Singapore Experience in Water Financing


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  • There have been two key factors necessary for successful water management in Singapore.The first key factor is the strong commitment from our political leaders to rank water as among the top in our national agenda for the last 40 years. As I quote Mr Lee Kuan Yew, “ … This (water) dominated every other policy. Every other policy had to bend at the knees for water survival.”
  • SIWW
  • Singapore Experience in Water Financing

    1. 1. Sharing of Singapore’s Experience in PPP in water infrastructure projects Fong Han Loong Industry Development Department PUB Singapore
    2. 2. Biodata of Singapore Small Island State High population 5.3M High annual rainfall 2400 mm Small Land Area 710 km2 land area Average water demand 1.82 million m3/d (400 mgd)  100% potable water at tap & 100% sanitation
    3. 3. Singapore in our early days Difficult and Humble Beginnings
    4. 4. Water one of the National Agenda Water as oneof the top top National Agenda Water as oneasofthe top National Agenda Mr. Lee Kuan Yew Prime Minister of Singapore (1965 – 1990) at the Inaugural Singapore International Water Week (2008) “ … This (water) dominated every other policy. Every other policy had to bend at the knees for water survival.”
    5. 5. Managing the complete water cycle stormwater management rain treatment of used water sea reclamation of used water collection of rainfall in drains & reservoirs desalination treatment of raw to potable water supply of water to the population & industries collection of used water in sewers
    6. 6. Principles for Sustainable Water Supply Principles for sustainable water supply
    7. 7. Collect Every Drop of Rain That Falls on Singapore Local Catchment Water • 2/3 of Singapore’s land area is water catchment • Rainwater collected & stored in 17 reservoirs • Tapping on more urbanised catchment (Marina, Punggol/Serangoon) with integration to optimise yield
    8. 8. Collect Every Drop of Rain That Falls on Singapore • • More urbanised catchment & with integration of reservoirs  More challenging raw water quality • Upgrading needed  Technological advancement • Increasing need to have more effective pollution control in urbanised catchments
    9. 9. Recycle every drop Collect Every Drop of Used Water Kranji WRP Changi WRP Jurong WRP Ulu Pandan WRP
    10. 10. Deep Tunnel Sewerage System (DTSS) Deep Tunnel Sewerage System (DTSS) Deep tunnel and outfall completed Digesters Changi WRP
    11. 11. Recycle Every Drop of Water More Than Once NEWater Kranji NWF 17 mgd Ulu Pandan NWF 32 mgd Bedok NWF 18 mgd Changi NWF 50 mgd • Current NEWater capacity can meet up to 30% of demand • Ulu Pandan and Changi NEWater Plants supply NEWater to PUB under the Public- Private-Partnership (PPP) Approach.
    12. 12. Desalinated Water Tuaspring Desal Plant (artist impression) Singspring Desal Plant  TuasSpring Desalination Plant (Hyflux subsidiary)  70 mgd, 25 year DBOO plant  Officially opened by Prime Minister Lee Hsien Loong on 18 Sep 2013 Singspring Desal 30 mgd Tuaspring Desal 70 mgd
    13. 13. Public-Private Partnership (PPP)  Overview of Desalination and NEWater Design- Build-Own-Operate (DBOO) Projects  DBOO Project Structure  Payment Structure and Indexation  Challenges in Managing PPP project  Concluding Remarks 13
    14. 14. PPP – A form of Best Sourcing •Deliver projects and source services at the best value for money. Best Sourcing Build to Design Design & Build Traditional procurement of assets DBO ** DBOO * PPP • *DBOO: Design – Build – Own – Operate •**DBO: Design – Build – Operate 14
    15. 15. Case Studies 1st PPP Project - Singspring Desalination Plant    Date of Agreement : April 2003 Concession Company : SingSpring (Pte) Ltd Contract Term : 2005 – 2025 2nd PPP Project - Keppel Seghers NEWater Plant    Date of Agreement : January 2005 Concession Company : Keppel Seghers NEWater Dev (Pte) Ltd Contract Term : 2007 – 2027
    16. 16. Case Studies 3rd PPP Project - Sembcorp NEWater Plant   Date of Agreement: February 2008 Concession Company: SembCorp NEWater Pte Ltd Contract Term : 2010 – 2035  4th PPP Project - Tuaspring Desalination Plant    Date of Agreement: April 2011 Concession Company: Tuaspring Pte Ltd Contract Term : 2013 – 2038 16
    17. 17. PPP Procurement Process Prequalification of bidders Issue of Request for Proposal Clarifications Submission of the bids Evaluation Signing of the Agreement Financial Close /Implementation by Concession Company
    18. 18. DBOO Project Structure Step-In Agreement Financier Financing Agreement Equity Investor O&M Contractor PUB 2. Includes the Water Purchase Agreement, Third Party Agreements, Water Purchase Agreement Step-In Agreement. Shareholder’s Agreement O&M Contract 1. Project Structure Similar to International DBOO Projects Concession Company EPC Contract Energy Supply Agreement Land Lease EPC Contractor Energy Supplier Land Owner
    19. 19. Water Purchase Agreement • The Water Purchase Agreement (WPA) is the key agreement for the DBOO Scheme. • It prescribes the contractual and legal rights of both parties. • It contains the technical, commercial and legal terms and conditions for the supply and purchase of water. 19
    20. 20. Step-In-Agreement or Direct Agreement • Step-In Agreement is signed amongst PUB, Concession Company and the Lenders/Financiers. • Provides for the Lenders/Financiers to step-in and rectify concession company’s defaults. • In the case of NEWater DBOO projects, it also provides for PUB to step-in to ensure service continuity. 20
    21. 21. Payment Structure and Indexation Payment structure based on fixed capacity payment and variable output payment. Capital Recovery Charge Fixed Capacity Payment (Based on available capacity) Fixed O&M Charge (Subject to Singapore Consumer Price Index) Fixed Energy Charge Total Payments to Concession Company Variable O&M Charge Variable Output Payment (Based on actual quantity of water supplied) (Subject to Singapore Consumer Price Index) Variable Energy Charge (Subject to HSFO CST 180) 21
    22. 22. Technical Specifications • Concession Company primarily takes construction and operational risk. Therefore, they should be given significant latitude to provide innovative solutions to meet the public agency’s specified outcomes. • The technical specifications of the four DBOO projects are performance-based. 22
    23. 23. Challenges (1) Monitoring the Performance of the Concession Company Includes day-to-day monitoring of performance, assessing whether the contracted services are delivered to the specified standards and evaluating the remedial action taken by the Concession Company when performance standards are not met. (2) Managing the PPP Relationship Long term, interdependent nature of PPP project necessitates a good strong working relationship between the public agency and PPP provider. (3) Managing the Organisational Changes Changes in management control of the Concession Company can happen. Public agency’s interest must not be compromised despite the change in management . 23
    24. 24. Concluding Remarks • The project has so far gone well because the contract were balanced. A rigorous selection process was adopted to ensure that the selected DBOO partner has the capacity to take on the project. • Both have also adopted a partnership approach to reach a win-win implementation of the project. 24
    25. 25. Singapore International Water Week 1 – 5 June 2014 Sands Expo and Convention Centre, Marina Bay Sands
    26. 26. 1st to 5th June 2014 Water Solutions for Liveable and Sustainable Cities • The global platform to share and co-create innovative water solutions • Key highlights include Lee Kuan Yew Water Prize, Water Leaders Summit ,Water Convention, Water Expo and Business Forum & Business Forums • Held in conjunction with the 4th World Cities Summit and 2nd Clean Enviro Summit Singapore Year No. of attendees No. of countries participated Value of deals, tenders & investments announced No. of participating companies in Water Expo 2008 8,500* 79* S$380m 350 2009 10,000 82 S$2.2b 420 2010 14,000* 112* S$2.8b 514 2011 13,500 99 S$2.9b 604 2012 19,000+ 104+ S$13.6b 750 * Jointly with World Cities Summit + Jointly with World Cities Summit and Cleanenviro Summit Singapore
    27. 27. NEXT SIWW – Biennial Edition in 2014 Better synergistic integration with 3 Events – truly holistic and integrated solutions approach towards sustainable urban development Cross pollination of ideas and technologies, access to integrated solutions as well as outreach to a wider pool of policy makers, industry players and other key stakeholders
    28. 28. Highlights of the Water Convention 2012:       > 1,200 delegates from 60 countries 40 track-specialised parallel sessions 155 platform/oral presentations 176 poster presentations 4 Best Poster Awards (1 The New iPad & 3 iPod Touch) Keynote Speakers: Tan Gee Paw, PUB (Singapore); Glen Daigger, CH2M Hill (USA); Rita Colwell, University of Maryland (USA); Rob Skinner, Monash University (Australia)
    29. 29. Themes of the Water Convention 2014:  THEME 1: DELIVERING WATER FROM SOURCE TO TAP  THEME 2: EFFECTIVE AND EFFICIENT WASTEWATER MANAGEMENT  THEME 3: WATER FOR LIVEABILITY AND RESILIENCE  THEME 4: WATER QUALITY AND HEALTH  THEME 5: WATER FOR INDUSTRIES Highlights of the Water Convention 2014:  THE “HOT ISSUES” WORKSHOP Presentations and Panel Discussions on Emerging Issues BEST POSTER AWARD Attractive Prizes to be won! Presenters will have the opportunity to interact with the judges and delegates during a dedicated poster session Water Convention is jointly organised by:
    30. 30. We look forward to seeing you at SIWW 2014! 1 – 5 June 2014 For more information, please visit: Or email: Water Convention is jointly organised by: