Water supply PPP

Nagpur Municipal Corporation has invited for 'Expression of Interest' for pre-qualification for bidding for its 24x7 City Water Supply Project, on PPP basis. Should Bangalore follow suit?

Through its ad on page 15 Sunday TOI (dt 10/08/08, click on right-side bottom corner at
http://epaper.timesofindi...), Nagpur Municipal Corporation, has invited for 'Expression of Interest' for pre-qualification for bidding for its 24x7 City Water Supply Project, on a PPP basis.

The ad interalia says
Nagpur, the second capital of maharashtra, has a population of over 2.5 million, spread over 217 square kilometers. The total water supply to the city is over 500 mld per day, through nearly 225 thousand connections. The distribution network consists of over 2100 km of pipeline network. Nagpur city development plan states that NMC mission includes achieveing "water for all, and 24/7 supplies, with focus on safety, equity and reliabilty".

NMC has recieved JNNURM sanctions for about Rs 615 crores for expansion of water suppy systems and will apply to get JNNURM grant for rehabilitation of distribution network for this project of approxmately Rs 350 crores. NMC envisages to collect full user charges for assets created under JNNURM. To this end, it has established new tarrif setting with a view to collecting full cost of operation and maintenacne.

NMC intends to entrust the realization of full capacity uninterrupted 24/7 water supply to a private opertaor, who will be required to finance the captial expenditure required to rehabilitate, repair, maintain and to provide for appropriate refurbishing and replacement of water supply infrastructure as required to acheive the objectives of this project. To this end, NMC intends to grant 25 year exclusove rights of operating the water supply services under which the private operator shall be granted exclusove rights to operate, maintain refurbish water supply infrastructure owned by NMC, to celiver water supply services, and to collect corresponding waer charger on behalf of NMC, and to retain an operator's fee in proprtion to the volume of the water produced and sold. The operator's fee shall be intended to cover eligible expenditure incurred by the operator for running the system. It will depend on factors designed to reward performance in limiting physical and commercial losses below certain levels and in providing for adequate collection efficiency.

The BWSSB is unable to account for over 38% of the water being pumped from its diffrent sources (http://praja.in/blog/silk......), even as it is struggling to connect up the extended city areas.

While that's the scene on the one hand, on the other, water pipes laid ages ago (in the older areas) have corroded to the extent that raw sewage, from lines laid alongside, is seeping into them leading to spread of water-borne diseases in epidemic proportions.

Simultaneously, the BWSSB is unable to utilise even its 'much lower than required' sewage treatment capacity because of its inability to pay BESCOM bills on time, resulting in the mosquito menace and diseases thereof also reaching epidemic proportions.

All in all, very clearly the BWSSB does not have the capacity, and is also not in a position to gear up the requisite capacity, to discharge the functions thrust upon it.

As such, this is another vital infrastructure area where participation by professional private players is imperative. But, even the mention of that sets of hysteric rhetoric from Socialists, so much so the government immediately tucks its tail between its legs and makes a hasty retreat. Doesn't look like there's salvation on this front in the forseeable future.

Admittedly, the skewed structurings of many of the PPP arrangements have also led to this impasse. But, that doesn't mean we throw the baby out with the bath water, and continue to suffer the status quo, even as water bottlers and tanker contractors make a killing, largely at the cost of the 'not-so well off' sections of the society.

Well, a regulatory authority has been proposed. Hopefully, it can atleast begin to bring these issues to focus to eventually find some viable solutions.

For more, click on http://privatised-water-s...

Muralidhar Rao