prospects for public private partnership in the irrigation sector
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Presented by:
Siddharth Dasgupta – 09EM033
Ravi Sharma – 09EM028
Parimal Sinha – 09EM024
Mukesh Kr Mishra – 09EM20
Kishor Kumar – 09EM17
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Significant Achievements in Food Security:
40% of Food (on 17% Land)Increased Food Availability & Affordability Income and Employment IncreaseInvestments in Rural Infrastructure Multiplier EffectsGrowth in Rural
Economy PIM Experience (in over 60 countries) with
promising results
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Costs and Consequences of Past Irrigation Development
Vicious Circle of Inadequate O&M, Poor Service
Delivery, Infrastructure Degradation, Low Cost
recovery, etc
Inefficient Water Use (physical & economic)
Unsustainable Public Subsidies to Irrigation
Growing Environmental and Social Problems
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Objective:
Review and Analyze Concrete Examples of PPP and Draw Lessons from These for Guiding Future Interventions in PPP in I&D.
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The private sector has been very active in Investing and managing:Irrigated Agricultural Farming and Production
and On-Farm Water Management Traditional Small-Scale Irrigation Systems (ex:
about 40% of Morocco’s irrigated area)Groundwater Development (ex: about 50% of
India’s irrigated area)Water User Associations
BUT Contrary to Water Supply and Sanitation…. There has been little PPP Investments and/or Management of Large-Scale I&D Schemes
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Professionalism and Knowledge Transfer Better Governance Corporate Culture Financial Rigor and Budgeting Productivity Gains BUT…
Higher Costs of Private Capital Need for Increased Water Charges Greater Risks in I&D (Financial, Water
Resources, Demand)
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duration (years)
Divestiture (asset sale)
35
30Build-Operate-
Own
25Concession
20
Build-Operate-Transfer
15Lease Affermage
10
5
Management contract
0Service contract
public privatecommercial risk or/and investment responsibility
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Public Service Delegation
Service/Management Contract
PUBLIC AGENCY
PRIVATE COMPANY
GOVERNMENT AGENCY
WUAs FARMERS
IIIIIIIIIIIII
----------------------------------------------
Com
merc
ial
Ris
k
High
Low
Public Private
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Country where cases have been considered and selected for the study
Country where cases have been considered but not selected for the study
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Cases «With No Commercial Risk»(Water Service Charged to Local Entity):
1) CACG, ASA, France
2) SAED, Senegal
3) Alaotra, Madagascar
4) Nakhlet, Mauritanie
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Cases «With Commercial Risk on OMM » (Water Service Charged to Users): 5) Juazeiro, Brazil6) Toula, Niger7)Pequin Kavaje, Albania8)Sonora, Mexico9)Tieshan, China10) Adasiyeh, Jordan 11) Ormva Reform, Morocco
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Cases «With Commercial Risk on Investment» (Water Service Charged to Users):12) Eastern Uttar Pradesh, India13) Gap, Turkey14) CSS, Senegal15) Dina Farm, Egypt16) Business farms, Saudi Arabia17) SCP, France18) CACG Neste, France 19) Irrigation Murray Limited, Australia20) Toshka, Egypt21) Guerdanne, Morocco
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Cases
I&D functions
01 -
CA
CG
-AS
A
02 -
SA
ED
03 -
Ala
otr
a
04 -
Nakhle
t
05 -
Juazeir
o
06 -
Toula
07 -
Pequin
Kav.
08 -
Sonora
09 -
Tie
shan
10 -
Adasiy
eh
11 -
OR
MV
A r
ef.
12 -
Easte
rn U
P
13 -
GA
P
14 -
CS
S
15 -
Din
a F
arm
16 -
Busin
ess f.
17 -
SC
P
18 -
CA
CG
-Nest
19 -
Murr
ay
20 -
Toshka
21 -
Guerd
ane
Investment
Decision
Financing
Design
Construction
Regulation & control
Water alloc. and police
Maint.audit & price regul.
OMM
Water alloc. managemnt
Maintenance
System operat. (&CRM)
Water value optimis.
Agricultural production
Service contracts PSD on OMM PSD on Investment
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Demand for PPP is Mostly a Government Initiative Motivated by the Need to Reduce Recurrent Public Subsidies to I&D System O&M.
Almost All Contract Cases were for Private Sector Participation in one or more of the “OMM Functions”.
2/3 of the Contract Cases were for Private Sector Participation in one or more of the “Investment Functions”.
In Most Cases, Farmers are Organized in Groups/Associations.
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In Terms of Contracts Service/Management Contracts Account for 13% of the
total PSD Contracts represent 81% of the cases, nearly
always including for OMM function as well
In Terms of Risks: Investment PPPs are More Sensitive to:
Financial Risks (Cost Recovery) Water Demand Risks Water Resources Risks “Rural Conditions” Risks (Markets, Poverty,..)
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The I&D “Sustainability Vicious Circle” Calls for “Professionalization” of the Service Delivery Functions
This can be Brought by a “Professional Third Party” between Farmers --Preferably Organized in WUAs-- and Government Services.
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This “Professional Third Party” could be:
Financially Autonomous Government Agency.
A professionalized Water User Association
A Private Company
Any combination of the above
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Development Organizations Should Support the Emergence and Development of PPP Especially for the OMM Functions which are :Key to I&D SustainabilityLess Costly to undertake Less Risky
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No Panacea… For Private Sector Involvement as The Unique Solution to improve the Performance of the Sector.
No Mantra… about The Need for Privatization of I&D Assets or Service Delivery Functions.
What the Study highlights is:
“The Need for a Professional Third Party Between Government and Farmers in PPP in I&D”
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This Third Professional Party could be Government, Users, Private or Mixed Body, provided that it is legally and financially totally autonomous and accountable for the Users.
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Can you bring additional cases of PPP in irrigation and drainage?
What can you suggest to enrich the conceptual framework?
Based on your own experience, is there indeed a need for PPP in I&D?
If yes, what are the most important functions that could benefit from PPP
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