, o which
none is meIered. A basic proile o Ihe waIer
supply sysIem o VMC has been presenIed in
Table 40.
Problem Area
supply services in Ihe ciIy o Virar, a survey o
problem areas in Ihe exisIing sysIem's services
criIeria. On Ihe basis o Ihe assessmenI, Ihe key
issues in Ihe currenI sysIem would need Io be
idenIiied and exisIing projecIs reviewed. The
assessmenI presenIed or Virar is based only
on a ew key parameIers. lor a deIailed review
discussed in ParI l o Ihe Iool kiI, Ihe UL8 would
be required Io carry ouI a consumer survey, waIer
audiI, leak deIecIion survey, and energy audiI or
Ihe enIire value chain o waIer supply services.
8ased on Ihe preliminary analysis o waIer supply
service daIa
!2
and discussions wiIh VMC oicials,
CPlSlL Pisk and lnrasIrucIure SoluIions LimiIed
(CPlSlL) assessed Ihe currenI waIer supply sysIem
in Virar. Table 4! presenIs Ihe key indicaIors or
assessing Ihe waIer supply sysIem aI Virar.
AIer assessing Ihe waIer supply and sewerage
services in Virar, Ihe nexI sIep is or Ihe urban
local body (UL8) Io clearly lisI all Ihe service and
inrasIrucIurerelaIed issues being aced by Ihe
currenI waIer supply sysIem in Ihe ciIy. 8ased
on Ihe sIaIus o Ihe waIer supply sysIem, key
indicaIors, and Ihe resulIanI inerences, Ihe
ollowing areas appear Io need invesImenI on a
prioriIy basis:
(i) repair and rehabiliIaIion o Ihe idenIiied
sIreIch o disIribuIion neIwork Io reduce
losses due Io pipeline leakages,
(ii) increased operaIional eiciencies
especially aI Ihe disIribuIion end, and
(iii) insIallaIion o meIers aI all poinIs o
bulk disIribuIion and consumpIion, and
adopIion o a volumeIricbased Iari
sysIem.
Review of Water Supply Projects
been idenIiied or Virar under various schemes
Table 42 lisIs Ihe projecIs VMC has idenIiied or
Ihe waIer supply secIor.
!J
The source augmenIaIion projecIs menIioned
in Table 42 are currenIly under preparaIion
and no approvals or eiIher projecI have been
received. Since Ihe currenI proposal is, aI besI,
an esIimaIe and no decision has been Iaken,
Ihese projecIs have noI been considered while
exploring Ihe publicprivaIe parInership (PPP)
alIernaIives or waIer supply operaIions in Virar.
exisIing sIaIus o waIer supply services in Ihe
ciIy, idenIiied key issues, and briely review o
involves choosing beIween Ihe public mode o
unding and implemenIaIion o Ihe proposed
parInership (PPP)based mode o developing
!2
ln Ihe absence o a waIer or energy audiI reporI, Ihe daIa provided by Ihe UL8 represenIaIives has been considered or
all Ihe assessmenIs. The acIual Iechnical losses may be more or less Ihan IhaI sIaIed and can be veriied only Ihrough
waIer audiI.
!J
Virar
123
1abIe 41 Key WaIer 5uppIy IndicaIors !or Virar
Per!ormance Area Norm Virar Key In!erence
8ulk WaIer
Supply (per capiIa
consumpIion)
!J5 lpcd 85 lpcd PeducIion o losses rom 20% Io !5% and
uIilizaIion o Ihe enIire quoIa o J6 MLD increases
waIer availabiliIy Io !20 lpcd. Hence, Ihere is no
urgenI need Io augmenI waIer supply Io Virar.
1reaImehI
capaciIy
!00% !00% There may be a need Io increase Ihe capaciIy o
Ihe waIer IreaImenI planI i Ihe waIer supply is
increased. However, Ihis is noI urgenI.
TreaImenI loss Less Ihan J% 2% Loss levels are as per accepIable sIandards.
Losses Less Ihan
!5%
22%
a
The level o losses is moderaIe and disIribuIion
losses are primarily due Io leaking pipelines. The
loss level can be broughI down by improved
operaIional eiciency, including beIIer leakage
managemenI.
Cohsumer
Coverage 95%!00% !00%
b
This is inclusive o only direcI service connecIions.
MeIering !00% 0% No meIers have been insIalled aI Ihe consumer
end, a laI Iari sIrucIure is prevalenI.
DuraIion o waIer supply 24 hours J hours
each day
Supply hours are inadequaIe and need Io
be increased.
OperaIion and
mainIenance cosI
recovery
!00% 94% There is a deiciI o Ps5 million largely on accounI
o high energy bills. There is a need Io implemenI
energysaving measures and ensure improved
operaIional eiciencies. lllegal connecIions need
Io be idenIiied and reduced.
UniI income
Ps8.9J/kl
Ps8.J8/kl
Per uniI revenue realizaIion is aI moderaIe levels,
however, iI can be urIher improved Io ensure ull
cosI recovery.
c
CollecIion eiciencies need Io be improved
subsIanIially.
lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
a
The loss levels include Iransmission loss and disIribuIion loss. TreaImenI and raw waIer Iransmission losses have been
esIimaIed Io be aI minimal accepIable levels as undersIood rom VMC oicials. ln Ihe absence o meIers, Ihe leakages in Ihe
disIribuIion neIwork cannoI be accuraIely esIablished.
b
As per VMC oicials, one connecIion serves !2 households.
c
Sources: CPlSlL analysis and discussions wiIh Virar Municipal Council oicials.
and implemenIaIion o Ihe projecI. This decision
requires a viabiliIy assessmenI Io be underIaken.
However, as Ihe projecI assessmenI shows, Ihe
council currenIly does noI envisage underIaking
any major capiIal invesImenI work. Discussion
wiIh VMC oicials indicaIe IhaI Io reduce
disIribuIion losses, Ihe rehabiliIaIion o 26 km
o pipeline would be underIaken as a parI o
regular ongoing civil works o VMC, and a
separaIe projecI does noI need Io be developed.
This indicaIes IhaI Ihe currenI operaIions and
managemenI o Ihe waIer supply by VMC is
saIisacIory.
124
ln such a scenario, Ihe only area o improvemenI
is insIallaIion o meIers and improved eiciency
in billing and collecIion. A preliminary inancial
analysis has been underIaken in Ihe conIexI o
exploring PPP or underIaking Ihe meIering,
billing, and collecIion.
The inIroducIion o meIering in Ihe sysIem may
be done under a PPP sIrucIure in which Ihe
meIering, billing, and collecIion o waIer supply
charges is ouIsourced Io a privaIe operaIor.
The viabiliIy assessmenI has been carried ouI
Io assess wheIher VMC should underIake Ihe
invesImenIs required or insIallaIion, operaIion,
and managemenI o meIers, and generaIion
o bills and collecIion, or wheIher Ihese
acIiviIies could be beIIer managed by a privaIe
developer.
The key assumpIions o Ihe analysis are ouIlined
in Table 4J.
8ased on Ihe assumpIions in Table 4J, Ihe
1abIe 42 Proposed WaIer 5uppIy ProjecIs
AugmenIaIion o waIer supply
under Ihe currenI joinI scheme
(Surya headworks) or Ihe
our ciIies
ProjecI or source augmenIaIion
o !25 MLD or supply Io all Ihe
municipal councils, Io be execuIed
by MMPDA.
DPP cosI: Ps6,729 million
AugmenIaIion o waIer supply or
VasaiVirar municipal councils
ProjecI or source augmenIaIion o
J00 MLD Io be execuIed by MMPDA.
CapiIal cosI: Ps!!,000 million
(approximaIe)
DPP currenIly under
preparaIion
lnsIallaIion o meIers No proposed scheme
DPP ~ deIailed projecI reporI, MLD ~ million liIers per day, MMPDA ~ Mumbai MeIropoliIan Pegional DevelopmenI
AuIhoriIy, Ps ~ rupees.
Sources: Virar Municipal Council and MaharashIra !eevan Pradhikaran.
CosI o a meIer (including insIallaIion charges) Ps4,000 per meIer
CosI o compuIer soIware Ps!00,000 (oneIime cosI)
MainIenance cosI o meIers 8% o capiIal expendiIure
CompuIer soIware mainIenance cosI !5% o capiIal expendiIure.
MeIer connecIion charges Ps!,000 per meIer
lncrease in waIer Iari J% per annum
PopulaIion growIh raIe (compounded annual growIh raIe) 9.5% per annum
Tari VolumeIric Iari o Ps8/kl
a
CollecIion eiciency 78% in case o Virar Municipal Council
95% in case o PPP
Period o conIracI/evaluaIion Period o 5 years up Io 20!J
CosI reducIion eiciency (O&M cosIs) 0% in case o Virar Municipal Council
20% in case o PPP
kl ~ kiloliIer, O&M ~ operaIion and mainIenance, PPP ~ publicprivaIe parInership, Ps ~ rupees.
a
Virar Municipal Council has an exisIing Iari schedule o Ps8 per kiloliIer volumeIric Iari in case o meIered connecIions.
Virar
125
meIering, billing, and collecIion are made by VMC,
and OpIion 2, where Ihe invesImenIs idenIiied or
Ihe proposed meIering, billing, and collecIion are
ully unded by Ihe privaIe developer.
Under OpIion !, VMC would have Io invesI a
IoIal capiIal expendiIure o Ps50 million (in Ihe
irsI year) and also incur an operaIions cosI o
Ps!J million per annum. WiIh meIering and a
volumeIric Iari, VMC would earn waIer supply
charges o PsJ90 million by 20!J. WiIh a
revenue surplus o jusI PsJ.9 million, VMC does
noI have Ihe poIenIial Io incur Ihis magniIude o
expendiIure and, Ihereore, iI is noI in a posiIion
Io incur Ihis invesImenI on iIs own.
Under OpIion 2, where a privaIe operaIor
underIakes Ihe meIering, billing, and collecIion
acIiviIy, Ihe privaIe operaIor would incur a IoIal
capiIal expendiIure o Ps50 million (in Ihe
irsI year), in addiIion Io an operaIion cosI
o Ps!0 million per annum. The waIer supply
charges generaIed would be Ps450 million by
20!J. VMC would have Io pay a minimum
annuiIy Io Ihe privaIe operaIor.
Thus, VMC can underIake Ihe meIering, billing,
and collecIion Ihrough PPP wherein VMC need
noI incur an expendiIure o Ps50 million up
ronI and also earns addiIional revenue o abouI
Ps!00 million up Io 20!J as a resulI o Ihe
operaIional and revenue collecIion eiciency o
Ihe privaIe enIiIy.
Since Ihe abovemenIioned sIrucIure involves
Ihe privaIe developer making Ihe invesImenIs or
insIallaIion o meIers and also being responsible
or overseeing Iheir operaIions and generaIing
and collecIing bills, Ihe PPP sIrucIure suiIable is
IhaI o a PPP agreemenI or meIering, billing,
and collecIion.
invesImenIs or insIallaIion o meIers aI Ihe
consumer end, oversee Iheir O&M, mainIain a
compuIerized daIa recording sysIem, generaIe
bills, and collecI user charges rom consumers.
The privaIe developer would noI be required Io
underIake any oIher acIiviIy in Ihe enIire chain
o waIer supply services. The Iype o meIer Io be
insIalled and Ihe number o connecIions where
Ihe meIer is Io be insIalled would be speciied
by Ihe UL8. The Iari Io be levied would also be
deIermined by Ihe UL8. The perormance sIandards
laid ouI by Ihe UL8 would speciy parameIers, such
as Ihe revenue collecIions IargeI Io be achieved,
need Io be mainIained. The cosI o purchase
and insIallaIion o Ihe meIer would be generally
recovered by Ihe privaIe developer rom Ihe
consumer as parI o Ihe waIer supply service bills.
lor Ihe operaIion and mainIenance acIiviIy
underIaken by Ihe privaIe developer, a ixed
annuiIy paymenI is made by Ihe UL8. This annuiIy
amounI would generally be Ihe bidding parameIer.
Step 4: Procurement
procuremenI process, VMC would need Io
in Ihe conIracI. There include Ihe conIracIual
duraIion o Ihe conIracI, perormance indicaIors,
!26
VII Navghar Manikpur
Brief Introduction
to Navghar Manikpur
The ciIy o Navghar Manikpur orms a parI o Ihe
Thane disIricI o MaharashIra. LocaIed in close
proximiIy Io Ihe suburban ciIy o Virar, Ihe ciIy has
an area o !6.5 square kilomeIers and a currenI
populaIion o 2!6,000 residenIs (!!6,000 aI Ihe
200! census). The ciIy is managed by Ihe Navghar
Manikpur Municipal Council (NMMC) and has an
esIimaIed 54,000 households. The council has a
IoIal revenue budgeI o Ps600 million (iscal year
2007) and a revenue surplus o Ps6.2 million.
WaIer supply works or Navghar Manikpur
is managed as parI o a joinI scheme o
!20 million liIers per day (MLD) wiIh Ihree oIher
ciIies: Vasai, Virar, and Nallasopara. TogeIher,
Ihese our ciIies have a joinI commiIIee IhaI
manages Ihe bulk waIer supply, IreaImenI, and
supply o IreaIed waIer Io Ihe our ciIies. NMMC
generaIes marginal revenues o Ps700,000 rom
iIs waIer supply operaIions.
Existing Water Supply System
Navghar Manikpur draws a IoIal waIer supply
o 24 MLD. However, iIs IoIal quoIa available
under boIh schemes is J2 MLD. The IoIal IreaIed
waIer available or consumpIion Io Ihe ciIizens
is !8.4 MLD (85 liIers per capiIa per day |lpcd).
WaIer is available or J hours every day and is
supplied Ihrough individual connecIions. The
IoIal number o direcI connecIions in Ihe ciIy
is 5,54!, and Ihese are all unmeIered. A basic
proile o Ihe waIer supply sysIem o Ihe Council
is presenIed in Table 44.
1abIe 44 asic Pro!iIe o! WaIer 5uppIy 5ervices in Navghar Manikpur
Navghar Manikpur UIiIiIy Pro!iIe
Key
ih!rasIrucIure
compohehIs
8ulk supply 24 MLD
TreaIed waIer available or
consumpIion
!00 lpcd
WaIer IreaImenI capaciIy Surya headworks (joinI scheme) !00 MLD
Uzgaon 20 MLD
SIorage capaciIy 6 elevaIed sIorage reservoirs 2.6 MLD
5 ground sIorage reservoirs !.85 MLD
DisIribuIion neIwork !08 km
ConnecIions 5,54!
WaIer supply
!ihahcials
(FY2007)
mainIenance cosIs
Ps76.8 million
1ari!! llaI Iari sIrucIure Ps!20 per monIh or residenIial connecIions
Ps!,500 per monIh or indusIrial connecIions
Source: Navghar Manikpur Municipal Council.
Navghar Manikpur
127
Problem Area
As a irsI sIep Io assessing Ihe sIaIus o waIer
supply services in Ihe ciIy o Navghar Manikpur,
an assessmenI o Ihe problem areas in Ihe
exisIing sysIem's services needs Io be carried
ouI. This would highlighI Ihe inIervenIions
required Io improve Ihe level o services. The
irsI acIiviIy Io underIake is a service assessmenI
and Ihe exisIing projecIs reviewed. lI should be
noIed IhaI Ihe assessmenI presenIed here or
Navghar Manikpur is based on only a ew key
would be required Io carry ouI a consumer
survey, waIer audiI, leak deIecIion survey, and
energy audiI or Ihe enIire value chain o waIer
supply services.
8ased on Ihe preliminary analysis o Ihe
waIer supply service daIa
!4
o Ihe NMMC and
discussions wiIh iIs oicials, CPlSlL Pisk and
lnrasIrucIure SoluIions LimiIed (CPlSlL) assessed
iIs currenI waIer supply sysIem. Table 45 presenI
Ihe key indicaIors or assessing Ihe sysIem.
!4
1abIe 45 Key WaIer 5uppIy IndicaIors !or Navghar Manikpur
Per!ormance Area Norm
Navghar
Manikpur Key In!erence
8ulk WaIer
Supply (per capiIa
consumpIion)
!J5 lpcd 85 lpcd PeducIion o disIribuIion losses rom 20% Io !5%
and uIilizaIion o Ihe enIire waIer supply quoIa o
J2 MLD increases Ihe waIer availabiliIy Io !20 lpcd.
Hence, Ihere is no urgenI need Io augmenI waIer
supply Io Navghar Manikpur.
1reaImehI
capaciIy
!00% !00% There is no urgenI need or increasing Ihe capaciIy o
Ihe waIer IreaImenI planI.
TreaImenI loss Less Ihan J% 2% Loss levels are as per accepIable sIandards.
Losses Less Ihan
!5%
22%
a
Loss levels are moderaIe. Primarily ricIional losses
and can be broughI down by improved operaIional
eiciency, including beIIer leak managemenI.
Cohsumer
Coverage 95%!00% !00%
b
This includes only direcI service connecIions.
MeIering !00% 0% No meIers have been insIalled aI Ihe consumer end,
a laI Iari sIrucIure is prevalenI.
DuraIion o
waIer supply
24 hours J hours
each day
lnadequaIe supply hours. The supply hours need Io
be increased.
OperaIion and
mainIenance cosI
recovery
!00% !00% lullcosI recovery indicaIes Ihe implemenIaIion
o raIional Iari levels and an overall eiciency in
managemenI o waIer supply acIiviIy.
FRQWLQXHGRQQH[WSDJH
128
AIer assessing Ihe waIer supply services in
Navghar Manikpur, Ihe UL8 should clearly lisI
all Ihe service and inrasIrucIurerelaIed issues
being aced by Ihe currenI waIer supply sysIem
in Ihe ciIy. 8ased on Ihe sIaIus o Ihe waIer
supply sysIem, key indicaIors, and resulIanI
inerences, Ihe ollowing areas appear Io need
invesImenI on a prioriIy basis:
(i) underIake a leakage sIudy Io capIure Ihe
losses in Ihe disIribuIion sysIem, and
(ii) insIall meIers Io undersIand Ihe paIIern o
consumpIion and levy an unbiased Iari.
been idenIiied or Navghar Manikpur under
various schemes or improvemenI o Ihe waIer
supply services. lrom discussions wiIh Ihe
oicials aI Navghar Manikpur, iI is undersIood
IhaI Ihe ollowing projecI is being planned
(Table 46).
The source augmenIaIion projecI, menIioned in
Table 46, is currenIly under preparaIion and no
approval has been received. Since Ihe currenI
proposal is, aI besI, an esIimaIe and no decision
has been Iaken on iI, Ihis projecI has noI been
considered while exploring Ihe PPP alIernaIives
or waIer supply operaIions aI Navghar
Manikpur.
exisIing sIaIus o waIer supply services in
Ihe ciIy, idenIiied Ihe key issues, and briely
1abIe 46 Key WaIer 5uppIy ProjecIs PIanned and Proposed
AugmenIaIion o waIer supply
under Ihe currenI joinI scheme
Proposed projecI or source augmenIaIion
o !25 MLD or supply Io all Ihe municipal
councils, Io be execuIed by MMPDA
(DPP): Ps6,729 million
lnsIallaIion o meIers No proposed scheme
DPP ~ deIailed projecI reporI, MLD ~ million liIers per day, MMPDA ~ Mumbai MeIropoliIan Pegional DevelopmenI
AuIhoriIy, Ps ~ rupees.
Sources: Navghar Manikpur Municipal Council and MaharashIra !eevan Pradhikaran.
Per!ormance Area Norm
Navghar
Manikpur Key In!erence
UniI income
Ps8.77/kl
Ps8.85/kl
The currenI per uniI (kl) revenue realizaIion is aI
saIisacIory levels.
c
CollecIion eiciencies are aI saIisacIory levels.
kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day.
a
The loss levels here Iake inIo accounI raw waIer Iransmission loss and pure waIer disIribuIion loss. TreaImenI and raw waIer
Iransmission loss has been esIimaIed Io be aI minimal accepIable levels as undersIood rom Ihe oicials. ln Ihe absence o
meIers, Ihe leakages in Ihe disIribuIion neIwork cannoI be accuraIely esIablished.
b
As per Navghar Manikpur Municipal Council oicials, one connecIion serves Iwo households.
c
Sources: CPlSlL analysis and daIa rom Navghar Manikpur Municipal Council.
Table 45 FRQWLQXHG
Navghar Manikpur
129
reviewed Ihe projecIs idenIiied by Ihe ciIy,
Ihe nexI sIage involves choosing beIween Ihe
public mode o unding and implemenIaIion
o Ihe proposed projecI and Ihe privaIe or
publicprivaIe parInership (PPP)based mode o
developing and implemenIaIion o Ihe projecI.
The assessmenI shows IhaI no major capiIal
invesImenI is needed and Ihe operaIion o Ihe
waIer supply sysIem is aI a saIisacIory level. ln
such a scenario, Ihe only area o improvemenI
needed is Io ensure IhaI all connecIions are
meIered and IhaI Ihe consumers are charged
on Ihe basis o Iheir consumpIion. This will
also reduce wasIage o waIer. Such a scenario
requires insIallaIion o meIers and improved
eiciency in billing and collecIion.
lmprovemenI in Ihe overall waIer supply
services in Navghar Manikpur, Ihrough Ihe
inIroducIion o meIering in Ihe sysIem, may be
done under a PPP sIrucIure in which meIering,
billing, and collecIion o waIer supply charges
are ouIsourced Io a privaIe operaIor. A viabiliIy
assessmenI has been carried ouI Io assess
wheIher Ihe NMMC should underIake Ihe
and managemenI o meIers, and also generaIe
bills and collecI paymenIs, or wheIher Ihis can
be beIIer managed by a privaIe developer.
The key assumpIions used Io underIake Ihe
preliminary inancial analysis are indicaIed in
Table 47.
8ased on Ihe assumpIions in Table 47, Ihe
meIering, billing, and collecIion are made by Ihe
NMMC, and OpIion 2, where Ihe invesImenIs
idenIiied or Ihe proposed meIering, billing, and
collecIion are ully unded by Ihe privaIe developer.
Under OpIion !, Ihe municipal council would
have Io invesI a IoIal capiIal expendiIure o
Ps40 million (in Ihe irsI year) and incur an
operaIions cosI o Ps!0 million per annum. WiIh
meIering and a volumeIric Iari, Ihe municipal
council would earn waIer supply charges o
Ps480 million by 20!J.
Under OpIion 2, since Ihe NMMC is highly
eicienI in Ihe managemenI o iIs operaIions
and has a high revenue collecIion eiciency,
Ihere is limiIed scope or a privaIe operaIor
Io bring in urIher eiciency. Thereore, Ihe
privaIe operaIor would incur Ihe same amounI
o capiIal expendiIure and generaIe almosI
equivalenI waIer charges as Ihe NMMC.
CompuIer soIware mainIenance cosI !5% o capiIal expendiIure
PopulaIion growIh raIe (compounded annual growIh raIe) 8.!% per annum
a
CollecIion eiciency 95% in case o boIh UL8 and PPP
Period o conIracI / evaluaIion Period o 5 years up Io 20!J
CosI reducIion eiciency (operaIion and
mainIenance cosIs)
0% in case o UL8
20% in case o PPP
kl ~ kiloliIer, PPP ~ publicprivaIe parInership, Ps ~ rupees, UL8 ~ urban local body.
a
ln Ihe absence o any general body resoluIion, Ihe volumeIric Iari o a Iown o similar naIure has been considered.
130
Hence, a PPP in meIering, billing, and collecIion
would noI be highly beneicial Io Ihe NMMC.
lI can implemenI Ihe meIering acIiviIy by
obIaining granIs rom governmenI schemes,
including MaharashIra Sujal Nirmal Abhiyan.
Since Ihe privaIe developer would make Ihe
invesImenIs or insIallaIion o meIers and
would also be responsible or overseeing Iheir
operaIions, generaIing bills, and collecIing
paymenIs, Ihe suiIable PPP sIrucIure is IhaI
o a PPP agreemenI or meIering, billing, and
collecIion.
invesImenIs or insIallaIion o meIers aI
Ihe consumer end, overseeing Iheir O&M,
mainIaining a compuIerized daIa recording
sysIem, generaIing bills, and collecIing user
charges rom Ihe consumers. The privaIe
developer would noI be required Io underIake
any oIher acIiviIy in Ihe enIire chain o waIer
supply services. The Iype o meIer Io be insIalled
and Ihe number o connecIions where Ihe meIer
is Io be insIalled would be speciied by Ihe UL8.
The Iari Io be levied would also be deIermined
by Ihe UL8. The perormance sIandards laid
ouI by Ihe UL8 would speciy parameIers, such
as Ihe revenue collecIion IargeI Io be achieved
needs Io be mainIained. The cosI o purchase
and insIallaIion o Ihe meIer would generally
be recovered by Ihe privaIe developer rom
Ihe consumers as parI o Ihe waIer supply
service bills.
lor Ihe operaIion and mainIenance acIiviIy
underIaken by Ihe privaIe developer, a ixed
annuiIy paymenI is made by Ihe UL8. This
annuiIy amounI would generally be Ihe bidding
parameIer.
Step 4: Procurement
procuremenI process, Ihe NMMC would need
Io develop a IransacIion sIrucIure IhaI would
cover Ihe aspecIs relaIing Io deIails on Ihe
parIies involved in Ihe conIracI. This would
include Ihe conIracIual relaIionship beIween
Ihe parIies, naIure o Ihe arrangemenI, risk
allocaIion, Ihe Iari Io be levied, Ihe duraIion
o Ihe conIracI, perormance indicaIors,
!J!
VIII Shirpur
Brief Introduction to Shirpur
Shirpur is a ciIy locaIed in Ihe Dhule disIricI
o MaharashIra. WiIh a currenI populaIion
o 75,000 (6!,294 aI Ihe 200! census), Ihe
ciIy, in recenI years, has seen an increase in
indusIrial acIiviIy. The ciIy is spread over an area
o 9 square kilomeIers and has an esIimaIed
!2,000 households. The ciIy is managed
by Ihe ShirpurWarvade Municipal Council
(SWMC), which has a IoIal revenue budgeI o
Ps96.9 million and a surplus revenue accounI o
PsJ7.6 million (iscal year 2007).
The waIer supply works in Ihe ciIy is managed by
Ihe SWMC, and iI incurs a deiciI o Ps900,000
rom iIs waIer supply operaIions. The ciIy has no
unpaid liabiliIies on iIs waIer accounI.
at Shirpur
Shirpur has a IoIal waIer supply o 9 million
liIers per day (MLD). lI has Iwo main waIer
sources: Ihe Tapi Piver (aI a disIance o
8.5 kilomeIers) and Ihe Karvand Dam (aI a
disIance o 8 kilomeIers). The IreaIed waIer
available or consumpIion is 97 liIers per
capiIa per day (lpcd). WaIer is supplied daily
or !.5 hours. The IoIal number o direcI
connecIions Io Ihe ciIy is 9,249, all o which
are unmeIered. A basic proile o Ihe waIer
supply sysIem o Ihe SWMC is presenIed in
Table 48.
1abIe 48 asic Pro!iIe o! WaIer 5uppIy 5ervices in 5hirpur
5hirpur UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply 9 MLD
Tapi Piver 4 MLD
Karvand Dam 5 MLD
WaIer availabiliIy aIer IreaImenI 97 lpcd
WaIer IreaImenI capaciIy Ganesh Colony and
Wazari Poad
!2 MLD
reservoirs
6.6 MLD
2 ground sIorage
reservoirs
2.J MLD
DisIribuIion neIwork J4 kilomeIers
ConnecIions 9,249
WaIer supply
!ihahcials (FY2007)
Annual operaIion and mainIenance cosIs Ps!0.6 million
1ari!! llaI Iari (per annum) DomesIic Ps!,000
NondomesIic Ps4,600
Special caIegories Ps2,000
Source: ShirpurWarvade Municipal Council.
132
Problem Area
As a irsI sIep in assessing Ihe sIaIus o Ihe
waIer supply services in Ihe ciIy o Shirpur, an
assessmenI o problem areas in Ihe exisIing
sysIem's services needs Io be carried ouI. This
would highlighI Ihe inIervenIions required Io
improve Ihe level o services. The irsI acIiviIy
Io underIake is a service assessmenI againsI a
ew key perormance criIeria. On Ihe basis o
Ihe assessmenI, Ihe key issues in Ihe currenI
sysIem would need Io be idenIiied and Ihe
exisIing projecIs reviewed. lI should be noIed
IhaI Ihe assessmenI presenIed here or Shirpur
is based on only a ew key parameIers. lor a
deIailed review, as discussed in ParI l o Ihe
Iool kiI, Ihe urban local body (UL8) would be
required Io carry ouI consumer survey, waIer
audiI, leak deIecIion survey, and energy audiI
or Ihe enIire value chain o waIer supply
services.
8ased on Ihe preliminary analysis o waIer
supply service daIa
!5
and discussions wiIh SWMC
LimiIed (CPlSlL) assessed Ihe currenI waIer supply
sysIem in Shirpur. Table 49 presenIs key indicaIors
or assessing Ihe waIer supply sysIem aI Shirpur.
Shirpur, Ihe nexI sIep is or Ihe UL8 Io clearly
lisI all Ihe waIer service and inrasIrucIure issues
aced by Ihe ciIy. 8ased on Ihe sIaIus o Ihe
(i) insIallaIion o meIers and adopIion o a
volumeIricbased Iari sysIem, and
(ii) underIaking waIer supply and energy
audiIs Io ascerIain loss levels.
As per discussions wiIh SWMC oicials, iI is
undersIood IhaI currenIly no projecIs have been
proposed in Ihe waIer supply secIor or Shirpur.
exisIing sIaIus o waIer supply services in Ihe
projecIs idenIiied by Ihe ciIy, Ihe nexI sIage
o unding and implemenIing Ihe proposed
implemenIaIion o Ihe projecI.
As per Ihe assessmenI, no major capiIal
invesImenI is needed and Ihe operaIion o
Ihe waIer supply sysIem is saIisacIory. ln Ihis
scenario, Ihe only area o improvemenI is Io
ensure IhaI all connecIions are meIered and
IhaI consumers are charged on Ihe basis o
Iheir consumpIion. MeIers, Ihereore, need
Io be insIalled and Ihe eiciency o billing
and collecIion improved. This will also reduce
wasIage o waIer. This may be done under a
PPP sIrucIure wherein Ihe acIiviIy o meIering,
billing, and collecIion o waIer supply charges is
ouIsourced Io a privaIe operaIor.
A viabiliIy assessmenI was underIaken Io assess
wheIher Ihe SWMC should underIake Ihe
and managemenI o meIers, and generaIing bills
and collecIing service ees, or wheIher Ihe same
acIiviIy could be managed beIIer by a privaIe
developer. The key assumpIions o Ihe analysis
are ouIlined in Table 50.
8ased on Ihe assumpIions in Table 50, a
!5
Shirpur
133
1abIe 49 Key WaIer 5uppIy IndicaIors !or 5hirpur
Per!ormance Area Norm 5hirpur Key In!erence
8ulk WaIer
Supply (per capiIa
IreaIed waIer
available or
consumpIion)
70 lpcd 97 lpcd The IreaIed waIer available or consumpIion
is 97 lpcd (7.J MLD), which is higher Ihan Ihe
CPHLLO norm o 70 lpcd or Iowns wiIh piped
waIer supply wiIhouI sewerage sysIems. The
ciIy, Ihereore, does need Io augmenI iIs bulk
waIer supply.
1reaImehI
WaIer IreaImenI
planI capaciIy
!00% !00% The currenI insIalled waIer IreaImenI planI
capaciIy is suicienI and has been operaIing
as per Ihe required sIandards.
TreaImenI loss Less Ihan J% J% The IreaImenI loss levels are considered Io be
as per norm.
Losses Less Ihan !5% !5%
a
Minimal Iransmission losses. The currenI levels
do noI, Ihereore, require replacemenI or
rehabiliIaIion o pipelines.
Cohsumer
Coverage
(connecIions/IoIal
households)
!00% !00%
b
On average in SWMC, each connecIion
serves ive households. Thereore, Ihe exisIing
connecIions indicaIe ull coverage. The ciIy has
no public sIandposIs.
MeIering/ToIal
connecIions
!00% 0% No meIers are insIalled aI Ihe consumer end.
A laI Iari sysIem based on pipe diameIer is
prevalenI.
DuraIion o waIer
supply
24 hours !.25 hours
each day
The number o supply hours needs Io be
increased.
OperaIion and
mainIenance cosI
recovery
!00% 9!% The currenI cosI recovery levels need Io be
improved. lI would be imporIanI Io review
Ihe laI raIes and adopI a volumeIric Iari
sIrucIure Io relecI more accuraIe revenue
demand levels.
UniI income
PsJ.24/kl
Ps2.95/kl
eiciency and reduce energy cosIs in order Io
improve cosI recovery.
CollecIion eiciency !00% 9J%
c
CollecIion eiciency level is saIisacIory.
CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion, kl ~ kiloliIer, lpcd ~ liIer per capiIa per day,
MLD ~ million liIers per day, SWMC ~ ShirpurWarvade Municipal Council.
a
As per SWMC oicials, Ihere is no loss aI Ihe disIribuIion end. ln Ihe absence o bulk meIers and consumer end meIers,
Ihere is no accuraIe meIhod Io ascerIain Ihe loss level. lI is assumed IhaI minimum o !5% losses are ineviIable due Io
ricIion and leakages. lor Ihe purpose o analysis, Ihereore, Ihe minimal loss levels have been considered.
b
SWMC oicials indicaIe IhaI one connecIion serves ive households. However, iI would be prudenI or Ihe SWMC Io
underIake waIer supply audiIs and mainIain deIailed consumer daIabase Io ensure ull coverage levels.
c
CollecIion eiciency has been measured againsI currenI demand raised visavis Ihe currenI collecIions.
Sources: CPlSlL analysis and discussion wiIh ShirpurWarvade Municipal Council oicials.
134
proposed meIering, billing, and collecIion
are made by SWMC, and OpIion 2, where
meIering, billing, and collecIion are ully unded
by Ihe privaIe developer.
Under OpIion !, Ihe SWMC would have Io invesI
a IoIal capiIal expendiIure o Ps50 million (in
Ihe irsI year) and also incur an operaIions cosI
o Ps!0 million per annum. WiIh meIering and
a volumeIric Iari, Ihe SWMC would earn waIer
supply charges o Ps50 million by 20!J. WiIh
a revenue surplus o PsJ7.6 million, Ihe SWMC
has Ihe capaciIy Io insIall and mainIain meIers.
Under OpIion 2, since Ihe SWMC is highly
eicienI in Ihe managemenI o iIs operaIions
and has high revenue collecIion eiciency, Ihere
is limiIed scope or Ihe privaIe operaIor Io bring
in urIher eiciencies. The privaIe operaIor
would incur Ihe same capiIal expendiIure and
generaIe almosI equivalenI waIer charges, as
sIaIed under OpIion !.
Hence, Ihe SWMC would noI derive subsIanIial
beneiIs rom PPP in meIering, billing, and
collecIion. lI could implemenI meIering Ihrough
unding rom inIernal unds or by obIaining
a granI rom governmenI schemes, including
MaharashIra Sujal Nirmal Abhiyan.
CompuIer soIware mainIenance cosI !5% o capiIal expendiIure
PopulaIion growIh raIe (compounded annual growIh raIe) 2.55% per annum
a
CollecIion eiciency 9J% in case o boIh SWMC and PPP
Period o conIracI Period o 5 years up Io 20!J
CosI reducIion eiciency (operaIion and
mainIenance cosIs)
0% in case o SWMC
20% in case o PPP
kl ~ kiloliIer, PPP ~ publicprivaIe parInership, Ps ~ rupees, SWMC ~ ShirpurWarvade Municipal Council.
a
ln Ihe absence o any general body resoluIion, Ihe volumeIric Iari o a Iown o similar naIure has been considered.
!J5
IX Akot
Brief Introduction to Akot
The ciIy o AkoI is a 8class municipal council
in Ihe Akola disIricI o MaharashIra. The ciIy is
governed by Ihe AkoI Municipal Council (AMC)
and encompasses an area o !4.J4 square
kilomeIers. WiIh a currenI populaIion o
!00,000 (8!,000 aI Ihe 200! census), Ihe ciIy
has an esIimaIed !8,600 households. AMC has
a IoIal revenue budgeI o Ps72.! million (iscal
year 2007) and generaIes a revenue surplus o
Ps0.4 million.
The waIer supply works, including billing and
collecIion, are currenIly operaIed and managed
by MaharashIra !eevan Pradhikaran (M!P).
All Ihe revenue income and expendiIure or
Ihe waIer supply works are, Ihereore, ully
overseen by M!P.
AkoI draws a IoIal waIer supply o J.4 million
liIers per day (MLD) primarily rom Ihe
Wan Dam. lI receives waIer rom a joinI
scheme (including AkoI and 84 villages in
Ihe surrounding areas) operaIed by M!P. The
IoIal IreaIed waIer available or Ihe ciIizens is
2.8 MLD (27.4 liIers per capiIa per day |lpcd).
WaIer is available or J hours each day and is
supplied Ihrough individual connecIions and
public sIandposIs. A basic proile o Ihe waIer
supply sysIem o AMC is presenIed in Table 5!.
1abIe 51 asic Pro!iIe o! WaIer 5uppIy 5ervices in AkoI
AkoI UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply J.4 MLD
Wan Dam !.9 MLD
8ore well !.5 MLD
WaIer availabiliIy or consumpIion 27.4 lpcd
WaIer IreaImenI capaciIy (or Ihe joinI scheme) !6 MLD
SIorage capaciIy LlevaIed sIorage
reservoirs
!.8! MLD
ConnecIions 6,9!J
WaIer supply
!ihahcials (FY2007)
cosIs
Ps!4.4 million
1ari!! llaI Iari (annual) DomesIic !5 mm: PsJ00
20 mm: Ps460
25 mm: Ps890
FRQWLQXHGRQQH[WSDJH
136
Problem Area
waIer supply services in Ihe ciIy o AkoI, an
assessmenI o Ihe problem areas in Ihe exisIing
improve Ihe level o services. The irsI acIiviIy Io
underIake is a service assessmenI againsI a ew
key perormance criIeria. On Ihe basis o Ihe
assessmenI, Ihe key issues in Ihe currenI sysIem
would need Io be idenIiied and Ihe exisIing
projecIs reviewed. lI should be noIed IhaI Ihe
assessmenI or AkoI is based on only a ew key
parameIers. lor a deIailed review, as discussed in
ParI l o Ihe Iool kiI, Ihe UL8 would be required
Io carry ouI consumer survey, waIer audiI, leak
deIecIion survey, and energy audiI or Ihe enIire
value chain o waIer supply services. The key
perormance parameIers used are presenIed in
Table 52.
service daIa
!6
and discussions wiIh AMC oicials,
(CPlSlL) assessed Ihe currenI waIer supply sysIem
in AkoI. Table 52 presenIs Ihe indicaIors or
assessing Ihe waIer supply sysIem aI AkoI and
Ihe resulIanI inerences.
AkoI, Ihe nexI sIep is or Ihe urban local
body (UL8) Io clearly lisI all Ihe service and
currenI waIer supply sysIem in Ihe ciIy. 8ased
on Ihe sIaIus o Ihe waIer supply sysIem, key
indicaIors, and Ihe resulIanI inerences, Ihe
ollowing areas appear Io need invesImenI on a
prioriIy basis:
(i) augmenIaIion o bulk waIer supply Io
Ihe ciIy,
(ii) !00% meIering, and
(iii) improvemenI in Ihe overall operaIional
eiciencies o Ihe sysIem.
Having idenIiied Ihe key issues in Ihe
exisIing sIaIus o provisioning o waIer
supply services in Ihe ciIy, Ihe nexI acIiviIy
is Io underIake a brie review o Ihe projecIs
IhaI have already been idenIiied or AkoI
under various schemes or improving Ihe
waIer supply services. AMC and M!P have,
under Ihe Urban lnrasIrucIure DevelopmenI
Scheme or Small and Medium Towns
(UlDSSMT) scheme, idenIiied Ihe projecI or
Ihe waIer supply secIor (see Table 5J).
!7
Table 5! FRQWLQXHG
AkoI UIiIiIy Pro!iIe
1ari!! Commercial !5 mm: Ps!00
20 mm: Ps205
25 mm: PsJ85
VolumeIric Iari DomesIic Ps!0.20/kl
Commercial Ps46.20/kl
lY ~ iscal year, kl ~ kilo liIers, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, mm ~ millimeIer, Ps ~ rupees.
Sources: MaharashIra !eevan Pradhikaran and AkoI Municipal Council.
!6
ln Ihe absence o any general body resoluIion, Ihe volumeIric Iari o a Iown o similar naIure has been considered or all
Ihe assessmenIs. The acIual Iechnical losses may be more or less Ihan IhaI sIaIed and can be veriied only i waIer audiI is
underIaken along wiIh consumer survey.
!7
lor Ihe purpose o Ihis assessmenI, due diligence on Ihe projecI componenIs and cosIs has noI been underIaken.
AkoI
137
1abIe 52 Key WaIer 5uppIy IndicaIors !or AkoI
Per!ormance Area 1ypicaI Norm AkoI Key In!erence
8ulk WaIer
Supply (per capiIa
IreaIed waIer available
or consumpIion)
70 lpcd 29 lpcd The level o waIer supply Io Ihe ciIy is
highly inadequaIe. The ciIy needs Io
augmenI iIs bulk waIer supply immediaIely.
The carrying capaciIy o Ihe raw waIer
Iransmission lines is inadequaIe Io source
addiIional raw waIer rom Ihe source. The
size o Ihe Iransmission lines needs Io be
augmenIed.
1reaImehI
WTP capaciIy !00% !00% The insIalled capaciIy o WTP is parI o
Ihe combined scheme or AkoI and 84
surrounding villages. O Ihe IoIal insIalled
capaciIy o Ihe WTP, 22% is uIilized or
AkoI. l Ihe bulk waIer supply Io Ihe ciIy
is augmenIed signiicanIly, capaciIy o Ihe
WTP may need Io be augmenIed.
TreaImenI loss Less Ihan J% J% CurrenI loss levels are as per minimal
accepIable sIandards.
Losses Less Ihan !5% !5%
a
The currenI loss levels are as per minimal
accepIable levels.
Cohsumer
Coverage 95%!00% 74% Assuming IhaI each connecIion serves Iwo
households, Ihe ciIy should have aI leasI
9,J00 connecIions. Coverage needs Io be
improved.
MeIering !00% !0% All Ihe connecIions should be meIered.
DuraIion o
waIer supply
24 hours J hours The supply hours are inadequaIe.
OperaIion and
mainIenance cosI
recovery
!00% J2% The high producIion cosI, coupled wiIh
poor collecIion eiciency, resulIs in a poor
level o recovery.
UniI income
Ps!!.24/kl
PsJ.60/kl
Per uniI realizaIion is exIremely low.
CollecIion eiciency !00% !8% The level o collecIion eiciency is exIremely
poor and needs Io be improved drasIically.
kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, Ps ~ rupees, WTP ~ waIer IreaImenI planI.
a
ln Ihe absence o !00% meIering, iI is noI possible Io accuraIely esIimaIe Ihe acIual levels o disIribuIion loss. The loss level
assumed here is as per M!P oicials.
Source: CPlSlL analysis based on daIa given by MaharashIra !eevan Pradhikaran and AkoI Municipal Council.
138
projecIs idenIiied by Ihe ciIy, Ihe nexI sIage
implemenIing Ihe projecI. This requires a viabiliIy
underIaken Io assess Ihe viabiliIy o Ihe projecIs
idenIiied. The purpose o Ihis assessmenI is Io
assess Ihe commercial viabiliIy o Ihe projecI i
iI is developed as a PPP. The viabiliIy assessmenI
underIaken in Ihe ollowing secIions is largely
ocused on deIermining wheIher Ihe public
secIor, i.e., AMC, or Ihe privaIe secIor has Ihe
inancial wherewiIhal Io underIake Ihe projecI.
The invesImenI need under each scenario has
been looked aI. ln addiIion, Ihe opIion o
ViabiliIy Gap lund (VGl) supporI has also been
considered Io help assess Ihe viabiliIy o Ihe
projecI rom Ihe privaIe secIor perspecIive.
lrom Ihe deIailed projecI reporI (DPP) review
presenIed, iI can be observed IhaI AkoI plans
Io underIake projecIs worIh Ps540 million by
iscal year 20!!. CPlSlL underIook a preliminary
inancial analysis Io undersIand Ihe applicabiliIy
o PPP Io Ihese projecIs. The seI o key
assumpIions used in underIaking Ihe inancial
analysis are indicaIed in Table 54.
8ased on Ihe assumpIions in Table 54, a
proposed projecIs are made by AMC, and
Ihe proposed projecIs are ully unded by Ihe
privaIe developer.
AMC would have Io invesI a IoIal o
PsJ60 million (excluding granI amounI) and,
in addiIion, incur Ihe operaIions cosI o an
average o PsJ5 million per annum.
!8
This resulIs
in a neI cash low (in neI presenI values) o
PsJ70 million. However, AMC has a revenue
surplus o Ps0.4 million only, Ihus, iI is noI in a
posiIion Io underIake such invesImenI.
Under OpIion 2, i Ihe invesImenI gap o
PsJ60 million and Ihe yearonyear operaIion
cosI o Ps!J.5 million (considered up Io 20J0)
is incurred by Ihe privaIe developer, Ihen
Ihe privaIe developer would require viabiliIy
gap unding o Ps2J0 million. This is in spiIe
o improved operaIional and managerial
eiciencies broughI in and revenue reIained
1abIe 53 Proposed WaIer 5uppIy ProjecIs !or AkoI
AugmenIaIion o bulk waIer supply
Io AkoI ciIy rom Ihe exisIing
Wan Dam source and expansion o
Ihe disIribuIion neIwork in Ihe ciIy
lI includes augmenIaIion o waIer
supply by 2! MLD, consIrucIion
o raw waIer rising mains,
augmenIaIion o Ihe WTP capaciIy
Io 2! MLD, and expansion o Ihe
disIribuIion neIwork by
80 kilomeIers
DPP cosI: Ps450 million, o which
Ps200 million is approved
ToIal capiIal cosI (including
escalaIion): Ps540 million
UlDSSMT granI: Ps!80 million
AMC's conIribuIion: PsJ60 million
AMC ~ AkoI Municipal Council, DPP ~ deIailed projecI reporI, MLD ~ million liIers per day, UlDSSMT ~ Urban lnrasIrucIure
DevelopmenI Scheme or Small and Medium Towns, WTP ~ waIer IreaImenI planI.
Sources: MaharashIra !eevan Pradhikaran and AkoI Municipal Council.
!8
The operaIions cosI incurred by AMC is higher Ihan IhaI incurred by Ihe privaIe operaIor since iI does noI have
cosI eiciency.
AkoI
139
TreaImenI losses 2%
DisIribuIion losses 20% in case managed by AMC
!5% in case managed by AMC
Tari
a
Ps4.20/kl
b
CollecIion eiciency Phased rom !8% Io 70% in case o AMC
Phased rom J0% Io 90% in case o privaIe developer
CosI reducIion eiciency (on operaIions) 0% in case managed by AMC
20% in case managed by privaIe parIy
(only up Io 20!5)
AMC ~ AkoI Municipal Council, kl ~ kiloliIer, Ps ~ rupees.
a
b
As per M!P oicials, Ps4.20 has been currenIly decided Io be Ihe new Iari raIe posI implemenIaIion o Ihe scheme.
The currenI Iari o Ps!0.2/kl shall be applicable only up Io lY20!!.
ParIicuIars
CapiIaI
FxpendiIure
(Rs millioh)
In Case o!
InvesImenI and
OperaIions
by AMC
In Case o!
InvesImenI and
OperaIions by
PrivaIe OperaIor
DeIailed projecI reporI cosI 456
LscalaIed cosI 5J5
GranI !76
AMC share (expecIed) buI envisaged Io
be sourced rom privaIe operaIor (A)
!9.5
ViabiliIy gap rom privaIe secIor (8) (NeI presenI
value: !4%)
(NeI presenI
value: !4%)
ToIal invesImenI required (A8) J59 PsJ70 million Ps2J0 million
AMC ~ AkoI Municipal Council, PPP ~ publicprivaIe parInership, Ps ~ rupees.
by Ihe developer. The exisIing UlDSSMT granI
o Ps!76 million and Ihe VGl requiremenI
o Ps2J0 million indicaIe IhaI 76% o Ihe
IoIal projecI cosI would be unded by Ihe
governmenI. This high granI requiremenI would,
Ihereore, deeaI Ihe purpose o Iaking up Ihe
projecI on a PPP basis, hence, iI is noI advisable
Io underIake Ihe projecI on a PPP basis. Table 55
presenIs Ihe invesImenI requiremenI under each
o Ihe opIions.
AMC may ind iI diiculI Io implemenI Ihe
projecI on iIs own, and iI does noI have Ihe
inancial capabiliIy Io meeI Ihe invesImenI gap.
Similarly, even i a privaIe developer were Io
underIake Ihe invesImenIs, Ihe overall accounI
would conIinue Io be in a deiciI and iI would
noI be proiIable or Ihe privaIe developer eiIher.
WiIh 76% unding rom Ihe governmenI, iI is
noI easible Io have a concession or Ihis projecI
on a PPP basis.
140
proposed projecI Ihrough a publicunded or
PPP mode, Ihe nexI sIep is Io choose Ihe PPP
sIrucIure besI suiIed Io addressing Ihe overall
needs o Ihe proposed projecI.
lrom Ihe viabiliIy assessmenI underIaken, iI is
observed IhaI Ihe invesImenI requiremenIs or
Ihe projecI are large and AMC, on iIs own, would
noI be able Io develop, operaIe, and manage Ihe
projecI. Also, assessmenI o Ihe privaIe secIor
viabiliIy or underIaking Ihe projecI indicaIes
IhaI Ihe projecI is noI commercially easible or
a privaIe developer given Ihe currenI invesImenI
requiremenIs and Ihe operaIion cosIs involved.
Under such a scenario, Ihe sIaIe governmenI
would have Io provide addiIional inancial
supporI Io puI in place Ihe physical
inrasIrucIure or Ihe projecI. However, or Ihe
operaIion and managemenI o Ihe waIer supply
sysIem, a privaIe developer can be appoinIed
under a perormancebased managemenI
agreemenI.
ln a perormancebased managemenI conIracI,
Ihe operaIion and mainIenance o Ihe enIire
waIer supply sysIem rom source Io consumer,
including meIering, billing, and collecIion o
revenues. All capiIal invesImenIs needed Io
improve Ihe waIer supply and sewerage services
would have Io be borne by Ihe public secIor.
The operaIing sIandards are as prescribed by Ihe
UL8. The privaIe developer is given Ihe righIs Io
levy Ihe user charges seI by Ihe UL8, and collecI
and hand over Ihe charges Io Ihe UL8. lor Ihe
acIiviIies carried ouI, Ihe UL8 would make a
perormancebased paymenI Io Ihe privaIe
developer.
arrangemenIs under Ihe perormancebased
managemenI conIracI are provided in ParI ll o
Ihis Iool kiI, and Ihe Ierm sheeI or Ihis conIracI
sIrucIure is in ParI lV.
Step 4: Procurement
Io be adopIed or operaIing and mainIaining Ihe
proposed projecI, Ihe nexI sIage is Io plan Ihe
procuremenI process. To iniIiaIe Ihe procuremenI
process, AMC would need Io develop a
IransacIion sIrucIure IhaI would cover Ihe aspecIs
relaIing Io deIails on Ihe parIies involved in Ihe
conIracI, conIracIual relaIionship beIween Ihe
parIies, naIure o Ihe arrangemenI, risk allocaIion,
Iari Io be levied, duraIion o Ihe conIracI,
perormance indicaIors, paymenI Ierms, award
criIeria, and conIracI managemenI sIraIegy.
DeIails can be ound in Ihe Ierm sheeI in ParI lV.
!4!
X Saoner
Brief Introduction to Saoner
Saoner is a Iown and a WHKVLO/adminisIraIive
headquarIers o Ihe norIh parI o Nagpur disIricI
in Ihe sIaIe o MaharashIra. The Iown has an area
o J.8 square kilomeIers and a currenI populaIion
o J0,000 (28,7!2 aI Ihe 200! census). The Iown
is managed by Ihe Saoner Municipal Council
(SMC) and has an esIimaIed 8,000 households.
The waIer supply works are managed by SMC,
which incurred a deiciI o PsJ.9 million on iIs
waIer supply operaIions in iscal year 2007.
The council has no unpaid liabiliIies on iIs waIer
accounI.
Saoner has a IoIal waIer supply o !.86 million
liIers per day (MLD), o which ! MLD is rom Ihe
Kanan Piver (!2 kilomeIers rom Ihe ciIy) and
0.86 MLD is rom Ihe Kolar Piver (2 kilomeIers
rom Ihe ciIy). There are Ihree waIer IreaImenI
planIs: Iwo aI Ihe Kolar headworks siIe, and
anoIher aI Khapar road.
Saoner receives a IreaIed waIer supply o
approximaIely 47 liIers per capiIa per day (lpcd)
aI Ihe consumpIion poinI. WaIer supply is
provided on an average o ! hour each day and
is supplied Ihrough individual connecIions and
public sIandposIs. The Iown has J,694 direcI
service connecIions. A basic proile o Ihe waIer
supply sysIem o SMC is presenIed in Table 56.
Problem Area
waIer supply services in Ihe ciIy o Saoner,
required Io improve Ihe level o services.
The irsI acIiviIy Io underIake is a service
criIeria. On Ihe basis o Ihe assessmenI, Ihe
key issues in Ihe currenI sysIem would need
Io be idenIiied and Ihe exisIing projecIs
reviewed. lI should be noIed IhaI Ihe
assessmenI presenIed here or Saoner is based
on only a ew key parameIers. lor a deIailed
review, as discussed in ParI l o Ihe Iool kiI,
Ihe urban local body (UL8) would be required
Io carry ouI consumer survey, waIer audiI,
leak deIecIion survey, and energy audiI or Ihe
enIire value chain o waIer supply services.
supply service daIa
!9
o SMC and discussions
wiIh SMC represenIaIives, a ew key
indicaIors o Ihe eiciency and adequacy o
waIer supply services have been developed.
These indicaIors highlighI Ihe key issues
aced by SMC in Ihe waIer supply secIor
(Table 57).
!9
142
1abIe 56 asic Pro!iIe o! WaIer 5uppIy 5ervices in 5aoner
5aoner UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply !.86 MLD
Kanan Piver ! MLD
Kolar Piver 0.86 MLD
WaIer IreaImenI capaciIy Kolar Piver !.89 MLD
Khapar road 5 MLD
reservoirs
!!.5 MLD
ConnecIions J,694
WaIer supply
!ihahcials (FY2007)
WaIer accounI revenue PsJ.! million
1ari!! llaI Iari (per annum) DomesIic 0.5 inch: Ps926
0.75 inch: Ps!,795
! inch: Ps4,022
NondomesIic 0.5 inch: Ps4,060
0.75 inch: Ps7,7J8
! inch: Ps!6,872
lY ~ iscal year, lpcd ~ liIer per capiIa per day, MLD~ million liIers per day, Ps ~ rupees.
Source: Saoner Municipal Council.
1abIe 57 Key WaIer 5uppIy IndicaIors !or 5aoner
Per!ormance Area 1ypicaI Norm 5aoner Key In!erence
8ulk WaIer
waIer available or
consumpIion)
70 lpcd
a
47 lpcd The waIer available or consumpIion is
very low. The sand conIenI aI Ihe source
is exIremely high. As a resulI, Ihe jack
well geIs blocked and SMC is unable Io
draw suicienI waIer. There is no need
or augmenIaIion o Ihe source. The
necessary machinery or sorIing o sand
needs Io be seI.
1reaImehI
WTP capaciIy !00% !00% The capaciIy o Ihe exisIing IreaImenI
planI exceeds Ihe requiremenI. Since Ihe
currenI bulk supply is much lower Ihan
Ihe insIalled capaciIy, Ihe uIilizaIion o
Ihe WTP is limiIed Io 27%. CurrenIly,
Ihere is no need or augmenIing Ihe WTP
capaciIy.
Loss Less Ihan J% 2% Loss levels are as per norms.
FRQWLQXHGRQQH[WSDJH
Saoner
143
Per!ormance Area 1ypicaI Norm 5aoner Key In!erence
Losses Less Ihan !5% 25% There are moderaIe Iransmission losses.
However, raw waIer Iransmission loss
levels are high due Io corroded pipelines
IhaI need Io be repaired or replaced Io
conIain Ihe losses in line wiIh minimum
accepIable sIandards. ln Ihe absence o
consumer meIers, accuraIe esIimaIes
o Ihe disIribuIion loss cannoI be
ascerIained.
Cohsumer
Coverage (connecIions/
IoIal households)
46%
b
Coverage levels are poor. The low
coverage has been aIIribuIed Io Ihe
inadequaIe disIribuIion neIwork. The
currenI disIribuIion neIwork is a parI
o a 40yearold scheme and requires
expansion. AddiIional direcI connecIions
need Io be provided.
MeIering/IoIal
connecIions
!00% 0% All waIer connecIions need Io be provided
wiIh meIers.
DuraIion o waIer supply 24 hours ! hour supply on
an average
CurrenI levels are noI adequaIe and need
Io be increased.
OperaIion and
mainIenance cosI recovery
!00% 25% CosI recovery levels are poor. The currenI
Iari levels require revision. ln addiIion,
SMC needs Io pursue cosI reducIion
eiciency measures Io conIain Ihe
expendiIure incurred.
UniI income
Ps7.66/kl
Ps!.9!/kl
eiciency and reduce energy cosIs in
order Io improve cosI recovery.
CollecIion eiciency !00% 87% The igure indicaIes scope or
improvemenI in collecIion eiciency.
kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, Ps ~ rupees, SMC ~ Saoner Municipal Council, WTP ~ waIer IreaImenI planI.
a
As per CPHLLO norms, Ihe IoIal waIer supplied Io consumers aIer IreaImenI should be 70 lpcd or Iowns wiIh piped waIer
supply and no sewerage sysIem.
b
As per SMC oicials, one connecIion serves one household uniI.
Source: CPlSlL analysis and daIa provided by Saoner Municipal Council.
Table 57 FRQWLQXHG
Saoner, Ihe nexI sIep is or Ihe UL8 Io clearly lisI
all Ihe waIer service and inrasIrucIure issues
aced by Ihe ciIy. 8ased on Ihe sIaIus o Ihe
(i) augmenIaIion o bulk waIer supply,
(ii) increasing Ihe waIer supply by seIIing
up sandsiIing machinery near Ihe
source,
(iii) rehabiliIaIion and/or replacemenI o
exisIing raw waIer Iransmission lines and
expansion o disIribuIion neIwork, and
(iv) esIablishmenI o meIers or all waIer
connecIions.
144
sIaIus o provisioning o waIer supply services in
Ihe ciIy, Ihe nexI acIiviIy is Io underIake a brie
review o Ihe projecIs IhaI have already been
idenIiied or Saoner under various schemes or
improvemenI o waIer supply services. ln Ihe
conIexI o Ihe issues aced aI Saoner, SMC has
proposed a waIer supply projecI. The deIailed
projecI reporI (DPP) or Ihe proposed projecI is in
iIs inal sIages o compleIion and Ihe projecI is yeI
Io be submiIIed or approval. The deIails o Ihe
proposed waIer supply projecIs are shown in Table
58. Since Ihe proposal is currenIly being prepared,
Ihere are no escalaIion cosIs Io be considered.
implemenIing Ihe projecI. This requires a viabiliIy
A preliminary inancial analysis has already
been underIaken Io assess Ihe viabiliIy o
Ihe projecIs idenIiied and Iheir commercial
viabiliIy i developed in a PPP mode. The
viabiliIy assessmenI underIaken (discussed
in Ihe ollowing secIions) largely ocuses on
deIermining wheIher Ihe public secIor, i.e.,
SMC, or Ihe privaIe secIor has Ihe inancial
wherewiIhal Io underIake Ihe projecI. The
invesImenI need under each scenario has been
looked aI and, Io assess Ihe viabiliIy o Ihe
projecI rom Ihe privaIe secIor perspecIive, Ihe
opIion o supporI Ihrough Ihe ViabiliIy Gap
lund (VGl) has also been considered.
lrom Ihe projecI deIails, iI can be observed
IhaI Saoner plans Io underIake projecIs worIh
Ps7J.9 million up Io iscal year 20!!. AI Ihe same,
SMC needs Io arrange or a capiIal invesImenI o
Ps7.J million. lI is undersIood in discussion wiIh
SMC oicials IhaI Ihe projecI is already under way
and Ihe invesImenI gap will be meI by SMC.
Since SMC has already arranged Ihe unding
or Ihe proposed projecIs and invesImenI has
already been underIaken, Ihe projecI cannoI
be underIaken on a PPP basis. However, Ihe
operaIions and managemenI o Ihe waIer supply
sysIem (on compleIion o Ihis projecI) on a PPP
basis can be explored.
(CPlSlL) underIook a preliminary inancial
analysis Io undersIand Ihe applicabiliIy o PPP
or Ihe operaIions and managemenI o Ihe
waIer supply sysIem. The key assumpIions o Ihe
analysis have been ouIlined in Table 59.
Given IhaI Ihe invesImenI needs o SMC are
being meI, we have underIaken an analysis Io
review Ihe possibiliIy o a PPP in operaIions and
managemenI o Ihe waIer supply sysIem alone.
WaIer supply augmenIaIion, raw
waIer Iransmission, and expansion
o Ihe disIribuIion neIwork
Proposed under Ihe Sujal Nirmal
Abhiyaan scheme:
7.5 MLD source augmenIaIion
scheme, including raw waIer
rising main, pure waIer pumping
main, 42 kilomeIers o disIribuIion
neIwork
(DPP): Ps7J.9 million
GovernmenI o MaharashIra
granI: Ps67 million
SMC conIribuIion: Ps7.J million
DPP ~ deIailed projecI reporI, MLD ~ million liIers per day, Ps ~ rupees, SMC ~ Saoner Municipal Council.
Source: DaIa provided by Saoner Municipal Council.
Saoner
145
Two opIions have been considered or Ihe same:
OpIion !, in which operaIion and managemenI
is underIaken by SMC iIsel, and OpIion 2,
where operaIion and managemenI is handed
over Io a privaIe developer.
Under OpIion !, i Ihe waIer supply operaIions
were Io be underIaken by SMC or Ihe period
up Io 20J0, Ihe council would generaIe a neI
revenue (neI presenI value) o Ps!!.4 million.
Under OpIion 2, i Ihe waIer supply operaIions
were Io be underIaken by privaIe operaIor
or Ihe period up Io 20J0, Ihe council would
generaIe a neI revenue (neI presenI value) o
Ps22.J million.
lI can be seen IhaI underIaking Ihe operaIions
o Ihe waIer supply sysIem on a PPP basis
provides a beneiI Io SMC o only Ps!!.0 million.
l SMC increases iIs collecIion eiciency rom
87% Io 95% and underIakes measures Io reduce
expendiIure on energy and sIaing, iI can bridge
Ihis gap. Thereore, Ihere is limiIed scope or PPP
or invesImenI and/or operaIions o Ihe waIer
supply sysIem in Saoner.
TreaImenI losses 2%
DisIribuIion losses 20% in case o SMC
Tari
a
PsJ.0!
b
CollecIion eiciency 92% in case o SMC
CosI reducIion eiciency 0% in case o SMC
Ps ~ rupees, SMC ~ Saoner Municipal Council.
a
b
As per SMC oicials posI implemenIaIion o Ihe proposed scheme, a Iari raIe o PsJ.0!/kl has been esIimaIed Io be
implemenIed. lrom Ihe year o implemenIaIion o Ihe scheme an operaIion and mainIenance o Ps0.J6 million has been
esIimaIed by SMC. This esIimaIe has been Iaken up as Ihe base year operaIion and mainIenance and escalaIed or Ihe
subsequenI years.
!46
XI Chiplun
Brief Introduction to Chiplun
The ciIy o Chiplun orms a parI o Ihe
PaInagiri disIricI o MaharashIra. The ciIy has
a IoIal area o !4.69 square kilomeIers and
a populaIion o 55,000 (46,000 aI Ihe 200!
census). lI is managed by Ihe Chiplun Municipal
Council (CMC) and has a revenue budgeI
o Ps!84.6 million (iscal year 2007), wiIh a
revenue deiciI o Ps20.7 million. The ciIy has
4,9J5 households. WiIh respecI Io iIs waIer
accounI, Ihe ciIy has a deiciI Io Ihe Iune o
Ps!J.8 million. There are no unpaid liabiliIies in
Ihe waIer accounI o CMC.
Chiplun draws 9 million liIers per day (MLD)
o raw waIer rom Ihe VashisIi Piver, locaIed
aI 0.5 kilomeIer rom Ihe ciIy. O Ihe 9 MLD,
approximaIely 7 MLD o waIer is supplied rom
Ihe Kherdi headworks and 2 MLD come rom
Ihe GovalkoI headworks. Paw waIer is IreaIed aI
Ihe waIer IreaImenI planIs locaIed aI Ihe siIe o
Ihe Iwo headworks and is IransmiIIed Io Ihe ciIy.
The IreaIed waIer is supplied Io end consumers
Ihrough a J0kilomeIer disIribuIion neIwork.
The IoIal IreaIed waIer available or
consumpIion is 6.9 MLD (!26 liIers per capiIa
per day |lpcd). WaIer is available or 2 hours
every day. The ciIy has 5,668 individual
connecIions. A basic proile o Ihe waIer supply
sysIem o Chiplun is presenIed in Table 60.
Problem Area
waIer supply services in Ihe ciIy o Chiplun, an
assessmenI o Ihe problem areas o Ihe exisIing
improve Ihe level o services. The irsI acIiviIy is
Io underIake a service assessmenI againsI a ew
key perormance criIeria. On Ihe basis o Ihis
assessmenI, Ihe key issues in Ihe currenI sysIem
would need Io be idenIiied and exisIing projecIs
reviewed. lI should be noIed IhaI Ihe assessmenI
presenIed here or Chiplun is based on only a
ew key parameIers. lor a deIailed review, as
discussed in ParI l o Ihe Iool kiI, Ihe urban
local body (UL8) would be required Io carry ouI
consumer survey, waIer audiI, leak deIecIion
survey, and energy audiI or Ihe enIire value
chain o waIer supply services.
supply service daIa
20
and discussions wiIh CMC
supply sysIem in Chiplun. Table 6! presenIs Ihe
key indicaIors or assessing Ihe waIer supply
sysIem aI Chiplun.
20
Chiplun
147
1abIe 60 asic Pro!iIe o! WaIer 5uppIy 5ervices in ChipIun
ChipIun UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply 9 MLD
WaIer IreaImenI capaciIy Kherdi headworks 7 MLD
GovalkoI headworks 2 MLD
reservoirs
0.67 MLD
2 ground sIorage
reservoirs
4.90 MLD
ConnecIions 5,668
WaIer supply
!ihahcials (FY2007)
1ari!! llaI Iari sIrucIure (per annum) PesidenIial
!5 mm Ps806
20 mm Ps!,550
Commercial
!5 mm PsJ,500
20 mm Ps4,000
lY ~ iscal year, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, mm ~ millimeIer, Ps ~ rupees.
Source: Chiplun Municipal Council.
1abIe 61 Key WaIer 5uppIy IndicaIors !or ChipIun
Per!ormance Area Norm ChipIun Key In!erence
8ulk WaIer
Supply (per capiIa
consumpIion)
70 lpcd !26 lpcd The supply o waIer Io Ihe ciIizens is very high
compared Io Ihe norms or a Iown wiIh piped
waIer supply and no sewerage sysIem, as per
Ihe CPHLLO norms. This indicaIes IhaI Ihe ciIy
has ample waIer supply and Ihere is no need or
source augmenIaIion.
1reaImehI
WTP capaciIy !00% !00% LxisIing insIalled capaciIy o Ihe IreaImenI
planIs is suicienI. However, Ihe WTP aI
8awada, being obsoleIe, is noI uncIioning
properly and requires upgrading.
TreaImenI loss Less Ihan J% 2% TreaImenI loss is wiIhin Ihe norms.
Losses Less Ihan !5% 22% Loss levels are moderaIe.
The exisIing lines are approximaIely J0 years
old and corroded and need replacemenI. An
accuraIe esIimaIe on disIribuIion loss can be
provided only once Ihe meIers are insIalled.
FRQWLQXHGRQQH[WSDJH
148
lollowing Ihe assessmenI o Ihe waIer supply
services in Chiplun, Ihe nexI sIep is or Ihe UL8
Io clearly lisI all Ihe service and inrasIrucIure
relaIed issues being aced by Ihe currenI waIer
supply sysIem in Ihe ciIy. 8ased on Ihe sIaIus o
Ihe waIer supply sysIem, key indicaIors, and Ihe
(i) underIaking rehabiliIaIion and repair
works or Ihe disIribuIion neIwork
pipelines,
(ii) increasing Ihe sIa and service qualiIy,
(iii) underIaking leak deIecIion sIudy Io
ascerIain Ihe exIenI o Iechnical and
commercial losses, and
(iv) insIalling meIers and adopIion o
volumeIric Iari.
idenIiied or Chiplun under various schemes or
improvemenI o waIer supply services. CMC has
idenIiied Ihe ollowing projecI or Ihe waIer
supply secIor (Table 62).
2!
ln spiIe o abundanI waIer supply, Chiplun has
proposed a projecI or waIer source augmenIaIion.
This is wiIh Ihe objecIive o uIilizing Ihe opporIuniIy
o Ihe Urban lnrasIrucIure DevelopmenI Scheme
or Small and Medium Towns (UlDSSMT) unding
and caIering Io iIs uIure needs. This includes Ihe
consIrucIion o a new jack well aI Ihe currenI
oIake poinI or reducing Ihe energy cosIs.
Per!ormance Area Norm ChipIun Key In!erence
Cohsumer
Coverage 95%!00% !00%
a
This is inclusive o only direcI service
connecIions.
MeIering !00% 0% No meIers have been insIalled aI Ihe consumer
end, a laI Iari sysIem is prevalenI.
DuraIion o waIer
supply
24 hours 2 hours each
day
The supply hours and requency are noI
adequaIe. CMC oicials are o Ihe opinion IhaI
lack o sIa is an issue, resulIing in poor service
delivery in spiIe o abundanI waIer supply.
OperaIion and
mainIenance cosI
recovery
!00% JJ% High operaIion and mainIenance cosIs primarily
due Io high energy cosIs. CMC needs Io
underIake an energy audiI and implemenI cosI
reducIion measures.
UniI income
Ps6.27/kl
Ps2.07/kl
Per uniI revenue realizaIion is very low, primarily
due Io Ihe high operaIions cosI.
b
The collecIion eiciency level is high.
CMC ~ Chiplun Municipal Council, CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion,
kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, Ps ~ rupees, WTP ~ waIer IreaImenI planI.
a
lI has been assumed IhaI one waIer supply connecIion serves Iwo households. lI is imporIanI or CMC Io mainIain a
deIailed consumer daIabase wiIh deIails o each connecIion. ln Ihe absence o accuraIe daIabase, Ihe waIer supply
coverage levels would be only esIimaIes.
b
Source: CPlSlL analysis and daIa provided by Chiplun Municipal Council.
Table 6! FRQWLQXHG
2!
Chiplun
149
The projecI is expecIed Io be compleIed by
!anuary 20!0. CMC is currenIly in Ihe process
o arranging iIs conIribuIion Io Ihe projecI.
AlIernaIive arrangemenIschiely exIernal
borrowingsare under way Io meeI Ihe
remaining invesImenI requiremenI.
exisIing sIaIus o Ihe waIer supply services in
Ihe ciIy, idenIiied Ihe key issues, and briely
reviewed Ihe projecIs idenIiied by Ihe ciIy, Ihe
nexI sIage is Io choose beIween public unding
and implemenIing Ihe proposed projecI and
Ihe privaIe or publicprivaIe parInership (PPP)
based mode o developing and implemenIing
Ihe projecI. This decision requires a viabiliIy
lrom Ihe projecI analysis, iI can be observed IhaI
Chiplun is currenIly in Ihe process o implemenIing
projecIs Io Ihe Iune o Ps!50 million, due Io be
compleIed by 20!0. lor Ihe same, CMC needs Io
arrange or a capiIal invesImenI o Ps70 million.
lI is undersIood in discussion wiIh CMC oicials
IhaI Ihe projecI is already under way and Ihe
invesImenI gap would be meI by CMC.
Since CMC has already arranged Ihe unding
or Ihe proposed projecIs and invesImenI has
already been underIaken, Ihe projecI cannoI
be underIaken on a PPP basis. However, Ihe
sysIem o Ihe compleIed projecI on a PPP basis
can be explored.
CPlSlL underIook a preliminary inancial analysis
Io undersIand Ihe applicabiliIy o PPP or Ihe
sysIem. The key assumpIions o Ihe analysis are
ouIlined in Table 6J.
The analysis Io review Ihe possibiliIy o a PPP
in operaIions and managemenI o Ihe waIer
supply sysIem considered Iwo scenarios:
OpIion !, where Ihe invesImenIs idenIiied or
Ihe proposed projecIs are made by CMC, and
Ihe proposed projecIs are ully unded by Ihe
privaIe developer.
Under OpIion !, i Ihe waIer supply operaIions
were Io be underIaken by CMC or Ihe period up
Io 20J0, Ihe council would have Io bear a neI
loss (neI presenI value) o Ps4J.! million.
Under OpIion 2, i Ihe waIer supply operaIions
were Io be underIaken by privaIe operaIor
or Ihe period up Io 20J0, Ihe council would
generaIe a neI revenue (neI presenI value)
o Ps!6.8 million. This is primarily due Io Ihe
reducIion o disIribuIion losses and operaIions
cosI as a resulI o operaIional eiciencies
inIroduced by Ihe privaIe developer.
1abIe 62 Key WaIer 5uppIy ProjecI PIanned and Proposed
AugmenIaIion o waIer supply,
waIer IreaImenI sysIem,
rehabiliIaIion o disIribuIion
sysIem
UlDSSMT:
7.5 MLD source augmenIaIion, including
jack well, inIake well and pump house,
pure waIer rising main works, and
disIribuIion neIwork rehabiliIaIion
(DPP): Ps95.6 million
(escalaIed): Ps!50 million
UlDSSMT granI: Ps86 million
CMC conIribuIion:
Ps9.5 million
plus escalaIion: Ps64 million
CMC ~ Chiplun Municipal Council, DPP ~ deIailed projecI reporI, MLD ~ million liIers per day, Ps ~ rupees,
Source: Chiplun Municipal Council.
150
lI can be seen IhaI underIaking Ihe operaIions
o Ihe waIer supply sysIem on a PPP basis
provides a beneiI Io CMC o Ps60 million.
Thereore, CMC can underIake Ihe operaIions
and managemenI o Ihe waIer supply sysIem on
a PPP basis.
mode, Ihe nexI sIep is Io deIermine Ihe choice o
PPP sIrucIure IhaI is besI suiIed Io addressing Ihe
lrom Ihe preliminary inancial analysis, iI has
been observed IhaI or Ihe improvemenI Io
Ihe waIer supply and sewerage projecIs in Ihe
Chiplun, Ihe suiIable orm o PPP conIracI is IhaI
o a perormancebased managemenI conIracI.
ln a perormancebased managemenI conIracI,
Ihe operaIion and mainIenance o Ihe enIire
waIer supply sysIem rom source Io consumer,
including meIering, billing, and collecIion o
revenues. All Ihe capiIal invesImenIs needed
Io improve Io Ihe waIer supply and sewerage
services would have Io be borne by Ihe public
secIor. The operaIing sIandards are as prescribed
by Ihe UL8. The privaIe developer is given Ihe
collecI Ihe charges, and hand Ihem over Io
Ihe UL8. The UL8 would make a perormance
based paymenI Io Ihe privaIe developer or Ihe
acIiviIies carried ouI.
arrangemenIs under Ihe perormancebased
managemenI conIracI (OpIion 2|b), are provided
in ParI ll o Ihis reporI, and Ihe Ierm sheeI or
Ihis conIracI sIrucIure can be ound in ParI lV.
Step 4: Procurement
procuremenI process, CMC would need Io
develop a IransacIion sIrucIure IhaI would cover
duraIion o Ihe conIracI, perormance indicaIors,
TreaImenI losses 2%
DisIribuIion losses 20% in case o CMC
!5% in case o privaIe developer
Tari PsJ.5/kl
a
CollecIion eiciency 98% in case managed by CMC
98% in case managed by privaIe developer
!0%
b
in case managed by CMC
CosI reducIion eiciency 20% in case managed by privaIe parIy
CMC ~ Chiplun Municipal Council, kl ~ kiloliIer, Ps ~ rupees.
a
The currenI Iari sIrucIure is on a laI raIe basis. The volumeIric Iari has been arrived aI aIer compuIing Ihe per kiloliIer
cosI o producIion. The Iari assumed here is an average o producIion cosI o Ihree consecuIive years or Ihe iniIial J years.
b
WiIh Ihe replacemenI o Ihe jack well, Ihe energy cosIs will be reduced.
!5!
XII Kulgaon-Badlapur
supply hours in Ihe remaining wards vary rom
J hours Io 8 hours. The IoIal number o direcI
connecIions in Ihe ciIy is !2,52J, all o which
are meIered. A basic proile o Ihe waIer supply
sysIem o K8MC is presenIed in Table 64.
Problem Area
supply services in Ihe ciIy o Kulgaon8adlapur, a
survey o problem areas in Ihe exisIing sysIem's
services needs Io be carried ouI. This would
highlighI Ihe inIervenIions required Io improve
Ihe level o services. The irsI acIiviIy, which needs
Io be underIaken, is a service assessmenI againsI
a ew key perormance criIeria. On Ihe basis o
Ihe assessmenI, Ihe key issues in Ihe currenI
sysIem would need Io be idenIiied and exisIing
projecIs reviewed. lI should be noIed IhaI Ihe
assessmenI or Kulgaon8adlapur is based on
only a ew key parameIers. lor a deIailed review,
as discussed in ParI l o Ihe Iool kiI, Ihe urban
local body (UL8) would be required Io carry ouI
a consumer survey, waIer audiI, leak deIecIion
survey, and energy audiI or Ihe enIire value
chain o waIer supply services.
supply service daIa
22
and discussions wiIh K8MC
supply sysIem in Kulgaon8adlapur. Table 65
presenIs Ihe key indicaIors or assessing Ihe
waIer supply sysIem aI Kulgaon8adlapur.
Brief Introduction
to Kulgaon-Badlapur
The ciIy o Kulgaon8adlapur is a parI o Ihe
Thane disIricI o MaharashIra. The ciIy is
managed by Ihe Kulgaon8adlapur Municipal
Council (K8MC) and encompasses an area
o J5.69 square kilomeIers. lI has a currenI
populaIion o !9!,000 (97,948 aI Ihe 200!
census). The revenue budgeI o K8MC (iscal
year |lY 2007) is Ps246 million, wiIh a revenue
surplus o Ps!!7.6 million.
MaharashIra !eevan Pradhikaran (M!P) as a
combined scheme or Ihe Iowns o Kulgaon
8adlapur and AmbernaIh. The waIer accounI or
Kulgaon8adlapur aces a deiciI o Ps!.6 million
(lY2007).
Water Supply System
at Kulgaon-Badlapur
Kulgaon8adlapur draws 28 million liIers per
day (MLD) o raw waIer rom Ihe Ulhas Piver,
J kilomeIers rom Ihe ciIy. The IoIal quoIa
available Io Ihe ciIy is J5 MLD. The scheme rom
source Io consumer is operaIed and managed by
M!P. Thereore, Ihe onus o Ihe enIire scheme,
including Ihe operaIion and mainIenance cosIs,
resIs purely wiIh M!P.
As a parI o Ihe joinI scheme, Ihe ciIy has one
waIer IreaImenI planI. The ciIizens receive
9J liIers per capiIa per day (lpcd) o IreaIed
waIer or consumpIion. lour wards in Ihe
ciIy receive waIer supply or 24 hours. The
22
audiI is underIaken along wiIh Ihe consumer survey.
152
1abIe 64 asic Pro!iIe o! WaIer 5uppIy 5ervices in KuIgaon-adIapur
KuIgaon-adIapur UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply 28 MLD
WaIer IreaImenI capaciIy 52 MLD
TreaIed waIer available or consumpIion 9J lpcd
SIorage capaciIy ! elevaIed sIorage
reservoir
!0.! MLD
4 ground sIorage
reservoirs
4.55 MLD
DisIribuIion neIwork !!4 kilomeIers
ConnecIions !2,52J
WaIer supply
!ihahcials (FY2007)
mainIenance cosIs
Ps5J.! million
1ari!! llaI Iari DomesIic Ps7.6/kl
NondomesIic PsJ4.65/kl
kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
Source: Kulgaon8adlapur Municipal Council.
1abIe 65 Key WaIer 5uppIy IndicaIors !or KuIgaon-adIapur
Per!ormance Area 1ypicaI Norm KuIgaon-adIapur Key In!erence
8ulk WaIer
Supply (per capiIa
IreaIed waIer
available or
consumpIion)
!J5 lpcd 9J lpcd As per CPHLLO norms, Ihe IoIal waIer
should be !J5 lpcd. The bulk supply
currenIly has an average o 9J lpcd. l Ihe
Iransmission losses are reduced rom Ihe
exisIing level o JJ% Io an average o 20%,
Ihe waIer supply available or consumpIion
would increase by 4 MLD, and raise Ihe per
capiIa availabiliIy o waIer Io !!0 lpcd aI Ihe
consumers' end. This indicaIes IhaI Ihe ciIy
does have an immediaIe need Io augmenI
iIs bulk waIer supply.
1reaImehI
WTP capaciIy !00% !00% The currenI insIalled WTP capaciIy is
suicienI and has been operaIing as per
required sIandards.
TreaImenI loss Less Ihan J% 2% The IreaImenI losses are wiIhin Ihe norms.
FRQWLQXHGRQQH[WSDJH
Kulgaon8adlapur
153
Per!ormance Area 1ypicaI Norm KuIgaon-adIapur Key In!erence
Losses Less Ihan !5% JJ% There are high Iransmission losses due Io
leakages rom old, corroded pipes. CurrenI
pipelines are J5 years old and have a high
exIenI o leakages.
Cohsumer
Coverage
(connecIions/IoIal
households)
!00% !00%
a
On an average in K8MC, each connecIion
serves ive households. Thereore, Ihe
exisIing connecIions indicaIe ull coverage.
The ciIy has no public sIandposIs.
MeIering/IoIal
connecIions
!00% !00% All Ihe exisIing connecIions are meIered and
a volumeIric Iari sysIem is in operaIion.
DuraIion o waIer
supply
24 hours 5 hours each day DuraIion o supply is insuicienI and needs Io
be improved. This calls or a reducIion in losses
and more eicienI operaIions o Ihe sysIem.
OperaIion and
mainIenance cosI
recovery
!00% !00% The cosI recovery levels are saIisacIory.
UniI income
Ps5.20/kl
Ps5.80/kl
The revenue realizaIions againsI per uniI
producIion cosIs are high.
b
The collecIion eiciency level is saIisacIory.
CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion, kl ~ kiloliIer, K8MC ~ Kulgaon8adlapur
Municipal Council, lpcd ~ liIer per capiIa per day, Ps ~ rupees, WTP ~ waIer IreaImenI planI.
a
K8MC oicials indicaIe IhaI one connecIion serves ive households. However, iI would be prudenI or MaharashIra !eevan
Pradhikaran and K8MC Io mainIain a deIailed consumer daIabase Io esIimaIe Ihe acIual number o households served by
each connecIion.
b
CollecIion eiciency has been measured againsI currenI demand raised visavis Ihe currenI collecIions.
Source: CPlSlL analysis and daIa provided by Kulgaon8adlapur Municipal Council and MaharashIra !eevan Pradhikaran.
Table 65 FRQWLQXHG
lollowing Ihe assessmenI o Ihe waIer supply
services in Kulgaon8adlapur, Ihe nexI sIep is
or Ihe UL8 Io clearly lisI all Ihe key service and
currenI waIer supply sysIem in Ihe ciIy. However,
Ihe assessmenI underIaken, so ar, indicaIes
a largely saIisacIory level o operaIions and
managemenI o Ihe waIer supply services in
Ihe ciIy. The only issue IhaI requires aIIenIion is
Ihe disIribuIion losses, which exceed accepIable
sIandards.
Ihe ciIy, Ihe nexI acIiviIy Io underIake is a brie
idenIiied or Kulgaon8adlapur under various
schemes or improvemenI o Ihe waIer supply
services. ln Ihe conIexI o Ihe issues aced aI
by Ihe ciIy, K8MC has proposed a projecI or
rehabiliIaIion o Ihe disIribuIion neIwork. The
projecI has been proposed under Ihe Urban
lnrasIrucIure DevelopmenI Scheme or Small
and Medium Towns (UlDSSMT).
Ihe projecIs idenIiied by Ihe ciIy, Ihe nexI sIep is
154
Io choose beIween Ihe public mode o unding
and implemenIing Ihe proposed projecI and Ihe
privaIe or publicprivaIe parInership (PPP)based
mode o developing and implemenIing Ihe
projecI.
The ciIy has limiIed scope or PPP since no
major capiIal invesImenI is required and Ihe
operaIional eiciencies are saIisacIory. Also,
i any invesImenIs are needed or source
augmenIaIion in Ihe uIure, K8MC, wiIh
a revenue surplus o Ps!!7.6 million, has
Ihe inancial capabiliIy Io underIake such
invesImenI.
Thereore, Ihere is no scope or PPPbased
inIervenIion in supply o waIer supply services in
Kulgaon8adlapur.
PehabiliIaIion and/or replacemenI
o exisIing Iransmission and
disIribuIion inrasIrucIure
Io reduce Iechnical losses Io
minimum accepIable sIandards
ProjecI proposed under UlDSSMT
scheme.
lI includes rehabiliIaIion o
disIribuIion neIwork pipelines,
repairs Io Ihe main balancing
reservoir, a 24MLD waIer
IreaImenI planI, and a consumer
survey.
Ps268.5 million.
ln 2009, when Ihe projecI was
under review and had noI received
Ihe requisiIe approvals.
l approved, K8MC's share o
Ihe projecI is expecIed Io be
Ps26.8 million.
DPP ~ deIailed projecI reporI, K8MC ~ Kulgaon8adlapur Municipal Council, MLD ~ million liIers per day, Ps ~ rupees,
Source: Kulgaon8adlapur Municipal Council.
!55
Brief Introduction to Ambernath
The ciIy o AmbernaIh is a parI o Ihe Thane
disIricI o MaharashIra. Managed by Ihe
AmbernaIh Municipal Council, Ihe ciIy
encompasses an area o J8 square kilomeIers and
has a currenI populaIion o 250,000 (20J,000
aI Ihe 200! census). The council has a revenue
accounI budgeI o Ps580 million (iscal year 2007),
and a revenue surplus o Ps22.7million.
MaharashIra !eevan Pradhikaran (M!P) as a
combined scheme or Ihe Iowns o Kulgaon
8adlapur and AmbernaIh. WiIh respecI Io
expenses incurred on AmbernaIh by M!P, Ihe
waIer accounI generaIes a surplus o Ps60 million.
AmbernaIh draws a IoIal waIer supply o
J9 million liIers per day (MLD) rom Ihree
waIer sourcesIhe Chikhaloli Dam, Ihe
Ulhas Piver, and Ihe 8arvi Piver. O Ihe IoIal,
28 MLD is supplied by M!P, 5 MLD by Ihe
MaharasIra lndusIrial DevelopmenI CorporaIion
(MlDC), and Ihe balance o 6 MLD by Ihe
AmbernaIh Municipal Council.
The ciIy receives a IreaIed waIer supply o
!06 liIers per capiIa day (lpcd) or consumpIion.
WaIer is available or 4 hours each day and is
supplied Ihrough individual connecIions. A basic
proile o Ihe waIer supply sysIem o AmbernaIh
is presenIed in Table 67.
1abIe 67 asic Pro!iIe o! WaIer 5uppIy 5ervices in AmbernaIh
AmbernaIh UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply J9 MLD
Chikhaloli Dam 6 MLD
Ulhas Piver J2 MLD
8arvi Piver 5 MLD
WaIer IreaImenI capaciIy Chikhaloli, 8elavali 6 MLD
WaIer availabiliIy aIer IreaImenI !50 lpcd
reservoirs
J.5 MLD
2 ground sIorage
reservoirs
4.42 MLD
ConnecIions 6,000
WaIer supply
!ihahcials
(FY2007)
WaIer accounI revenue Ps!!J.J million
cosIs
Ps47.! million
1ari!! llaI Iari (per annum) DomesIic Ps7.6/kl
NondomesIic PsJ5.4/kl
lY ~ iscal year, kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, MLD ~ million liIers per day, Ps ~ rupees.
Source: AmbernaIh Municipal Council.
XIII Ambernath
156
Problem Area
waIer supply services in Ihe ciIy o AmbernaIh,
required Io improve Ihe level o services. The
irsI acIiviIy Io underIake is a service assessmenI
and exisIing projecIs reviewed. lI should be
noIed IhaI Ihe assessmenI presenIed here
or AmbernaIh is based on only a ew key
parameIers. lor a deIailed review, as discussed
in ParI l o Ihe Iool kiI, Ihe urban local body
(UL8) would be required Io carry ouI consumer
survey, waIer audiI, leak deIecIion survey, and
energy audiI or Ihe enIire value chain o waIer
supply services.
supply service daIa
2J
AmbernaIh and M!P oicials, CPlSlL Pisk and
lnrasIrucIure SoluIions LimiIed (CPlSlL) assessed
Ihe currenI waIer supply sysIem o Ihe ciIy.
Table 68 presenIs Ihe key indicaIors or assessing
Ihe waIer supply sysIem aI AmbernaIh and Ihe
resulIanI inerences.
The nexI sIage ollowing Ihe assessmenI o
Ihe waIer supply services in AmbernaIh is or
Ihe UL8 Io clearly lisI down all Ihe service and
currenI waIer supply sysIem in Ihe ciIy. 8ased on
Ihe sIaIus o waIer supply operaIions, key waIer
supply indicaIors, and key inerences, iI can be
seen IhaI Ihe overall waIer supply operaIions in
Ihe ciIy are saIisacIory. However, Ihere is scope
or urIher improvemenI, such as ensuring !00%
coverage o Ihe waIer supply services, higher
requency o supply, and !00% meIering o all
Ihe connecIions.
idenIiied or AmbernaIh under various schemes
M!P has idenIiied Ihe ollowing projecIs or Ihe
waIer supply secIor (Table 69).
24
As o AugusI 2009, works on phase ! o Ihe
projecI were under way, and Ihe cosIs were
being borne by AmbernaIh Municipal Council.
lor phase 2 o Ihe projecI, Ihe deIailed projecI
reporI has been prepared. However, no
approvals have been received.
parInership (PPP)based mode o developing
and implemenIing Ihe projecI.
The ciIy has limiIed scope or PPP since Ihe
currenI waIer supply issues are adequaIely
addressed by Ihe ongoing projecI o
MaharashIra Sujal Nirmal Abhiyaan. The
proposed waIer source augmenIaIion projecI
is noI an immediaIe need o Ihe ciIy and is
currenIly under preparaIion. The deIailed
2J
24
NoIe IhaI or Ihe purpose o Ihis assessmenI, a due diligence on Ihe projecI componenIs and cosIs has noI been underIaken.
AmbernaIh
157
1abIe 68 WaIer 5uppIy IndicaIors and In!erence
Per!ormance Area 1ypicaI Norm AmbernaIh Key In!erence
8ulk WaIer
Supply (per capiIa
or consumpIion)
!J5 lpcd !06 lpcd As per CPHLLO norms, Ihe IoIal waIer
should be !J5 lpcd. AmbernaIh supplies
!06 lpcd (J0 MLD). l Iransmission losses
are reduced rom Ihe exisIing level o 22%
Io an average o 20%, Ihe waIer supply
available or consumpIion would increase by
!.8 MLD, and raise Ihe per capiIa availabiliIy
o waIer Io !!2 lpcd aI Ihe consumer end.
Though Ihe supply levels do noI meeI
Ihe requisiIe norm Ihe availabiliIy can be
considered adequaIe and noI requiring any
immediaIe source augmenIaIion.
1reaImehI
capaciIy
!00% !00% The bulk o Ihe IreaIed waIer is supplied
rom Ihe IreaImenI planI aI Kulgaon
8adlapur. Though Ihe uIilizaIion o Ihe waIer
IreaImenI planI is more Ihan Ihe insIalled
capaciIy, Ihere is no adverse eecI on Ihe
qualiIy o IreaIed waIer supply.
Loss Less Ihan J% 2% Loss levels meeI Ihe norm.
Losses Less Ihan !5% 22% The exIenI o Iransmission losses is
moderaIe.
Cohsumer
IoIal households)
!00% 88% Assuming IhaI one connecIion caIers Io Iwo
households, exisIing coverage levels need Io
be improved.
MeIering/IoIal
connecIions
!00% 78% The connecIions provided by M!P are ully
meIered. However, Ihose provided by AMC
are meIered only Io Ihe exIenI o 5%. The
remaining connecIions need Io be meIered.
DuraIion o waIer supply 24 hours 4 hours Supply duraIion is insuicienI and needs
Io be improved. This calls or reducIion in
losses and more eicienI operaIions.
OperaIion and
mainIenance cosI
recovery
!00% !00% The high recovery levels indicaIe saIisacIory
levels o operaIional eiciency.
UniI income
Ps7.70/kl
Ps9.70/kl
Pevenue realizaIion per uniI againsI cosI o
producIion is high, indicaIing saIisacIory
CollecIion eiciency !00% 9J%
a
The currenI collecIions are high, however,
urIher improvemenIs can be made.
AMC ~ AmbernaIh Municipal Council, CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion,
kl ~ kiloliIer, lpcd ~ liIer per capiIa per day, M!P ~ MaharashIra !eevan Pradhikaran, Ps ~ rupees.
a
This includes eiciency o currenI collecIions only. Arrears o waIer accounI are Ps250 million. This is on inclusion o a
number o villages Io Ihe jurisdicIion. These arrears are spread over several years.
Source: CPlSlL analysis on Ihe basis o daIa provided by MaharashIra !eevan Pradhikaran and AmbernaIh Municipal Council.
158
projecI reporI and projecI cosI o Ihe
proposed projecI are yeI Io be inalized.
Given IhaI Ihere is no immediaIe need Io
underIake any capiIal projecI, and also
accounIing or Ihe currenI saIisacIory levels
o operaIions, iI can be concluded IhaI
Ihere is limiIed scope or need or PPPbased
inIervenIion Io improve Ihe waIer supply
service delivery in Ihe Iown.
AugmenIaIion o waIer supply,
improvemenIs Io Ihe exisIing waIer
supply sysIem, including meIering
and repairs.
Proposed under Ihe Sujal Nirmal
Abhiyaan scheme
Phase !: insIallaIion o bulk
meIers, reassessmenI o properIies
Io reduce illegal connecIions,
implemenIaIion o spoI billing,
replacemenI o disIribuIion lines,
replacemenI o aulIy consumer
meIers, and replacemenI o old
Iransmission pipelines
Phase 2: waIer supply
augmenIaIion scheme
Ps40 million
(escalaIed): Ps48 million
Sujal Nirmal granI: PsJ6.0 million
AmbernaIh conIribuIion:
Ps4.0 million plus escalaIion o
Ps8.0 million
Ps!55.6 million
a
DPP ~ deIailed projecI reporI, Ps ~ rupees.
a
Phase ll o Ihe projecI has noI been considered as Ihe DPP and Ihe projecI cosI are noI approved as yeI.
Sources: MaharashIra !eevan Pradhikaran and AmbernaIh Municipal Council.
!59
on average. The supply hours vary beIween
a minimum daily supply o 4 hours Io a
maximum o 24 hours in a ew wards. WaIer
is supplied Ihrough !!5,264 direcI house
service connecIions, o which 75% are currenIly
meIered. A basic proile o Ihe waIer supply
sysIem o Navi Mumbai is presenIed in Table 70.
Assessment of the Water
Supply System
service daIa
25
and discussions wiIh NMMC
supply sysIem o Ihe ciIy. Table 7! presenIs Ihe
key indicaIors or assessing Ihe waIer supply
sysIem aI Navi Mumbai and Ihe resulIanI
inerences.
The waIer supply service o Navi Mumbai
has been assessed as perorming aI a airly
good level. On all Ihe key indicaIors o waIer
supply services, Ihe NMMC has delivered as
per Ihe required norms and sIandards. ln Ihe
insIances where Ihere has been a shorIall, such
as meIering levels, eorIs are being made Io
achieve Ihe required sIandards.
The NMMC has been able Io susIain good
service delivery sIandards on accounI o a
combinaIion o reorms and sIringenI measures
Io improve operaIional eiciency sIandards.
One such measure is Ihe use o geographic
inormaIion sysIembased soIware or Iracking
cases o illegal connecIions.
Brief Introduction to Navi Mumbai
The ciIy o Navi Mumbai, previously known
as New 8ombay, is a parI o Ihe Mumbai
conurbaIion. WiIh a IoIal area o J44 square
kilomeIers (km
2
), Navi Mumbai was developed
as a Iwin ciIy o Mumbai, and is considered Io
be one o Ihe largesI planned ciIies in Ihe world.
O Ihe IoIal ciIy limiIs, an area o !08.6J square
kilomeIers

is managed by Ihe Navi Mumbai
Municipal CorporaIion (NMMC). The parI o
Ihe ciIy managed by Ihe NMMC has a currenI
populaIion o approximaIely !.2 million. ln iscal
year 2008, Ihe NMMC had a revenue accounI
budgeI o Ps4,800 million and a revenue surplus
o Ps!,J00 million.
Navi Mumbai has a IoIal waIer supply o
J!7 million liIers per day (MLD). WaIer is
supplied rom Ihree sources: Morbe Dam,
HeIvane Dam, and 8arvi Dam. The NMMC
purchases J2 MLD o poIable waIer rom Ihe
CiIy and lndusIrial DevelopmenI CorporaIion o
MaharashIra, Ihe waIer supply o 67 MLD rom
8arvi Dam is a backup arrangemenI in case o a
Iemporary shuIdown o Ihe Morbe Dam.
The ciIy has a waIer IreaImenI planI (WTP) o
450 MLD capaciIy wiIhin Ihe municipal limiIs,
a second WTP wiIh an insIalled capaciIy o
50 MLD aI Ihe HeIvane siIe, and a Ihird WTP
wiIh an insIalled capaciIy o !60 MLD aI Ihe
8arvi siIe. The ciIy receives a IreaIed waIer
supply o 200 liIers per capiIa per day (lpcd)
25
XIV Navi Mumbai
160
1abIe 71 WaIer 5uppIy IndicaIors and In!erences
Per!ormance Area 1ypicaI Norm Navi Mumbai Key In!erence
8ulk WaIer
Supply (per capiIa
or consumpIion)
!J5 lpcd 200 lpcd The IreaIed waIer supply aI Navi Mumbai
is high aI 200 lpcd levels, much higher
Ihan Ihe !J5 lpcd norms seI by CPHLLO.
CurrenI levels o losses in Ihe sysIem
are minimal and oer limiIed scope or
reducIion. The currenI waIer supply
levels are assessed Io be adequaIe and,
Ihereore, Ihere is no immediaIe need or
bulk waIer supply augmenIaIion.
1reaImehI
WTP capaciIy !00% !00% The insIalled WTP capaciIy is 450 MLD,
o which only 250 MLD is currenIly being
uIilized. The currenI WTP availabiliIy is
suicienI and, hence, does noI require
augmenIaIion.
Loss Less Ihan J% 2% Loss levels meeI Ihe norm.
1abIe 70 asic Pro!iIe o! WaIer 5uppIy 5ervices in Navi Mumbai
Navi Mumbai UIiIiIy Pro!iIe
Key ih!rasIrucIure
compohehIs
8ulk supply J!7 MLD
Morbe Dam 2!8 MLD
ClDCO HeIvane J2 MLD
MlDC 8arvi 67 MLD
WaIer IreaImenI capaciIy Navi Mumbai 450 MLD
ClDCO HeIvane 50 MLD
MlDC 8arvi !60 MLD
SIorage capaciIy LlevaIed sIorage
reservoirs
74.95 MLD
Ground sIorage
reservoirs
!24.50 MLD
DisIribuIion neIwork 72! kilomeIers
ConnecIions !!5,264
WaIer supply
!ihahcials (FY2007)
cosIs
Ps!4J.4 million
1ari!! VolumeIric Iari PesidenIial Ps4.75/m
J
Commercial PsJ0.00/m
J
lnsIiIuIional Ps!!.00/m
J
ClDCO ~ CiIy and lndusIrial DevelopmenI CorporaIion, lY ~ iscal year, lpcd ~ liIer per capiIa per day, m
J
~ cubic meIer,
MlDC ~ MaharashIra lndusIrial DevelopmenI CorporaIion, MLD ~ million liIers per day, Ps ~ rupees.
Source: Navi Mumbai Municipal CorporaIion.
FRQWLQXHGRQQH[WSDJH
Navi Mumbai
161
Proposed Water Supply Project
To urIher improve iIs waIer supply services,
Ihe NMMC has proposed a projecI under Ihe
!awaharlal Nehru NaIional Urban Penewal
Mission (Table 72).
To manage iIs waIer supply services, Ihe NMMC
has engaged a privaIe developer Io operaIe and
mainIain Ihe enIire waIer supply sysIem. The
Iype o publicprivaIe parInership (PPP) conIracI
implemenIed by Ihe NMMC is a perormance
based service conIracI or Ihe operaIion and
mainIenance (O&M) o waIer supply services.
Per!ormance Area 1ypicaI Norm Navi Mumbai Key In!erence
Losses !5% !7% Minimal accepIable levels o Iransmission
losses. O Ihese losses, approximaIely 4%
are aIIribuIed Io IheI. NMMC can Iake
measures Io check Ihese insIances o IheI
and urIher reduce losses.
Cohsumer
IoIal households)
!00% !00% lndividual connecIions are provided Io all
uniIs wiIhin Ihe municipal area.
MeIering/IoIal
connecIions
!00% 78% Though Ihe currenI exIenI o meIering
is less Ihan Ihe required norm, NMMC is
currenIly underIaking measures Io achieve
!00% meIering wiIhin Ihe ollowing
6 monIhs. WiIh eecIive operaIions o
Ihe meIering sysIem and raIional Iari
levels, per capiIa waIer consumpIion is
reporIed Io have been reduced.
DuraIion o waIer supply 24 hours 4 hours24 hours MosI wards receive 24 hours o
uninIerrupIed waIer supply. Only a ew
wards receive waIer or 4 hours. However,
in Ihese wards, Ihe supply requency is
Iwice a day.
OperaIion and
mainIenance cosI
recovery
!00% !00% The high recovery levels indicaIe IhaI
operaIional eiciency is saIisacIory.
UniI income
Ps!.27/kl
Ps9.70/kl
High revenue realizaIion per uniI againsI
cosI o producIion indicaIes saIisacIory
CollecIion eiciency !00% 97% CurrenI collecIions are high, however,
urIher improvemenIs can be made. ToIal
collecIions include an arrears componenI
o Ps240 million. However, Ihese are one
Iime accumulaIed arrears rom areas IhaI
were previously noI included in NMMC
municipal limiIs and have been recenIly
included.
CPHLLO ~ CenIral Public HealIh and LnvironmenIal Lngineering OrganisaIion, kl ~ kiloliIer, lpcd ~ liIer per capiIa per day,
NMMC ~ Navi Mumbai Municipal CorporaIion, Ps ~ rupees, WTP ~ waIer IreaImenI planI.
Source: CPlSlL analysis on Ihe basis o daIa provided by Navi Mumbai Municipal CorporaIion.
Table 7! FRQWLQXHG
162
lor a clear undersIanding on how Ihe currenI
conIracI oversees and ensures eicienI
managemenI o waIer supply services in Ihe ciIy,
deIails o Ihe PPP sIrucIure are now presenIed.
The perormancebased operaIion and
managemenI conIracI requires Ihe privaIe
operaIor Io operaIe and manage Ihe waIer
supply services rom Ihe poinI o Ihe elevaIed and
ground sIorage reservoirs Io Ihe consumer end.
The operaIor would be supplied wiIh IreaIed
waIer rom Ihe IreaImenI planI Ihrough Ihe pure
waIer Iransmission lines, and rom IhaI poinI on,
all acIiviIies would be managed by Ihe operaIor.
Thereore as per Ihe conIracI, Ihe NMMC is
responsible or bulk waIer supply sourcing, raw
waIer Iransmission, and IreaImenI aI Ihe WTP.
The ocus o Ihis conIracI is Io ensure improved
services aI Ihe disIribuIion end, inclusive o
meIering, billing, and collecIion. The privaIe
operaIor is, Ihereore, noI required Io make any
capiIalbased improvemenIs Io Ihe waIer supply
sysIem, such as augmenIaIion, and replacemenI
or rehabiliIaIion. Under Ihis agreemenI, Ihe
ollowing acIiviIies have Io be perormed by Ihe
privaIe operaIor:
(i) operaIions and managemenI o elevaIed
and ground sIorage reservoirs, pumps,
and disIribuIion neIwork,
(ii) mainIenance o waIer supply pressures
and chlorinaIion o waIer aI Ihe
disIribuIion end,
(iii) operaIion and mainIenance o Ihe
disIribuIion neIwork, including leak
deIecIion and managemenI,
(iv) provision o new waIer connecIions as per
Ihe urban local body's direcIions,
(v) insIallaIion o bulk and consumerend
meIering, billing, and collecIion,
(vi) civil works, including repairs and
mainIenance o Ihe waIer asseIs rom Ihe
elevaIed sIorage reservoir poinI Io Ihe
disIribuIion end, including meIers, bore
wells, and public sIandposIs, and
(vii) consumer redress.
The NMMC will seI Ihe user charges Io be
levied and collecIed, and Ihe privaIe operaIor
will be required Io generaIe Ihe bills as per
Ihe seI Iari sIrucIure, and collecI and hand
over Ihe revenues Io Ihe NMMC. The privaIe
operaIor would be paid, on an annuiIy basis,
a ixed conIracI price or Ihese acIiviIies. ln
addiIion, Ihe conIracI oers incenIives or
perormance over Ihe seI sIandards. WiIh
reerence Io Ihe expendiIure incurred on
O&M o Ihe waIer supply services, as per Ihe
agreemenI, Ihe NMMC would be required Io
bear Ihe expenses or purchase o bulk waIer,
energy charges, chemicals, and any major
capiIal invesImenI work Io Ihe exisIing waIer
asseIs. The expenses on labor engaged or
O&M and civil works would be borne by Ihe
privaIe operaIor.
lmprovemenIs Io Ihe exisIing waIer
supply services Ihrough measures,
such as increasing coverage,
improving meIering sysIems, and
rehabiliIaIing Ihe disIribuIion
neIwork
DevelopmenI o Supervisory
ConIrol and DaIa AcquisiIion
(SCADA) sysIem
PemoIe reading sysIem or meIers
AddiIional 42,000 meIers in Ihe
slums
PehabiliIaIion o !50 kilomeIers o
!50MLD WTP
Ps2,J00 million
DPP ~ deIailed projecI reporI, MLD ~ million liIers per day, Ps ~ rupees, WTP ~ waIer IreaImenI planI.
Source: Navi Mumbai Municipal CorporaIion.
Navi Mumbai
163
Key Roles and Responsibilities of the
Navi Mumbai Municipal Corporation
and the Private Operator
The key roles and responsibiliIies o Ihe
sIakeholders are given in Table 7J.
IransacIion under a disIribuIioncumrevenue
collecIion conIracI.
Though Ihe NMMC would aciliIaIe obIaining
necessary clearances and permiIs required or
operaIions, Ihe inal responsibiliIy or obIaining
all Ihe applicable permiIs would resI wiIh Ihe
privaIe developer. ln addiIion, during Ihe period
o Ihe conIracI, i Ihere are any disrupIions in
supply o bulk waIer, elecIriciIy, eIc., Ihe privaIe
developer is obligaIed Io make Ihe requisiIe
inIerim arrangemenIs.
As per Ihe conIracI, in addiIion Io carrying
ouI Ihe O&M acIiviIy, Ihe privaIe developer
is required Io underIake overall sysIem and
energy audiIs on a regular basis. The conIracI
speciies Ihe poIenIial increase in Ihe scope
o work, which may be asked o Ihe privaIe
developer. The NMMC may need Io increase
Ihe lengIh o Ihe exisIing disIribuIion pipelines,
and Ihe number o connecIions and criIical
pressure poinIs. The conIracI speciies Ihe
maximum range by which Ihese could increase,
beyond which Ihe conIracI price or Ihe annual
paymenI would be revised or Ihe privaIe
developer.
ParIicuIars PrivaIe OperaIor Navi Mumbai MunicipaI CorporaIion
Primary Iask OperaIes and mainIains Ihe disIribuIion
neIwork inclusive o operaIion o pumps,
elevaIed and ground sIorage reservoirs,
chlorinaIion, civil works, meIering, billing,
and collecIion
OperaIes and manages Ihe waIer supply
sysIem up Io Ihe poinI o Ihe elevaIed or
ground sIorage reservoir
UnderIakes major capiIal invesImenI works
or Ihe enIire waIer supply sysIem
Provides permiIs and righIs o operaIion Io
privaIe developer
Provides all necessary equipmenI required
or operaIion and mainIenance
Oversees operaIion and mainIenance o
1ari!! GeneraIes bills as per seI Iari DeIermines user charges and Iari sIrucIure
OperaIihg
expehse
Pays all expenses relaIed Io labor employed
8ears expenses on repair o asseIs
lnsIalls meIers and incurs operaIion and
mainIenance expense on meIers
8ears any oIher operaIion and mainIenance
expense relaIed Io disIribuIion neIwork
Pays or raw waIer purchase, waIer IesIing
charges, and elecIriciIy consumpIion
8ears expenses on chlorinaIion o waIer
CapiIal expehse 8ears all capiIal expendiIure works,
including augmenIaIion o Ihe exisIing
sysIem, replacemenI and/or compleIe
rehabiliIaIion o Ihe disIribuIion neIwork
AsseI owhership Only geIs righIs o operaIion o Ihe asseIs,
and is required Io hand over Ihe asseIs aI
Ihe end o Ihe Ienure o Ihe conIracI
Takes over asseIs aI Ihe end o Ihe conIracI
period
164
Key Features of Navi Mumbai
Municipal Corporations
Performance Management Contract
Some o Ihe unique eaIures and risk miIigaIion
measures, which orm parI o Ihe exisIing
conIracI, are as ollows:
(i) The conIracI clearly lisIs down Ihe
perormance criIeria, which are Io
be meI by Ihe privaIe developer or
operaIions and managemenI o Ihe
sysIem. lor insIance, along wiIh Ihe
regular Iasks, Ihe operaIor is required
Io underIake energy and sysIem audiIs.
These audiIs are inIended Io aciliIaIe
leak deIecIion, ix incorrecI connecIions,
reduce power consumpIion, eIc. AgainsI
Ihese measures, Ihe privaIe developer is
provided wiIh a clear sysIem o incenIives.
lor example, or every kiloliIer reducIion
in waIer loss beyond Ihe benchmark,
a per uniI revenue incenIive o Ps2 is
menIioned. Similarly, or deIecIion o each
illegal connecIion, an incenIive value has
been ixed. Such revenuelinked incenIives
have been builIin Io encourage beIIer
operaIion o Ihe sysIem by Ihe privaIe
developer.
(ii) SIringenI penalIies have also been builI
inIo Ihe conIracI. lor insIance, Ihe
penalIy value has been ixed, in case Ihe
privaIe developer exceeds Ihe speciied
number o reporIs or ailing Io provide
waIer supply aI speciied pressure levels.
Such penalIies are applicable or any
deviaIion in waIer qualiIy levels, loss
levels, increased power consumpIion,
inadequaIe sysIem mainIenance, delay in
meIer reading, unauIhorized sale o waIer
or provision o new connecIions, non
aIIendance Io cusIomer complainIs wiIhin
Ihe prescribed Iimelines, eIc. l penalIy
charges exceed !0% o Ihe conIracI
price or Ihe concerned operaIing year,
Ihe NMMC would review wheIher Ihe
conIracI needs Io be conIinued wiIh Ihe
operaIor or IerminaIed.
(iii) To be able Io ensure eecIive
implemenIaIion o Ihe incenIives and
penalIies, Ihe NMMC has also deIailed
Figure 18 5IrucIure o! WaIer 5uppIy Per!ormance ManagemenI ConIracI
!or OperaIion and MainIenance
NMMC ~ Navi Mumbai Municipal CorporaIion.
Fixes Iari!!
Households
AnnuaI !ixed paymenI as per conIracI
Sources
bulk waIer
8uilds/
AugmehIs
8uilds/
AugmehIs
8uilds/
AugmehIs
NMMC
DisIribuIes
CollecIs
revehue
!rom households
ahd passes
oh Io NMMC
PrivaIe
developer
1reaIs
Navi Mumbai
165
in Ihe conIracI Ihe sysIem o regulaIion
and moniIoring. The NMMC would
compare Ihe waIer bill amounI generaIed
aI each zone wiIh Ihe amounI o waIer
supplied as per records and, in case o any
dierence in Ihe expecIed and acIual bill
amounI, seek a deIailed explanaIion rom
(iv) ln iIs eorI Io ensure implemenIing
consumer responsibiliIy, Ihe NMMC has
auIhorized Ihe privaIe operaIor Io impose
sIringenI penalIies. lor example, i a waIer
Iank is ound Io be overlowing, a penalIy
o !00% o average amounI o 4 monIhs
would be imposed.
(v) lailure o Ihe operaIor Io dispense any
o Ihe required duIies would resulI in Ihe
NMMC underIaking Ihe same service aI
Ihe operaIor's cosI.
Risk Sharing between the
Navi Mumbai Municipal Corporation
and the Private Developer
The apporIioning o key risks beIween Ihe
privaIe developer and Ihe urban local body is
shown in Table 74.
isks PrivaIe OperaIor NMMC
Commissioning risk 9
Design risk 9
OperaIions risk 9
linancial risk 9
PaymenI risk 9
Perormance risk 9
Change in law risk 9 9
lorce majeure risk 9
NMMC ~ Navi Mumbai Municipal CorporaIion.
PART IV
Term Sheets
I Introduction
ParI lV o Ihis reporI presenIs Ihe deIailed
Ierm sheeIs prepared or Ihe publicprivaIe
parInership (PPP) opIions idenIiied or Ihe ciIies
analyzed in ParI lll. ln ParI lll, Ihe sample seI
o ciIies o MaharashIra!alna, SangliMiraj
Kupwad, Kolhapur, Virar, Navghar Manikpur,
Chiplun, AkoI, Saoner, Shirpur, Kulgaon
8adlapur, and AmbernaIhwere sIudied Io
assess Ihe sIaIus o Iheir waIer supply and
sewerage services and choose an appropriaIe PPP
sIrucIure or Ihe projecIs idenIiied as necessary
Io improve Ihe waIer supply and sewerage
services. The PPP sIrucIures recommended are
based on Ihe sIudy o a sample o PPP projecIs
IhaI have been implemenIed in lndia. These
PPP sIrucIures can be modiied according Io
Ihe unique requiremenIs o a projecI and may
be urIher reined Io address Ihe needs o Ihe
urban local body (UL8) or sIaIe agency and Ihe
projecI. DeIailed Ierm sheeIs, Iheir objecIives,
and conIenIs are presenIed in Ihis parI o
Ihe reporI.
Objective of the Term Sheet
The Ierm sheeI is a reerence guide or
undersIanding Ihe key clauses applicable under
a speciic PPP sIrucIure. The clauses presenIed
in Ihe Ierm sheeI would help Ihe UL8 or sIaIe
agency in draIing a conIracI or Ihe PPP
sIrucIure selecIed or implemenIaIion o Ihe
idenIiied projecIs in Ihe waIer supply and
sewerage secIor. The Ierm sheeIs presenIed have
been developed or Ihose PPP sIrucIures IhaI
have been ound Io be besI suiIed or Ihe ciIies
sIudied in ParI lll.
The UL8 or sIaIe agency can reer Io Ihe deIailed
seI o clauses, which have been lisIed in order
Io develop a comprehensive PPP conIracI. lI
should be noIed IhaI Ihe clauses menIioned
are generic in naIure and would vary according
Io Ihe unique characIerisIics o Ihe PPP
sIrucIure inalized or a speciic ciIy. The roles,
responsibiliIies, and risk miIigaIion measures are
subjecI Io change, depending upon Ihe ouIpuI
rom Ihe deIailed analysis, which Ihe UL8 or
sIaIe agency would carry ouI.
Contents of the Term Sheet
As indicaIed, Ihe Ierm sheeI is expecIed Io
oer Ihe user wiIh broad guidelines or Ihe
preparaIion o a comprehensive conIracI or Ihe
PPP sIrucIure idenIiied. The Ierm sheeI broadly
covers Ihe ollowing areas:
(i) lisI o preparaIory work Io be underIaken
by Ihe UL8 or sIaIe agency beore Ihe
commencemenI o Ihe PPP conIracI,
(ii) lisI o inormaIion Io be provided by Ihe
UL8 Io Ihe privaIe developer,
(iii) Ienure o Ihe PPP conIracI,
(iv) roles and responsibiliIies o Ihe developer,
and
(v) UL8's obligaIions.
ProjecI moniIoring mechanism
Perormance sIandards
PaymenI Ierms
Pisk MiIigaIion sIraIegies
Consequences o deaulI
PlQ criIeria
8idding parameIer
The deIails o Ihe abovemenIioned conIenIs are
as presenIed in Ihe Ierm sheeIs in Ihe ollowing
secIions o Ihis reporI.
169
II Term Sheets
Performance Management Contract
for the Entire Water Supply System
Problem Denition
The urban local body (UL8) has low levels o
overall operaIional eiciencies. Under Ihe
currenI supply o waIer, alIhough Ihe exisIing
inrasIrucIure is saIisacIory, Ihe UL8 is unable
Io ully recover operaIion and mainIenance
(O&M) cosIs incurred. The low cosI recoveries
may be aIIribuIed parIly Io low Iari levels, buI
are also aecIed by ineicienI managemenI o
Ihe waIer supply services, such as inadequaIe
moniIoring, a high exIenI o IheI, poor leak
deIecIion and managemenI, and low levels o
collecIion eiciency. ln addiIion, Ihe enIire waIer
supply sysIem may noI have an adequaIe exIenI
o meIering. As a resulI, Ihe UL8 would require
beIIer managemenI o Ihe enIire waIer supply
sysIem wiIh a single ocus on improvisaIion o
operaIional eiciencies and ull cosI recovery.
Need for PPP
The UL8 needs publicprivaIe parInership
(PPP) largely Io improve Ihe service delivery
mechanism. The UL8 has, hisIorically, seen
poorIomoderaIe operaIional sIandards and
or has seen minimal yearonyear operaIional
improvemenI Io Ihe waIer supply sysIem. The
UL8, Ihereore, needs an improvemenI in currenI
operaIional levels, including reducIion o energy
cosIs, reducIion o Iransmission and disIribuIion
losses, and improvemenI in collecIion eiciency.
Thereore, Ihe UL8 needs a privaIe operaIor Io
bring abouI operaIional eiciencies in Ihe overall
managemenI and provisioning o waIer supply
services.
PPP Structure
The PPP sIrucIure designed Io address Ihe sIaIe's
problem is a perormance managemenI conIracI
or O&M o Ihe enIire waIer supply sysIem.
Under such a sIrucIure, Ihe privaIe developer
would be required Io carry ouI all Ihe waIer
supply operaIions, sIarIing rom sourcing o bulk
waIer rom Ihe exisIing source, Io Iransmission
Io Ihe IreaImenI planI, IreaImenI, sIorage, and
supply Ihrough Ihe exisIing disIribuIion neIwork.
ln addiIion, in Ihe absence o bulk meIers
and meIers aI Ihe consumer end, Ihe privaIe
developer would also be required Io insIall
Ihese, operaIe and mainIain Ihe meIers, read
and record daIa, generaIe bills, and underIake
collecIion. The privaIe developer would be
paid, on an annuiIy basis, or Ihe acIiviIies
underIaken. This annuiIy sum is Io be IreaIed as
Ihe imporIanI inancial bid parameIer.
Objective of the PPP Structure
This PPP sIrucIure aims Io improve Ihe
operaIional eiciencies o Ihe waIer supply
sysIem by ensuring improved operaIional
recoveries, reduced losses, and improved
collecIion eiciency.
Integrated Concession and
Management of the Entire Water
Supply and Sewerage System
Problem Denition
The UL8 aces a dual problem o poor waIer
supply coupled wiIh absence o a sewerage
sysIem. There exisIs a shorIage o Ihe currenI
waIer source, highly corroded raw waIer and
pure waIer Iransmission mains, high IreaImenI
losses, and an old disIribuIion neIwork wiIh
leakages and high number o illegal connecIions.
The UL8 is unable Io recover iIs operaIional
cosIs rom Ihe currenI waIer revenue due
Io inadequaIe Iaris, insuicienI direcI
connecIions, and poor collecIion eiciency.
As a resulI, Ihe UL8 needs Io invesI in Ihe
170
Term SheeIs
171
5I No. IIem DescripIion
! PreparaIory work by
urbah local body (UL8)
!. UnderIake a consumer survey Io gauge Ihe number o direcI
connecIions, unauIhorized connecIions, eIc.
2. UnderIake a Iechnical survey (including waIer audiI sIudy,
leak deIecIion sIudy, and energy audiI sIudy) Io gauge Ihe
currenI sIaIus o Ihe waIer supply sysIem, including Ihe
Iechnical losses in Ihe sysIem
J. Analyze Ihe eiciency o Ihe IreaImenI planI and collecI
deIailed inormaIion on Ihe number o pumps and sIa
4. Decide on Ihe qualiIy and Iype o meIers Io be insIalled in
Ihe ciIy
5. UnderIake a survey o Ihe raw waIer Iransmission, pure waIer
Iransmission, and disIribuIion neIwork on a geographic
inormaIion sysIem (GlS) plaIorm
6. UnderIake a valve operaIion sIudy
7. UnderIake a cusIomer regularizaIion plan
2 lh!ormaIioh Io be
provided Io Ihe privaIe
operaIor by Ihe UL8
!. ConIracI o UL8 wiIh Ihe WaIer Pesource DeparImenI or
drawing o waIer source
2. ConIracI o UL8 wiIh Ihe LlecIriciIy 8oard or supplying power
Io Ihe waIer supply sysIem and Ihe Iari deIails
J. Design o Ihe waIer supply sysIem, including jack well,
elevaIed sIorage reservoirs, main balance reservoirs, waIer
IreaImenI planI (WTP), raw waIer Iransmission lines, and
4. DeIails o Ihe exisIing connecIionsnumber and Iype
5. DeIails o qualiIy o bulk meIers and cusIomer meIers
6. DeIails o qualiIy o leak deIecIion equipmenI
7. Tari sIrucIure o waIer connecIion charges, waIer supply
charges, penalIies or illegal connecIion and nonpaymenI o
waIer supply charges and escalaIions Io boIh, i applicable
8. ConIour maps and neIwork maps
9. QualiIy sIandards o waIer Io be mainIained
!0. Disposal sIandards or Ihe inerI maIIer generaIed aI waIer
IreaImenI planI
!!. OperaIion and mainIenance sIandards o reservoirs
!2. SpeciicaIions and sIandards o handover o asseIs aI Ihe end
o Ihe conIracI period
J 1ehure o! Ihe
PPP cohIracI
Generally 5!0 years, depending on Ihe inancial easibiliIy o Ihe
projecI, Ihe lie o Ihe waIer asseIs, and poliIical will
4 Roles ahd
respohsibiliIies o!
Ihe developer
!. Takeover o all Ihe waIer supply sysIems rom source Io
disIribuIion poinI, including jack wells, pipelines, WTPs,
elecIrical subsIaIions, sIorage reservoirs, pumping sIaIions,
meIers, and valves
2. OperaIe pumping sIaIions and jack wells or drawing o bulk
waIer rom Ihe source
FRQWLQXHGRQQH[WSDJH
172
J. OperaIe and mainIain Ihe pumping sIaIions
4. OperaIe and mainIain Ihe main balancing reservoir
5. OperaIe valves or raw waIer Iransmission rom Ihe source Io
Ihe WTP
6. Pepair and mainIain Ihe raw waIer Iransmission pipelines
7. OperaIe and mainIain Ihe WTP as per Ihe procedure and
qualiIy sIandards speciied by Ihe UL8
8. OperaIe and mainIain Ihe sIorage reservoirs, operaIe ouIleI
valves o elevaIed sIorage reservoirs (LSPs) and/or ground
sIorage reservoirs (GSPs) Io supply waIer as per operaIing
schedules
9. OperaIe and mainIain Ihe exisIing connecIions
!0. OperaIe valves in Ihe disIribuIion neIwork or eicienI and
equiIable waIer disIribuIion
!!. Carry ouI minor repairs Io Ihe waIer supply asseIs or a period
o ___ years
!2. ConducI daily checks Io waIer pressure levels
!J. LsIablish bulk meIers aI Ihe WTP and sIorage reservoirs, and
measure Ihe inpuI and ouIpuI volumes
!4. MainIain overall cleanliness and hygiene sIandards or all
waIer supply asseIs being mainIained, avoiding condiIions
o waIerlogging and mosquiIo breeding in LSP, GSP, and
GSP complexes
!5. Dispose Ihe wasIe generaIed and oIher inerI maIIer rom Ihe
WTP as per applicable environmenIal norms
!6. Check qualiIy o IreaIed waIer and operaIing chlorinaIors Io
add chlorine dosage as required, collecI Ihe waIer samples
rom various locaIions and submiI iI Io Ihe laboraIory or
IesIing on a daily basis
!7. Pecord and reporI Ihe readings o bulk low meIers aI various
inleIs and ouIleIs on a daily basis
!8. LsIablish meIers or all Ihe consumer connecIions, operaIe
and mainIain Ihe meIers (!00% meIering)
!9. Pecord, on a monIhly basis, waIer meIer readings o
cusIomer and regisIer Ihese in an appropriaIe compuIer
daIabase, and prinI and disIribuIe waIer bills and noIices Io
consumers as per insIrucIions o Ihe engineerincharge
20. Provide and mainIain new connecIions Io households
2!. Provide securiIy or aciliIies and/or sysIem aI all Iimes
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
173
22. ConducI daily daIa recording regarding working hours o each
pump, power acIor, power consumpIion Io be collecIed,
record and submiI Io Ihe execuIive engineerincharge o Ihe
UL8 (waIer supply)
2J. UnderIake an overall sysIem and connecIion audiI, including
leak deIecIion, recording and recIiicaIion o incorrecI
cusIomer connecIions, deIecIion o aulIy meIers, deIecIion
o illegal use o waIer, and regulaIion o meIers Io reduce
energy consumpIion once every ___ years
24. UnderIake replacemenI o damaged or leaking pipelines up
Io ___ meIers
25. UnderIake mainIenance o public wells and bore wells,
including desilIing, disinecIion, and any repair
26. Develop and mainIain a public awareness sysIem Io inorm
abouI sysIem breakdown, shuIdown, and supply shorIage
27. Arrange waIer Iankers or Ihe public in Iimes o waIer crises
or power ailure
28. Pay Ihe WaIer Pesources DeparImenI or oIake o waIer
rom Ihe waIer resource, in accordance wiIh Ihe conIracI
beIween Ihe WaIer Pesources DeparImenI and Ihe UL8
29. Pay or elecIriciIy consumed or Ihe operaIion and
mainIenance (O&M) o Ihe waIer supply sysIem and bear
power Iari escalaIions, i any
J0. 8ear all expenses or chemicals required or operaIing WTPs
J!. Arrange or sIaing or Ihe O&M o Ihe waIer asseIs as
per Ihe conIracI and or underIaking Ihe scope o work as
deined in Ihe conIracI. 8ear all esIablishmenI expenses or
operaIing and mainIaining Ihe waIer asseIs, including Ihe
salaries and wages o Ihe sIa deployed by Ihe developer,
uniorms, and saeIy equipmenI, underIake medical IesIs aI
predescribed inIervals, eIc.
J2. Lnsure IhaI Ihe raw waIer Iransmission losses are wiIhin Ihe
range speciied in Ihe perormance sIandards
JJ. SubmiI records on waIer qualiIy mainIained aI dierenI
poinIs in Ihe value chain Io Ihe UL8
J4. Lnsure IhaI O&M sIandards are as per speciied levels
J5. SubmiI a plan Io Ihe UL8 ouIlining Ihe deIails o Ihe O&M
acIiviIies Iimelines and Ihe phasing o meIering, reducing
unauIhorized connecIions, eIc.
J6. Charge penalIy Io consumers i Ihe waIer supply charges and
waIer connecIion ees are noI paid wiIhin Ihe speciied
Iime limiI
J7. OperaIe and mainIain Ihe exisIing connecIions
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
174
J8. MainIain a record o all asseIs purchased by Ihe privaIe
developer
J9. Assess Ihe gross yearly demand o raw waIer and submiI iI Io
Ihe UL8 or approval, and aciliIaIe Ihe urIher submission Io
Ihe WaIer Pesources DeparImenI
40. Abide by all applicable bylaws, noIiicaIions, amendmenIs
Io labor laws, eIc.
4!. Provide a superinIendenI Io be an auIhorized represenIaIive
o Ihe privaIe developer and key poinI o conIacI or Ihe UL8
42. UnderIake exIensive campaigning and awareness programs
or meIering o connecIions
4J. Supervise procuremenI or supply chain managemenI
44. Deine and implemenI cusIomer service policy applicable Io
Ihe developer's employees
5 UL8's obligaIiohs !. Pesponsible or signing Ihe conIracI wiIh Ihe WaIer Pesources
DeparImenI or oIake o waIer rom Ihe waIer source
2. Pesponsible or signing conIracI wiIh Ihe LlecIriciIy
DeparImenI or supply o elecIriciIy or Ihe waIer supply
operaIions
J. PeplacemenI o pumping sIaIions, as needed
4. Lnsure IhaI Ihe pipes or raw waIer Iransmission are closed
in order Io avoid raw waIer Iransmission losses due Io
evaporaIion and IheI
5. PeplacemenI o Ihe raw waIer Iransmission pipelines,
disIribuIion neIwork pipes, WTP augmenIaIion, major repairs,
and reconsIrucIion works, eIc., as needed
6. lix Ihe Iari or waIer supply or Ihe consumer and deIermine
Ihe escalaIions
7. laciliIaIe approvals needed
8. MoniIor Ihe operaIions o Ihe developer
9. MainIain adminisIraIive conIrol over Ihe personnel, aciliIies,
and/or sysIem
!0. AlIer waIer supply Iimings, quanIiIies, pressures, and zoning
!!. Provide IenIaIive lisI o sIa and labor required
!2. lmplemenI capiIal expendiIure as per Ihe CapiIal lnvesImenI Plan
!J. Lnable access Io Ihe waIer asseIs, ree rom encumbrances
!4. PermiI peaceul use o Ihe waIer asseIs
!5. Provide supporI Io Ihe developer or regularizing illegal
connecIions
!6. DisconnecI Ihe waIer connecIion i Ihe consumer does noI
pay Ihe waIer supply charge and Ihe penalIy wiIhin Ihe
speciied Iime limiI
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
175
6 MohiIorihg mechahism !. Developer shall underIake periodic inspecIion o waIer
asseIs and submiI reporIs Io an independenI engineer, Ihe
independenI engineer shall review Ihe mainIenance reporIs
and inspecI Ihe waIer asseIs aI leasI once in J monIhs and
submiI an O&M inspecIion reporI Io Ihe UL8.
2. The privaIe developer would have Io underIake qualiIy
assurance IesIs or Ihe consIrucIion acIiviIy under way or
already compleIed, aI Ihe behesI o Ihe UL8.
J. The developer would oversee Ihe perormance sIandards
being meI, and mainIain records o Ihe same, and provide
access Io Ihe developmenI auIhoriIy or UL8 as and when
required.
7 Per!ormahce sIahdards !. Perormance sIandards shall be seI up on Ihe basis o Ihe
exisIing baseline igures
2. WaIer IreaImenI planI Io uncIion aI a minimum capaciIy
o ___%
J. Coverage: cover a minimum o ___% o IoIal households in
Ihe range o Ihe main Irunk line
4. WaIer supply should be minimum ___ liIers per day (lpcd). lI
shall be measured as |(quanIiIy measured aI LSP)*
(! disIribuIion loss(%)
5. Paw waIer Iransmission loss should be in Ihe range o
___% Io ___%. lI shall be measured as |((! quanIiIy o
waIer received aI WTP)/quanIiIy o waIer pumped aI inIake
works)*!00
6. WaIer IreaImenI loss should be in Ihe range o ___%
Io ___%. lI shall be measured as |((! quanIiIy o waIer
discharged rom WTP)/quanIiIy o waIer received aI
WTP)*!00
7. Pure waIer Iransmission loss should be in Ihe range o ___%
discharged rom LSP)/quanIiIy o waIer discharged rom
WTP)*!00
8. DisIribuIion loss should be in Ihe range o ___% Io ___%. lI
shall be measured as |((! quanIiIy o waIer billed in a zone)/
quanIiIy o waIer discharged rom LSPs)*!00
9. Supply waIer or minimum ___ hours per day
!0. lrequency o supply should be minimum ___ days a week
!!. The pressure o waIer supply should be mainIained aI ___
such IhaI iI ills a ___ liIer buckeI in less Ihan ___ seconds
!2. Consumer complainIs noI Io exceed ___ per monIh
!J. Consumer complainIs Io be redressed wiIhin 24 hours rom
Ihe Iime Ihe complainI is lodged
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
176
!4. WaIer qualiIy Io be mainIained as per Ihe norms o Ihe
CenIral Public HealIh and LnvironmenIal Lngineering
OrganisaIion (CPHLLO)
!5. lrequency o billing should be 2 monIhs
!6. CollecIion eiciency Io increase Io ___ wiIhin ___ years
!7. QualiIy o meIers as per ___ sIandards
8 PaymehIs !. As per Ihe inancial easibiliIy, Ihe privaIe developer would be
required Io make a ixed license ee paymenI Io Ihe UL8 every
___ monIhs.
2. The privaIe developer shall have Io submiI a perormance
securiIy in Ihe orm o a bank guaranIee, which Ihe UL8 has
Ihe righI Io encash in case o nonadherence Io perormance
sIandards and in Ihe evenI o deaulI.
J. All Ihe operaIional expenses o Ihe waIer asseIs would have
Io be borne by Ihe privaIe developer.
9 Risk miIigaIioh
sIraIegies
!. The secondranked bidder shall be issued Ihe leIIer o award,
i Ihe developer does noI sign Ihe agreemenI wiIhin ___ days
o accepIance o Ihe leIIer o award.
2. l Ihe developer does noI pay Ihe ixed paymenI, Ihen Ihe UL8
shall encash Ihe equivalenI amounI due rom Ihe paymenI
securiIy. The developer is Io replenish Ihe paymenI securiIy
wiIhin ___ days rom such encashmenI. l Ihe developer ails
Io replenish Ihe securiIy, Ihen iI shall be an evenI o deaulI.
J. The developer shall have Io submiI a plan Io Ihe UL8
ouIlining deIails o Ihe O&M plan. The developer shall be
allowed Io commence operaIions only once Ihe UL8 approves
Ihe plan.
4. The liabiliIies o Ihe bulk waIer supply conIracI beIween Ihe
WaIer Pesources DeparImenI and Ihe UL8 shall resI wiIh Ihe
developer (excepI changes in Ihe Iari paid Io Ihe WaIer
Pesources DeparImenI, as Ihe case may be). l Ihe supply o
waIer alls shorI and is noI available, Ihen Ihe developer shall
have Io arrange or waIer supply Ihrough privaIe Iankers or
Ihe ciIizens.
5. ln case Ihe developer does noI pay Ihe WaIer Pesources
DeparImenI and/or sIaIe elecIriciIy deparImenI, Ihen Ihe
UL8 shall encash Ihe equivalenI amounI due rom Ihe
perormance securiIy.
6. ln Ihe evenI o Ihe developer noI conirming Io and meeIing
Ihe perormance sIandards, Ihe UL8 is liable Io declaring
Ihe same as an evenI o deaulI and use Ihe perormance
guaranIee sum againsI Ihe same.
7. l Ihe developer ceases Io operaIe all or any subsIanIial parI
o Ihe waIer supply and disIribuIion asseIs or a period
o ___ consecuIive hours wiIhouI prior consenI o Ihe UL8,
Ihen Ihe UL8 can immediaIely enIer any or all o Ihe waIer
supply asseIs and operaIe Ihe sysIem.
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
177
8. Any delay in paymenI Io Ihe UL8 shall aIIracI a penal inIeresI
o ___% per annum quarIerly compounded.
9. The UL8 is liable Io impose an evenI o deaulI noIice in Ihe
case o Ihe developer selling IreaIed waIer Io any parIy oIher
Ihan Ihe UL8.
!0. l Ihe privaIe developer underreporIs Ihe revenue rom sale o
surplus waIer and/or does noI share Ihe prescribed amounI
as per agreemenI rom Ihis sale Io Ihe UL8, Ihen iI would be
considered as an evenI o deaulI.
!0 Cohsequehces o! de!aulI
a) Developer: evenI
o deaulI
!. The UL8 has Ihe righI Io make good any shorIall rom Ihe
2. The UL8 reserves Ihe righI Io claim rom Ihe developer any
cosIs, expenses, or loss iI may have incurred by reason o
breach or ailure on parI o Ihe Developer.
J. Developer shall deliver Io Ihe UL8 all papers, including
orms used, receipI books, promoIional maIerials, and oIher
documenIs.
4. The developer shall hand over all asseIs Io Ihe UL8.
b) UL8: evenI o deaulI The UL8 shall pay Ihe developer an amounI equal Io Ps___ lakhs,
book value o developer's asseIs, and paymenIs or paymenIs
ouIsIanding rom Ihe UL8
!! Quali!icaIioh criIeria
(requesI or qualiicaIion
or requesI or proposal
|RFQ/RFP)
Technical criIeria
Developer should have underIaken a similar projecI or a
populaIion size o ___.
Developer should have operaIed and managed ___ waIer
supply projecI/s rom bulk supply Io disIribuIion end or a
ciIy wiIh waIer supply o ___ MLD.
Developer should have operaIed and managed one projecI
requiring insIallaIion or operaIion and managemenI o ___
number o meIers.
linancial criIeria
Developer should have a minimum neI worIh equivalenI
Io 25% o Ihe esIimaIed projecI cosI or which bids have
been inviIed.
Developer should have average neI cash accruals over Ihe
pasI J years o Ps___ million.
Holding companies wiIh a direcI holding o more Ihan 50% equiIy in
Ihe lead consorIium member can be considered or Ihe evaluaIion o
inancial criIeria.
!2 8iddihg parameIer !. l Ihe privaIe developer is given Ihe righI Io collecI and reIain
Ihe user charges, Ihe bidding parameIer would be Ihe highesI
bimonIhly or annual ixed paymenI Io be paid as royalIy or
license ee Io Ihe UL8.
2. l Ihe privaIe developer is noI given Ihe righI Io reIain Ihe user
charges, Ihe bidding parameIer would be Ihe lowesI price aI
which Ihe privaIe developer would underIake Ihe O&M acIiviIy.
Table FRQWLQXHG
Sl ~ serial.
178
augmenIaIion and upgrading o Ihe enIire waIer
supply sysIem and improvemenI in operaIional
eiciencies.
ln addiIion Io poor waIer supply, Ihe ciIy also
lacks an adequaIe sewerage sysIem. A miniscule
percenIage o Ihe IoIal area and populaIion
is covered Ihrough an underground sewerage
neIwork. Sewage low Ihrough open drains is
quiIe common. ln major parIs o Ihe ciIy, Ihe UL8
has seI sepIic Ianks, which are cleaned periodically.
The ciIy does noI have a sewage IreaImenI planI,
and Ihe enIire sewage IhaI is generaIed is disposed
inIo Ihe river or sea. This resulIs in conIaminaIion
o waIer and aI Iimes also aecIs Ihe qualiIy o
waIer supplied Io Ihe ciIizens.
Need for PPP
The UL8 needs PPP Io enhance Ihe public
resources and improve Ihe service delivery
or Ihe waIer supply and sewerage sysIems.
The UL8 needs Io underIake huge amounI o
invesImenI Io augmenI Ihe bulk waIer source,
rehabiliIaIe waIer pipelines, seI up a sewerage
neIwork, and esIablish sewage pumping
sIaIions and sewage IreaImenI planIs. The
UL8 does noI have Ihe required invesImenI
capaciIy Io arrange or unds or Ihe planned
capiIal invesImenI (in spiIe o governmenI
granIs). Also, Ihe UL8 needs Io improve
currenI operaIional levels, including reducIion
o energy cosIs, reducIion o Iransmission
and disIribuIion losses, and improvemenI in
collecIion eiciency. Thereby, Ihe UL8 needs
a privaIe operaIor Io bring in invesImenIs Io
underIake Ihe ouIlined projecIs and Io bring in
eiciencies.
PPP Structure
The PPP sIrucIure designed or Ihis problem
deiniIion is an lnIegraIed Concession and
ManagemenI conIracI or Ihe enIire waIer
supply and sewerage sysIem o Ihe ciIy. ln such a
sIrucIure, Ihe privaIe operaIor will invesI capiIal
Io augmenI and upgrade Ihe enIire waIer supply
sysIem and esIablish Ihe sewerage sysIem as
ouIlined in Ihe deIailed projecI reporI, esIablish
meIers, and manage Ihe enIire sysIem. The PPP
operaIor shall also underIake Ihe billing and
collecIion or waIer supply, as well as sewerage
sysIem, and reIain Ihe revenue collecIed. l Ihe
projecI is inancially viable, Ihe bidder shall make
an annual paymenI Io Ihe UL8. l Ihe projecI
is noI inancially viable and needs ViabiliIy Gap
lund (VGl) supporI, Ihe privaIe operaIor shall
quoIe Ihe VGl amounI. lI is possible IhaI Ihe
VGl needed or Ihe projecI shall exceed Ihe cap
o 40%. ln such a scenario, Ihe UL8 or sIaIe
governmenI shall need Io pay a shadow Iari Io
This PPP sIrucIure aims Io augmenI Ihe currenI
capaciIy o Ihe waIer supply sysIem, reduce Ihe
Iechnical and commercial losses in Ihe enIire
waIer supply sysIem, and esIablish a compleIe
neIwork o sewerage sysIem and IreaIed
disposal o Ihe sewage generaIed in Ihe ciIy.
Detailed Term Sheet
The ollowing Ierm sheeI ouIlines Ihe deIailed
working o an inIegraIed concession and
managemenI conIracI or Ihe enIire waIer
supply and sewerage sysIem, including Ihe
preparaIory work Io be underIaken by Ihe UL8,
key obligaIions o Ihe developer and Ihe UL8,
moniIoring mechanism, paymenI sIrucIure,
perormance sIandards Io be adhered Io by
Ihe privaIe operaIor, and key clauses or risk
miIigaIion relaIed Io Ihe PPP sIrucIure.
Management Contract for Metering,
Billing, and Collection
Problem Denition
The UL8 has suicienI and requenI waIer supply
coupled wiIh an eicienI Iransmission and
disIribuIion sysIem. The UL8 may need invesImenI
in upgrading Ihe sysIem, buI is inancially capable
o underIaking Ihe same. However, Ihe UL8 is noI
in a posiIion Io recover iIs operaIional cosI as a
resulI o low revenue demand, high commercial
loss, and poor collecIion eiciency. As a resulI, in
order Io undersIand Ihe waIer acIually consumed
by Ihe cusIomers and increase Ihe revenue rom
waIer, Ihe UL8 needs Io esIablish meIers and
underIake measures Io improve iIs eiciencies in
billing and collecIion.
Term SheeIs
179
!. UnderIake a Iechnical survey Io gauge Ihe currenI sIaIus o
Ihe waIer supply sysIem, including Ihe Iechnical losses in
Ihe sysIem
2. UnderIake a Iechnical survey Io gauge Ihe characIerisIics o
Ihe sewage generaIed, Ihe design o Ihe sewerage neIwork,
and Ihe Iechnology Io be adopIed or Ihe sewage IreaImenI
planI (STP)
J. Design, in deIail, Ihe sewerage neIwork considering Ihe
conIours and physical eaIures o Ihe ciIy
4. UnderIake a consumer survey Io gauge Ihe number o direcI
5. Analyze Ihe eiciency o Ihe waIer IreaImenI planI (WTP) and
collecI deIailed inormaIion on Ihe number o pumps
and sIa
Ihe ciIy
!0. Prepare a comprehensive meIering policy
!!. Prepare Ihe perormance criIeria as per Ihe currenI levels o
perormance
2 lh!ormaIioh Io be
operaIor by Ihe UL8
lor waIer supply sysIem
!. ConIracI o UL8 wiIh WaIer Pesources DeparImenI or
Iapping o waIer source
elevaIed sIorage reservoirs, main balance reservoirs, WTP, raw
waIer Iransmission lines, disIribuIion neIwork, eIc.
4. CondiIion o Ihe waIer asseIs or quanIiying Ihe cosI
required or rehabiliIaIion and/or renovaIion o asseIs
charges, penalIies or illegal connecIion, and/or nonpaymenI
o waIer supply charges and escalaIions, i applicable
8. DeIailed projecI reporI (DPP) o Ihe projecIs Io be underIaken
!0. QualiIy sIandards o waIer Io be mainIained
!!. Disposal sIandards or Ihe inerI maIIer generaIed aI Ihe WTP
!2. OperaIion and mainIenance (O&M) sIandards or all Ihe
waIer supply asseIs in Ihe value chain
FRQWLQXHGRQQH[WSDJH
180
!J. SpeciicaIions and sIandards o handover o asseIs aI end o
Ihe conIracI period
!4. HisIory o paymenIs o end users, i available
lor sewerage sysIem
!. Design o Ihe sewerage sysIem, including sewerage neIwork,
pumping sIaIions, STP, rising mains, eIc.
2. Technology speciicaIions o Ihe STP
J. CondiIion o Ihe sewerage asseIs or quanIiying Ihe cosI
required or rehabiliIaIion and/or renovaIion o asseIs
4. Tari sIrucIure o sewerage connecIion charges, sewerage
charges, penalIies or illegal connecIion, and/or nonpaymenI
o sewerage charges and escalaIions, i applicable
5. DPP o Ihe projecIs Io be underIaken
6. Disposal sIandards or Ihe inerI maIIer generaIed aI Ihe STP
7. O&M sIandards
8. SpeciicaIions and sIandards o handover o asseIs aI end o
Ihe conIracI period
J 1ehure o! Ihe
PPP cohIracI
The Ienure o Ihe PPP conIracI is generally deined in Ierms o Ihe
years o operaIion and ranges beIween 25 years and J0 years.
4 Roles ahd
respohsibiliIies o! Ihe
developer
!. DevelopmenI, design, engineering, inance, procuremenI,
consIrucIion, compleIion, commissioning, implemenIaIion,
managemenI, adminisIraIion, O&M o Ihe waIer supply
source, WTP, waIer supply neIwork, sewerage neIwork,
including pumping sIaIions, STP, and meIers
2. Taking over Ihe exisIing asseIs o Ihe waIer supply scheme,
including Ihe jack well, pumping sIaIions, elecIrical
insIallaIions, WTPs, waIer sIorage reservoirs, connecIing
pipelines, and disIribuIion sysIem, rom source Io Iap or Ihe
operaIion, mainIenance, and repairs
J. ConsIrucIion o raw waIer inIake pumps, jack wells, sucIion
mains, Iransmission pipelines, WTPs, and oIher works as per
Ihe DPP speciicaIions
4. LxIracIion o raw waIer rom Ihe source and supply Ihe
required levels Io Ihe ciIy
5. O&M o Ihe newly consIrucIed WTP and Ihe old WTP
7. lncreasing Ihe piped waIer supply by providing new
connecIions
8. TreaI Ihe waIer and ensure IhaI Ihere are no impuriIies in
waIer aI Ihe poinI o sale
9. MainIenance o a minimum average waIer supply level o
___ liIers per capiIa per day (lpcd) wiIh due pressure and
required qualiIy
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
181
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
!0. ConsIrucIion and mainIenance o sewerage rising mains,
Iransmission pipelines, pumping sIaIions, STP, and oIher
works as per DPP speciicaIions
!!. Dispose o Ihe sewageIreaIed eluenIs in Ihe waIer body
speciied by Ihe UL8 and as per Iechnical speciicaIions
!2. ConsIrucI, operaIe, and mainIain Ihe STP in accordance wiIh
applicable laws relaIed Io polluIion conIrol environmenIal
sIandards as applicable
!J. Prepare deIailed designs wiIh all requisiIe speciicaIions or
Ihe consIrucIion works and obIain approval or Ihe same
!4. Procure all Ihe necessary raw maIerials or Ihe consIrucIion
works, hire labor, or subconIracI Ihe consIrucIion acIiviIy
!5. UnderIake rehabiliIaIion works or operaIing and mainIaining
Ihe asseIs or a period o ___ years
!6. Manage regularizaIion o illegal connecIions and impose
penalIies in case o illegal connecIions
!7. LsIablish meIers, read meIers, and record Ihe waIer
consumpIion
!8. Deploy O&M sIa
!9. Develop and mainIain a consumer redress sysIem
20. CollecI waIer supply sysIem and sewerage sysIem relaIed daIa
and perormance reporIing Io Ihe UL8
2!. ObIain Ihe necessary approvals
22. Lnsure inancial closure o Ihe projecI
2J. Pay or Ihe elecIriciIy consumpIion or Ihe O&M o Ihe projecI
and bear power Iari escalaIions, i any, arrange or power
supply backup in case o power ailure
24. Provide access Io Ihe oicials o Ihe UL8 Io carry ouI
inspecIion o Ihe consIrucIion acIiviIy and operaIions and
managemenI works
25. 8e solely and exclusively responsible or recruiImenI,
IransporI, accommodaIion, paymenI o salaries, wages, and
Iaxes as applicable
26. Deine and implemenI procuremenI policy or Ihe employees
o Ihe developer
27. SelecI suppliers and subconIracIors or Ihe projecI as per Ihe
Ierms and condiIions o Ihe concession agreemenI
28. Manage subconIracIs as per Ihe Ierms and condiIions o Ihe
concession agreemenI
5 UL8's obligaIiohs !. Pesponsible Io sign Ihe conIracI wiIh Ihe WaIer Pesources
DeparImenI or oIake o waIer rom Ihe waIer source,
ensure supply o waIer Io Ihe developer aI a predecided
Iari as Ihe case may be
2. laciliIaIe or assisI in obIaining necessary or applicable permiIs
182
J. Provide land Io Ihe developer on lease basis or on Ierms
agreed upon or Ihe period o concession or underIaking
consIrucIion acIiviIy, operaIion, and managemenI o Ihe
waIer and sewerage asseIs
4. Provide necessary permissions or possession and access o
Ihe siIe Io Ihe privaIe developer
5. Lnsure IhaI all necessary auIhoriIy required by Ihe privaIe
developer or drawing o raw waIer in Ihe quanIiIy required
by Ihe developer is provided
6. UnderIake independenI supervision o Ihe consIrucIion
acIiviIy under way and moniIor Ihe operaIions
7. Provide all necessary accounIs, invoices, sIaIemenIs,
demands, noIices, insurance demands, and oIher
correspondence IhaI are applicable Io asseIs under privaIe
developer's possession during concession period
8. GranI righIoway Io Ihe siIe Io Ihe developer
9. UnderIake independenI checks aI requenI inIervals Io assess
Ihe waIer qualiIy sIandards o Ihe IreaIed waIer supplied
rom Ihe IreaImenI planI and Ihe disposal sIandards o Ihe
IreaIed sewage
!0. AuIhorize Ihe developer Io collecI, reIain, appropriaIe,
recover, and enorce waIer supply and sewerage charges rom
Ihe consumers
!!. GranI Ihe righI Io charge a penalIy Io consumers in case o
nonpaymenI o waIer supply and sewerage charges
!2. Provide a capiIal granI Io Ihe developer on Ihe compleIion o
speciied milesIones (applicable only i unding Ihrough Ihe
!awaharlal Nehru NaIional Urban Penewal Mission |!NNUPM
or viabiliIy gap unding is being provided Io Ihe projecI)
!J. ObIain permission rom Ihe concerned auIhoriIy or discharge
o sewage in a waIer body adjacenI Io Ihe STP
!4. lssue a noIiicaIion banning Ihe use o groundwaIer aIer
Ihe developer is in a posiIion Io oer waIer connecIions Io
all consumers, and cancel all exisIing permissions given or
exIracIion o groundwaIer
!5. AssisI Ihe bidder in obIaining uninIerrupIed elecIric power
supply rom Ihe SIaIe LlecIriciIy 8oard or Ihe implemenIaIion
o Ihe projecI. ln case o any inIerrupIion in Ihe power supply
beyond ___ hours conIinuously or ___ hours per monIh, Ihe
cosI incurred by Ihe developer or Ihe generaIors shall be
borne by Ihe UL8
6 MohiIorihg mechahism !. ConsIrucIion would be overseen by an independenI
consulIanI appoinIed by Ihe UL8, and quarIerly progress
reporIs o Ihe same would be generaIed.
2. The developer shall underIake periodic inspecIion o waIer
asseIs and submiI reporIs Io an independenI engineer. The
and inspecI Ihe waIer and sewerage asseIs aI leasI once in
J monIhs and submiI an O&M inspecIion reporI Io Ihe UL8.
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
183
J. The developer would have Io underIake qualiIy assurance
IesIs or Ihe consIrucIion under way or already compleIed, aI
Ihe behesI o Ihe UL8.
4. The developer would oversee Ihe perormance sIandards
being meI, mainIain records o Ihe same, and provide access
Io Ihe developmenI auIhoriIy or UL8 as and when required.
5. The UL8 shall, aI all Iimes, have access Io Ihe projecI siIe Io
inspecI and examine Ihe works, maIerials, equipmenI, and
workmanship.
7 Per!ormahce sIahdards Perormance sIandards shall be seI up on Ihe basis o Ihe exisIing
baseline igures
!. ConsIrucIion o Ihe required asseIs Io be compleIed as per
Ihe phasing o Ihe deIailed projecI reporI (DPP)
2. Paw waIer Iransmission loss should be in Ihe range o
works)*!00
J. WTP Io uncIion aI a minimum capaciIy o ___%
WTP)*!00
discharged rom LSP)/quanIiIy o waIer discharged rom
WTP)*!00
6. WaIer qualiIy Io be mainIained as per Ihe norms o Ihe
CenIral Public HealIh and LnvironmenIal Lngineering
7. QualiIy o meIers as per ___ sIandards
8. Coverage (waIer supply and sewerage) should be a minimum
o ___% o IoIal households in Ihe range o Ihe main Irunk
line
9. DisIribuIion loss should be in Ihe range o ___% Io ___%. lI
shall be measured as |((! quanIiIy o waIer billed in a zone)/
quanIiIy o waIer discharged rom LSPs)*!00
!0. WaIer should be supplied or minimum ___ hours per day
and minimum ___ days a week
!!. The pressure o waIer supply should be mainIained aI ___
such IhaI iI ills a ___ liIer buckeI in less Ihan ___ seconds
!2. TreaIed sewage disposed should be as per speciied CPHLLO
norms
!J. lrequency o billing should be 2 monIhs
!4. Pevenue collecIion eiciency aI ___% o Ihe IoIal bills
generaIed
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
184
Table FRQWLQXHG
!6. Consumer complainIs Io be redressed wiIhin 24 hours rom
Ihe Iime o lodge o complainI
!7. All perormance sIandards Io be achieved wiIhin Ihe seI
Iime rame by Ihe UL8
8 PaymehIs !. l Ihe projecI is inancially easible: Ihe privaIe developer shall
pay Ihe UL8 a ixed royalIy o Ps___ per monIh. ln Ihis case,
Ihe privaIe developer shall also have Io submiI a paymenI
securiIy in Ihe orm o _____ equivalenI Io J monIhs o ixed
paymenI payable Io Ihe UL8.
2. l Ihe projecI needs VGl: Ihe UL8 shall pay Ihe privaIe
developer Ihe amounI o VGl in insIallmenIs on Ihe
compleIion o speciied milesIones. The privaIe operaIor shall
reIain Ihe waIer revenue and make no paymenI Io Ihe UL8.
J. ln all cases, Ihe privaIe developer shall have Io submiI a
perormance securiIy in Ihe orm o a bank guaranIee, which
Ihe UL8 has Ihe righI Io encash in case o nonadherence Io
perormance sIandards and in Ihe evenI o deaulI.
4. All Ihe operaIional and capiIal expendiIures or design,
consIrucIion, and operaIion o Ihe waIer asseIs would have
9 Risk miIigaIioh
sIraIegies
!. The secondranked bidder shall be issued Ihe leIIer o award
i Ihe developer does noI sign Ihe agreemenI wiIhin Ihe ___
days o accepIance o leIIer o award.
2. l Ihe developer does noI pay Ihe ixed paymenI, Ihen Ihe UL8
shall encash Ihe equivalenI amounI due rom Ihe paymenI
securiIy. Developer is Io replenish Ihe paymenI securiIy wiIhin
___ days rom such encashmenI. l Ihe developer ails Io
replenish Ihe securiIy, Ihen iI shall be an evenI o deaulI.
ouIlining, in deIails, Ihe consIrucIion plan and Ihe O&M plan.
The developer shall be allowed Io commence consIrucIion
and operaIions only once Ihe UL8 approves Ihe plan.
4. The ownership o Ihe projecI asseIs consIrucIed during Ihe
concession period would be Iranserred Io Ihe UL8 on Ihe
compleIion o Ihe asseIs.
5. l Ihe developer does noI underIake consIrucIion or
operaIions as per Ihe speciied schedule, Ihe UL8 would issue
a noIice o deaulI and a cure period would be given Io Ihe
developer or course correcIion. ln case Ihe developer ails Io
respond Io Ihe noIices issued wiIhin J0 days o issue daIe,
Ihe conIracI would sIand IerminaIed.
waIer alls shorI and is noI available, Ihen Ihe developer shall
have Io arrange or waIer supply Ihrough privaIe Iankers or
Ihe ciIizens.
FRQWLQXHGRQQH[WSDJH
Term SheeIs
185
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
DeparImenI and/or Ihe sIaIe elecIriciIy deparImenI, Ihen
Ihe UL8 shall encash Ihe equivalenI amounI due rom Ihe
8. ln Ihe evenI o Ihe developer noI conirming Io and meeIing
Ihe perormance sIandards, Ihe UL8 is liable Io declaring
Ihe same as an evenI o deaulI and use Ihe perormance
guaranIee sum againsI Ihe same.
o Ihe waIer supply and disIribuIion asseIs or a period o
___ consecuIive hours wiIhouI prior consenI o Ihe UL8, Ihen
Ihe UL8 can immediaIely enIer any or all o Ihe waIer supply
asseIs and operaIe Ihe sysIem.
!0. Any delay in paymenI Io Ihe UL8 shall aIIracI a penal inIeresI
!!. The UL8 is liable Io impose an evenI o deaulI noIice in Ihe
Ihan Ihe UL8.
considered an evenI o deaulI.
!J. ln case o any decrease or increase in Ihe cosI o Ihe running
o Ihe projecI due Io escalaIion in power Iari by Ihe
SIaIe LlecIriciIy 8oard beyond ___% in any given year and
variaIion in Ihe cosI o Ps___/kl o bulk waIer purchased, Ihe
proporIionaIe addiIional cosI shall be borne by Ihe UL8.
!4. The consumer shall be liable Io pay waIer supply and
sewerage charges, irrespecIive o wheIher consumer avails
boIh waIer supply and sewerage connecIion aciliIies or noI.
!5. Consumer shall be responsible or Ihe saeIy o Ihe meIer
and shall be responsible or Ihe loss o meIer due Io IheI,
damage by ire, or accidenI.
a) Developer: evenI o
deaulI
cosIs, expenses, or loss iI may have incurred by reason o
breach or ailure on Ihe parI o Ihe developer.
J. The developer shall deliver Io Ihe UL8 all papers, including
documenIs.
4. All asseIs shall be handed over Io Ihe UL8.
5. All righIs, IiIles, and inIeresI in Ihe projecI asseIs shall be
handed over Io Ihe UL8.
186
b) UL8: evenI o deaulI !. The UL8 shall pay Ihe developer an amounI equal Io Ps___
lakhs, book value o developer's asseIs, and paymenIs or
paymenIs ouIsIanding rom Ihe UL8. This amounI paid shall
be aIer deducIing Ihe granI or viabiliIy unding.
2. The UL8 shall reIurn Ihe perormance securiIy Io Ihe
developer.
!! Quali!icaIioh criIeria Technical criIeria
Developer should have experience in consIrucIion o one
waIer supply projecI
The developer should have handled O&M o waIer supply
services or a ciIy wiIh 50% o ____ direcI connecIions
The developer should have underIaken one projecI
requiring consIrucIion o __ MLD WTP, ___ kilomeIers o
waIer Iransmission pipelines
requiring consIrucIion and O&M o ____ MLD o STP wiIh
___ kilomeIers o neIwork line
linancial criIeria
Developer should have a minimum neI worIh equivalenI
Io 25% o Ihe esIimaIed projecI cosI or which bids have
been inviIed
Developer should have an average neI cash accruals over
J years o Ps___ million
inancial criIeria.
!2 8iddihg parameIer !. l Ihe projecI is inancially easible, Ihe bidding parameIer
shall be Ihe ixed royalIy o Ps___ per monIh payable Io Ihe
UL8. The privaIe developer quoIing Ihe highesI royalIy shall
be selecIed as Ihe successul bidder.
2. l Ihe projecI needs VGl supporI, Ihe bidding parameIer
shall be Ihe IoIal amounI o VGl supporI payable by Ihe
UL8 Io Ihe privaIe developer. The privaIe developer quoIing
Ihe leasI VGl supporI shall be selecIed as Ihe successul
bidder.
!J SIa!!ihg The deploymenI o sIa Io privaIe operaIor by Ihe UL8 shall be Ihe
decision o Ihe UL8. The UL8 may explore Ihe Iranser o employees
on depuIaIion or a year and, on Ihe compleIion o a year, Ihe
employees can be provided wiIh an opIion o conIinuing Io work
wiIh Ihe developer or reIurning Io Ihe UL8. This shall need Io be
urIher deIailed in Ihe conIracI documenIs during Ihe Iendering
process.
Table FRQWLQXHG
Need for PPP
Since Ihe UL8 has a airly well managed
Iransmission and disIribuIion sysIem and Ihe waIer
supply is suicienI, Ihe only scope or PPP is in
esIablishing a meIering sysIem and bringing in
operaIional and managemenI eiciencies in billing
and collecIion. The need or PPP is noI urgenI buI
is desirable rom Ihe poinI o view o increasing
Ihe revenue poIenIial o Ihe UL8.
Sl ~ serial.
Term SheeIs
187
rom Ihe users Io Ihe UL8. ln reIurn or Ihe
service, Ihe UL8 shall pay a ixed annual paymenI
Io Ihe privaIe operaIor.
This PPP sIrucIure aims Io reduce Ihe commercial
losses in Ihe sysIem and bring in operaIional
eiciencies in Ihe revenue managemenI o Ihe
waIer supply sysIem.
Detailed Term Sheet
working o a meIering, billing, and collecIion
conIracI or Ihe enIire waIer supply sysIem,
including Ihe preparaIory work Io be underIaken
by Ihe UL8, Ihe key obligaIions o Ihe developer
and Ihe UL8, Ihe moniIoring mechanism,
paymenI sIrucIure, perormance sIandards
Io be adhered Io by Ihe privaIe operaIor, and
key clauses or risk miIigaIion relaIed Io Ihe
PPP sIrucIure.
PPP Structure
deiniIion, is a MeIering, 8illing, and CollecIion
conIracI or Ihe enIire ciIy. ln such a sIrucIure,
Ihe privaIe operaIor shall esIablish bulk
waIer meIers, meIers aI imporIanI poinIs
in Ihe disIribuIion neIwork, and meIers aI
consumpIion poinIs. The privaIe operaIor shall
also be responsible or regular mainIenance and
repairs o such meIers. lurIher, Ihe operaIor
shall also read Ihe meIers, prepare bills, issue Ihe
bills, and collecI Ihe money rom Ihe cusIomers.
A compuIerized sysIem conIaining a deIailed
daIabase on Ihe number and Iype o meIers,
Ihe consumpIion paIIerns, Ihe uncIionaliIy o
meIers, Ihe revenue demand, Ihe collecIions
due, eIc., shall be mainIained by Ihe privaIe
operaIor. However, Ihe Iari or Ihe waIer
consumpIion, ees or esIablishing meIers, and
Ihe penalIy or absence o or nonuncIioning
o meIers shall be seI by Ihe UL8. The privaIe
operaIor shall Iranser Ihe revenue collecIed
!. UnderIake a waIer audiI
2. Decide on Ihe mosI suiIable and aordable Iype o meIer Io
be insIalled in Ihe ciIy
J. UnderIake a consumer survey Io gauge Ihe number o direcI
connecIions, unauIhorized connecIions, slum connecIions,
connecIions charged by general raIes, meIered connecIions, eIc.
4. UnderIake a Iechnical survey o all Ihe exisIing waIer supply
disIribuIion lines
5. UnderIake leak IesIs
8. l meIers are exisIing, Ihen prepare a lisI o uncIional meIers
2 lh!ormaIioh Io be
operaIor by Ihe UL8
!. DeIails o Ihe number and Iype o bulk meIers and cusIomer
meIers Io be esIablished
2. Tari sIrucIure o waIer supply charges, penalIies or illegal
connecIion and nonpaymenI o waIer supply charges and
escalaIions, i applicable
J. ConIour maps and neIwork maps
4. DeIails o exisIing meIers, i any, Iheir uncIionaliIy, cosI, and
usage
FRQWLQXHGRQQH[WSDJH
188
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
5. A daIabase o consumers, Iheir currenI sIaIus o billing, and
waIer consumed
6. PegularizaIion plan, i any
7. MeIer replacemenI policy, i any
8. MeIer reading policy, i any
9. CurrenI billing and collecIion policy, i any
J 1ehure o! Ihe
PPP cohIracI
years o operaIion and ranges beIween 5 years and 7 years.
4 Roles ahd respohsibiliIies
o! Ihe developer
!. Procure and esIablish bulk low meIers and consumpIion
meIers aI households
2. The meIers insIalled should be as per Ihe Iechnical
speciicaIions provided by Ihe UL8
J. Pecord, on a monIhly basis, waIer meIer readings o Ihe
consumer and regisIer Ihe same in an appropriaIe compuIer
daIabase
5. PrinI bills and disIribuIe waIer bills and noIices Io Ihe
concerned consumer as per Ihe insIrucIion o Ihe UL8
6. CollecI rom consumers as per Ihe billing procedure
7. CollecI arrears rom consumers due Io Ihe UL8 or Ihe period
prior Io Ihe signing o Ihe conIracI
8. OperaIe and mainIain Ihe meIers
9. Deploy sIa or operaIion and mainIenance (O&M) o meIers
and billing and collecIion
!0. Pecord and reporI Ihe reading o Ihe bulk low meIers aI Ihe
various inleIs and ouIleIs on a daily basis
!!. Make announcemenIs or Ihe recovery o waIer bills, shuI
down o waIer supply, and public awareness as guided rom
UL8 rom Iime Io Iime
!2. ObIain Ihe necessary approvals
!J. Develop a daIabase o consumers using appropriaIe soIware
Iechnology, and provide hardware and seI up a billing sysIem
or Ihe waIer consumed by Ihe consumers
!4. 8ill collecIion arrangemenIs shall include arrangemenIs wiIh
local banks having branch oices aI suiIable locaIions in
projecI area, in addiIion, Ihe privaIe operaIor shall make iIs
own arrangemenIs or waIer supply bill collecIions aI various
locaIions in Ihe projecI area
5 UL8's obligaIiohs !. laciliIaIe procuring, obIaining, and mainIaining applicable
permiIs
2. Provide all necessary accounIs, invoices, sIaIemenIs, demands,
noIices, and oIher correspondence IhaI are applicable
Term SheeIs
189
J. Prepare a lisI o arrears and crediI balance o consumers due
Io Ihe UL8 and hand Ihis over Io Ihe developer
4. Pay Ihe bulk waIer charges, energy charges, and Ihe waIer
IesIing charges
5. Pesponsible or supply o adequaIe waIer or disIribuIion
6. Adherence Io waIer supply Iimings, quanIiIies, pressures,
and zoning
7. GranI Ihe righI Io Ihe privaIe operaIor Io charge delayed
paymenI inIeresI up Io ___% per monIh on Ihe principal amounI
ouIsIanding rom consumers, privaIe developer shall noI be
allowed Io charge inIeresI on Ihe delayed paymenI charge
8. DisconnecI waIer supply connecIion o any consumer
delaying paymenI o waIer supply bill beyond ___ monIhs
rom Ihe due daIe o Ihe paymenI o bills
6 MohiIorihg mechahism !. The UL8 shall supervise Ihe operaIions o Ihe privaIe
developer aI all Iimes and noIiy Ihe operaIor o any deecIs
IhaI are ound.
2. The developer shall underIake periodic inspecIion o meIers
and submiI reporIs Io Ihe engineerincharge. The engineer
incharge shall review Ihe mainIenance reporIs and inspecI
Ihe meIers aI leasI once in J monIhs and submiI an O&M
inspecIion reporI Io Ihe UL8.
7 Per!ormahce sIahdards !. QualiIy o meIers as per ___ sIandards
2. lrequency o billing: ___ monIhs
J. Pevenue collecIion eiciency aI ___% o Ihe IoIal bills
generaIed
4. !00% o all properIy connecIions (individual and shared)
musI be meIered, and compuIerized records o Ihe readings
musI be mainIained
5. All perormance sIandards Io be achieved wiIhin Ihe seI Iime
rame by Ihe UL8
6. Perormance sIandards shall be seI up on Ihe basis o Ihe
exisIing baseline igures
8 PaymehIs !. The revenue rom waIer supply charges collecIed by Ihe
privaIe developer shall be Iranserred Io Ihe UL8.
2. The UL8 shall pay a ixed amounI o Ps___ per monIh Io Ihe
privaIe developer.
J. ln all cases, Ihe privaIe developer shall have Io submiI a
perormance securiIy in Ihe orm o a bank guaranIee, which
Ihe UL8 has Ihe righI Io encash in case o nonadherence Io
perormance sIandards and in Ihe evenI o deaulI.
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
190
Table FRQWLQXHG
4. All operaIional and capiIal expendiIures or Ihe scope o work
assigned Io Ihe privaIe developer would have Io be borne by
5. The UL8 may provide or a bonus Io Ihe developer i Ihe
perormance sIandards are meI beore Ihe Iime limiIs and as
per Ihe qualiIy speciicaIions. This shall be as per Ihe Ierms and
condiIions o Ihe agreemenI and will be Ihe choice o Ihe UL8.
9 Risk miIigaIioh
sIraIegies
!. The secondranked bidder shall be issued Ihe leIIer o award,
i Ihe developer does noI sign Ihe agreemenI wiIhin ___ days
o accepIance o leIIer o award.
2. l Ihe developer does noI Iranser Ihe revenues Io Ihe UL8,
or Ihere is a shorIall in Ihe revenue Iranserred, Ihe UL8 shall
encash Ihe equivalenI amounI due rom Ihe perormance
securiIy. The developer is Io replenish Ihe perormance securiIy
wiIhin ___ days rom such encashmenI. l Ihe developer ails Io
replenish Ihe securiIy, Ihen iI shall be an evenI o deaulI.
J. The developer shall have Io submiI a plan Io Ihe UL8 ouIlining,
in deIail, Ihe plan or esIablishing meIers, Ihe billing procedure,
and Ihe deIailed compuIerized sysIem Io be esIablished.
4. The meIers esIablished during Ihe conIracI period would be
Iranserred Io Ihe UL8 on Ihe expiry or IerminaIion o Ihe
agreemenI.
5. l Ihe developer does noI underIake Ihe operaIions as per
Ihe speciied schedule, Ihe UL8 would issue a noIice o
deaulI and a cure period would be given Io Ihe developer or
course correcIion. ln case Ihe developer ails Io respond Io
Ihe noIices issued wiIhin J0 days o issue daIe, Ihe conIracI
would sIand IerminaIed.
6. ln Ihe evenI o Ihe developer noI conorming Io Ihe
perormance sIandards, Ihe UL8 is liable Io declare Ihe same
as an evenI o deaulI and Io use Ihe perormance securiIy
sum againsI Ihe same.
8. l Ihe privaIe developer underreporIs Ihe revenue rom sale o
deaulI
cosIs, expenses, or losses iI may have incurred by reason o
documenIs.
FRQWLQXHGRQQH[WSDJH
Term SheeIs
191
Table FRQWLQXHG
5. The UL8 shall noI make any paymenI Io Ihe developer.
b) UL8: evenI o deaulI !. The UL8 shall reIurn Ihe perormance securiIy Io Ihe
developer aIer deducIing any paymenIs due rom Ihe privaIe
developer Io Ihe UL8.
!! RFQ criIeria Technical criIeria
insIallaIion and O&M o ___ meIers
linancial criIeria
The developer should have a minimum neI worIh
equivalenI Io 25% o Ihe esIimaIed projecI cosI or which
bids have been inviIed
The developer should have an average neI cash accruals
over J years o Ps___ million
!2 8iddihg parameIer The bidding parameIer shall be Ihe ixed paymenI o Ps___ per
monIh payable Io Ihe privaIe developer by Ihe UL8. The privaIe
developer quoIing Ihe leasI ixed paymenI per monIh shall be
selecIed as Ihe successul bidder.
Concession Agreement for the
Development, Operation, and
Maintenance of the Bulk Water
Supply System
Problem Denition
The UL8 aces Ihe problem o inadequaIe waIer
supply in Ihe service area. This is primarily
because o shorIage o currenI waIer source,
highly corroded Iransmission mainsboIh
carrying raw waIer and pure waIer and high
IreaImenI losses. As a resulI, Ihe UL8 needs Io
invesI in Ihe augmenIaIion o Ihe bulk waIer
supply sysIem and rehabiliIaIe Ihe raw and pure
waIer Iransmission mains, and Ihe WTP.
Need for PPP
The UL8 needs PPP Io enhance Ihe public
resources and improve Ihe service delivery or
Ihe waIer supply. The UL8 needs Io underIake
huge amounI o invesImenI Io augmenI Ihe bulk
waIer source and rehabiliIaIe waIer pipelines.
The UL8 does noI have Ihe required invesImenI
capaciIy Io arrange or unds or Ihe planned
capiIal invesImenI (in spiIe o governmenI
granIs). Also, Ihe UL8 needs Io improve currenI
operaIional levels, including reducIion o energy
cosIs and reducIion o Iransmission losses.
Thereby, Ihe UL8 needs a privaIe operaIor Io
bring in invesImenIs Io underIake Ihe ouIlined
projecIs and Io bring in eiciencies.
PPP Structure
deiniIion is Ihe Concession AgreemenI or Ihe
DevelopmenI, OperaIion and MainIenance
o Ihe 8ulk WaIer Supply SysIem. ln such a
sIrucIure, Ihe privaIe developer is required Io
underIake Ihe design, consIrucIion, inance,
operaIion, and managemenI o waIer
supply services rom raw waIer source Io Ihe
disIribuIion poinI. The augmenIaIion acIiviIy
includes consIrucIion o Ihe raw waIer oIake
machinery, insIallaIion o elecIrical subsIaIions
and raw waIer Iransmission lines, and Ihe
consIrucIion o WTPs, pure waIer Iransmission
lines up Io Ihe poinI o Ihe sIorage reservoir, and
sIorage Ianks. The capiIal invesImenI required
or Ihe augmenIaIion works needs Io be borne
by Ihe privaIe developer.
Sl ~ serial.
192
! Scope o! Ihe projecI !. Prepare deIailed designs wiIh all requisiIe speciicaIions or
Ihe consIrucIion o Ihe waIer IreaImenI planI (WTP)
2. UnderIake deIailed engineering or Ihe approved designs o
Ihe WTP
J. Procure all Ihe necessary raw maIerials or Ihe consIrucIion o
Ihe raw waIer inIake wells, pipelines, and Ihe WTP
4. Arrange or consIrucIion o Ihe raw waIer inIake and Ihe
WTP, hire labor or subconIracI Ihe consIrucIion acIiviIy
5. ConsIrucI raw waIer inIake pumps, jack wells, sucIion
mains, Iransmission pipelines, WTP, insIallaIion o elecIrical
subsIaIion, boundary wall wiIh gaIe and guardroom, and all
relaIed elecIrical works
6. ConsIrucI a Iank or sIorage o IreaIed waIer
7. LxIracI raw waIer rom Ihe source and supply Ihe required
levels Io Ihe ciIy
8. lnsIall bulk meIers, reading meIers, and record Ihe waIer
inIake and ouIpuI levels
9. TreaI Ihe raw waIer as per process and sIandards speciied
!0. TransmiI IreaIed waIer Io Ihe sIorage reservoir
!!. Arrange or disposal o brine and oIher wasIes generaIed
rom Ihe WTP as per environmenIal norms and sIandards
speciied
The privaIe operaIor will invesI capiIal Io
augmenI and upgrade Ihe bulk waIer supply
sysIem as ouIlined in Ihe deIailed projecI reporI,
esIablish bulk meIers, and manage Ihe bulk
waIer sysIem. The UL8, on iIs parI, would speciy
Ihe quanIiIy o IreaIed waIer, which would have
Io be made available by Ihe privaIe developer aI
all Iimes. lor Ihe IreaIed waIer produced, Ihe
privaIe developer is paid a waIer charge by Ihe
UL8. The unique eaIure o Ihis conIracI is IhaI
or all Ihe acIiviIies required Io be underIaken
by Ihe privaIe enIiIy, iI is assured o a minimum
ixed paymenI by Ihe uIiliIy.
l Ihe projecI is noI inancially viable and needs
ViabiliIy Gap lund (VGl) supporI, Ihe privaIe
operaIor shall quoIe Ihe VGl amounI. lI is
possible IhaI Ihe VGl needed or Ihe projecI may
exceed Ihe cap o 40%. ln such a scenario, Ihe
UL8 may have Io provide necessary concessions
Io Ihe privaIe operaIor in Ierms o land parcel aI
reduced lease renIals, reduced per uniI raw waIer
FRQWLQXHGRQQH[WSDJH
charges, and oIher such alIernaIives IhaI would
conIribuIe Io reducing Ihe overall projecI cosI.
This PPP sIrucIure aims Io augmenI Ihe currenI
capaciIy o Ihe waIer supply sysIem, reduce
Ihe Iechnical and commercial losses in Ihe bulk
waIer supply sysIem.
Detailed Term Sheet
working o a concession agreemenI or Ihe
developmenI, operaIion, and mainIenance o
Ihe bulk waIer supply sysIem, Ihe preparaIory
work Io underIaken by Ihe UL8, Ihe key
obligaIions o Ihe developer and Ihe UL8, Ihe
moniIoring mechanism, paymenI sIrucIure,
perormance sIandards Io be adhered Io by
Ihe privaIe operaIor, and key clauses or risk
miIigaIion relaIed Io Ihe PPP sIrucIure.
Term SheeIs
193
FRQWLQXHGRQQH[WSDJH
!2. OperaIe and mainIain Ihe raw waIer inIake equipmenI and
Ihe newly consIrucIed WTP
!J. Lnsure an agreed producIion capaciIy and IreaIed waIer aI
all Iimes
!4. Deploy operaIion and mainIenance (O&M) sIa
!5. Adhere Io waIer qualiIy norms aI all Iimes
Ihe asseIs or a period o ___ years
!7. CollecI waIer supply sysIemrelaIed daIa and reporI
perormance Io Ihe urban local body (UL8)
!8. Levy and collecI waIer charges rom Ihe UL8 or supply o
IreaIed waIer
2 PreparaIory work by
Ihe UL8
!. DeIermine Ihe quanIiIy o bulk waIer demand and Ihe exIenI
o oIake permissible
2. UnderIake a Iechnical survey Io gauge Ihe currenI sIaIus o
Ihe bulk waIer supply sysIem, including Ihe Iechnical losses in
Ihe sysIem
J. Analyze Ihe eiciency o Ihe IreaImenI planI and collecI
4. DeIermine Ihe waIer qualiIy sIandards Io be adhered Io
5. Decide on Ihe qualiIy, Iype, and number o bulk meIers Io be
insIalled
6. UnderIake a survey o Ihe raw waIer Iransmission neIwork on
a geographic inormaIion sysIem (GlS) plaIorm
J lh!ormaIioh Io be
operaIor by Ihe UL8
!. ConIracI o UL8 wiIh WaIer Pesources DeparImenI or
elevaIed sIorage reservoirs, main balance reservoirs, WTP, and
raw waIer Iransmission lines
4. DeIails o qualiIy o bulk meIers
7. WaIer qualiIy sIandards Io be mainIained
8. Disposal sIandards or Ihe inerI maIIer generaIed aI Ihe WTP
9. O&M sIandards or Ihe bulk waIer supply IreaImenI sysIem
!0. SpeciicaIions and sIandards o handover o asseIs aI Ihe end
o Ihe conIracI period
Table FRQWLQXHG
194
4 1ehure o! Ihe
PPP cohIracI
years o operaIion and ranges beIween 25 years and J0 years.
5 Roles ahd
developer
!. Draw necessary permiI applicaIions wiIh all parIiculars Io be
submiIIed Io relevanI governmenI auIhoriIies or clearances,
no objecIion cerIiicaIes, and all necessary approvals
2. Arrange or all Ihe inance required or design, engineering,
procuremenI, consIrucIion, operaIion, and mainIenance o
Ihe WTP and Ihe raw waIer inIake asseIs
J. ObIain Ihe necessary approvals rom concerned deparImenIs
and submiI copies Io Ihe UL8
4. Provide Io Ihe UL8 all necessary documenIs Io aciliIaIe
inancial closure
5. lurnish Ihe UL8 all deIails o Ihe insIiIuIional arrangemenI
being developed or consIrucIion, operaIion, and
managemenI o Ihe waIer asseIs as required, deIails o
special purpose vehicles being ormed, i any, deIails on
parIners, Iechnology parIners, Ihe equiIy sIake o Ihe
parIners, eIc.
6. Takeover o Ihe siIe rom Ihe UL8 or consIrucIion and
developmenI o Ihe WTP
7. Prepare deIailed designs o Ihe raw waIer inIake sysIems, Ihe
WTP, and all oIher Iechnical speciicaIions o all Ihe machinery
Io be used or oIake o waIer and IreaImenI o Ihe raw
waIer, and obIain approvals rom Ihe UL8 or Ihe designs
8. Prepare a capiIal invesImenI plan and submiI Io Ihe UL8
or review
9. Provide projecI cosI esIimaIes and obIain approvals
!0. Assess Ihe gross yearly demand o raw waIer and submiI iI Io
Ihe UL8 or approval and aciliIaIe Ihe urIher submission Io
Ihe WaIer Pesources DeparImenI.
!!. Arrange or supply o power or raw waIer inIake, consIrucIion
acIiviIy, and O&M o Ihe WTP during Ihe period o conIracI
!2. ln case o power ailure, arrange or backup power supply
!J. UnderIake all raw maIerial procuremenI as per Ihe prescribed
sIandards
!4. Make all necessary arrangemenIs or IransporI o raw maIerial
Io Ihe siIe, bear all expenses or purchase and IransporI o
raw maIerials, in case o escalaIions in cosIs o raw inpuIs
due Io delays, bear Ihe increased cosI
!5. Arrange or subconIracIing o consIrucIion or Ihe WTP and
laying o Iransmission lines, i required
!6. MoniIor work and progress achieved by subconIracIors o
consIrucIion acIiviIy, i applicable
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
195
Table FRQWLQXHG
!7. UnderIake consIrucIion o all inIernal roads, guardhouse,
eIc., aI Ihe siIe o Ihe WTP
!8. LsIablish bulk meIers aI Ihe WTP and measure Ihe inpuI and
ouIpuI volumes
!9. Arrange or removal o all consIrucIion debris, raw maIerials,
hazardous wasIe, and oIher maIerials Io ensure Ihe projecI
siIe is kepI neaI and clean
20. Pay or Ihe elecIriciIy consumpIion or Ihe O&M o Ihe waIer
supply sysIem and bear power Iari escalaIions, i any
2!. 8ear all charges, i any, or Iemporary or permanenI access Io
Ihe siIe, e.g., lease renIals
22. 8ear all expenses or chemicals required or operaIing Ihe
WTPs, and mainIaining waIer qualiIy sIandards
2J. Arrange sIaing or Ihe O&M o Ihe waIer asseIs as per Ihe
conIracI and or underIaking Ihe scope o work as deined
in Ihe conIracI. 8ear all Ihe esIablishmenI expenses or
operaIing and mainIaining Ihe waIer asseIs, including Ihe
salaries and wages o Ihe sIa deployed by Ihe developer
24. OperaIe and mainIain Ihe sIorage reservoirs
25. OperaIe and mainIain Ihe pumping sIaIions
26. Lnsure IhaI Ihe raw waIer Iransmission losses are wiIhin Ihe
range speciied in Ihe perormance sIandards
28. OperaIe and mainIain Ihe WTP as per Ihe procedure and
qualiIy sIandards speciied by Ihe UL8
29. SubmiI records on waIer qualiIy mainIained aI dierenI
J0. Lnsure IhaI Ihe waIer IreaImenI losses are wiIhin Ihe range
speciied in Ihe perormance sIandards
J!. Dispose o Ihe wasIe generaIed aI Ihe WTP as per Ihe norms
o Ihe CenIral Public HealIh and LnvironmenIal Lngineering
J2. 8ear all expenses involved in sae and eecIive disposal o
wasIe generaIed rom Ihe wasIe IreaImenI procedure
JJ. lnsIall meIers Io read Ihe inpuI and ouIpuI volume aI Ihe
sIorage reservoirs, operaIe Ihe meIers, and replace Ihem, i
need be
J4. UnderIake requenI qualiIy checks aI Ihe sIorage Ianks and
mainIain securiIy
J5. l Ihe pumping sIaIion breaks down, Ihe developer should
rerouIe Ihe waIer Io anoIher pumping sIaIion or supply waIer
Ihrough Iankers
FRQWLQXHGRQQH[WSDJH
196
J6. MainIain a record o all asseIs purchased by Ihe developer
J7. Carry ouI an annual energy audiI aI all pumping sIaIions and
an annual waIer audiI aI Ihe WTPs
J8. UnderIake all necessary saeIy precauIions or prevenIion o
accidenIs aI Ihe projecI siIe
J9. UnderIake all necessary obligaIions o Ihe UL8, which are
applicable aI Ihe siIe
40. Lnsure IhaI Ihe siIe handed over by Ihe UL8 or consIrucIion
and operaIions is used only or acIiviIies as sIaIed by Ihe UL8
in Ihe agreemenI
4!. Provide access Io Ihe oicials o Ihe UL8 Io carry ouI
inspecIion o Ihe consIrucIion acIiviIy and operaIions and
managemenI works
6 UL8's obligaIiohs !. Pesponsible Io sign Ihe conIracI wiIh Ihe WaIer Pesources
DeparImenI or oIake o waIer rom Ihe waIer source,
ensure supply o waIer Io Ihe developer ree o cosI or aI a
predecided Iari, as applicable
2. Provide permissions Io underIake any Iechnical siIe survey
wiIhouI causing disrupIion Io exisIing waIer supply sysIem
J. Provide land Io Ihe developer on a lease basis or on Ierms
agreed upon or Ihe period o concession or underIaking
consIrucIion, operaIion, and managemenI o Ihe waIer asseI
4. Provide necessary permissions or possession and access o
Ihe siIe Io Ihe privaIe developer
5. SIaIe Ihe acIiviIies or which Ihe land or siIe handed over Io
Ihe privaIe developer can be used
6. Lnsure IhaI all necessary auIhoriIy required by Ihe privaIe
developer or drawing o raw waIer in quanIiIies as required
by Ihe developer is provided
7. UnderIake independenI supervision o Ihe consIrucIion
acIiviIy under way
8. laciliIaIe or assisI in obIaining necessary or applicable permiIs
9. Lnsure Ihe developer has access Io a supply o elecIriciIy or
Ihe O&M o Ihe WTP
!0. Provide all necessary accounIs, invoices, sIaIemenIs,
demands, noIices, insurance demands, and oIher
correspondence IhaI are applicable Io asseIs under Ihe privaIe
developer's possession during concession period
!!. Provide guidelines and/or norms Io be ollowed or Ihe waIer
IreaImenI process
!2. GuaranIee purchase or paymenI o ___ insIalled capaciIy o
IreaIed waIer rom Ihe IreaImenI planI
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
197
!J. lix Ihe waIer producIion capaciIy level or Ihe Iake or pay
arrangemenI. SIaIe Ihe minimum IreaIed waIer supply
againsI which paymenI is guaranIeed
!4. lix Ihe Iari or IreaIed waIer supply by Ihe privaIe developer.
SIaIe boIh Ihe ixed amounI and Ihe variable acIor and Ihe
margin or range or Iari escalaIions is suggesIed
!5. MoniIor Ihe operaIions o Ihe developer
!6. SIaIe i Ihe privaIe developer has Ihe righI Io sell surplus
IreaIed waIer beyond required capaciIy Io any Ihird parIy
!7. UnderIake independenI checks aI requenI inIervals Io assess
Ihe waIer qualiIy sIandards o Ihe IreaIed waIer supplied
rom Ihe IreaImenI planI
!8. Lnable access Io Ihe waIer asseIs ree rom encumbrances
20. Provide Iechnical or oIher assisIance i requesIed or by Ihe
privaIe developer
2!. lmpose penalIies on deaulI by Ihe developer
22. UnderIake or aciliIaIe dispuIe resoluIion in insIances o
dierences arising beIween Ihe developer and any Ihird parIy
7 MohiIorihg mechahism !. The developer shall underIake periodic inspecIion o waIer
2. The developer would have Io underIake qualiIy assurance
IesIs or Ihe consIrucIion acIiviIy under way or already
compleIed, aI Ihe behesI o Ihe UL8.
8 Per!ormahce sIahdards !. ConsIrucIion o Ihe required asseIs Io be compleIed wiIhin
___ monIhs o Ihe daIe o commencemenI
2. Time rame or achievemenI o Ihe perormance sIandards
J. Paw waIer Iransmission loss should be in Ihe range o
works)*!00
4. WTP Io uncIion aI a minimum capaciIy o ___%
5. WaIer IreaImenI loss should be in Ihe range o % Io
%. lI shall be measured as |((! quanIiIy o waIer
WTP)*!00
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
198
discharged rom elevaIed sIorage reservoir)/quanIiIy o waIer
discharged rom WTP)*!00
7. WaIer qualiIy Io be mainIained as per Ihe CPHLLO norms
8. QualiIy o meIers as per ___ sIandards
9 PaymehIs !. The UL8 has Io make a minimum ixed paymenI or ___
million liIers per day (MLD) o IreaIed waIer made available
by Ihe privaIe developer aI all Iimes. lor every addiIional MLD
over Ihe ixed quanIiIy, a predeIermined variable charge has
Io be paid by Ihe UL8 Io Ihe privaIe developer.
J. All Ihe capiIal cosIs and operaIional expenses o Ihe waIer
asseIs would have Io be borne by Ihe privaIe developer.
!0 Risk miIigaIioh
sIraIegies
2. l Ihe UL8 does noI pay Ihe ixed paymenI Io Ihe privaIe
developer or Ihe ixed quanIiIy o IreaIed bulk waIer
supplied by Ihe privaIe operaIor, Ihen iI shall be an evenI o
deaulI.
ouIlining deIails o Ihe consIrucIion, operaIions, and
mainIenance plan. The developer shall be allowed Io
commence consIrucIion and operaIions only once Ihe UL8
approves Ihe plan.
waIer alls shorI and is noI available, Ihe developer shall have
Io arrange or waIer supply Ihrough privaIe Iankers or Ihe
ciIizens.
DeparImenI and/or sIaIe elecIriciIy deparImenI, Ihen Ihe
UL8 shall encash Ihe equivalenI amounI due rom Ihe
6. ln Ihe evenI o Ihe developer noI conorming Io and meeIing
Ihe perormance sIandards, Ihe UL8 is liable Io declare an
evenI o deaulI and use Ihe perormance guaranIee sum
againsI Ihe same.
Table FRQWLQXHG
FRQWLQXHGRQQH[WSDJH
Term SheeIs
199
Table FRQWLQXHG
o Ihe waIer supply and disIribuIion asseIs or a period o ___
consecuIive hours wiIhouI prior consenI o Ihe UL8, Ihe UL8
can immediaIely enIer any or all o Ihe waIer supply asseIs
and operaIe Ihe sysIem.
8. Any delay in paymenI by Ihe UL8 shall aIIracI a penal inIeresI
Ihan Ihe UL8.
!! Cohsequehces o! de!aulI
deaulI
documenIs.
book value o developer's asseIs.
!2 8iddihg parameIer The lowesI per kiloliIer IreaIed waIer supply charge Io be levied by
Ihe privaIe developer would be Ihe key bidding parameIer.
!J SIa!!ihg The deploying o sIa Io privaIe operaIor by Ihe UL8 shall be Ihe
employees can be provided wiIh an opIion o conIinuing Io work wiIh
Ihe developer or reIurning Io Ihe UL8. These shall need Io be urIher
deIailed in Ihe conIracI documenIs during Ihe Iendering process.
!4 Quali!icaIioh criIeria Technical criIeria
The developer should have experience in consIrucIion
o one waIer supply projecI or source augmenIaIion
o __ _ MLD
requiring consIrucIion o ___ MLD WTP
linancial criIeria
The developer should have an average neI cash accruals o
over J years o Ps___million
inancial criIeria.
Sl ~ serial.
200
FRQWLQXHGRQQH[WSDJH
Concession Agreement for Development of the Bulk Water Supply System
and Operation and Maintenance of the Entire Water Supply System
! Scope o! Ihe projecI !. Take over Ihe exisIing asseIs o ___ waIer supply scheme,
comprising sources aI ___ wiIh all pumping sIaIions, elecIrical
insIallaIions, waIer IreaImenI planIs (WTPs), waIer sIorage
reservoirs, connecIing pipelines, and disIribuIion sysIem rom
source Io Iap or operaIion, mainIenance, and repairs.
2. LxIracI raw waIer rom Ihe source and supply aI Ihe required
levels Io Ihe ciIy.
J. Design and consIrucI new WTP as per capaciIy speciied,
including raw waIer inIake pipes, pump houses, sucIion
mains, sIrucIures or crossing o drains, roads, elecIrical
subsIaIion, boundary wall wiIh gaIe and guardroom, and all
relaIed elecIrical works.
4. ConsIrucI and lay Iransmission lines as per design capaciIy
speciied.
5. Upgrade works or Ihe exisIing WTP.
6. OperaIe and mainIain Ihe newly consIrucIed WTP and Ihe old
WTP.
7. UnderIake eecIive disposal o wasIe generaIed rom Ihe
WTP.
8. Deploy operaIion and mainIenance (O&M) sIa.
9. MainIain a minimum average waIer supply level o ___ liIers
per capiIa per day (lpcd) wiIh due pressure and required
qualiIy.
Ihe asseIs or a period o ___ years.
!!. Manage Ihe exisIing disIribuIion neIwork and underIake
expansion.
!2. lncrease Ihe piped waIer supply by providing new
connecIions.
!J. Manage regularizaIion o illegal connecIions and impose
penalIies in case o illegal connecIions.
!4. LsIablish meIers, read meIers, and record waIer consumpIion.
!5. Peduce waIer losses in disIribuIion o waIer.
!6. UnderIake billing and collecI waIer revenues.
!7. Pecover Ihe cosI o supply o waIer rom Ihe consumers
as per Ihe Iari seI by Ihe urban local body (UL8) or
developmenI auIhoriIy.
!8. Develop and mainIain a consumer redress sysIem.
Term SheeIs
201
FRQWLQXHGRQQH[WSDJH
Table FRQWLQXHG
!9. CollecI waIer supply sysIemrelaIed daIa and reporI
perormance Io Ihe UL8.
20. UnderIake eicienI O&M by insIiIuIional sIrengIhening, and
business process and disIribuIion improvemenI.
2 PreparaIory work by
Ihe UL8
!. UnderIake an assessmenI Io deIermine Ihe qualiIy o Ihe
bulk waIer supply sysIem, deIermine Ihe augmenIaIion and
replacemenI works required, and idenIiy Ihe overall losses in
Ihe sysIem
2. UnderIake a consumer survey Io gauge Ihe number o direcI
J. UnderIake a Iechnical survey Io gauge Ihe currenI sIaIus o
Ihe waIer supply sysIem, including Ihe Iechnical losses in Ihe
sysIem
4. Analyze Ihe eiciency o Ihe IreaImenI planI and collecI
Ihe ciIy
J lh!ormaIioh Io be
operaIor by Ihe UL8
!. ConIracI o UL8 wiIh Ihe WaIer Pesources DeparImenI or
J. Design o Ihe waIer supply sysIem, including jack wells,
elevaIed sIorage reservoirs, main balance reservoirs, WTP, raw
waIer Iransmission lines, and disIribuIion neIwork
4. DeIails o Ihe exisIing connecIions
charges, penalIies or illegal connecIion and nonpaymenI o
waIer supply charges, and escalaIions, i applicable
8. SiIe deIails in Ierms o area o operaIion
!0. WaIer qualiIy sIandards Io be mainIained
!!. Disposal sIandards or Ihe inerI maIIer generaIed aI Ihe WTP
!2. O&M sIandards o reservoirs
202
FRQWLQXHGRQQH[WSDJH
!J. lnormaIion on exisIing poinIs o chlorinaIion in Ihe
!4. CapiIal invesImenI plan or Ihe disIribuIion sysIem and
expansion plan
!5. Manuals or consumer service sIandards
!6. WaIer demand projecIions
!7. lnormaIion on poIenIial bulk consumers ouIside Ihe projecI
siIe where waIer can be sold
!8. SpeciicaIions and sIandards o handover o asseIs aI end o
Ihe conIracI period
4 1ehure o! Ihe
PPP cohIracI
Generally 25J0 years, depending on Ihe inancial easibiliIy o Ihe
projecI, Ihe lie o Ihe WTP, Ihe disIribuIion neIwork, demographic
growIh paIIern, and poliIical will
5 Roles ahd
developer
!. Draw necessary permiI applicaIions wiIh all parIiculars Io be
submiIIed Io relevanI governmenI auIhoriIies or clearances,
no objecIion cerIiicaIes, and all necessary approvals
2. Provide Io Ihe developmenI auIhoriIy all necessary documenIs
Io aciliIaIe inancial closure
J. Prepare necessary designs, deIail all oIher Iechnical
speciicaIions o all Ihe machinery Io be used or oIake o
waIer and IreaImenI o Ihe raw waIer, and obIain approvals
rom Ihe developmenI auIhoriIy or UL8 or Ihe designs and
consIrucIion plans
5. Provide projecI cosI esIimaIes and obIain approvals
6. Provide Ihe developmenI auIhoriIy capiIal invesImenI plan
or underIaking consIrucIion work o Ihe WTP and laying o
Iransmission lines
7. Assess Ihe gross yearly demand o raw waIer and submiI iI Io
Ihe UL8 or approval and aciliIaIe urIher submission Io Ihe
WaIer Pesources DeparImenI
8. UnderIake all raw maIerial procuremenI as per Ihe prescribed
sIandards
9. Arrange or removal o all consIrucIion debris, raw maIerials,
hazardous wasIe, and oIher maIerials Io ensure Ihe projecI
siIe is kepI neaI and clean
!0. Arrange or subconIracIing o consIrucIion or WTP and
laying o Iransmission lines, i required
!!. MoniIor work and progress achieved by subconIracIors o
consIrucIion acIiviIy, i applicable
!2. UnderIake consIrucIion o all inIernal roads, guardhouse,
eIc., aI Ihe siIe o Ihe WTP
Table FRQWLQXHG
Term SheeIs
203
FRQWLQXHGRQQH[WSDJH
Table FRQWLQXHG
!J. LsIablish bulk meIers aI Ihe WTP and measure Ihe inpuI and
ouIpuI volumes
!4. Make monIhly paymenIs o Ihe ixed license ee Io Ihe UL8 or
developmenI auIhoriIy, as agreed Io in Ihe conIracI
!5. Pay or Ihe elecIriciIy consumpIion or Ihe O&M o Ihe waIer
supply sysIem and bear power Iari escalaIions, i any
!6. 8ear all charges, i any, or Iemporary or permanenI access Io
Ihe siIe
!7. 8ear all expenses or chemicals required or operaIing WTPs
and mainIaining waIer qualiIy sIandards
!8. Arrange sIaing or Ihe O&M o Ihe waIer asseIs as per Ihe
conIracI and or underIaking Ihe scope o work as deined
in Ihe conIracI. 8ear all Ihe esIablishmenI expenses or
operaIing and mainIaining Ihe waIer asseIs, including salaries
and wages o sIa deployed by Ihe developer
!9. OperaIe and mainIain Ihe main balancing reservoir
20. OperaIe and mainIain Ihe sIorage reservoirs
2!. OperaIe and mainIain Ihe pumping sIaIions
2J. OperaIe and mainIain Ihe WTP as per Ihe procedure
and qualiIy sIandards speciied by Ihe UL8 and mainIain
permissible loss levels
24. SubmiI records on waIer qualiIy mainIained aI dierenI
25. Dispose Ihe wasIe generaIed aI Ihe WTP as per Ihe norms
o Ihe CenIral Public HealIh and LnvironmenIal Lngineering
26. LsIablish meIers Io read Ihe inpuI and ouIpuI volume aI Ihe
sIorage reservoirs, operaIe Ihe meIers, and replace, i need be
27. UnderIake requenI qualiIy checks aI Ihe sIorage reservoirs
and mainIain securiIy
28. l Ihe pumping sIaIion breaks down, Ihe developer should
rerouIe Ihe waIer Io anoIher pumping sIaIion or supply waIer
Ihrough Iankers
29. ChlorinaIe Ihe waIer aI poinIs speciied by Ihe UL8
J0. SubmiI a plan Io Ihe UL8 ouIlining Ihe deIails o Ihe
O&M Iimelines and Ihe phasing o meIering, reducing
unauIhorized connecIions, eIc.
J!. Provide and mainIain new connecIions Io households
J2. OperaIe and mainIain Ihe exisIing connecIions
JJ. LsIablish consumer meIers, provide !00% meIering, read Ihe
meIers, and operaIe and mainIain Ihe meIers
204
J4. Levy waIer charges rom consumers
J5. Charge a penalIy Io consumers i Ihe waIer supply charges
and/or waIer connecIion ees are noI paid wiIhin Ihe
speciied Iime limiI
J6. MainIain a record o all asseIs purchased by Ihe developer
J7. Carry ouI an annual energy audiI aI all pumping sIaIions and
an annual waIer audiI aI Ihe WTPs
J8. UnderIake debI service paymenIs as per inancial agreemenIs
J9. UnderIake all necessary saeIy precauIions or Ihe prevenIion
o accidenIs aI Ihe projecI siIe
5 UL8's obligaIiohs !. Sign Ihe conIracI wiIh Ihe WaIer Pesources DeparImenI or
oIake o waIer rom Ihe waIer source
2. 8ear cosI escalaIions in Ihe Iari o bulk waIer supply as
charged by WaIer Pesources DeparImenI
J. Arrange or Ihe supply o elecIriciIy or Ihe O&M o Ihe waIer
supply sysIem
4. Peplace pure waIer pumping sIaIions, i need be
5. Lnsure IhaI Ihe pipes or raw waIer Iransmission are closed
in order Io avoid raw waIer Iransmission losses due Io
evaporaIion and IheI
6. Peplace disIribuIion neIwork pipes, expansion o Ihe
disIribuIion neIwork, major repairs, eIc., i need be
7. lix Ihe Iari and escalaIions or waIer supply Io consumers
8. laciliIaIe approvals needed
9. MoniIor Ihe operaIions o Ihe developer
!0. MainIain adminisIraIive conIrol over Ihe personnel, aciliIies,
and/or sysIem
!!. AlIer waIer supply Iimings, quanIiIies, pressures, and zoning
!2. Provide IenIaIive lisI o sIa and labor required
!J. lmplemenI capiIal expendiIure as per capiIal invesImenI plan
!4. Lnable access Io Ihe waIer asseIs ree rom encumbrances
!6. Provide supporI Io Ihe developer or regularizing illegal
connecIions
!7. DisconnecI Ihe waIer connecIion i Ihe consumer does noI
pay Ihe waIer supply charge and penalIy wiIhin Ihe speciied
Iime limiI
FRQWLQXHGRQQH[WSDJH
Table FRQWLQXHG
Term SheeIs
205
6 MohiIorihg mechahism !. The developer shall underIake periodic inspecIion o waIer
2. The developer would have Io underIake qualiIy assurance
IesIs or Ihe consIrucIion under way or already compleIed, aI
Ihe behesI o Ihe UL8.
7 Per!ormahce sIahdards !. ConsIrucIion o Ihe required asseIs Io be compleIed wiIhin
___ monIhs o Ihe daIe o commencemenI
2. Time rame or achievemenI o Ihe perormance sIandards
J. Paw waIer Iransmission loss should be in Ihe range o
works)*!00
4. WTP Io uncIion aI a minimum capaciIy o ___%
WTP)*!00
6. WaIer supply should be minimum ___ lpcd. lI shall be
measured as |(quanIiIy measured aI elevaIed sIorage
reservoir)*(! disIribuIion loss (%)
7. Pure waIer Iransmission loss should be in Ihe range o
% Io %. lI shall be measured as |((! quanIiIy o waIer
discharged rom elevaIed sIorage reservoir)/quanIiIy o waIer
discharged rom WTP)*!00
8. Coverage: cover a minimum o ___% o IoIal households in
Ihe range o Ihe main Irunk line
9. DisIribuIion loss should be in Ihe range o ___% Io ___%.
lI shall be measured as |((! quanIiIy o waIer billed in a
zone)/quanIiIy o waIer discharged rom elevaIed sIorage
reservoirs)*!00
!0. Supply waIer or a minimum o ___ hours per day
!!. lrequency o supply should be a minimum o ___ days a week
!2. The pressure o waIer supply should be mainIained aI ___
such IhaI iI ills ___ liIer buckeIs in less Ihan ___ seconds
!J. Consumer complainIs Io be redressed wiIhin 24 hours rom
Ihe Iime Ihe complainI is lodged
!4. WaIer qualiIy Io be mainIained as per Ihe CPHLLO norms
FRQWLQXHGRQQH[WSDJH
Table FRQWLQXHG
206
FRQWLQXHGRQQH[WSDJH
!5. lrequency o billing should be 2 monIhs
!6. CollecIion eiciency Io increase Io ___ wiIhin ___ years
!7. QualiIy o meIers as per ___ sIandards
!9. Pevenue collecIion eiciency aI ___% o Ihe IoIal bills
generaIed
8 PaymehIs !. The privaIe developer shall pay Ihe UL8 a bimonIhly
license ee.
J. All Ihe operaIional expenses o Ihe waIer asseIs would have
4. PrivaIe developer Io share ___% o Ihe revenue earned rom
Ihe sale o surplus waIer Io consumers oIher Ihan Ihose
idenIiied by Ihe UL8
9 SIa!!ihg The deploying o sIa Io Ihe privaIe operaIor by Ihe UL8 shall be Ihe
employees can be provided wiIh an opIion o conIinuing Io work
wiIh Ihe developer or reIurning Io Ihe UL8. This shall need Io be
urIher deIailed in Ihe conIracI documenIs during Ihe Iendering
process.
!0 Risk miIigaIioh
sIraIegies
2. l Ihe developer does noI pay Ihe ixed paymenI, Ihe UL8 shall
encash Ihe equivalenI amounI due rom Ihe paymenI securiIy.
The developer is Io replenish Ihe paymenI securiIy wiIhin ___
days rom such encashmenI. l Ihe developer ails Io replenish
Ihe securiIy, iI shall be an evenI o deaulI.
ouIlining deIails o Ihe O&M plan. The developer shall be
allowed Io commence operaIions only once Ihe UL8 approves
Ihe plan.
waIer alls shorI and is noI available, Ihe developer shall have
Io arrange or waIer supply Ihrough privaIe Iankers or Ihe
ciIizens.
DeparImenI and/or sIaIe elecIriciIy deparImenI, Ihe UL8 shall
encash Ihe equivalenI amounI due rom Ihe perormance
securiIy.
Table FRQWLQXHG
Term SheeIs
207
FRQWLQXHGRQQH[WSDJH
Table FRQWLQXHG
6. ln Ihe evenI o Ihe developer noI meeIing Ihe perormance
sIandards, Ihe UL8 is liable Io declare Ihe same as an evenI
o deaulI and use Ihe perormance guaranIee sum againsI
Ihe same.
o Ihe waIer supply and disIribuIion asseIs or a period o ___
consecuIive hours wiIhouI prior consenI o Ihe UL8, Ihe UL8
can immediaIely enIer any or all o Ihe waIer supply asseIs
and operaIe Ihe sysIem.
Ihan Ihe UL8.
!! Cohsequehces o! de!aulI
deaulI
documenIs.
book value o developer's asseIs, and paymenIs or paymenIs
ouIsIanding rom Ihe UL8.
!2 8iddihg parameIer The bidding parameIer would be Ihe highesI bimonIhly or annual
ixed paymenI Io be paid as royalIy Io Ihe UL8
208
!J Quali!icaIioh criIeria Technical criIeria
The developer should have experience in consIrucIion o
one waIer supply projecI or source augmenIaIion o ___
MLD
requiring consIrucIion o ___ MLD WTP
The developer should have operaIed and managed ___
waIer supply projecI rom Ihe bulk supply Io disIribuIion
end or a ciIy wiIh waIer supply o ___ MLD
linancial criIeria
The developer should have an average neI cash accruals
over J years o Ps____ million
inancial criIeria.
Table FRQWLQXHG
Sl ~ serial.

PPP Water Ind Bagus Banget

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PPP Water Ind Bagus Banget

Uploaded by

Copyright:

Available Formats

Too| Kit for Pub|icPrivate

Partnerships in Urban Water Supp|y

You might also like