Urban Infrastructure Through PPP

Transcription

1 Urban Infrastructure Through PPP Efficiency and quality of urban services? Possibilities and Challenges 1

2 Structure Learning from project experience Urban Water Solid Waste collection, transportation & disposal Urban Transport Land-related: public + commercial use Reasons for optimism 2

3 Some Project Experience 3

4 Water: Mid 1990s - failed City Project Components Key factors for failure Pune Bulk water Treatment & Distribution High political opposition to the project Pune Goa Hyderabad Hyderabad Bulk Water Bulk water tariff unaffordable Credit quality of the water board Goa Bulk Water High bulk water tariff Need of the Project questioned Bangalore Bangalore Bulk Water Bulk water tariff unaffordable Project generated controversy 4

5 More water Around 2000: Momentum subsides Sonia Vihar TP City Project Components Key factors Sonia Vihar Treatment Design, Construction & O&M Sangli Bulk Water, Treatment & Distribution Operator bears only technical risk Risk of bulk water availability rests with DJB Council decided against the Project Sangli Bangalore DMA Bangalore Rehabilitation, Distribution O&M, collection Project abandoned after two international firms submitted their proposals 5

6 Successful projects also emerge Mid decade City Project Components Key factors KUWASIP Mysore Nagpur Pilot KUWASIP Hubli-Dharwad, Belgaum (Veolia) Mysore (JUSCO) Nagpur Distribution Design, Construction, O&M Distribution & Rehabilitation Construction, O&M, Collection Distribution & Rehabilitation Design, Construction & O&M Capital investments funded publicly, managed by operator Performance based fee model for the operator Grant funds from JNNURM Well funded pilot projects 6

7 Successful projects also emerge Mid decade City Project Components Key factors Salt Lake (JUSCO VOLTAS Consortium) Distribution Design, Construction, O&M, Collection, Tariff Institutional clients with high credit quality. High growth area Bhiwandi Latur Nagpur Pilot Salt Lake Latur (Hydrocomp Consortium) Rehabilitation, Distribution O&M, collection Capital investment completed by Govt utility Favourable metering and tariff policy Tariff curve for ten years fixed before bidding Chennai desal 7

8 Issues Domestic operator interest and success is high, international operators are tying up with domestic Domestic operators are more comfortable with collection risks Higher political acceptability NGO activism less vocal as compared to international operators Macro level - Public funding JNNURM support critical (Salt Lake, Mysore, potentially Madurai) Public funding in other cases (KUWASIP, Latur) Ground level Attention to detail Government of Maharashtra has a volumetric tariff policy, had financed water audits and energy audits Karnataka had spent adequate time on preparation Balanced approach in contract design (Salt Lake, KUWASIP, Latur) But concerns that remain are baseline data, payment guarantee, contract 8

9 Solid Waste A number of tipping fee based contracts have been awarded Lucknow waste to energy Inappropriate technology Thiruvananthapuram Composting Inadequate waste Bangalore the first sanitary land-fill in the country Land? 9

10 Governance Issues Project Structure & Risks Waste quantification, characterization Existing commitments (MSW, manpower, equipment) Unbudgeted costs of Govts new element in the chain not accustomed to paying tipping fees Most projects conceptualized independent of a disposal facility incomplete solution for ULB Selection Process & Contracts Extremely favourable or adverse conditions equitable risk sharing far & few (MSW supply, payment, penalties & termination) 10

11 Governance Issues 2 Land Single most important factor in T&D projects Availability, clearances to be ensured for successful implementation Capacity/ willingness of Contracting Agency Very significant management/ liaison time needs to be budgeted Lengthy approval/ award period Concept of tipping fee alien to most ULBs 11

12 Urban Transport A few large projects awarded recently: With capex Mumbai, Hyderabad (!) Without capex Delhi Airport Link Some under bid Buses: Bangalore airport rail link. Indore, a successful model A number of BRT systems (Delhi, Bangalore, Mysore) studied and structured on PPP, but being executed by the Authority 12

13 Land Related A large number of projects being attempted on this formula Project = land available with Authority + Some public use + commercial development Bus terminals. Convention centers. 13

14 Reasons for optimism 14

15 Looking ahead, hopefully Efficiency = f (ULB capacity, contract, policies, ) Political/ Social realization of imperative need for improvement of urban services Policies slowly being set in place Local capacities improving PPP experience building up Various precedents are being tried and tested, and experience is maturing But yet a long way to go 15

16 Thank You 16