Transcript Title
Surat Wastewater Recycling Project
through PPP Approach
SACOSAN IV –
Group Discussion on Urban Sanitation
Dr. Anand Chiplunkar
07 April, 2011
Background
Joint initiative of ADB, GoG and SMC
Ministry of Urban Development, Government of India (MoUD)
sought ADB assistance for developing PPPs in water supply /
wastewater reuse
GoG positive response to participate in this initiative
Surat waste-water reuse project developed as part of this
initiative
Largest (40 MLD) project in waste water recycling through PPP
approach in India till date
First such PPP project to be bid out by a Municipal Corporation
Surat City Settings
Textile, Diamond
cutting/polishing
clusters
City water
source is
upstream dam
not river
• Ground water
has high total
dissolved solids
PANDESARA
INDL. AREA
BAMROLI
STP
Proximity of STP
and industrial
estate
Need for the Project
Water shortage as an impending threat by 2015
Dependence on River Tapi
Significant unmet industrial water demand
Pandesara demand ~100 MLD (~ 13% of SMC demand)
SMC supply only 55 MLD; rest by tanker/other sources
Bamroli STP within 5 km from Pandesara Industrial Estate
100 MLD capacity Sewage Treatment Plant
Pandesara Industries keen interest in water security
Early stage interactions confirmed strong support
Recycling the Secondary Treated Water from Bamroli and
supplying to Pandesara Industrial Estate therefore was
a logical win-win project
Rationale for PPP
PPP will bring in required investment of Rs. 800 million
Will release SMC capital for other socially relevant and nonremunerative projects
Opportunity cost of capital (at 12%) translates to nearly Rs. 100
million annually
PPP will help insulate SMC and GoG from technology and
operating risks
Doing project on EPC will lead to SMC bearing technology and O&M
accountability
PPP facilitates outcome-based monitoring and payments
Private operator responsible to meet quality and quantity targets
Stringent roll-out and performance obligations
PPP thus emerged the best approach for
implementing this project
Project Scope
Bamroli
STP
Tertiary
Treatment
Plant
40 MLD scalable
to 80 MLD
Pandesara
WDS
Industrial
Grade Water
100 MLD
Capacity
Pandesara
Users
Potable Quality
Water
15 MLD Capacity
Water from
SMC supply
75 MLD
Existing facility
Rehabilitate, Maintain, Use
New Facility to be developed,
maintained and used
1. Operation and Maintenance of existing Bamroli STP.
2. Construction, O&M of new Tertiary Treatment plant.
3. Construction, O&M of new Transmission networks.
4. Rehabilitation, O&M of existing sumps at Pandesara
5. Rehabilitation, O&M of existing distribution network
6. Construction, O&M of new potable water network
Project structure
Private Operator
SMC
Equity
Distribution network
Improvement Grant
Debt
Land for setting TT
Plant
Project SPV
DBFOT concession
Minimum Off Take – Take or Pay
Compensation by SMC to SPV
for bulk supply
Rehab Operate Maintain
Distribution Network
for IG Water supply
User level Contracts
for water supply
Compensation based
on metered supply
Build Operate Maintain
TT Plant and Transmission network
Build Operate Maintain
New Potable Water
Network
SMC
Supply Potable
quality water and
Industrial Grade
Water
Pandesara
Industries
All Assets of the Project SPV transferred to SMC at the end of the Concession Period
Bid process
Transparent engagement with private sector through
the process
Two Pre-Bid meetings in June and July 2009; over 20 operators
participated
Participation from reputed Indian and international
Operators
Triveni Engineering: Rs. 18.20/KL (Declared as Preferred Bidder)
Others Bids: Rs. 21.98/KL, Rs. 24.90/KL, Rs. 39.60/KL
Two of the unsuccessful bidders sent written
appreciation on project development and bid process
transparency
Good project structuring and transparent bid process led to a
highly competitive bidding and efficient price discovery
Bid process - timelines
Identification
Dec 07
April 08
Feasibility
evaluation
started
Preparation
Approval
Nov 08
Presentation
to SMC
Standing
Committee
Bid Process
Mar 09
Bid process
initiated
Nov 09
Preferred
Bidder
Identified
Political decision making has been a challenge in the award
Apr 11
SMC approval
pending
Project is a win-win for SMC,
Pandesara and GoG
SMC gets to augment water availability at NO Additional Cost
55 MLD-60 MLD supplied by SMC will continue to provide revenues
40 MLD from Tertiary treatment with flexibility to expand to 80 MLD
New Tertiary Treatment Plant and Potable Water Network assets
Pandesara gets greater water security at competitive tariffs
Tariff (Rs. 18.20/KL) less than Rs. 25 / KL that is proposed by SMC and
compares well with current tariff of Rs. 16 / KL
GoG could create wider impact through the replication
potential of this project
Provides a replicable model to realise water security and climate
change goals
Consistent with GoG’s PPP vision and intent to usher in Private
investment in Infrastructure
Replication Potential in Urban Sanitation
Sewage / waste-water recycling in water stress areas has
business potential
Focus on sewage treatment plant - industry cluster combinations
Attract private sector investments through public private
partnership (PPP) projects
Balance risk appetite of international and national players without
comprising project quality and performance obligations
technical expertise / capabilities of international operators
investment risk appetite of local private sector operators
Thank You
For further information contact:
Dr. Anand Chiplunkar
[email protected]