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Alandur Sewerage ProjePublic Private Partnership
Group 1, Section A
Amitesh | Narahari | S Giridharan | Pradeep | Subodh
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PPP
Public Private Partnership Alandur Sewerage Project
ALANDUR- BACKGROUND
Brief:
Located 14Kms from Chennai (Kanchi D
Comes under Chennai Metropolitan de
(CMDA) with a population of 1,65,000
25% of population living in Slums
Situation Prior to PPP
No sewerage system for 1.65 lakh peop
Unregulated disposal of sewerage from
Storm water + Sewage stagnation in op
Contamination of ground water
Mosquito Menace
Objectives:
To improve the standard of living of the residents of Alandur
Toprovide the most essential basic facility to all the residents of the town
To eradicate the mosquito menace
To avoid the recurring expenditureon septic tank cleaning
To avoid ground water contamination
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PPP MAJOR WORK COMPONENTS
Sewage Network Pumping station +
Designed for 3,00,000 population (for 2027) in 2-Phases
Phase-1 : Plant to treat 12 Million Liters per Day (MLD)
By Phase-2 : Ultimate capacity of 24MLD
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PPP PPP STRUCTURE
TNUDF
Alandur MunicipalityGoTN
TUFIDCOCitizens/Community
O&M Contract
EPC Works Contract
BOT Concession
AgreementSPV
Loan
Loan/GrantSewage Tariff -
Sewerage
Connection
Installation fee
TUFIDCO - Tamil Nadu Urban Infrastructure
TNUDF - Tamil Nadu Urban Development Fu
SPV- FirstSewerage Treatment Plant Pvt Ltd(FSTPPL)was created, Land was provided by Municipality t
2-stage bid process, key criteria being lowest cost for the sewerage system (90%) and lowest lease
(10%)
Out of 13 bidders, The Project was awarded to IVRCL Infrastructures Ltd. (Had experience in similar proje
IVRCL- Civil Works
Va Tech Wabag Technologies- Electro Mechanical Works (14 yrs)
5 Year
Maintenance
14 Years (till 2019)
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PPP TIME LINE
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PPP FINANCING INFORMATION
Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL): The State Asset Management Company
Tamil Nadu Urban Infrastructure Development Corporation (TUFIDCO): The agency to coordinate, supervise and s
the project, was also responsible for detailed studies on the feasibility of the project
Crores Percentage Remarks
Grant from TNUIFSL 3 7%
Loan from TNUIFSL 6 15% 16% per Annum
Loan from TUFIDCO 16 39% 5% per Annum Interest rate
Grant from TUFIDCO 1 2%
Deposits from public 12.4 30% Domestic (5000 per connection) + Commercial (10000 PC) +
Interest from deposits 2.46 6%
Total 40.86 100%
Finances:
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PPP PUBLIC CONTRIBUTION
Tariff Willingness to Pay Campaigning
Residential:
One time Deposit 5k/Unit
Monthly: 150Rs/Unit
159, 169, 178, 180, 180.
(Rates increasing @6%/Year
and stabilizing)
Commercial:
One time Deposit 10k/HH
Monthly: 450Rs/Unit
477, 506, 536, 540, 540..
(Rates increasing @6%/Yearand stabilizing)
Industrial:
One time Deposit 10k/HH
Monthly: 750Rs/Unit
795, 842, 893, 900, 900.
(Rates increasing @6%/Year
and stabilizing)
Survey on 10% sample
Strong support to the
project from public
But, Very low willingness to
pay
Condition by TNUIFSL to
collect OTD from at least
10,000 HHs (to access the
commitment)
Active Canvassing
Educating the citizens,
welfare organizations
Support from media
We for ourselves
campaign
2-Installment Payments
Transparency and opinion
seeking in every step
130
tim
By 2
for
Mu
O&
the
500
con
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Risk Primary Risk Bearer Remark
Delay in obtaining permits
Alandur Municipality
(AM), Private developer
The AM took responsibility under the Contract for key approvals, including road
environmental clearances
The developer was responsible only of the works related approvals
Land acquisition
Government AM took the responsibility for directly acquiring the land for the construction of
Payment Risk (Capital Cost for Sewerage
System)Government
The key risk in respect of payment of capital cost for the sewerage system was tto be met through public contribution
The risk was addressed effectively through extensive public consultation and int
The collection exceeded initial plans and the AM did not have to draw upon the
Payment Risk (STP Annuity Payment) Government
Annuity Payment for the STP was contractually bound over the period of lease b
Based on willingness to pay survey, the Government had agreed to extend sub
cost
Technology Risk Government
There are no clear references to this in the agreement.
The design was prepared at the bidding stage and thereafter accepted by the B
Since the project was implemented without significant delays, the technology r
time did not arise
Financial Risk
Government & Private
Developer
The AM bore the financial risk in respect of the Sewerage System while the PrivSTP
The AMs capital investment plan was planned even before the bidding process,
of the capital cost that was to come from public contribution towards connectio
For STP, the Private Developer was able to raise the capital funds effectively as r
annuity payments as assured by the AM
Design Risk Private developer
Design for the Sewerage System as well as the STP was developed by the AM as
The same was provided to the developer as part of the RFP document
The Bidder had the option to comment on the design provided and suggest cha
However, after the submission of bids, the Contractor was required to adhere to
PPP KEY RISKS ADDRESSED
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Risk Primary Risk Bearer Remark
Construction Risk
Private developer
The Construction Contract for the underground Sewerage System specified st
to the payment along with a one year defect liability period to address any co
Liquidated damages were prescribed in the contract for every day of delay lim
For STP, the construction risk was borne by the Developer as the investment w
The STP was constructed in two phases. The defect liability period for the STP
period of 14 years, during which the developer operated and managed the fa
Construction cost over runs
Private developer
The construction of the Sewerage System was based on detailed bill of quanti
cost over-runs
For STP, though the developer bore the construction cost, the design and cost
determined at the bid stage.
As the construction cost was also the basis of the annuity payment determine
controlled.
Since the construction did not experience any time over-runs, cost over-runs
project was implemented as per the original cost estimation
Operations Risk
Private developer
The performance parameter mainly referred to the treatment of sewage as fe
period
The Agreement prescribed a fine if the treated effluents failed to meet the re10,000 per day of default
PPP KEY RISKS ADDRESSED
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Parameter Before PPP After PPP
Urban service
No sewerage system for a population of 165,000120 km of underground sewerage system
STP of 24 MLD
Water borne sanitation facilities, septic/holding tanks for disposal of
night soilUnderground sewerage system with direc
household
Unregulated disposal of sewerage in storm water drainage and low
lying areasModern sewerage treatment plant design
standards.
Environment and Health
Open storm water drains stagnating in outer areas of town
environmental and health hazardUnderground sewerage system has elimin
related diseases for the citizens of Alandu
Contamination of underground water sources due to open drainsAlmost 100% eradication of ground water
underground sewerage system and waste
Public participation
Rs. 8 crores out of the capital cost of Rs. 3
contribution
Collection of sewerage fee from the publi
amounting to a weighted average of Rs. 7
to Rs. 2 crores per month and covers both
costs of the AM
PPP IMPACT OF PPP
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Beneficiary participatory approach
29% of the project cost was garnered from public contributions, the most outstanding aspect and learning from the ASP
Stakeholder involvement and interdepartmental coordination
ASP established that close involvement of all stakeholders/departments at the key decision-making stages of the project, as also for
critical to ensuring that the project stays on-track
Political will and strong decision making, especially at the grass-root levelPolitical leadership and strong advocacy for the project provided by the chairman and council of the municipality proved to be critic
Acceptance of fiscal discipline
TNUIFSL required the municipality to establish a separate sewer account distinct from the general budget of the municipality. Also, c
between the municipality and the BOT operator forced the municipal government to ensure timely payment for management and w
Implementing an effective fee system
Municipal council, through its rigorous public outreach measures, managed to impose reasonable levels of connection charges and
Assurances on payment to the Private Sector Participant
Municipality agreed to provide the BOT operator a minimum level of income by accepting the take or pay condition in the Agreem
Access to finance for the municipality
Projects success stemmed from concession financing and subsidies from the Government and public-private entities, established spneeds of the municipalities without access to private capital
Technical and financial assistance
Expertise needed to plan and manage the technical and financial aspects of the project far exceeded the capacity of the municipalit
Chennai Corporation, TNUIFSL , Tamil Nadu Water supply and Sewerage Board, Chennai Metropolitan Water Supply and Sewerage B
in structuring the project
Transparency in bidding and contracting procedures
Right from inception to selection of contractor/operator and implementation, transparency was critical to providing the necessary a
bidders on the professional approach of the municipality
PPP KEY LEARNINGS
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Thank You
Public Private Partnership Alandur Sewerage Project
Amitesh | Narahari | S Giridharan | Pradeep | Subodh