Public Private Partnership Alandur Sewerage

8/10/2019 Public Private Partnership Alandur Sewerage

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Alandur Sewerage ProjePublic Private Partnership

Group 1, Section A

Amitesh | Narahari | S Giridharan | Pradeep | Subodh


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PPP

Public Private Partnership Alandur Sewerage Project

ALANDUR- BACKGROUND

Brief:

Located 14Kms from Chennai (Kanchi D

Comes under Chennai Metropolitan de

(CMDA) with a population of 1,65,000

25% of population living in Slums

Situation Prior to PPP

No sewerage system for 1.65 lakh peop

Unregulated disposal of sewerage from

Storm water + Sewage stagnation in op

Contamination of ground water

Mosquito Menace

Objectives:

To improve the standard of living of the residents of Alandur

Toprovide the most essential basic facility to all the residents of the town

To eradicate the mosquito menace

To avoid the recurring expenditureon septic tank cleaning

To avoid ground water contamination


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PPP MAJOR WORK COMPONENTS

Sewage Network Pumping station +

Designed for 3,00,000 population (for 2027) in 2-Phases

Phase-1 : Plant to treat 12 Million Liters per Day (MLD)

By Phase-2 : Ultimate capacity of 24MLD



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PPP PPP STRUCTURE

TNUDF

Alandur MunicipalityGoTN

TUFIDCOCitizens/Community

O&M Contract

EPC Works Contract

BOT Concession

AgreementSPV

Loan

Loan/GrantSewage Tariff -

Sewerage

Connection

Installation fee

TUFIDCO - Tamil Nadu Urban Infrastructure

TNUDF - Tamil Nadu Urban Development Fu

SPV- FirstSewerage Treatment Plant Pvt Ltd(FSTPPL)was created, Land was provided by Municipality t

2-stage bid process, key criteria being lowest cost for the sewerage system (90%) and lowest lease

(10%)

Out of 13 bidders, The Project was awarded to IVRCL Infrastructures Ltd. (Had experience in similar proje

IVRCL- Civil Works

Va Tech Wabag Technologies- Electro Mechanical Works (14 yrs)

5 Year

Maintenance

14 Years (till 2019)



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PPP TIME LINE



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PPP FINANCING INFORMATION

Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL): The State Asset Management Company

Tamil Nadu Urban Infrastructure Development Corporation (TUFIDCO): The agency to coordinate, supervise and s

the project, was also responsible for detailed studies on the feasibility of the project

Crores Percentage Remarks

Grant from TNUIFSL 3 7%

Loan from TNUIFSL 6 15% 16% per Annum

Loan from TUFIDCO 16 39% 5% per Annum Interest rate

Grant from TUFIDCO 1 2%

Deposits from public 12.4 30% Domestic (5000 per connection) + Commercial (10000 PC) +

Interest from deposits 2.46 6%

Total 40.86 100%

Finances:



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PPP PUBLIC CONTRIBUTION

Tariff Willingness to Pay Campaigning

Residential:

One time Deposit 5k/Unit

Monthly: 150Rs/Unit

159, 169, 178, 180, 180.

(Rates increasing @6%/Year

and stabilizing)

Commercial:

One time Deposit 10k/HH

Monthly: 450Rs/Unit

477, 506, 536, 540, 540..

(Rates increasing @6%/Yearand stabilizing)

Industrial:

One time Deposit 10k/HH

Monthly: 750Rs/Unit

795, 842, 893, 900, 900.

(Rates increasing @6%/Year

and stabilizing)

Survey on 10% sample

Strong support to the

project from public

But, Very low willingness to

pay

Condition by TNUIFSL to

collect OTD from at least

10,000 HHs (to access the

commitment)

Active Canvassing

Educating the citizens,

welfare organizations

Support from media

We for ourselves

campaign

2-Installment Payments

Transparency and opinion

seeking in every step

130

tim

By 2

for

Mu

O&

the

500

con



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Risk Primary Risk Bearer Remark

Delay in obtaining permits

Alandur Municipality

(AM), Private developer

The AM took responsibility under the Contract for key approvals, including road

environmental clearances

The developer was responsible only of the works related approvals

Land acquisition

Government AM took the responsibility for directly acquiring the land for the construction of

Payment Risk (Capital Cost for Sewerage

System)Government

The key risk in respect of payment of capital cost for the sewerage system was tto be met through public contribution

The risk was addressed effectively through extensive public consultation and int

The collection exceeded initial plans and the AM did not have to draw upon the

Payment Risk (STP Annuity Payment) Government

Annuity Payment for the STP was contractually bound over the period of lease b

Based on willingness to pay survey, the Government had agreed to extend sub

cost

Technology Risk Government

There are no clear references to this in the agreement.

The design was prepared at the bidding stage and thereafter accepted by the B

Since the project was implemented without significant delays, the technology r

time did not arise

Financial Risk

Government & Private

Developer

The AM bore the financial risk in respect of the Sewerage System while the PrivSTP

The AMs capital investment plan was planned even before the bidding process,

of the capital cost that was to come from public contribution towards connectio

For STP, the Private Developer was able to raise the capital funds effectively as r

annuity payments as assured by the AM

Design Risk Private developer

Design for the Sewerage System as well as the STP was developed by the AM as

The same was provided to the developer as part of the RFP document

The Bidder had the option to comment on the design provided and suggest cha

However, after the submission of bids, the Contractor was required to adhere to

PPP KEY RISKS ADDRESSED



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Risk Primary Risk Bearer Remark

Construction Risk

Private developer

The Construction Contract for the underground Sewerage System specified st

to the payment along with a one year defect liability period to address any co

Liquidated damages were prescribed in the contract for every day of delay lim

For STP, the construction risk was borne by the Developer as the investment w

The STP was constructed in two phases. The defect liability period for the STP

period of 14 years, during which the developer operated and managed the fa

Construction cost over runs

Private developer

The construction of the Sewerage System was based on detailed bill of quanti

cost over-runs

For STP, though the developer bore the construction cost, the design and cost

determined at the bid stage.

As the construction cost was also the basis of the annuity payment determine

controlled.

Since the construction did not experience any time over-runs, cost over-runs

project was implemented as per the original cost estimation

Operations Risk

Private developer

The performance parameter mainly referred to the treatment of sewage as fe

period

The Agreement prescribed a fine if the treated effluents failed to meet the re10,000 per day of default

PPP KEY RISKS ADDRESSED



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Parameter Before PPP After PPP

Urban service

No sewerage system for a population of 165,000120 km of underground sewerage system

STP of 24 MLD

Water borne sanitation facilities, septic/holding tanks for disposal of

night soilUnderground sewerage system with direc

household

Unregulated disposal of sewerage in storm water drainage and low

lying areasModern sewerage treatment plant design

standards.

Environment and Health

Open storm water drains stagnating in outer areas of town

environmental and health hazardUnderground sewerage system has elimin

related diseases for the citizens of Alandu

Contamination of underground water sources due to open drainsAlmost 100% eradication of ground water

underground sewerage system and waste

Public participation

Rs. 8 crores out of the capital cost of Rs. 3

contribution

Collection of sewerage fee from the publi

amounting to a weighted average of Rs. 7

to Rs. 2 crores per month and covers both

costs of the AM

PPP IMPACT OF PPP



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Beneficiary participatory approach

29% of the project cost was garnered from public contributions, the most outstanding aspect and learning from the ASP

Stakeholder involvement and interdepartmental coordination

ASP established that close involvement of all stakeholders/departments at the key decision-making stages of the project, as also for

critical to ensuring that the project stays on-track

Political will and strong decision making, especially at the grass-root levelPolitical leadership and strong advocacy for the project provided by the chairman and council of the municipality proved to be critic

Acceptance of fiscal discipline

TNUIFSL required the municipality to establish a separate sewer account distinct from the general budget of the municipality. Also, c

between the municipality and the BOT operator forced the municipal government to ensure timely payment for management and w

Implementing an effective fee system

Municipal council, through its rigorous public outreach measures, managed to impose reasonable levels of connection charges and

Assurances on payment to the Private Sector Participant

Municipality agreed to provide the BOT operator a minimum level of income by accepting the take or pay condition in the Agreem

Access to finance for the municipality

Projects success stemmed from concession financing and subsidies from the Government and public-private entities, established spneeds of the municipalities without access to private capital

Technical and financial assistance

Expertise needed to plan and manage the technical and financial aspects of the project far exceeded the capacity of the municipalit

Chennai Corporation, TNUIFSL , Tamil Nadu Water supply and Sewerage Board, Chennai Metropolitan Water Supply and Sewerage B

in structuring the project

Transparency in bidding and contracting procedures

Right from inception to selection of contractor/operator and implementation, transparency was critical to providing the necessary a

bidders on the professional approach of the municipality

PPP KEY LEARNINGS



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Thank You


Amitesh | Narahari | S Giridharan | Pradeep | Subodh

Documents

Public Private Partnership Alandur Sewerage