KUWASIP - Ministry of Housing and Urban...
Transcript of KUWASIP - Ministry of Housing and Urban...
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KUWASIP
Karnataka Urban Infrastructure Development & Finance CorporationWorking towards better urban living
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World Bank assisted
Karnataka Urban Water Sector
Improvement Project
(KUWASIP) – Experience on
PPP for achieving 24X7 water
Supply and control of UfW
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Karnataka Urban Infrastructure Development & Finance CorporationWorking towards better urban living
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W.B. Loan No.4730-0-IN
Project Cities in Karnataka
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Objectives of the Project:
• Reforms & service improvements through Private SectorParticipation (PSP) in the water sector in Karnataka
• Implement the strategy enunciated in the Urban DrinkingWater & Sanitation Policy of GoK
• Phased approach
Project Cities & Phases:
• Belgaum, Gulbarga & Hubli-Dharwad (Phase I)
• Continuous water supply in selected Demonstration Zones ofPhase I cities
• Scaling up to the rest of the areas in the three cities and also tomore cities
Project Period:
• 2004-2008
• Extended up to 31.3.2011
Introduction
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Project Details Project Components:
• Technical Assistance (TA) studies
• Investments:
• demonstrating continuous (24x7) water supply through PSP in
selected demonstration zones [D.Z] of the three ULBs
• Bulk water improvement related investments (Priority Investments
[P.I]) including critical/urgent works to improve supply frequency
Executing Agencies:
• Technical Assistance studies-consultancy firms selected by
competitive bidding
• Priority Investments-KUWS & DB.
• Demonstration project-private entity called ‘Operator’
• Quality Certification:
– All Works & Operator’s performance: Technical Auditor
– Priority Investments: Third Party Inspection Agency.
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Rs. in crores
Project Details
Component Cost WB GOK ExpenditureOut lay
2010-11
Technical Assistance 12 11 1 3.4 3
Physical Investments
1. Priority Investment Works
2. Demo Zone Project.*
(a) Works, including O&M.
(b) Operator Remuneration-Fixed.
(c) Operator Remuneration-Performance
(Including Bonus).
217
147
42
13
15
164
110
32
10
12
53
37
10
3
3
190.45
129.80
29
19
12.65
16
16
0
0
0
Project Implementation Support 8 7 1 6.15 1
Total 237 182 55 200 20
Reimbursable amount $39.50m
Reimbursed amount $34.27m
Loan effectiveness on : May 2005
Loan Closure : March 2011 (Extension proposed upto 30.9.2011)
* O&M expenditure on the Demo Zone Project w.e.f 1.4.2010 met out of water charges
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Project Structure
Funding agency:
World Bank
Govt of Karnataka:
KUIDFC
Final beneficiaries:
Municipal corporations of
. Hubli-Dharwad
. Belgaum
. Gulbarga
Associated organization:
Karnataka Urban Water Supply
& Drainage Board (KUWS&DB)
Operator:
Compagnie Generale des
Eaux
Project
Implementation
Unit
Hubli Dharwad Belgaum S. Belgaum N. Gulbarga
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Establishment of Karnataka State Urban Water Supply
Council (KSUWSC)
Review and Establishment of Regulatory and Legal
Framework
Water and Sanitation Sector Investment & Tariff
Frameworks
Strengthening of Urban Water Supply and Sanitation
(UWSS) Service Delivery in ULBs
Creation of Water and Sanitation Information System
(WASIS) and Benchmarking of Service Provision
Tariff Design for Continuous Water Supply
Technical Assistance (TA) studies
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Key Aspects of Project
Core of the project is Performance Based Management Contract
(PBMC) with private sector firm for rehabilitation, operation and
management of water service in small areas in Belgaum,
Gulbarga and Hubli-Dharwad (called Demonstration Zones)
The role of private sector is limited to demonstration of
improved service. Assets remain with ULBs, staff continue on
ULB rolls though working under PSP, no investment risk to PSP,
no role in tariff fixation & bill collection (though the PSP would
develop a computerized billing & collection software system)
Fee based contract
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A leading law firm’s assistance taken in drafting the contract
document – since the private sector operator was to be involved
Review of the existing legal regime done prior to finalizing the
contract
Amendments :
Amendment to the KMC Rules made to facilitate PSP
involvement in delivery of water service.
Amendment to the KMC Rules made enabling deputation of
employees from the CC’s to the Private Operator
Emphasis: Gradual PSP, as envisaged in the urban drinking water
and sanitation policy – 2003 of GoK.
Contract Model
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Operator Contract period: 3 ½ years
Single contract for all three ULBs
Single contract between five parties Vs Operator
Distinct obligations for all parties Vs the Operator
KUIDFC authorized to act on their behalf vis-à- vis the
Operator
Prime contractual responsibility – Operator
Contract Details
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Performance based contract.
Total contract price Rs. 28 crore (Rs. 22.40 crore
Remuneration; Rs. 5.60 crore Max. Bonus).
60% of Rs. 22.40 crore i.e., Rs. 13.50 crore Fixed
Remuneration:
40% of Rs.22.40 crore i.e., Rs.8.90 crore Performance
Remuneration.
Fixed Remuneration: 15 equal quarters
12% of Performance Remuneration, if all targets achieved, 12
months after effective date; 28% of Performance
Remuneration spread over two year Operation & Management
Period, if targets achieved.
Penalties (max. 10%) for failure; termination.
Contract Price Details
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Preparatory Period A - Survey, Design, Estimation;
Preparation of Draft/Final Investment Programme.
Preparatory Period B - Selection of sub-contractors
(contract document preparation, tender process
management); meeting performance targets for
Preparatory Period B.
Demonstration of performance targets in preparatory
period B and O & M period.
Customer grievance redressal.
What the Operator will do?
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Operator Performance Targets
At the end of Implementation Period:
• To demonstrate Continuous Pressured Water Supply to
every Customer in each Demonstration Zone.
• Metering of minimum of 90% property connections.
• Maintenance of computerized records of readings.
• Reduction of the losses to 30 litre / connection / day
/ metre pressure in each Demonstration Zone.
• Operation on a 24 hour basis of the Customer service
centers established at Demonstration Zone.
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Operator Performance Targets
During O&M Period:
• Continuous Pressured Water Supply must be provided to every
connected property and stand-post.
• Emergency stoppages shall not exceed twelve hours and no more
than an average of four emergency stoppages in a period of 12
months.
• 100% of all property connections and public stand-posts must be
metered.
• 100% of Customer meters must be read and billed every month.
• Losses must be reduced to 20 litres per connection / day / metre
pressure by the end of 24 months.
• System connection requests must be fulfilled within 7 days.
• All Customer complaints to be responded to within 24 hours and
redressed within 7 days of such complaint.
• Leaks appearing at the surface must be repaired within 24 hours
of notification/observance.
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Volumetric Tariff
Sl. No.
Belgaum / Hubli-Dharwad
Demonstration ZonesGulbarga Demonstration Zone
Tariff
Slab
(in KL)
Tariff
(in
Rs.)
Monthly min
charges per
connection
Tariff
Slab
(in KL)
Tariff
(in Rs.)
Monthly min
charges per
connection
1. 0 - 8 6
Rs.48/-
0 - 8 6
Rs.48/-
2. 8 - 25 8 8 - 15 8
3. 25 - 40 12 15 - 25 10
4. >40 20 >25 12
Water Tariff for Domestic Consumers
For Non-Domestic and Commercial / Industrial consumers, the tariff is 2 times
and 4 times that of Domestic Consumers in the respective slabs.
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Services to the Urban Poor
Defined as those living in houses < 600 Sq. ft. built up area.
No deposit for water connection.
Minimum lifeline supply of 8000 litres per household.
Provide water free of charge through public kiosks to
vulnerable sections with involvement of NGOs and / CBOs.
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SICS Activities
Social intermediation and communication activities conducted in 3 ULBsthrough local NGOs to build credibility for the Demonstration Project &to address objections to PSP and tariff reforms.
SIC activities consist of:
• Socio economic survey
• Awareness programme
• Project orientation
• Jathas
• Communication campaign
• Women development programme
• Motivation camps
• Trainings
• Workshops etc.,
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Under 8 packages of Priority Investment works, 108Km of
transmission mains laid for augmenting bulk water supply to 3
ULBs
In Demo Zones, 238Km of distribution mains laid and 26045
House service connections with customer meters completed
Continuous pressured water supply operationalized in all the 5
Demo Zones
O&M for 2 years (3.4.2008 to 31.3.2010) completed.
Social Intermediation & Communication activities conducted
Expenditure upto February 2011– Rs 200 Crores.
Status of the Project
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House Service Connections
Sl.
No.Demo Zone
Target
(Nos.)
Achievement
(Nos.)
Date of Operationalisation
of Continuous Water
Supply
1. Belgaum (South) 3610 4566 6.7.2007
2. Belgaum (North) 3510 4314 13.11.2007
3. Hubli 6410 7834 1.12.2007
4. Dharwad 4900 5945 3.4.2008
5. Gulbarga 4020 3386 14.3.2008
Total 22450 26045
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Control of UfW
Sl. No. Demonstration Zone Real Losses
(in litres/connection/day/metre pressure)
1. Belgaum (S) 5.21
2. Belgaum (N) 10.52
3. Hubli 5.45
4. Dharwad 4.84
5. Gulbarga 2.36
Status of Real (physical) Losses in the Demonstration Zones
Month: February 2011
According to a rough assessment, prior to implementation of the project, NRW
was >40% in Belgaum and Hubli-Dharwad and > 45% in Gulbarga. The same
has come down to 5% to 17% in the Demo Zones.
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Abstract Consumption slab (in KL) 0-8 8-15 15-25 25-40 >40 Total
Number of Customers 4413 6631 6828 4477 3012 25361
Water Consumption (per month ) (KL)22691 79536 136598 141808 214601 595234
Demand (per month ) (Rs)221736 543107 1017333 1234056 3521326 6537558
Revenue (per month ) (Rs)243275 554363 883300 960734 2570838 5212510
Collection Efficiency 110% 110% 87% 78% 73% 80%
Cost of Water (Rs. per KL)
a. Cost of Bulk Water 5.09 3029741
b. O&M Charges 0.35 208332
c. Operator Remuneration 4.67 2779743
d. Technical Auditor Fee 0.78 464283
e. Debt recovery 1.70 1011898
Total 7493997
Cost Recovery
a. % of Total 70%
b. % of Bulk 172%
c. % of Bulk and O&M 161%
d. % of (Bulk +O&M +Operator Rem+ Technical
Auditor Fee)
80%
e. % of (Bulk +O&M +Operator Rem+ Technical
Auditor Fee + Debt)
70%
Financial Sustainability
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Control of Unaccounted for Water (UfW)
Improvement in public health
Reliable water supply
Improved water quality
Improved customer satisfaction
Customers are saving money since no pumping of water from
sumps
Improved data management –customer database and asset
database
Benefits
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First instance of a new model of PSP in water service -challenge
& opportunity.
People’s misunderstandings about PSP, tariff reform and doubts
about feasibility of 24x7 water supply
Pressures of differing expectations - even of partner agencies.
Impatience / unrest of non demo zone residents in chosen cities.
Contract model & document - grey areas.
Conservative mindset of client staff to many issues, differing
from conventional contracts.
Curbing un-authorized / illegal connections and transition from
flat to volumetric tariff.
Challenges
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Way Forward
All the 3 ULBs passed resolution for extension of 24x7 services to
entire areas of the cities.
Upscaling of 24X7 water supply to 3 ULBs on PPP basis approved vide
G.O. No. UDD 81 PRJ 2008, dated 6.10.2008.
KUIDFC is the Nodal Agency for implementation of the Project.
Approximate cost for Belgaum Rs. 220 crores; for Gulbarga Rs.
150 crores and for Hubli-Dharwad Rs. 360 crores .
Broad investment structure. (Rs. in crores)
• Investment by Private Operator - 367.50 (50%)
• GOI funding under VGF - 147.00 (20%)
• State Government Funding - 147.00 (20%)
• ULB contribution - 73.50 (10%)
Total - 735.00
Consultants appointed and preparation of project reports and structuring
in progress.
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National Urban Water Awards 2009Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC), Bangalore received the
“National Urban Water Awards 2009” under Public-Private Partnership category for the “Karnataka Urban
Water Sector Improvement Project (KUWASIP)”. Her Excellency the President of India Smt. Pratibha
Devisingh Patil presented the award at Vigyan Bhavan, New Delhi on 13th August 2009
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Thank you