Enabling Regulation for Investment in WaterInfrastructure 4.11.09. UWSS

7/31/2019 Enabling Regulation for Investment in WaterInfrastructure 4.11.09. UWSS

1/43

1

ENABLING REGULATION FOR

INVESTMENT IN WATER SECTOR

NEW DELHI

Dt.4.11.2009

PRESENTATION BY

A.K.MEHTA

JOINT SECRETARY (UD)MINISTRY OF URBAN DEVELOPMENT


2/43

2

Water Supply is a State Subject as per Article 246 of theConstitution. (Item 17 of the List-II State List under 7th

Schedule)

States/Urban Local Bodies (ULBs) are responsible forplanning, designing, implementation and operation &

maintenance of water services

Govt. of India formulates policy guidelines, provides

financial and technical assistance and facilitatesmobilization of external assistance

Preamble


3/43

Year Towns

(No.)

Cities/UAs (with

million+population)

Total

Population

Urban

Population

Urban

Population (%of Total)

Decennial

Growth (Urban)(%)

1951 2250 5 361.1 62.44 17.29 NA

1961 2365 7 437.2 78.94 17.97 26.43

1971 2590 9 548.2 109.11 19.90 38.23

1981 3378 12 683.3 159.73 23.31 46.14

1991 23 844.3 217.61 25.71

2001 35 1028.3 286.11 27.81

Demographic Challenges

Total Population : 1028.7 million (as per Census 2001)

Urban Population : 286.11 million (27.8%) (as per Census 2001)

Size of Urban Population

Increase in population: 217 m to 286 m (1991 to 2001)

Increase in number of Cities with Million Plus population : 23 to 35 (1991to 2001)

36.46

31.41

3768

5161

Urban Scenario in India


4/43

2nd largest urban system

globally

Urban population - 315 million

(2005)

Urban decadal GR : 25% - 30%

GDP contribution: 50% +

Urbansystem

People in slums : 60 mill +

Stressed urbaninfrastructure

Weak municipalities

Regulatory issues &

Financial

constraints

Urbanchallenge

Towns (nos.) : 5,161

Million + cities :

35

100,000 + cities:

423

Indian urban context


5/43


1-2 Million

2-5 Million

5 -8 Million

+ 8 Million

Spatial Distribution of Major Cities (as per 2001 Census):

Year Million

Plus

Cities

1901 1

1951 5

1991 23

2001 35


6/43

CENTRAL

GOVERNMENT

STATES STATES STATES

Urban Local Bodies

( Municipal

Government)

Urban Local Bodies

(Municipal

Government)

{

I

II

III

Urban Governance

3 Tier System of Governance ( the Urban Local Bodies are the 3rd tierin the Governance Structure)

Urban Local Bodies are part of the system of Local Self Governance(being the level of government closest to and addressing the needsof the citizens directly)

Constitution of India empowers the State Governments to transferthe functional and financial powers of all basic services including

water supply & sanitation


{

{


7/43

Millennium Development

Goals (MDG)

Target

MDG- Goal -4:

Reduce Child Mortality

Target -5:

Reduce by Two-Thirds, between 1990 and 2015,

under five mortality rate

( Diarrhoea is an important issue here, related to

water supply)

MDG-Goal -7:

Ensure Environmental

Sustainability

Target -9:

Integrate the principles of sustainable development

into country policy and programmes and reverse the

loss of environmental resources

Target -10:

Halve, by 2015, the proportion of people without

sustainable access to safe drinking water and basic

sanitation

Millennium Development Goals


8/43

The overall progress so far in Urban Areas across the country

Millennium Development Goals- Water and SanitationCoverage

The Progress in achieving access to water sources is on target

The Progress in achieving access to improved sanitation has to be speededup

Year

Population having

access to improved Drinking

Water Sources (%) Rural

Population having

access to improved Drinking

Water Sources (%) Urban

1990 65 85

2000 77 892006 86 91

Source: World Health Organisation

Water

Supply

Coverage

Year

Population havingaccess to improved sanitation(%) Rural

Population havingaccess to improved sanitation(%) Urban

1990 4 44

2000 13 63

2006 18 63Source: World Health Organisation

SanitationCoverage


9/43

Jawaharlal Nehru National Urban Renewal Mission- An Overview

Mission objectives:

Improve and augmenteconomic and socialInfrastructure of Cities

Provide Basic Services toUrban Poor and Security of

Tenure

Initiate wide ranging UrbanSector Reforms toeliminate legal,Institutional, Financial

Constraints Strengthen Municipal

Governments functioningaccording to the 74thConstitutional Amendment


10/43

JNNURM Objective: Universal, Safe and Sustainable Access to Water for Urban

Areas:

Need to:

Improve the efficiency of services.

Ensure universal access.

Sustainable services


11/43

Expected Outcomes of Urban Water Supply under JNNURM

Financially self-sustainable cities.

Universal Access to Basic Services.

City wide framework for Planning and Governance.

Modern Financial Management Systems.

Transparent & Accountable Government and Service Delivery.


12/43

Problems in WatSan sector Equity

Accessibility

Reliable qualityFor sewerage/sanitation the issues are

Accessibility

Meeting environmental effluent norms

12


13/43

Even in metropolitan areas, large number of people still do

not have access to water networks

13

Source: World Bank Study, May 2005

23% of households in Delhi & Kolkata, and 55% of householdsin Chennai are not connected to piped water supply These households thus rely on informal or non-revenue

generating sources of water, which may represent a netdrain to water providers


14/43

with large inequalities in availability of water occurring

WITHIN cities

14Source: Ministry of Environment and Forests and GoNCTD, Planning Department

LPCD in various parts of Delhi

509

462

337

277

274

202

201

148

130

74

31

29

Cantonment

NMDC

Karol Bagh

City

Civil lines & Rohini

West Delhi

Pahar Ganj.

New & South Delhi

Shah Dara

NajafGarh/Dwarka

Narela

Mehrauli


15/43

So what is the problem?

Distorted Investment & Lack of Accountability

Utilities are not maintaining their assets or focusing on

service quality OR susutainability: Inadequate financial resources due to low / no tariffs and limited

central / state support

High costs due to operational inefficiencies

Lack of autonomy

They are focused on obtaining grants for investmentrather than on service provision for which they are notheld accountable

15


16/43

Investments in WatSan sector

The plan allocations since Independence are given inthe next slide

16


17/43

GoI Plan Investments in UWSS

Plan SizeRs.Crore

Allocation for

UWSSRs.Crore %

I Plan(1951-56) 3360 43 1.28

II Plan (1956-61) 6750 44 0.65

III Plan(1961-66) 8573 89.37 1.04

IV Plan(1969-74) 15902 282 1.77

V Plan(1974-79) 39303.49 549.44 1.4

VI Plan(1980-85) 97500 1766.68 1.81VII Plan(1985-90) 180000 2965.75 1.65

VIII Plan(1992-97) 434100 5982.28 1.38

IX Plan(1997-2002) 859200 18624 2.1617


18/43

Investments so far made The GoI resource investments have been small &

always much less than required

The investments were geared towards moreinfrastructure without addressing service delivery &

improvement.

18


19/43

It is proposed to achieve the following coverage targets by the end of the

Eleventh Five Year Plan i.e. 31.3.2012

As per Millennium Development Goals (MDGs), of which India is one of thesignatories, the above targets are required to be achieved

Urban Water Supply 100% population coverage

Urban Sewerage andSanitation

100% population coverage (which

includes 70% population to be provided

with sewerage and sewage treatment and

30% population with low cost sanitation,

septic tanks etc).

19

COVERAGE TARGETS

.


20/43

XI plan fund requirements It is estimated to require Rs.1,29,237 crore investment

for water & sanitation for 100% coverage & nationalnorms for quantity alone

Bringing in quality into service delivery is expected torequire more investment especially SOFT

infrastructure- managerial approach into the sector

20


21/43

Lessons from other sectors Lessons to be learnt from Electricity & Telecom sectors

Both essentially mean service to Customers

Both backed by adequate legislation Cannot be placed under life-line services

Peculiar problems in Water & sanitation

Water, an essential need

Economic loss due to unsafe, inadequate water &Environmental cost due to bad sanitation notquantifiable easily

There is no Central Act on the subject 21


22/43

Importance of Benchmarking In order to bring water & sanitation services under

quantifiable & verifiable service level indicators,Ministry has formulated Standardised Service Level

Bench marks (SSLBMs)

22


23/43

Benchmarking- WS Coverage of WS connections (Popln)- 100%

Per capita availability of WS at consumer end- 135 Lpcd

Extent of metering of WS connections -100% Extent of Non-Revenue Water -15%

Continuity of Water Supply -24x7

Efficiency of redressal of Customer Complaints-80%

Quality of Water Supplied -100%

Cost recovery of in Water Supply Services- 100%

Efficiency in collection of Water Supply Charges- 90%

Number of persons receiving less than 70 Lpcd -0 23


24/43

Benchmarking-Sewerage Coverage of Wastewater network services-100%

Collection efficiency of Wastewater network-100%

Adequacy of Wastewater treatment capacity-100%

Quality of Wastewater treatment-100%

Extent of reuse & recycling of treated Wastewater-20%

Extent of cost recovery in Wastewater management-100%

Efficiency of redressal of Customer Complaints -80%

Efficiency in collection of sewerage charges -90%

Capacity utilization of Wastewater Treatment facility-100%

Coverage of Toilets- 100%

24


25/43

Benchmarking- MSWM Household level Coverage of Solid Waste management

services-100%

Efficiency of Collection of Municipal Solid Waste-100%

Extent of segregation of Municipal Solid Waste-100%

Extent of Municipal Solid Waste recovered / recycled-80%

Extent of scientific disposal of Municipal Solid Waste-100%

Extent of cost recovery in Solid Waste Management-services-100%

Efficiency of redressal of Customer Complaints-80%

Efficiency in collection of user charges-90% 25


26/43

Need for paradigm shift Instead of the old dispensation of more&more

infrastructure, Ministry wants infrastructuredevelopment with managerial tools for measurement

of quality in service delivery, sustainability ofoperation, conservation through demand sidemanagement etc.

Such a model of infrastructure demandsseparation of functions of policy, operation &regulation, all of which are invested in Stateinstitutions at present.

26


27/43

Approach to RegulationWith performance standards Competition on tariff setting

Removing barriers to competition & monopoly

In an essential service like water supply whereprovision of service is more sacrosanct than

recovery of costs, the Regulation of Investment &rate of return can be extremely slippery

27


28/43

Approach to Regulation There are no regulators in the WatSan sector as on

date similar to TRAI, ERAI

Only Maharashtra has adopted an Act on the subject

( Mah Water Resources Regulatory Authority Act 2005)

The Maharashtra Water Resources RegulatoryAuthority is primarily for planning & allocation of

State Water Resources & Water Tariff System Being a State sector, legislation has to be made by

States.

29


29/43

Functions of Regulator To ensure equity of access of service

Geographical dispersal of services

Adherence to SLBMs for quality of serviceViable tariff structure

Protection of consumer rights

30


30/43

Functioning of Regulator Independent & Autonomous

Accountable to scrutiny by legislature

Legally accountable Subject to Judicial review

31


31/43

Attributes of Regulator Coherence in policy- in tariff, subsidies & adequate

returns

Credibility & Predictability- credible throughlegislative backing that Investors will be able to recovertheir costs

Legitimacy & transparency- participatory form of

regulation & public disclosure of all costs etc

32


32/43

Threats to Regulatory

mechanism Political interference may be inevitable in water &

sanitation sector due to emotive potential

Adverse public perception on leasing / transfer ofpublic assets

Adverse opinions on what constitutes reasonablereturn rate

The political mine-field of tariff imposition

33


33/43

Way Forward Separation of functions in WatSan sector essential. It

has to be institutionalized by statute

Participatory approach to policy making

Initial opening of Sewerage & Sewage Treatment sectorto private players to generate public goodwill

Initial guarantee of investment by State Governments

rather than ULBs for financial security of investment

34


34/43

Examples of entry of Pvt sector In Naba Diganta Indl. Township Authority in Salt

Lake, Kolkata, a water & sewerage project underJNNURM is being implemented by JUSCO.

The company invests the share of State & ULB ( to theextent of 65% of cap. expdtr + GoI 35%= Rs.39 crore)

JUSCO will do O&M for next 30 years after

implementation. The State & ULB have laid down fixed tariff structure,

raised by 5% every 5th year.

Limitation- it serves only commercial areas ( IT hub)of

2.00 Sq.Km 35


35/43

WS Dist System in Nagpur

Under JNNURM, Nagpur is going in for 100% servicecoverage with PPP with an Spl. Purpose Company

NMC will retain ownership of all fixed assets required toprovide water supply services in Nagpur City.

The SPC will operate, maintain, repair, refurbish andprovide for replacing any granted facilities according tocommitted service levels targets.

Operator will be recovering user charges to meet theO&M cost.

NMC has proposed to raise its share of 30% through SPCparticipation(Rs. 116 cr.).GoI will fund50% & St Govt 20%.

36


36/43

Pitfalls in bringing PSP Govt of Maharahstra, MJP & Latur MC had proposed

to improve the citys chronically unreliable WSS withPSP

The project took off and much work was done inleakage reduction

But revenue collection could not be implemented dueto public resistance against metering.

It is notable that this is happening in a progressiveState like Maharashtra.

37


37/43

Investment in Water Sector Not just for additional infrastructure

Not just for augmenting capacities

But the basic requirement is: Investing in better management

Implementing quantifiable services for quantity,quality, duration, redressal etc.

38


38/43

Investment in Water Sector Precedents in Electricity sector

Unbundling of service mechanism

Investing in last mile connectivity eg.Telecom sector

39


39/43

Investment in Water Sector Synergy can be developed with Electricity sector for

Metering & meter reading

Bill delivery Bill collection

Saving on costs and reducing customer stress

40


40/43

Investment in Water Sector Learning from telecom sector---

Widening customer base Reduce entry barriers

Simplify procedures

IVRS for complaint redressal

Multiple options of bill payment

41

I t t i W t S t E


41/43

Investment in Water Sector- EgNagpur MC

Investing in last mile-upgrading delivery

Reliability of water supply with 24x7

Benefits:

Water saved by ensuring delivery-measurement-higher

tariff on wastagesWomen & Children rescued from drudgerysocial&

economic development

42


42/43

Investment in Water Sector-The need is for investments in

Service delivery, reliability & measurement forsustainable water supply services

PVT & Public sectors can enter with

Management contracts Point of delivery operations such as meter reading,

bill delivery &collection

Take up stand alone components such as WTPs,

Pumping Stations, Long distance bulk transfer etc.

43


43/43

THANKS

Date post:	05-Apr-2018
Category:	Documents
Upload:	jbravinder
View:	218 times
Download:	0 times

Enabling Regulation for Investment in WaterInfrastructure 4.11.09. UWSS

Documents