1. Alternative Development of Water and Sewerage Projects - EG …. Alternative... · 2020. 3....
Transcript of 1. Alternative Development of Water and Sewerage Projects - EG …. Alternative... · 2020. 3....
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An Alternative Approach to the Development ofto the Development of Water Supply and Sewerage Projects in JamaicaJamaica
Everton G. Hunter
September 21 2011Jamaica Institution of Engineers
September 21 2011
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OutlineOutlineNWC – The Early YearsNWC E l tiNWC - EvolutionThe Water Sector PolicyNWC Supporting Tourism DevelopmentDevelopment and Implementation of I f t t P j t i th T diti lInfrastructure Projects in the Traditional WayAlt ti P j t D l tAlternative Project Development ApproachGoing ForwardGoing Forward
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NWC TheNWC – The Early YearsEarly Years
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NWC established in 1980NWC established in 1980Merger of the Corporate Area Water Commission & Rural based National Water AuthorityRural based National Water Authority
All Parish Council Facilities transferred to NWC in mid 1980in mid 1980Some of smaller former Parish Council Facilities returned to the respective parish councils (e.g. p p ( gentombed springs in remote areas) in 1991
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• NWC has developed over the yearsp y– Extending water supply services to areas of
the country (major capital towns)– Slow transformation from a “Department of
Government” to a more business type operationoperation
• Organization restructuring in search of best fit– In 1980 staff level was over 5,000– Limited use of technology & specialized equipment
• Slow response to customer queries and addressing technical problems (broken main, defective pumping equipment, etc)
– Had faced many challenges in the process
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Financing of operations was done through water gcharges and government grants– Tariff adjustments were
infrequent and inadequate and was the prerogative ofand was the prerogative of the portfolio Minister
– Maintenance suffered, resulting in poor state of water supply & sewerage infrastructureinfrastructure
• NWC depended on the government to obtain gfinancing from multi-lateral/bi-lateral agencies
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NWCNWC –EvolutionEvolution
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75%
Piped Water Supply - Jamaica
70%
75%Despite the challenges, piped water supply coverage
65%
70%
age
has increased
60%Cov
er
55%
C
50%1980 1990 2000 2009
Year
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Sewerage CoverageM j
24%26% Major sewerage
projects in 1990s-NegrilMontego Bay
20%22%
age
-Montego Bay-Ocho Rios
16%18%
Cove
ra
12%14%
C
10%1980 1990 2000 2010
Year
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The WaterThe Water SectorSector PolicyPolicy
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NEED FOR NWC REFORM• Situation in late 1990s necessitated NWC taking• Situation in late 1990s necessitated NWC taking
actions to address the inadequacies in service delivery & financial viability that existed then– There was no articulation of the role of NWC in the
water sector• NWC was all things to everyone in the water sector g y
– Worker unrest– Public distrust and some people saw the utility as
iuncaring– NWC was often in the newspaper headlines for
negative things.g g– There were many protests due to inadequate service
• GOJ prepared the WATER SECTOR POLICY– Became Effective in 2002
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NWC now operates within the context of the Government of Jamaica’s
WATER SECTOR POLICYWATER SECTOR POLICY
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• all Jamaicans to have access to potable water by 2015��� �����������
• major towns to have central sewerage by 2030
• the provision of water & sewerage services is to be• the provision of water & sewerage services is to be• focused to have the maximum impact on national • growth & developmentg p• NWC’s role in the water sector was defined
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Development andDevelopment and Implementation of Infrastructure Projects in the Traditional WayTraditional Way
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• The development of the earlier water supply and sewerage projects have beensupply and sewerage projects have been undertaken in traditional ways and though the use of standard project management p j gtools– Preliminary Design
Finance Sought (Multi lateral/Bi lateral)– Finance Sought (Multi-lateral/Bi-lateral)– Detailed Design
• Tendering & selection of Design consultants• Design work• Design work
– Construction• Tendering & selection of contractor• Implementation of the works• Implementation of the works
– Delays resulting from issues in the procurement process (multi-layered approval process), terms of the financing (level of inflexibility to respond to changes infinancing (level of inflexibility to respond to changes in situation
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KMA Water Supply and Rehab Project– Conceived in early 1990s– JBIC loan finalized in 2000– Design Engineers selected in 2002 & design work
commenced shortly after– Contractor selected and commenced work in
2006• Tender • Evaluation
A l P (NWC B d NCC C bi t)• Approval Process (NWC Board, NCC, Cabinet)– First stage of work completed in 2010.
ELAPSE TIME (f L A l) : 10 YEARSELAPSE TIME (from Loan Approval) : 10 YEARS
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Port Antonio WS Sewerage & Drainage– Conceived in the mid 1990s
• Port Antonio Study conducted by consultants engaged by UDC (water supply, sewerage, drainage and solid waste)
– NWC approached EIB for financing in 2000 and to do water supply & sewerage
EIB required that drainage component be included (since• EIB required that drainage component be included (since excavation in the road for sewers was to be done), but was to be financed by GOJ
C lt t l t d i 2005– Consultant selected in 2005• Detailed design for Stage 1 completed in 2007• Contractor Selected in mid 2009• Commencement of work has been delayed
– No “fiscal space” available; no disbursement request can be made to EIB
ELAPSE TIME TO DATE (from Loan Approval) : : 10 YEARS
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Kingston Water and Sanitation ProjectNWC approached IDB in 1998– NWC approached IDB in 1998
– Preliminary Engineering completed in 2003IDB– IDB Board approval in 2004
– Loan signed in 2006• IDB was concerned about certain NWC related
taxation contributed to the delayE i i C lt t E d i l t 2008– Engineering Consultant Engaged in late 2008
• Pre-Qualification• Approval of pre-qualified consultantsApproval of pre-qualified consultants• Tendering• Evaluation• Approval Process
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Kingston Water and Sanitation Project (cont’d)Kingston Water and Sanitation Project (cont d)– Some US$15M diverted in 2008 to assist Food Safety
Programme– New Loan being negotiated with IDB– Designs for some aspect of the Project
D li St t PS W k b t t• Darling Street PS – Work about to commence• Mona and Hope – Work about to commence• Tenders for others to be invited shortly
ELAPSE TIME TO DATE (from Loan Approval) : 7 YEARSYEARS
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ALTERNATIVEALTERNATIVE PROJECT DEVELOPMENT APPROACH
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Alternative Project Development Approach
• DEVELOPING AND IMPLEMENTING PROJECTS USING THE TRADITIONAL APPROACH – WITH FUNDING ASSISTANCE FROM INTERNATIONAL
LONG LEAD TIME
FUNDING ASSISTANCE FROM INTERNATIONAL AGENCIES - IS DIFFICULT
FORTUNATELY SOME PROJECTS REPRESENT AN OPPORTUNITY FOR RELATIVELY FAST COMMERCIAL RETURNS
SO THEY ALSO OFFER AN OPPORTUNITY FOR AN ALTERNATIVE •IMPLEMENTATION & FINANCING APPROACH
• IMPACT CHARGES - CONNECTION FEES
• EARLY (and LARGE) REVENUE STREAM
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A���������� �������
D���������� A����������������� A�������
�A�DA�An innovative approach to Project Development and Implementation has
Integrated Project Management Team
p pbeen developed
Integrated Project Management Team Established
NWCIndependent ConsultantConstruction Company
BUILT ON MUTUAL RESPECT AND TRUST
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�����A� ���C�D��� ��������A� ��� � ��� ���
A�DA
1. NWC DEFINES PRIORITY OBJECTIVES
2. NATIONAL CONTRACTS COMMISSION (NCC) APPRAISED
3. INDEPENDENT CONSULTANT APPOINTED
4. CONSTRUCTION COMPANY SELECTED
5. PROJECT TEAM, USING COLLECTIVE EXPERIENCE, DEFINESPROJECT IN DETAIL – TO OPTIMIZE NWC INVESTMENT
6a. CONSULTANT’S COST ESTIMATE6b. CONSTRUCTION COMPANY’S PROPOSAL FOR COST & FINANCING
PROJECT IN DETAIL TO OPTIMIZE NWC INVESTMENT
7. NEGOTIATIONS 8. “VALUE-FOR-MONEY” SUBMISSION TO NCC FOR APPROVAL9 CABINET APPROVAL
10. IMPLEMENTATION9. CABINET APPROVAL
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NWC’S APDA EXPERIENCE- The US$39 M GREAT RIVER PROJECTThe US$39 M GREAT RIVER PROJECT
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NWC’S A�DA ��������C� �
�����������A� ����� �����C� A����� 2000 – ������ ��� ����C� ����������
���A� � ��� � �5���� ��������� ����� ����A�C�D ���D� �5���� ��������� ����� �
20��� 500�� Ø ����������A�C� 2001 ���D� C�����C�D
A����� 2001 ���D� C�������D
�����B�� 2002 ��D����D��� C������A��
A�������DDECEMBER 2002 SOGEA – SATOM’S ������A�
� �� �� �� ���� � ������ ������D�C��B�� 2002 �� ���� 2002 � ������A������
���A�C� �AC�A����
� A�����A�JULY 2002 – C����AC�� �����D
DECEMBER 2002 – ���A�C�A� C������
MARCH 2003 – ��D�� �� C�����C�
�C��B�� 2004 – �����C� C�������D �� B�D����C��B�� 2004 �����C� C������� �� B� ���
ELAPSED TIME – 4 ��A��
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���A�C������ ���A� �����
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A��A���D B� C����AC����A��A���D B� C����AC����
FRENCH BUYER CREDIT 9 Million EURO - 7 years - 3.6%
46% of PROJECT COST
COMMERCIAL LOAN 6 Million EURO - 4 years - 7.5%
y
3 Million US$ - 4 years - 7 5%
A��A���D B� ��C�
3 Million US$ - 4 years - 7.5%
C�����C�A� ��A� 3�8
������� ���� � 8 ����� � 9�25�
54% of PROJECT COST
17 2 Milli US$ 5 9 25%������� ���� � 8 ����� � 9�25�17.2 Million US$ - 5 years - 9.25%
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• Scope of INITIAL 2 YEAR CONTRACT:
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• CAPITAL WORKS:• Refurbishment of (17 year old) 6 migd Treatment Plant
19 2 k 500 Ø T k T i i M i• 19.2 kms 500mm Ø Trunk Transmission Main• 2 # Service Reservoirs – each 2.75 Ml• 10kms Distribution Mains
• NETWORK IMPROVEMENT OVER WESTERN PARISHES:
R d ti d C t l f N R W t• 47 Production sites, 130 Reservoirs, 1611kms distribution mains
• Reduction and Control of Non-Revenue-Water• Increase in Billable Consumption
• through comprehensive approach including system audit, t k d li d t ti d i f l knetwork modeling, detection and repair of leakage, pressure
control, customer surveys, metering with training of NWC personnel
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����� �� �� ���� ��� ������ �������B�� 2003 ��D����D��� C������A��
A�������DDECEMBER 2003 SOGEA – SATOM’S ������A�
D�C��B�� 2003 �� �A� 2004 � ������A������
���A�C� �AC�A����
� A�����A�JUNE 2004 – C����AC�� �����D
MAY 2005 – ��D�� �� C�����C�
DECEMBER 2006 CA���A� ����� C��������
���� 2007 – �����A� ������� �����������
C�������� C���������
DECEMBER 2006 – CA���A� ����� C��������
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ELAPSED TIME – 3�6 ��A��
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���A�C��� ��� ������A�C��� ��� ���
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A��A���D B� C����AC����A��A���D B� C����AC����
FRENCH BUYER CREDIT 6 Million EURO - 8 years - 4.56%
50% of PROJECT COST
COMMERCIAL LOAN 6 Million EURO - 3 years - 7.5%
ySPANISH BUYER CREDIT 3.5 Million EURO - 8 years - 4.21%
A��A���D B� ��C�
4.8 Million US$ - 3 years - 9.5%
C�����C�A� ��A� 20
������� ��� � 7�5 ����� � 8�5�
50% of PROJECT COST
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SOAPBERRY SEWERAGE
• Development of Sewerage sector not as attractive as water
• Special arrangements to implement & operateimplement & operate
• Soapberry Sewerage– New WW TP for KSANew WW TP for KSA– Pending for over 30 years– Will reduce environmental
impactp• Special Purpose Company
(SPC) established• BOOT arrangement with the• BOOT arrangement with the
SPC
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PROJECT AGREEMENTS
E it H ldEquity Holders
UDC, NHT, NWC, Private Developer
Loan Agreement(s)
LENDER(S)AgreementEquity Participation
NWC
Sewerage Treatment Agreement
UDC
Loan Agreement(s)
PROJECT COMPANYNWC
Project Management Agreement
UDC
Construction Agreement O&M Agreement
PRIVATE DEVELOPER PRIVATE DEVELOPER
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• Decision to proceed with arrangement ec s o o p oceed a a ge emade in 2004
• Design completed by mid 2005Design completed by mid 2005• Construction Completed in late 2008
H b i ti f l t 2• Has been in operation for almost 2 years• Project Cost : US$50M
– Loan of US38M from NCB
ELAPSE TIME TO DATE : 4 YEARS
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Jamaica Water SuppIy Improvement Project
In 2006 NWC received an unsolicited proposal to address the water supply shortfall in KSA – The
p j
address the water supply shortfall in KSA – The Kingston Improvement Project
The proposal was considered and the Alternative Project Development Approach applied
Independent Consultant appointed in 2007
Over time the project evolved into the Jamaica Water Supply Improvement Project (JWSIP) to include projects in rural areas
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JWSIP The Project has Two Broad Components:
• CATEGORY A• CATEGORY A– Rehab of Constant Spring & Seaview WTP – New wells (Halls Green) – 1 mgd
Replacement of asbestos cement Rio Cobre Pipeline (Bog Walk– Replacement of asbestos cement Rio Cobre Pipeline (Bog Walk to Dam Head)
– Consumer Metering – 70,000 meters
• CATEGORY B– New 15 mgd WTP– Replacement of asbestos cement Rio Cobre Pipeline (Dam Head– Replacement of asbestos cement Rio Cobre Pipeline (Dam Head
to Ferry)– Network improvements (F/Hills & Stony Hill)– Connecting Pipeline to F/HillsConnecting Pipeline to F/Hills– Rural WS Projects
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Category A of JWSIP commenced in MarchCategory A of JWSIP commenced in March 2010 and is scheduled to be completed before end 2012
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JWSIP Project Benefits include
– Addressing the water supply shortfall in the KMA
• New sources• New sources • reduction of water loss
– Improve Reliabilityp y• Rehab of two major WTP• Network improvement
– Improvement in the efficiency of the operations
ELAPSE TIME : 2006 TO 2012ELAPSE TIME : 2006 TO 2012
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LESSONSLESSONSLEARNT
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M f j d l dMenu of project development and implementation strategiesTh h tli d i il bl fThe approach outlined is available for utilities to consider
Time criticalTime critical Compare loss revenue due to delays in project implementation using the p j p gtratiditional approach versus the additional cost (interest cost) pursuing the one presented herepresented here