Reforms & service improvements through Private
Sector Participation (PSP) in the water sector in
Implement the strategy enunciated in the Urban
Drinking Water & Sanitation Policy of GoK.
Belgaum, Gulbarga &
supply in selected DZs
of Phase I cities.
Scaling up to the rest
of the areas in the
three cities and also
to more cities.
Core of the project is a performance based
contract with private sector firm for
rehabilitation, operation and management of
water service in small areas in Belgaum,
Gulbarga and Hubli-Dharwad (called
The role of private sector is limited to
demonstration of improved service. Assets
remain with ULBs, staff continue on ULB rolls
though working under PSP, no investment risk to
PSP, no role in tariff fixation & bill collection
(though the PSP would develop a computerized
billing & collection software system)
Fee based contract
This is the first such structured initiative in
India, coming to fruition after several years
Extensive consultations with all stake holders
during project preparation; ULB support by
resolutions already passed.
Extensive consultations and reviews for
drafting the contract/bid document; no
previous model document, even with Bank,
First service improvement, then tariff hike.
Operator Contract period: 3 ½ years
Single contract for all three ULBs
Single contract between five parties Vs
Distinct obligations for all parties Vs the
KUIDFC authorized to act on their behalf vis-
à- vis the Operator
Prime contractual responsibility – Operator
Fixed Remuneration: 15 equal quarters
12% of Performance Remuneration, if all
targets achieved, 18 months after effective
date; 28% of Performance Remuneration
spread over two year Operation &
Management Period, if targets achieved.
Penalties (max. 10%) for failure; termination.
Preparatory Period A - Survey, Design,
Estimation; Preparation of Draft/Final
Preparatory Period B - Selection of sub-
contractors (contract document
preparation, tender process management);
meeting performance targets for Preparatory
Demonstration of performance targets in
preparatory period B and O & M period.
Customer grievance redressal.
To demonstrate Continuous Pressured Water
Supply to every Customer in each
Metering of minimum of 90% property
Maintenance of computerized records of
Reduction of the losses to 30 litre / connection /
day / metre pressure in each DZs.
Operation on a 24 hour basis of the Customer SCs
Continuous Pressured Water Supply
Emergency stoppages shall not exceed 12
hours & max of 4 emergency stoppages in 12
100% of all property connections and public
stand-posts must be metered.
100% of Customer meters must be read and
billed every month.
Losses must be reduced to 20 litres per
connection / day / metre pressure by the end of
System connection requests must be fulfilled
within 7 days.
All Customer complaints to be responded to
within 24 hours and redressed within 7 days of
Leaks appearing at the surface must be repaired
within 24 hours of notification/observance.
8 Priority Investment works for augmenting bulk
water supply completed and commissioned.
Laying of distribution network in 5 Demo Zones –
House service connections - completed.
All the five DZs operationalized
Technical Assistance Studies - 3 completed, 3 in
Social Intermediation & Communication activities
are being conducted.