PPP for NRW Reduction in Mehsana(Assignment for World Bank Group Course

How Can PPPs Help Deliver Better Services)

- Vivek Mehta Date- 24.06.2015

Administrative Map of Gujarat

Introduction to Study Area• Location- Mehsana

city in Gujarat (India)• Area- 22.76 Sq.Km• Population- 1,94,373

(Census 2011) • Sector- Water Supply

• Mehsana is located in dry and arid region• City doesn’t have perennial river and has depleted

its ground water– Receives water through Narmada Main Canal– 30 MLD raw water share is received through Narmada Canal

• New Water Supply network was commissioned in 2007

• Loss of around 45% water as NRW between raw water take-off point to Household level.– Thereby lacks water to supply to industries– Average HHs receives around 100 LPCD against benchmark

of 135 LPCD

Water Supply in Mehsana

Source: Infrastructure Planning Studio-2014, CEPT University, Ahmedabad

Water Supply Infrastructure

NMC Dediyasa

nWTP

ESRsumps

HH

primary secondary tertiary

GWIL/GSDWICL

GWSSB ULB

Agencies involved in providing and operating this infrastructure

Source: Infrastructure Planning Studio-2014, CEPT University, Ahmedabad

Water Supply Service LevelIndicators Benchmark1 Actuals2

Coverage of Water Supply connections

100% 84%

Per Capita Supply of Water 135 LPCD 105 LPCDExtent of Non-revenue Water 15% 45%Continuity of Water supplied 24 hrs Less than 2 hrsExtent of Metering 100% 20%Quality of Water Supplied 100% 100%Cost Recovery 100% N/DEfficiency in Collection of Water Charge

90% N/D

Source: 1. MoUD, Government of India 2. Infrastructure Planning Studio-2014, CEPT University, Ahmedabad

• Poor service level of water supply• Water is made available by GWSSB (State level body) but due

to high NRW, HHs lack adequate supply of water• Multiple agencies are involved in the whole process of water

supply and hence lacks co-ordination• Lack of capacity and technical skills of Urban Local Body (ULB)• Customers not charged adequately due to political

consequences in spite of high cost of receiving water from Narmada Canal, treatment and distribution.

• Poor collection efficiency due to inadequate staff in ULB.• Affecting economy as only agro-based industry with low water

requirement can grow

Issues

• Need for better utilization of scare resource (water)

• Govt. Agency lacks experience in NRW reduction, metering and efficiency in collection of charges

• Poor organizational and technical capacity of ULB to undertake work by itself

Need for PPP

• Deploy & operate SCADA system for centralized control of water supply system and monitoring of District Metering Areas (DMAs) for reduction of NRW.

• Incur finance required for NRW reduction• Installation of water meters at consumer’s end • Meet service standards of Service Level Benchmarks given by

Ministry of Urban Development (MoUD), Government of India • O&M of the system and collection of revenue from consumer

Role of Private Sector

• Gujarat Infrastructure Development Board (GIDB) which has prior PPP experience should take a lead from Public sector

• Hire an expert team for handling project preparation work leading to preparation of suitable contract and deciding the role and duties of Private partner

• Feasibility studies and requisite analysis relating to project.• Formulation of Pricing policy • Creating awareness and transparency for the said project among

all stakeholders especially consumers.• Capacity building of ULB which will be involved in monitoring of

the operations and addressing consumer grievances.

Role of Public Sector

• Profit from savings generated from the system

• Profit from the supply of surplus water created due to NRW reduction to commercial and industrial users

• Will be beneficial to receive similar work as many Indian cities suffer from high level of NRW

Incentive for Private Partner

Risk Matrix

Risks Technical

Financial

Construction

O&M

Revenue

Political/ Social

Force Majeure

Private √ √ √ √ √ √

Public √ √

Note- It’s a proposed risk matrix and it can vary depending on detailed project analysis and structuring

“ PPP will play an important role in this project as Private Sector can provide necessary technical expertise at optimum cost provided government does necessary preparatory work for the PPP, good contracting and formulate fair pricing policy through transparent framework”

Conclusion