financially sustainable asset management plan with a focus on improving service delivery performance...

FINANCIALLY SUSTAINABLE ASSET MANAGEMENT PLAN WITH A FOCUS ON

IMPROVING SERVICE DELIVERY

Performance Assessment Systems (PAS) Project

1

Session : OPTIMISING SERVICE DELIVERY FOR UNIVERSAL ACCESS

Performance Assessment and Improvement

INDIA Census 2011: 377 million i.e. 31.2% of the total population lives in towns (No. of towns: 5,161 in 2001; 7,935 in 2011.)

As additional investments are being made in UWSS services, there is a critical need to increase accountability for service delivery. Shift in focus from infrastructure creation to delivery of service outcomes

Benchmarking is now well recognized as an important mechanism for introducing accountability in service delivery (involves measuring and monitoring of service provider performance on a systematic and continuous basis)

MoUD has launched the Service Level Benchmarking (SLB) initiative covering water, sanitation, solid waste management and storm water drainage

Background

Sustained benchmarking can help utilities to identify performance gaps and introduce improvements through the sharing of information and best

practices, ultimately resulting in better services to people

Missing Link – Asset Creation and Service Delivery Outcomes

Leakage in transmission main

WS distribution lines over storm drains

Scene in a town receiving intermittent supply

Issues of low pressure

Wells as supply source

Consumer metering

Missing Link – Asset Creation and Service Delivery Outcomes

Non functional community toilet

Septic tanks constructed on roads

Collection, transportation and treatment systems

Open defecationSullage disposed in open drainsCleaning overflowing and blocked drains

Need to ASSESS PERFORMANCE… TRACK INVESTMENTS and OUTCOMES

No/ little information on quality, service levels and financial sustainability of WSS services

Limited information available on access of urban poor households to water and sanitation services

Assessment of impact from past investments difficult

Standardized information system for comparable and regular situational analysisSupport improved allocation of resources and decision making

Grants from state and central governments can be linked to local performance

Asset Information Framework

Source: Saskatchewan MAIS Feasibility Study

Being declared by 13 States as per 13th Central Finance Commission requirements since 2010Partially attempted by ULBs and under Municipal Accounting reforms

1. Asset inventory and assessment will help ULBs in India to develop comprehensive view of future financial needs of assets and review their performance

2. Need Tools that can assist ULBs in Integrated Improvement Planning in above areas

New Project Development (and DPRs) need to be linked with SLBs

Scope exists for exploring technical alternatives and innovative financing

Paradigm Shift RequiredFrom Asset Creation to Asset Maintenance / Management

INVESTMENTS ASSET CREATION PERFORMANCE• Focus on the targets of water and sanitation has been on increasing service coverage• New Investments at Centre & States paying less attention to O&M, increasing the risk to performance outcomes

•Less attention on improving the operation and maintenance (O&M) of existing assets•Lesser expenditure on rehabilitation of exstg. infrastructure• Corresponding reduction in quality of service delivery

Inappropriate design

Lack of O & M

Performance failure

=

+

Sectors : Water supply, Waste Water, Solid waste Management & Storm Water

PAS

Annual Service delivery profile for

419

Cities in 2 States

covering 32 Key indicators and

89 local action indicators

Performance Assessment System

Old city area

Newly developingcolonies

Focus on Measurement, Monitoring & Improvement

PAS - Sector wise Indicators and LAIs

9Key Indicators

38Local action Indicators

9Key Indicators


8Key Indicators


4Key Indicators


2Key Indicators

STORM WATER

WATER SUPPLY

WASTE WATER

SOLID WASTE

EQUITY

PAS

SUPPORT TO SLB NATIONAL STEERING

COMMITTEE MEETINGS

ORGANISE CAPACITY BUILDING WORKSHOPS

in over 400+

cities in two states

Activities asNational

Technical Support Partner

NATIONAL DATABASE FOR SLB BASELINE AND TARGETS

MoU with Ministry of Urban

Development on Roll out in ALL States

Sustaining Momentum of SLB Initiatives

The National Technical Support Partner will help mainstream SLB

exercise through trainings for regular State and City level monitoring systems and its

institutionalization.

11

PAS Efforts : From Performance assessment to Strategic Management of Assets by linking with Service Delivery Indicators

S t e p p i n g S t o n e t oA S S E T M A N A G E M E N T

Performance Measurement

Assessment on Asset Condition (Risks & Costs) Towards Integrated Asset Management

INFORMATION ENGINEERING MANAGEMENT

PERFORMANCE RISK COSTS

Largely ULBs in India are

at Performance measuremen

t Stage

Support to ULBs through various Stages of Asset Management Plan

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Asset Information

System

Support to select ULBs

for Development of models /

Tools

Decision-making, Actual

Implementation of Model

ISIP

Su

pp

ort

PIP

S

up

port

Stages already being partially supported under PAS assessment

Step 1 to 3 – Data oriented : ISIP SupportStep 4 to 5 – Methodology and policy issues

Step 6 – Actual Use of Info for Decision making by ULBs : PIP Support

13Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad

‘PROJECT’ based approach

Starting point is an assessment of funding resources available – SUPPLY DRIVEN

Focus on developing INDIVIDUAL PROJECTS of various sectors

Oriented towards achieving

OUTPUTS

‘SERVICE’ based approach

Oriented towards achieving OUTCOMES

Focus on developing integrated SECTORAL SOLUTIONS

Starting point is measurement of current performance and local priorities – NEED DRIVEN

PAS Approach

Conventional Approach

Support to ULBs for Decision Making through PIP Model

IMP

RO

VE

ME

NT

P

LA

N

OP

TIO

NS

Performance Improvement Planning process


I. PERFORMANCE PRIORITIESSector Performance indicators used as the basis for assessing service performance

Actions (investments, policies, process changes) identified to achieve sector service objectives

II. ACTION PLANNINGImprovement Plan developed by designing actions for costs, phasing & revenue impact

Review Improvement Plan for impact on service performance

III. FINANCIAL PLANNINGKey financial decisions related to sources funds, tariffs and transfer of surplus to WSS

Review feasibility of Financing Plan for capital and operating expenditure

The emphasis in PIP Model is on moving away from ‘infrastructure investment plans’ to evolving ‘service improvement plans’ which include a wide set of actions including policy and process re-engineering.

PIP Model starts with measurement of current performance levels. This is followed by identification and design of a set of actions to improve performance. Phasing and financial implications of these actions are assessed and a financing plan is developed. The Model enables comparison of various options in terms of their impacts on service levels and on ULB’s financial capacity to operate and maintain new infrastructure.

Steps of Performance Improvement Planning


PIP Model is developed as

an excel based

spreadsheet to facilitate interactive

usage.

The structure of the Model

has been aligned with PIP planning process. It has three distinct

modules, each for a

stage of PIP planning process.

The chart alongside

denotes each sheet of excel

workbook and its flow of sequence.

BASE INFORMATIONWater supply, wastewater and solid waste; Municipal finance past trends

and future forecastsExcel sheet in PIP model : WSS info, Finance info, Municipal Finance

Step 1.: ASSESS CITY PRIORITIESReview trends of key performance indicators and peer comparison

Excel sheet in PIP model : Performance assessment

Step 2. SELECT IMPROVEMENT ACTIONSIdentify improvement actions to meet sector goals

Excel sheet in PIP model : Performance assessment

Step 3. DEVELOP IMPROVEMENT PLANDesign of actions in Improvement Plan – Phasing, quantity and costs

Excel sheet in PIP model : WS Plan, WW Plan, SW Plan

Step 4. REVIEW IMPROVEMENT PLANReview impact on service performance

Excel sheet in PIP model : Summary of Action Plan

Step 5. MAKE FINANCIAL DECISIONSSources of funds, Tariff structures & levels, Transfer surplus to WSS

Excel sheet in PIP model : Action Plan finance, Financing Plan

Step 6. REVIW FINANCING PLANReview feasibility of Financing plan for CapEx and OpEx

Excel sheet in PIP model : Financing Plan

DATA ENTRY

PERFORMANCE

PRIORITIES

ACTION PLANNING

FINANCIAL PLANNING

Snapshot of performance assessment in PIP model - Identify city priorities


Local Action Indicators - indicated through graphs

Key Performance Indicators - comparison against peer groupsBASE

INFORMATION

ASSESS CITY PRIORITIES

SELECT IMPROVEMENT ACTIONS

DEVELOP IMPROVEME

NT PLAN

REVIEW IMPROVEME

NT PLAN

MAKE FINANCIAL DECISIONS

REVIW FINANCING

PLAN

Snapsh

ot of

entire

structu

re for

Action

Plannin

g in PIP

model


Tabular boxes for

calibration of

improvement actions

Visual display of impact of activated actions

on performa

nce

Snapshot of time series analysis of performance in PIP model


BASE INFORMATI

ON



DEVELOP IMPROVEME

NT PLAN

REVIEW IMPROVEME

NT PLAN


REVIW FINANCING

PLAN

Approach to Financial Planning


Financial planning essentially involves a balancing act between meeting funding requirement from external and internal ULB sources of funds. It also assesses sustainability of these sources in long run.

BASE INFORMATI

ON



DEVELOP IMPROVEME

NT PLAN

REVIEW IMPROVEME

NT PLAN


REVIW FINANCING

PLAN

Snapshot of setting tariff structures in PIP model


Revision in tariffs for revenue enhancement to meet funding

requirement of capital expenditure, operating expenditure & debt

servicing.Tabular boxes for setting of tariffs

sector-wiseVisual display of impact on revenues

BASE INFORMATI

ON



DEVELOP IMPROVEME

NT PLAN

REVIEW IMPROVEME

NT PLAN


REVIW FINANCING

PLAN

Snapshot of CapEx and OpEx plan summary in PIP model


Snapshot of Operating plan

summary and tariff structures

Snapshot of Capital plan summary and external sources of

funds

BASE INFORMATI

ON



DEVELOP IMPROVEME

NT PLAN

REVIEW IMPROVEME

NT PLAN


REVIW FINANCING

PLAN

Snapshot of Performance Improvement Plan Summary in PIP model


BASE INFORMATI

ON



DEVELOP IMPROVEME

NT PLAN

REVIEW IMPROVEME

NT PLAN


REVIW FINANCING

PLAN

Sample of PIP Model Application – Comparison of PIP Options for a City


Three sanitation options were simulated for a city in PIP Model to assess its impact on services and finances:

i)Conventional underground sewerageii)Settled sewer systemiii)On-site sanitation system

The Model was simulated to provide similar outreach of services with all sanitation options, the financial impact of these options varied considerably. A sample result of these results are shown here.

PIP options

Capital FinancesOperating Finances

Tariff increase required Base tariff = Rs.1465/HH/yr

Sources of funds (Rs cr) Average/yr (Rs

cr)

Grants

ULB funds

PrivateTotal

Capex Add.

Opex Add.

RevenueInternal funds

Debt

I) Business as Usual scenario with committed projects

42.6 9.1 - - 51.7 0.9 0.9 Rs. 2066

II) Proposal with only Wastewater Technology Options

A. Citywide Sewerage 76.1 9.9 7.0 1.5 94.5 2.3 1.2 Rs. 3602

B. Citywide Settled sewer 60.5 14.7 - 2.0 77.2 1.4 1.7 Rs. 2055C. On-site sanitation system 42.6 15.7 - 4.7 63 1.0 1.5 Rs. 2055

Annual tariff increment required

Model Application - City Sanitation Plans in Small Towns

In partnership with State Government of Maharashtra (Water Supply and Sanitation Department, State utility (MJP) and local Municipalities

Plans cover elimination of open defecation, safe excreta disposal, black and grey management and solid waste management

Wai Sinnar Hingoli

Ambajogai

Population 36,053 65,251 85,401 80,000

Area (sqkm) 3.6 51.4 16.7 10.2No. of prabhags / zones

5 6 7 7

No. of electoral wards

19 - 28 28

Households 7,580 13,112 15,573 14,517

Slum Population 2,140 5,445 30,974 20,258

% of slum population 5.9% 8.3% 36.3% 25.3%No. of slum settlements

2 8 9 12

Diagnostics of wastewater system – Sinnar

Collection/Storage

Reuse/disposal Treatment Conveyance

User interface

Provide treatment

sites

Avoid indiscriminate dumping

Avoid choking of drains through regular cleaning

Need to be designed as per prescribed standards

Avoid pollution of land and water

bodies

GREY WATER

BLACK WATER

428 ML/Yr

803 ML/Yr

426 ML/Yr

1228 ML/Yr

1.3 ML/Yr

Existing Links In the value chain

Missing Links In the value chain

Areas for Intervention in the value chain

Periodic cleaning needs to be monitored

Avoid soak pits where

ground water

tables are high

Wastewater Management- Citywide Conventional Sewer

PROPOSAL FOR WASTE WATER MANAGEMENT

Underground sewer in Old town area

(78km)

Sewage Treatment

Plant ( 15 MLD)

Underground Sewer for New

developing areas(112km),

Wastewater Management – Citywide Settled sewer

Settled Sewer for New

developing areas(112km),

Settled sewer in Old town

area (78 km)

Settled sewer connected to Interceptor

sewer (8km)

Waste Water Treatment

Plant ( 15 MLD)Suction

emptier truck

Septage treatment

facility

Soak pits for New

developing

Settled sewer in Old town

area (78 km)

Settled sewer connected to Interceptor

sewer (8km)

Waste water Treatment

Plant ( 15 MLD)Suction

emptier truck

Septage treatment

facility

Wastewater Management- Mixed option

Costs of sanitation options differ greatly!Sanitation

optionTotal

CapEx (Rs. mn)

Base case 230

Sewerage 1150

Settled sewer 620

On-site and settled sewer 480

Sanitation option

Total OpEx (Rs. mn/ annum)

Base case 80

Sewerage 150

Settled sewer 100

On-site and settled sewer 90

Capital expenditure on regular sewerage network is almost double the other options!

Capital expenditure

O&M expenditure

Financial implications – tariff increase required!

Conventional sewerage~450% increase

Other options ~150% increase

Thank YouFor more information on our Improvement Planning tools, please visit :

www.pas.org.in

financially sustainable asset management plan with a focus on improving service delivery performance...

Documents

optimising service delivery

service levels

performance track investments

little information

sharing of information

infrastructure creation

performance gaps

targets of water