1. Evaluation of Water Services Public Private Partnership Options for Mid-sized Cities in India
- Author
-
Ehrhardt, David, Gandhi, Riddhima, Mugabi, Josses, and Kingdom, William
- Subjects
WATER CONSUMPTION ,INVESTMENT ,PERFORMANCE INCENTIVES ,OPERATIONAL PERFORMANCE ,LEAKAGE REDUCTION ,WATER OPERATORS ,PRIVATE OPERATOR ,WATER PRODUCTION ,TOWN WATER SUPPLY ,COLLECTION EFFICIENCY ,CONTRACT MANAGEMENT ,WATER ,WATER SUPPLY FACILITIES ,LITRES PER DAY ,POPULATION GROWTH ,BULK WATER SUPPLY ,WASTEWATER SECTOR ,MUNICIPALITIES ,TOWNS ,OPERATIONAL EFFICIENCY ,LOCAL ENGINEERING ,SERVICE PROVIDERS ,WATER DEMAND ,OPERATIONAL EXPENDITURE ,WATER INFRASTRUCTURE ,PERFORMANCE BENCHMARKS ,UTILITY MANAGEMENT ,WATER TARIFFS ,OPERATIONAL IMPROVEMENTS ,CONTRACT DURATION ,WATER RESOURCES MANAGEMENT ,SERVICE STANDARDS ,IRRIGATION SYSTEMS ,CONCESSION CONTRACTS ,SERVICE QUALITY ,UTILITY STAFF ,FINANCE ,QUALITY OF WATER ,AFFORDABLE WATER ,HOURS OF SERVICE ,PUBLIC UTILITIES ,OPERATOR PERFORMANCE ,OPERATIONAL RISKS ,MUNICIPAL PROVIDERS ,TOWN ,WATER SERVICES ,URBAN GROWTH ,CONCESSION CONTRACT ,COST RECOVERY ,RESPONSIBILITY FOR WATER SUPPLY ,WATER SUPPLY SERVICES ,PRIVATE SECTOR OPERATORS ,WATER SECTOR ,PRIVATE PARTICIPATION ,UTILITY OPERATOR ,BULK SUPPLY ,LOCAL OPERATORS ,DISTRIBUTION SYSTEM ,INVESTMENT PLANNING ,WASTEWATER TREATMENT ,RESPONSIBILITY FOR WATER ,SERVICE IMPROVEMENT ,PRIVATE FINANCING ,TARIFF INCREASE ,CONCESSION AGREEMENT ,QUALITY WATER ,GOVERNANCE ARRANGEMENTS ,TOWN WATER ,CAPITAL ,QUALITY OF SERVICE ,NUMBER OF CONNECTIONS ,URBAN WATER UTILITIES ,FIXED FEE ,TARIFFS ,FINANCIAL VIABILITY ,METER READING ,WATER BOARD ,WATER COMPANY ,WATER SERVICE PROVISION ,WATER PARTNERSHIP ,INVESTMENT DECISIONS ,CUSTOMER RELATIONS ,HOUSEHOLDS ,MIXED PRIVATE-PUBLIC OWNERSHIP ,RAW WATER ,JOINT VENTURE ,MAINTENANCE COSTS ,POTABLE WATER ,ASSET OWNERSHIP ,MAINTENANCE OPERATIONS ,SERVICE PROVISION ,URBAN WATER ,UTILITIES ,SYSTEMS ,WATER SERVICE ,WATER DISTRIBUTION ,URBAN WATER SUPPLY ,PIPE NETWORK ,WATER UTILITIES ,WATER QUALITY ,WATER SUPPLY ,DISTRIBUTION FUNCTIONS ,TARIFF SETTING ,SERVICE IMPROVEMENTS ,PRIVATE OPERATORS ,CASH FLOWS ,MUNICIPAL COUNCIL ,WATER RESOURCES ,URBAN AREAS ,TARIFF ADJUSTMENTS ,SMALL TOWNS - Abstract
Successful mid-sized cities will be vital to India’s growth and prosperity in the coming decades. Indian cities are home to over 375 million people now, and their population is likely to double by 2035. Yet water supply in most mid-sized cities falls short of Government of India benchmarks for service, efficiency and cost recovery. In many of them water flows in the pipes for 2 hours a day or less, its quality is poor, and it is provided by utilities that cannot even cover their operating costs. Following a brief introduction to the three city case studies (section two), the report lays out the Indian water sector’s unique challenges, and using case examples to substantiate findings (section three). The challenges include day-to-day operational issues associated with running a utility, as well as policy and planning issues that affect the utility’s governance and investment planning to meet current and future demand. The results of a financial viability gap analysis, applied to Bhubaneswar and Coimbatore reveal the magnitude of improvements required, and the key drivers that affect the utilities’ financial performance (section four). These complex challenges make traditional PPP models, Management Contracts, Concessions and Leases, less amenable for use in mid-size Indian cities. As section five describes, this is because the traditional models are too risky for the operator or government or too limited in scope to create lasting improvements. The remaining sections focus on explaining the design and procurement strategy for the two innovative PPP models, the phased performance based contract and the Joint Venture (JV) Partnership (section six and seven). These models have the potential to deliver better results than the traditional PPPs and business as usual scenarios. This is because in addition to reforming dysfunctional utilities into focused and accountable organizations, they are able to respond to information uncertainty, include strong incentives, have clear sources of funding, and promote capital efficiency.
- Published
- 2015