Public private partnership sanitation sector

1. Need of ppp in sanitation

2. Public Private Partnership
~ Sanitation ~
Students :
Vaishnavi (111514004) Shraddha (111514022)
Piyush (111514011) Ishrat (111514042)
Akash (111514020)
Guide : Prof. Amruta Deshpande

3. What’s inside…???
1. Introduction
2. Demand and Supply gaps
3. Existing Policies
4. Challenges and Loopholes in Implementation
5. Need for PPP in Sanitation
6. PPP Models
7. Case Study

4. Introduction
• Sanitation is defined as safe management
of human excreta, including its safe
confinement treatment, disposal and
associated hygiene-related practices.
• According to World Health
Organization (WHO), ‘Sanitation
generally refers to the provision of
facilities and services for the safe
disposal of human urine and faeces.’

5. Demand and supply gap
• 4861 out of 5161 cities/towns do not have (even
partial) sewerage network
• 18 per cent of urban households defecate in the
open
• Lack of treatment of wastewater is costing India
$15 billion in treating water-borne diseases.
• The cost per DAY due to poor sanitation is
estimated to be Rs. 5400 crore and due to poor
hygiene practices at Rs.900 crore (HPEC 2011).
• Poor coverage of wastewater treatment – less than
25% of all waste water is treated.

6. Issues
 Poor Awareness
 Poor Institutional Arrangements
 Lack of Integrated City wide Approach
 Reaching urban poor
 Lack of Demand Responsiveness
Solution ?

7. • The main objective of the
scheme is to convert
latrines into low cost pour
flush latrines
• 911 towns had been
declared as scavenger free
• 11th Plan Allocation was
Rs. 200 crore; spending
has been low
• 676 projects costing Rs.
8626 crore
• 50% of project cost has to
be met from institutional
finance/capital market.
• 75% of the Central and
State shares would be
recovered & ploughed back
into the Revolving Fund
• The scheme was subsumed
under JNNURM
2000s
Policy
1. IDSMT
2. ILCS
Mega City Scheme
NUSP – CSP
JNNURM
1990s
1980s
JNNURM
• 4 sub-missions – UIG,
UIDSSMT , BSUP and
IHSDP
• CDP – identifying city’s
development priorities
through stakeholder
participation
• National Urban Sanitation
Policy (NUSP)

8. Policy
1. National urban sanitation policy
All Indian cities and towns become totally sanitized, healthy and liveable; and ensure and sustain good
public health and environmental outcomes for all their citizens with a special focus on hygienic and
affordable sanitation facilities for the urban poor and women.
NationalUrbansanitationpolicy
City Sanitation Plan
State Sanitation strategy
City Sanitation
Task Force
DPR
JnNURM
UIDSSMT
BSUP
• Toilet facility
• Sewerage
• Wastewater
• SWM
Strom water Drains
• Assign Responsibility , Resources and Capacities
• Set Standards
• Planning and Financing
• Monitoring and evaluation
• Capacity Building and Training
NationalRewardScheme

9. Initiatives by the Maharashtra Government
1. Sant Gadge Baba Abhiyan- (SGBA) Urban Sanitation Campaign
 Improvement in the field of public and individual cleanliness
 Making area open defecation free
 Management of waste water and solid waste management
 Enhancement of public health
 Ensuring 100% consumer survey and detection of illegal connections
 Regularization to ensure universal access to water supply and sanitation services
 Provide technical, managerial and financial assistance to the urban local bodies
 Improve infrastructure and achieving technical, financial and environmental sustainability of these services
2. Sujal Nirmal Maharashtra Abhiyan (SNMA)

10. Challenges and Loopholes
1) Social and Behavioural
 Resistance of people to take up a scheme common
for a group of people in village.
 Open defecation in India is considered a social
acceptable behaviour.
 Cleaning of toilets is a major issue as most people
think they are not responsible for its maintenance.
There is a lack of awareness about the impact of
unclean toilets and the diseases transmitted.
2) Programmatic
 Lack of capacity at state and district level for
complete implementation and coverage of
sanitation programmes.
 Inadequate survey and investigations, absence
of smooth flow of funds, land acquisition
problems and failure of officers to take
cognizance.
 Lack of social education .

11. Need of ppp in sanitation

12. Commercial viability
Politicalwilltoprivatize
telecom
transport
health
education
water & sanitation
electricity
Privatization spectrum

13. Objectives of ppp in sanitation
De-politicizing end-user charges
Smart risk allocation
Managing contingent liabilities
Building institutional capacities
(Political and Fiscal decentralization)

14. Role of different stakeholders in the process
• Public sector role as enabler (policy maker and regulator) and in some cases
provider cannot be substitute.
• Private sector is still a key player to provide the large amounts of capital and management
needed to sustain infrastructure development and economic growth.
• End-users play a significant role in the “political economy” required to sustain a successful
PPP Program.

15. Case study
URBAN WATER SECTOR REFORM IN SENEGAL
Background and Necessity of Reform-
 In 1995, only 54% of the urban population had access to safe water
 Greater autonomy in management process was needed to ensure improved productivity and operational
efficiency
 For this, some financing had to come from non-state sources
 These pointed towards involving private sector and to set up an enabling government framework for private
investment, increased efficiency and improved service delivery.

16. Details and Working of the Reform-
 In 1994, a steering committee of ministers of Water Supply and Sanitation was created.
A. Steering Committee recommendations:
 Two companies should be formed; State asset- holding
company
To retain the assets and the right to extract water
Operating company To produce and deliver water
 Stocks to be distributed as; 51% Stocks Owned by a professional operator
49% Stocks Owned by a joint venture of Senegalese investors and
former workers of Societe Nationale d’ Exploitation
Eaux du Senegal (SONEES)
 Restructuring of water tariffs to ensure full cost recovery – this is the “Social dimension” of the project.

17. B. Technical Sub- Committee recommendations:
 Drew up a list of functions for both companies
 “Payment of the private operator should be linked to network efficiency (measured through reduced volume
of Non Revenue Water and increased billing and collection efficiency)
 An affermage contract should be made (which means a private company is paid a fee which is the price
required by the operator to run the system of producing and selling a particular volume of water)
C. Objective of Urban Water Sector Reform:
To establish a long- term financial viability through increased efficiency and effectiveness
This was necessary for reasons like –
a. To alleviate the burden on the state of providing direct and indirect subsidies
b. To bring indebtedness to a compatible level
c. To attract private investors

18. D. Basis for defining the financial policy of Urban Water Sector Reform:
 Only support from state would be in the form of, on- lending of donor’s financing and no on- going
operating subsidies
 No excessive increases in water tariffs, increase would be gradual, initially at a constant rate and then upwards
or downwards
 The social tariff (subsidized rates of tariff for consumption under 10 cu. m per month) to ensure
affordability
Main Outcomes-
 More water to more people: Volume of water produced rose from 96.3 cu. Mm in 1997 to 114.6 cu. Mm
 Better Financial health: Financial status of the government improved
 Changes in tariff: The reform had an Increasing Block Tariff (IBT) structure, made up of –
Social tariff For consumption below 20 cu. m per 60 day period
Dissuasive tariff For consumption of greater than 100 cu. m per 60 days
period

19. Key factors for successful implementation-
Choice of affermage contract
Strong political will
Good leadership from all ministries

20. Case study
AGUAS ARGENTINAS (1993 – 2005)
9/20/2006
92%
100%
71%
92%
82%
100%
36%
63%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
La Paz Water La Paz Sanitation El Alto Water El Alto Sanitation
Start of Contract 2005

21. 9/20/2006
Infrastructures Realised (1997-2005)
Connections La Paz El Alto Total
Potable water 32 338 64 703 97 031
Sanitation 24 768 51 173 75 941
Networks installed La Paz El Alto Total
Potable water 289 km 683 km 972 km
Sanitation 322 km 263 km 585 km
People connected (1997-2004)
La Paz El Alto Total
Potable water 310,000 298,000 608,000
Sanitation 238,000 235,000 473,000

22. 9/20/2006
LYDEC (Casablanca, Morocco)
 Each year 20 to 25 million m3 of water are saved, i.e. equivalent to the needs of a
Moroccan city of 800,000 inhabitants.
The percentage of "Non-revenue Water" (commercial and physical losses) has
dropped from 38% to 28%.
The number of subscribers has risen from 440,000 to 710,000 (1997- year-end
2005).

23. 9/20/2006
Conclusion--- Overall, Results of PPP’s has been Mixed
Successes :
• Limeira, Brazil; Santiago, Chile; Casablanca; Jakarta; BOTT’s South Africa; China; Eastern Europe
• Management contracts in Johannesburg; Amman; Algiers
• (Also --- over 1,200 in US including Seattle Tolt and Cedar Projects)
Ended by Mutual Consent
• Atlanta and Puerto Rico  Poorly structured contract; inability of private sector to achieve needed efficiencies
and lack of government support for labor reforms
Ended in Disputes  however, significant improvements in water and sanitation have been
achieved
• Buenos Aires; Bolivia; Manila  dramatic currency devaluation producing unsustainable financial operation

24. 9/20/2006
• Common situation in developing countries
• POOR --- usually not connected but pay high price
• NON-POOR --- connected to the water network and pay a price below the
cost of the service
• MUNICIPAL BUDGET --- finances the operating deficit,
OR…
• WATER SYSTEM --- progressively falls into disrepair and ultimately collapses
Who pays for what ?

25. Challenges in ppp
INSTITUTIONAL LEVEL ORGANISATIONAL PROJECT LEVEL
 Lack of enabling PPP
legislation in several states.
 Inadequate legal
frameworks and safeguards.
 Financially viability
 The occupational and
organizational cultural differences
between the public and private
sectors
 Sharing risks and responsibilities
 Lack of political awareness

26. 9/20/2006
Actions Required by Local Governments
• Provide local / international Financing to insure the building of new infrastructures and the
Renewal/Replacement of existing facilities that have met their useful life
• Provide proper governance, high integrity and transparency of management
• Engage all stakeholders in process (particularly the local users)
• Implement affordable water tariffs
For the Poor:
• Provide financial assistance (subsidies) for new water and sanitary connections.
• Create affordable water services through cross subsidies in overall tariff structure.
Future of PPP

27. USERS
Expect Efficient
Service Delivery
Governance
Investment
Public
Private
Multilateral Agencies
Management
Local
Municipal
Public Private Partnership
Creating a Sustainable Sanitation Management Model

28. Thank You