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FINANCIALLY SUSTAINABLE ASSET MANAGEMENT PLAN WITH A FOCUS ON
IMPROVING SERVICE DELIVERY
Performance Assessment Systems (PAS) Project
1
Session : OPTIMISING SERVICE DELIVERY FOR UNIVERSAL ACCESS
Performance Assessment and Improvement
INDIA Census 2011: 377 million i.e. 31.2% of the total population lives in towns (No. of towns: 5,161 in 2001; 7,935 in 2011.)
As additional investments are being made in UWSS services, there is a critical need to increase accountability for service delivery. Shift in focus from infrastructure creation to delivery of service outcomes
Benchmarking is now well recognized as an important mechanism for introducing accountability in service delivery (involves measuring and monitoring of service provider performance on a systematic and continuous basis)
MoUD has launched the Service Level Benchmarking (SLB) initiative covering water, sanitation, solid waste management and storm water drainage
Background
Sustained benchmarking can help utilities to identify performance gaps and introduce improvements through the sharing of information and best
practices, ultimately resulting in better services to people
Missing Link – Asset Creation and Service Delivery Outcomes
Leakage in transmission main
WS distribution lines over storm drains
Scene in a town receiving intermittent supply
Issues of low pressure
Wells as supply source
Consumer metering
Missing Link – Asset Creation and Service Delivery Outcomes
Non functional community toilet
Septic tanks constructed on roads
Collection, transportation and treatment systems
Open defecationSullage disposed in open drainsCleaning overflowing and blocked drains
Need to ASSESS PERFORMANCE… TRACK INVESTMENTS and OUTCOMES
No/ little information on quality, service levels and financial sustainability of WSS services
Limited information available on access of urban poor households to water and sanitation services
Assessment of impact from past investments difficult
Standardized information system for comparable and regular situational analysisSupport improved allocation of resources and decision making
Grants from state and central governments can be linked to local performance
Asset Information Framework
Source: Saskatchewan MAIS Feasibility Study
Being declared by 13 States as per 13th Central Finance Commission requirements since 2010Partially attempted by ULBs and under Municipal Accounting reforms
1. Asset inventory and assessment will help ULBs in India to develop comprehensive view of future financial needs of assets and review their performance
2. Need Tools that can assist ULBs in Integrated Improvement Planning in above areas
New Project Development (and DPRs) need to be linked with SLBs
Scope exists for exploring technical alternatives and innovative financing
Paradigm Shift RequiredFrom Asset Creation to Asset Maintenance / Management
INVESTMENTS ASSET CREATION PERFORMANCE• Focus on the targets of water and sanitation has been on increasing service coverage• New Investments at Centre & States paying less attention to O&M, increasing the risk to performance outcomes
•Less attention on improving the operation and maintenance (O&M) of existing assets•Lesser expenditure on rehabilitation of exstg. infrastructure• Corresponding reduction in quality of service delivery
Inappropriate design
Lack of O & M
Performance failure
=
+
Sectors : Water supply, Waste Water, Solid waste Management & Storm Water
PAS
Annual Service delivery profile for
419
Cities in 2 States
covering 32 Key indicators and
89 local action indicators
Performance Assessment System
Old city area
Newly developingcolonies
Focus on Measurement, Monitoring & Improvement
PAS - Sector wise Indicators and LAIs
9Key Indicators
38Local action Indicators
9Key Indicators
26Local action Indicators
8Key Indicators
12Local action Indicators
4Key Indicators
13Local action Indicators
2Key Indicators
STORM WATER
WATER SUPPLY
WASTE WATER
SOLID WASTE
EQUITY
PAS
SUPPORT TO SLB NATIONAL STEERING
COMMITTEE MEETINGS
ORGANISE CAPACITY BUILDING WORKSHOPS
in over 400+
cities in two states
Activities asNational
Technical Support Partner
NATIONAL DATABASE FOR SLB BASELINE AND TARGETS
MoU with Ministry of Urban
Development on Roll out in ALL States
Sustaining Momentum of SLB Initiatives
The National Technical Support Partner will help mainstream SLB
exercise through trainings for regular State and City level monitoring systems and its
institutionalization.
11
PAS Efforts : From Performance assessment to Strategic Management of Assets by linking with Service Delivery Indicators
S t e p p i n g S t o n e t oA S S E T M A N A G E M E N T
Performance Measurement
Assessment on Asset Condition (Risks & Costs) Towards Integrated Asset Management
INFORMATION ENGINEERING MANAGEMENT
PERFORMANCE RISK COSTS
Largely ULBs in India are
at Performance measuremen
t Stage
Support to ULBs through various Stages of Asset Management Plan
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Asset Information
System
Support to select ULBs
for Development of models /
Tools
Decision-making, Actual
Implementation of Model
ISIP
Su
pp
ort
PIP
S
up
port
Stages already being partially supported under PAS assessment
Step 1 to 3 – Data oriented : ISIP SupportStep 4 to 5 – Methodology and policy issues
Step 6 – Actual Use of Info for Decision making by ULBs : PIP Support
13Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
‘PROJECT’ based approach
Starting point is an assessment of funding resources available – SUPPLY DRIVEN
Focus on developing INDIVIDUAL PROJECTS of various sectors
Oriented towards achieving
OUTPUTS
‘SERVICE’ based approach
Oriented towards achieving OUTCOMES
Focus on developing integrated SECTORAL SOLUTIONS
Starting point is measurement of current performance and local priorities – NEED DRIVEN
PAS Approach
Conventional Approach
Support to ULBs for Decision Making through PIP Model
IMP
RO
VE
ME
NT
P
LA
N
OP
TIO
NS
Performance Improvement Planning process
14Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
I. PERFORMANCE PRIORITIESSector Performance indicators used as the basis for assessing service performance
Actions (investments, policies, process changes) identified to achieve sector service objectives
II. ACTION PLANNINGImprovement Plan developed by designing actions for costs, phasing & revenue impact
Review Improvement Plan for impact on service performance
III. FINANCIAL PLANNINGKey financial decisions related to sources funds, tariffs and transfer of surplus to WSS
Review feasibility of Financing Plan for capital and operating expenditure
The emphasis in PIP Model is on moving away from ‘infrastructure investment plans’ to evolving ‘service improvement plans’ which include a wide set of actions including policy and process re-engineering.
PIP Model starts with measurement of current performance levels. This is followed by identification and design of a set of actions to improve performance. Phasing and financial implications of these actions are assessed and a financing plan is developed. The Model enables comparison of various options in terms of their impacts on service levels and on ULB’s financial capacity to operate and maintain new infrastructure.
Steps of Performance Improvement Planning
15Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
PIP Model is developed as
an excel based
spreadsheet to facilitate interactive
usage.
The structure of the Model
has been aligned with PIP planning process. It has three distinct
modules, each for a
stage of PIP planning process.
The chart alongside
denotes each sheet of excel
workbook and its flow of sequence.
BASE INFORMATIONWater supply, wastewater and solid waste; Municipal finance past trends
and future forecastsExcel sheet in PIP model : WSS info, Finance info, Municipal Finance
Step 1.: ASSESS CITY PRIORITIESReview trends of key performance indicators and peer comparison
Excel sheet in PIP model : Performance assessment
Step 2. SELECT IMPROVEMENT ACTIONSIdentify improvement actions to meet sector goals
Excel sheet in PIP model : Performance assessment
Step 3. DEVELOP IMPROVEMENT PLANDesign of actions in Improvement Plan – Phasing, quantity and costs
Excel sheet in PIP model : WS Plan, WW Plan, SW Plan
Step 4. REVIEW IMPROVEMENT PLANReview impact on service performance
Excel sheet in PIP model : Summary of Action Plan
Step 5. MAKE FINANCIAL DECISIONSSources of funds, Tariff structures & levels, Transfer surplus to WSS
Excel sheet in PIP model : Action Plan finance, Financing Plan
Step 6. REVIW FINANCING PLANReview feasibility of Financing plan for CapEx and OpEx
Excel sheet in PIP model : Financing Plan
DATA ENTRY
PERFORMANCE
PRIORITIES
ACTION PLANNING
FINANCIAL PLANNING
Snapshot of performance assessment in PIP model - Identify city priorities
16Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
Local Action Indicators - indicated through graphs
Key Performance Indicators - comparison against peer groupsBASE
INFORMATION
ASSESS CITY PRIORITIES
SELECT IMPROVEMENT ACTIONS
DEVELOP IMPROVEME
NT PLAN
REVIEW IMPROVEME
NT PLAN
MAKE FINANCIAL DECISIONS
REVIW FINANCING
PLAN
Snapsh
ot of
entire
structu
re for
Action
Plannin
g in PIP
model
17Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
Tabular boxes for
calibration of
improvement actions
Visual display of impact of activated actions
on performa
nce
Snapshot of time series analysis of performance in PIP model
18Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
BASE INFORMATI
ON
ASSESS CITY PRIORITIES
SELECT IMPROVEMENT ACTIONS
DEVELOP IMPROVEME
NT PLAN
REVIEW IMPROVEME
NT PLAN
MAKE FINANCIAL DECISIONS
REVIW FINANCING
PLAN
Approach to Financial Planning
19Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
Financial planning essentially involves a balancing act between meeting funding requirement from external and internal ULB sources of funds. It also assesses sustainability of these sources in long run.
BASE INFORMATI
ON
ASSESS CITY PRIORITIES
SELECT IMPROVEMENT ACTIONS
DEVELOP IMPROVEME
NT PLAN
REVIEW IMPROVEME
NT PLAN
MAKE FINANCIAL DECISIONS
REVIW FINANCING
PLAN
Snapshot of setting tariff structures in PIP model
20Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
Revision in tariffs for revenue enhancement to meet funding
requirement of capital expenditure, operating expenditure & debt
servicing.Tabular boxes for setting of tariffs
sector-wiseVisual display of impact on revenues
BASE INFORMATI
ON
ASSESS CITY PRIORITIES
SELECT IMPROVEMENT ACTIONS
DEVELOP IMPROVEME
NT PLAN
REVIEW IMPROVEME
NT PLAN
MAKE FINANCIAL DECISIONS
REVIW FINANCING
PLAN
Snapshot of CapEx and OpEx plan summary in PIP model
21Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
Snapshot of Operating plan
summary and tariff structures
Snapshot of Capital plan summary and external sources of
funds
BASE INFORMATI
ON
ASSESS CITY PRIORITIES
SELECT IMPROVEMENT ACTIONS
DEVELOP IMPROVEME
NT PLAN
REVIEW IMPROVEME
NT PLAN
MAKE FINANCIAL DECISIONS
REVIW FINANCING
PLAN
Snapshot of Performance Improvement Plan Summary in PIP model
22Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
BASE INFORMATI
ON
ASSESS CITY PRIORITIES
SELECT IMPROVEMENT ACTIONS
DEVELOP IMPROVEME
NT PLAN
REVIEW IMPROVEME
NT PLAN
MAKE FINANCIAL DECISIONS
REVIW FINANCING
PLAN
Sample of PIP Model Application – Comparison of PIP Options for a City
23Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad
Three sanitation options were simulated for a city in PIP Model to assess its impact on services and finances:
i)Conventional underground sewerageii)Settled sewer systemiii)On-site sanitation system
The Model was simulated to provide similar outreach of services with all sanitation options, the financial impact of these options varied considerably. A sample result of these results are shown here.
PIP options
Capital FinancesOperating Finances
Tariff increase required Base tariff = Rs.1465/HH/yr
Sources of funds (Rs cr) Average/yr (Rs
cr)
Grants
ULB funds
PrivateTotal
Capex Add.
Opex Add.
RevenueInternal funds
Debt
I) Business as Usual scenario with committed projects
42.6 9.1 - - 51.7 0.9 0.9 Rs. 2066
II) Proposal with only Wastewater Technology Options
A. Citywide Sewerage 76.1 9.9 7.0 1.5 94.5 2.3 1.2 Rs. 3602
B. Citywide Settled sewer 60.5 14.7 - 2.0 77.2 1.4 1.7 Rs. 2055C. On-site sanitation system 42.6 15.7 - 4.7 63 1.0 1.5 Rs. 2055
Annual tariff increment required
Model Application - City Sanitation Plans in Small Towns
In partnership with State Government of Maharashtra (Water Supply and Sanitation Department, State utility (MJP) and local Municipalities
Plans cover elimination of open defecation, safe excreta disposal, black and grey management and solid waste management
Wai Sinnar Hingoli
Ambajogai
Population 36,053 65,251 85,401 80,000
Area (sqkm) 3.6 51.4 16.7 10.2No. of prabhags / zones
5 6 7 7
No. of electoral wards
19 - 28 28
Households 7,580 13,112 15,573 14,517
Slum Population 2,140 5,445 30,974 20,258
% of slum population 5.9% 8.3% 36.3% 25.3%No. of slum settlements
2 8 9 12
Diagnostics of wastewater system – Sinnar
Collection/Storage
Reuse/disposal Treatment Conveyance
User interface
Provide treatment
sites
Avoid indiscriminate dumping
Avoid choking of drains through regular cleaning
Need to be designed as per prescribed standards
Avoid pollution of land and water
bodies
GREY WATER
BLACK WATER
428 ML/Yr
803 ML/Yr
426 ML/Yr
1228 ML/Yr
1.3 ML/Yr
Existing Links In the value chain
Missing Links In the value chain
Areas for Intervention in the value chain
Periodic cleaning needs to be monitored
Avoid soak pits where
ground water
tables are high
Wastewater Management- Citywide Conventional Sewer
PROPOSAL FOR WASTE WATER MANAGEMENT
Underground sewer in Old town area
(78km)
Sewage Treatment
Plant ( 15 MLD)
Underground Sewer for New
developing areas(112km),
Wastewater Management – Citywide Settled sewer
Settled Sewer for New
developing areas(112km),
Settled sewer in Old town
area (78 km)
Settled sewer connected to Interceptor
sewer (8km)
Waste Water Treatment
Plant ( 15 MLD)Suction
emptier truck
Septage treatment
facility
Soak pits for New
developing
Settled sewer in Old town
area (78 km)
Settled sewer connected to Interceptor
sewer (8km)
Waste water Treatment
Plant ( 15 MLD)Suction
emptier truck
Septage treatment
facility
Wastewater Management- Mixed option
Costs of sanitation options differ greatly!Sanitation
optionTotal
CapEx (Rs. mn)
Base case 230
Sewerage 1150
Settled sewer 620
On-site and settled sewer 480
Sanitation option
Total OpEx (Rs. mn/ annum)
Base case 80
Sewerage 150
Settled sewer 100
On-site and settled sewer 90
Capital expenditure on regular sewerage network is almost double the other options!
Capital expenditure
O&M expenditure
Financial implications – tariff increase required!
Conventional sewerage~450% increase
Other options ~150% increase
Thank YouFor more information on our Improvement Planning tools, please visit :
www.pas.org.in