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7/27/2019 Presentation India Infrastructure

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Private Sector Participation inSewerage : Experiences in India

Presentation at

Second Annual Conference on Sewage Treatment

Plants: Opportunities, Issues, Projects,

Technologies,October, 17-18,2013

R.V. SINGHVice President & Head - Engineering

JITF WATER INFRASTRUCTURE LIMITED


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STRUCTURE OF PRESENTATION

Experience Of The Private Sector In Sewerage Management

Risks And Challenges Faced By Private Players

Expectations

Way Forward


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EXPERIENCE OF THE PRIVATE

SECTOR IN SEWERAGEMANAGEMENT


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SEWERAGE MANAGEMENT

It consists of :

Sewer Network

Sewage Treatment Plant With Or Without Reuse & Sludge Management

O &M

PPP in complete Value chain of Sewerage Management, in India, is yet to happen.


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PROCUREMENT STRUCTURE OF A

SEWERAGE PROJECT

There are mainly three elements in sewerage management:

SEWERAGE NETWORKING: Private sector is involved in construction as contractor.

contracts are awarded based on competitive bidding system and are of EPC

Turnkey or Item Rate type. O&M responsibility of network is of ULB beyond the

DLP or extended O&M period as per contract; Generally 1-7 years (vary contract to

contract)

O&M: Service Contract are not so common for sewerage networks & generally

undertaken by ULBs after end of DLP of the contractor.(Management contract in line with water supply, are yet to happen)

STP: Private sector is involved as EPC Contractor & Developer both.


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SEWERAGE NETWORK

EXPERIENCE CONSIDERING EPC/TURKEY CONTRACT:

Delay in approval of network design

House connection is responsibility of ULB which is done poorly byuntrained workers resulting into leakage of sewage

Generally S/W & RCC pipes are prescribed in bid documents which are

prone to breakage due to unequal settlement of soil below sewer owing to

ingress of rain water or any other reason

Least state level commitment or support


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STP/ETP/CETP

EXPERIENCES CONSIDERING BOT PROJECT:

Inadequate considerations for financial viability and lack of project development ability

Delay in appointment in independent engineer

Delay in approval due to prescriptive rather than participative technical specifications as well

ambiguity in specification & interpretation of codes

Sludge disposal mechanism not defined in contract

Reuse policy or facility not in place in time; often not in concession agreement

Industries discharge effluent in nearby natural course and least bother to take membership of CETP.

Projected revenue not realized as plant is ready but either sewer conveyance network is not readyor users not ready to connect with network/number of users substantially lower than projected atprocurement stage

Least involvement of employer during implementation


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CASE STUDY

CETP, SIDCUL INDUSTRIAL PARK, SITARGANJ ON

BOT


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CASE STUDY

Capacity of CETP in CA 8MLD with RO (for Reuse)

Plant capacity reduced to 4MLD during development stage & RO system procuredbut not installed owing to zero demand in local market of treated effluent forreuse

Plant is running under capacity as only 1.3MLD influent is available

Even BEP sale is not realizing

Though Tariff revision based on deviation in Base Effluent Parameters (pH, COD,

TDS) is permissible yet deviation measuring mechanism not in place. HenceTariff revision is always a conflict

Private developer is making loss


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RISKS AND CHALLENGES

FACED BY PRIVATEPLAYERS


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RISK & CHALLANGES

o The typical design & preparation process is still largely technically-

oriented with limited appreciation of the overall financial and

commercial risk issues involved.

o Often information distortions in the market have led to large variations

in the bids/offers received during the procurement process.o The procurement process is highly prescriptive, rather than

participative.

o The emphasis is on conforming to public sector requirements which

may not offer value for money and doesn't not encourage innovative

solutions

o While public sector dictating the terms, it is quite often not willing to

shoulder commitment risk and apportionment of risk, in some cases,

quite inefficient.


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EXPECTATIONS


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PRIVATE SECTOR EXPECTATIONS

o Incorporation Of State Asset Management Company Such As TNUIFSL (Tamil Nadu

Urban Infrastructure Financial Services Limited) to take the lead in preparing &

structuring the project and finance package in conjunction with multi-stake holder

committee to ensure sound and bankable project.

o There must be an agreement among the parties/stake holders for sharing

responsibilities to avoid confusion and delay in implementation stage of theproject.

o Transparent Lines Of Communication With BOT Operator/ Management

Contractor.

o PAYMENT ASSURANCE TO THE PRIVATE SECTOR PARTICIPANTS: ULB to provide

BOT Contractor a minimum level of revenue through a form of TAKE OR PAY

arrangement; ULB to guarantee to supply minimum level of raw sewage/effluent

to the plant and pay through a unit rate agreement at pre-determined annual fee.

Through this arrangement, ULB/ the city assume the risk of paying the fee if the

predetermined level sewage was not met. in turn, the private partner assumes all

responsibilities and risks for financing, constructing and operating the

STP/ETP/CETP for whole concession period.


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OUTLOOK GOING FORWARD


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PROJECTS; ENSURE FINANCIAL VIABILITY

AND DEVELOPERSS REPAYMENTS THROUGH

TAKE OR PAY CLAUSE IN CA. FURTHER, AS

LONG -TERM SUSTAINBILITY OF THEPROJECT IS THE ABILITY OF THE ULB TO

ASSUME RESPONSIBILTY FOR OPERATION &

MAINTENANCE OF THE PROJECT AFTER THE

END OF CONCESSION PERIOD ..FOR THIS ULB TO HAVE LONG-TERM PLAN THAT

SHOULD INCLUDE THE TRAINING AND STAFFING OF

MUNICPAL EMPLOYEES.

A VIABLE ALTERNATIVE TO THIS APPROACH

WOULD BE FOR THE ULB TO AWRAD A NEW

MANAGEMENT CONTRACT AND KEEP O&M

WITHIN THE PRIVATE SECTOR.


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THANKS

REFERENCES: Case studies of bankable water & sewerage projectfor USAID by ARD

Infrastructure In India: A Vast Land Of ConstructionOpportunities By PWC

R V SinghVice President & Head-Engineering

JITF WATER INFRASTRUCTURE LTD.

Jindal ITF Centre, 28 Shivaji Marg

New Delhi-110 015

Mob: +91 9910772779

email: [email protected]

[email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]

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