24 x7 water in three states of karnataka

24X7 WATER IN THREE STATES OF KARNATAKA

By Ankur Upadhyay

MBA IFM

500021690

OBJECTIVE OF THE PROJECT Reforms & service improvements through

Private Sector Participation (PSP) in the water sector in Karnataka

Implement the strategy enunciated in the Urban Drinking Water & Sanitation Policy of GoK.

Phased approach.

TOWNS SELECTED Belgaum, Gulbarga

& Hubli-Dharwad (Phase I).

Continuous water 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.

KEY ASPECT OF THE PROJECT 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 Demonstration Zones).

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 of work.

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, to follow.

First service improvement, then tariff hike.

CONTRACT DETAILS Operator Contract period: 3 ½ years Single contract for all three ULBs Single contract between five parties Vs

Operator Distinct obligations for all parties Vs the

Operator KUIDFC authorized to act on their behalf

vis-à- vis the Operator Prime contractual responsibility –

Operator

CONTRACT PRICE DETAILS Performance based contract. Total contract price Rs. 28 crore (Rs.

22.40 crore Remuneration; Rs. 5.60 crore Max. Bonus).

60% of Rs. 22.40 crore i.e., Rs. 13.50 crore Fixed Remuneration:

40% of Rs.22.40 crore i.e., Rs.8.90 crore Performance Remuneration.

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.

WHAT THE OPERATOR WILL DO Preparatory Period A - Survey, Design,

Estimation; Preparation of Draft/Final Investment Programme.

Preparatory Period B - Selection of sub-contractors (contract document preparation, tender process management); meeting performance targets for Preparatory Period B.

Demonstration of performance targets in preparatory period B and O & M period.

Customer grievance redressal.

PERFORMANCE TARGETS

END OF IMPLEMENTATION To demonstrate Continuous Pressured Water

Supply to every Customer in each Demonstration Zone

Metering of minimum of 90% property connections.

Maintenance of computerized records of readings.

Reduction of the losses to 30 litre / connection / day / metre pressure in each DZs.

Operation on a 24 hour basis of the Customer SCs

DURING O&M PERIOD Continuous Pressured Water Supply Emergency stoppages shall not exceed 12

hours & max of 4 emergency stoppages in 12 months.

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 24 months

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 such complaint.

Leaks appearing at the surface must be repaired within 24 hours of notification/observance.

STATUS OF THE PROJECT 8 Priority Investment works for augmenting bulk

water supply completed and commissioned. Laying of distribution network in 5 Demo Zones –

completed. House service connections - completed. All the five DZs operationalized Technical Assistance Studies - 3 completed, 3 in

progress Social Intermediation & Communication activities

are being conducted.

15

Sl.No.

Demo Zone No. of Wards. HSCs Target

(Nos.)HSCs Achievement

(Nos.)

1. Belgaum (South) 5 3610 4216

2. Belgaum (North) 5 3510 3909

3. Hubli 4 6410 7258

4. Dharwad 4 4900 5581

5. Gulbarga 11 4020 3201

6. Total 29 22450 24165