Peeking into the challenges in managing waste water in the tier-2/3 cities in India

In the recently organized 2nd Annual India Utility Knowledge and Networking Conference, experts discussed the Business and Technology Innovations that are the need of the hour for scaling up the Waste Water Management in the tier-2/3 cities in India.

While access to safe drinking water is one challenge that remains to be solved, a corollary and equally significant and impacting health hazard is rising from accumulating municipal & industrial waste water and its untreated disposal. The major issues impacting waste water management are -

• Cost effective Waste Water Treatment Technology; 
• By-products use and market development; 
• Economics and price adoption for Industrial use of treated waste water vs. fresh water; 
• Public Private Partnerships structuring with clear roles and responsibilities, etc. 

In most ULBs, the reforms are yet to come in. There is still no answer for what to do with recycled water post primary treatment. Often such water is released in nearby water bodies as dissolved impurities in this water can be treated only through RO technology, which is expensive. 

Consider a typical Indian tier 2/3 city with population of 100,000 and about 120-135l water/person/day.  On an average, 80% of the supplied water returns as sewage. At this rate, the city would generate 10mld of sewage per day. 

Experts suggested that installing a 10mld capacity plant with the best in country technology would cost around Rs. 100-130 million i.e. Rs.1300/person investment required. Assuming a 10yrs life of one such plant, the costs come to Rs.130/person/year. This cost plus cost to collect water, suction pump etc put together, recycled water is available at Rs.40/person/month which is about Rs.1.35/person/day. 

If the Government of India considers a country wide investment in waste water treatment, the amount to be raised by government it amounts to (Rs.1.35 x total population of India) per day, which is a huge.

Commercialization of waste water can turn out to be a very useful step in encouraging more industries involved towards treating the waste water. Out 8% of total water supplied to industry, 70% goes to power plants. For Municipal corporations, OpEx still remains an issue since the CapEx is taken care by schemes like JnNURM. Of the total OpEx, 70-80% is the power cost. Without power, it is simply garbage in- garbage out. If power cost is taken care by methods like Group Captive Power Plants (GCPP), the Sewage Treatment Plants could become financially sustainable.

In one such initiative to commercialize and reuse the waste water, Maharashtra State Power Generation Company Limited (Mahagenco) and Nagpur Municipal Corporation (NMC), are jointly installing a 130mld Waste Water Treatment Plant in Nagpur. The NMC will allocate land and subsidy under the JnNURM program and Mahagenco will pay balance amount for project and bear opex. The recycled water would be supplied to Koradi Thermal Plant.

According to Central Pollution Control Board, in tier 2 and 3, only about 20% of total waste water is being treated. Less than 20% WWTPs are being utilized at their 100% capacity i.e.only 5-10% capacity is utilized to treat water. 

This calls for more time being spent on understanding the engineering and technology so as to make the waste water treatment business in India more viable.

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This panel had participation from Jal Board, State Government,. Technology Providers and Project Developers who shared their experiences, and brainstormed to build consensus on shaping an effective and integrated PPP models in Municipal Waste Water Management.

Also read: 

http://timesofindia.indiatimes.com/city/nagpur/Mahagenco-to-give-Rs-15cr-to-NMC-for-waste-water-project/articleshow/3446853.cms

http://timesofindia.indiatimes.com/city/nagpur/660MW-Koradi-unit-countrys-biggest-to-run-on-sewage-water/articleshow/24728967.cms

Interview with Col. Gowardhan - HR Director, OCW on the key challenges and future plans for 24 x 7 water supply project at Nagpur

The interview showcases the key challenges and future plans of the 24x7 water supply operator for the city of Nagpur, as told to Mohammad.Sufiyan@pManifold.com

Nagpur 24x7 water supply project is the first urban water supply project in India. Could you, at the outset, help us understand the current status of the Project?

Nagpur comes along as the first big urban water supply project on Public-Private-Partnership (PPP) model. In this Project, Orange City Water Pvt. Ltd. (OCW) is to upgrade city water distribution network through rehabilitation of the existing network and laying new network to achieve 24x7 uninterrupted water supply to city of Nagpur.The work is in progress under JnNRUM scheme. The plan agreed and approved for 5 years and in last 18 months OCW has been able to lay about 250 km of pipe line and done more than 26000 new service connections. One zone is already operating on 24x7 basis and few areas will be shortly added to 24x7 list as work in 3 areas is nearing completion.  Further to that, OCW is currently working in almost 30% of the city to improve the water mains network.

Rs.400 Cr Water Supply Projects up for tendering in Baneta and Bikaner; L&T and SPML win projects in Water Space, IUKAN 2014 - October 2013

This is a newsletter sent to mailing list of pManifold, sharing Water Distribution Industry opportunities and updates.

Some of the recent updates in the Water Distribution space are shared below. We hope you'll find the content informative and useful.

New Water Project Highlights in Sep-2013

• L&T Construction has won orders in water segment worth Rs 1,141 Cr. more... 
• SPML Infra bagged order worth Rs.772.20 Cr. more... 
• Shriram EPC(SEPC) has won orders worth Rs. 389 Cr. from Tamil Nadu and Rajasthan municipal corporation more... 
• Bids invited for Baneta Water supply scheme - estimated contract value of Rs.75 Cr. more...
• Bids invited for Bikaner Water supply project - estimated contract value of Rs.298 Cr. more...

Top News Highlights of Sep-2013

• Asian Development Bank (ADB) is likely to provide $400 Million (Approx Rs.2488.2 Cr.) loan to improve the water and sanitation system in Kolkata more...
• Asian Development Bank has recently sanctioned 130 Cr. To improve water distribution systems in Agartala more... 
• Now “Water ATM machines” to bring reforms in life of peoples in India more...

Articles of Sep-2013

• Why urbanization is a problem all over Asia? more... 
• Poor water supply system becoming a massacre for Delhi’s poor people more... 
• Goa to achieve self sufficiency by 2015 more...

  Upcoming Water Events

• India’s Leading Trade fair for Water, Sewage, Refuse and Recycling 24-26 October 2013, Mumbai, India
• India water forum 2013, 28-30 Oct 2013, New Delhi
• India Water Expo  21-23 November 2013, Chennai, India
• 11th EverythingAboutWater Expo 2014  9-11 January 2014, Delhi, India
• IUKAN 2014 12-13 February 2014, Delhi, India
• India Water Expo  Ahmadabad, 7-9 March 2014, India

Case Studies

• If you are prospecting to enter in Water Utilities as Operator or Service Provider or Vendor - learn some best practices through case studies from pManifold (Water Utility Case Studies)

If you would like to know more about us, please contact at mohammad.sufiyan@pmanifold.com

Case Study: Willingness To Pay for Water

There has been an uncertainty around the success of the PPP models in the Indian Utility Market. While some of the fears are well placed, I think that one of the best ways to counter the apprehensions over the revenue projections of the operators, is the Willingness-to-Pay (WTP) analysis of the consumers in question.

The WTP analysis provides a localized and a  stratified consumer response across the socio-economic categories, if well planned and executed. The figure below shows a typical boxplot drawn for a consumer analysis done for one of our clients.

Box-Plot for a typical WTP Study

The client - a private PPP Water Utility operator - had taken over the water supply project of a town with approx 2 lacs consumers. The operator had approached a leading institution for financing the over INR 1000 Cr.

The institutional investor had his apprehensions about the revenue projections and had approached us to do the top-line validation through a WTP Survey and Analysis.

The existing water supply condition of the city was very poor and residents were facing utmost difficulties in meeting their requirements through the ULB supplied water.

We designed the WTP Study using the Contingent Valuation Methodology (CVM) and developed the  framework to execute the study. Key findings, which can be generally seen across other Water consumers, are shown in the adjoining figure.

Key Findings of the WTP Study

The findings helped the operator impress the necessity of the improved quality of water supply and prove that the people, if provided with better services, are willing to bear the cost for the service improvement as well.

The WTP Study did manage to help the operator get to the financial closure.

As we discussed the findings and success story of the WTP Study, we are now engaging with clients not just from the Utility Operators, but even from other service sector enterprises who want to validate their top-line projections before launching new or improved services.

Challenges in and Levers for success of the 24x7 water supply projects in India

As one wonders what has been holding back the operationalization of the 24x7 water supply projects in India, we thought of penning down our observations around it.

Even before kicking-off the operations, one observes that the long gestation period (5+ years) to engage and realize even first pilot is a show-stopper. This is primarily because of:

• lack of standardization of the model, and various agency issues at Central, State & ULB level
• delays in contract sign-off & getting consensus on SLAs and new Tariff agreement
• Delayed financial closures - constricted investments flow from investors, because of perceived high risk of regulated (& politicised) utility

Levers for Successful Implementation of 24x7 Projects

As the operators take-over and start the operations, the first challenge hitting them in the face is the inaccurate baselines. Revisions in tariff, SLAs, employee deputation follow. The lack of education of customers, employees and local politicians on the PPP models affect all the other stakeholders. 

The nascency of the industry has created an acute shortage of skilled middle management resources that are ready to engage on-ground in Tier-2/3 towns. Further to this, the lack of investment from operators in Strategy, Structure, Systems and Processes, and doing it right from long term perspective creates a totally different shade of problems.

The technological levers of GIS modelling based on low confidence data collection, and fast obsoletion, no useful optimization and design possible. Only static view is captured on GIS and no real  updates happen in the system. Even though water metering (bulk and end-customers) and regular auditing is being stressed upon & invested in, no useful actions are enforced based on analytics. (Power sector has long been metering and doing energy audits, but losses have only increased, because of missing actions. Water is just starting to walk on same trail, and will likely see similar results.)

Finally, there seems to be a total lack of SLAs performance monitoring and enforcement institution. This gives rise to ever-moving targets, and cross blaming.

Overall, currently Management change, and Technology are being stressed upon for the success of 24x7 water supply projects. We believe that there is a need for two additional levers - Performance Monitoring and Customer Engagement, to bring effective Change Management. We strongly believe, that its operationalisation of these models that has to be improved, and rest will follow.