COMPREHENSIVE WATER LOSS CONTROL PROGRAM: NAGPUR (INDIA) Dinesh Rathi
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1 ACHIEVING 24X7 WATER SUPPLIES THROUGH COMPREHENSIVE WATER LOSS CONTROL PROGRAM: NAGPUR (INDIA) Dinesh Rathi 1
2 Nagpur Water Supply Population 2.5 million in 217 sq km 530 mld of water supply ( 210 lpcd) 225 Thousand connections 2100 km of distribution network 31 water districts 41 service reservoirs 5 water treatment plants 2
3 Equitable Water Distribution-2005
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6 NAGPUR WATER SUPPLY: Status before JNNURM Measurement Losses 125 mld Losses 20 mld 235 mld Commercial losses/ theft/metering error Losses In canal Raw water Purchase 625 mld TREATMENT 500 mld Distribution 480 mld Recovery 200 mld 140 mld SYSTEM EFFICIENCY : 32% Annual Loss (W/O Dep): Rs 56 crore With Depreciation : Rs 75 crore (appx) Physical losses Collection Losses 45mld
7 Water sector Challenges: NMC Water Losses and UFW Equitable distribution (Alternate day / 20 hrs/day) Accountability Water to Slums (inefficient i system) Water network coverage and inadequacy of network Water supply management during summer peak demand Old and inefficient assets Delay in capacity augmentation ti for future demand d from Limited water sources. Capital availability Low water tariff and Poor billing mechanism. Lack of professional approach.
8 Vicious circle Inadequate maintenance of existing assets Lack of operational expertise High UFW Strain on Water Resources Tariffs not rational Unsatisfied demand Poor cost recovery AUGMENTATIO N Strain on water resources Additional capital expenditure MISMATCH BETWEEN INCREASING NEEDS & DECREASING RESOURCES FUNDING BURDEN ON STATE FUNDING CONSTRAINTS THROUGH COMMERCIAL SOURCES BWSSB-NOV '96
9 WATER AUDIT FACTS WATER AUDIT IDENTIFIES HOW MUCH WATER IS LOST AND WHAT IS THE COST OF THAT LOSS. FACT-1 : NOT ALL WATER SUPPLIED BY NMC REACHES THE CUSTOMER FACT-2 : NOT ALL OF THE WATER THAT REACHES THE END USER IS PROPERLY MEASURED OR PAID FOR.
10 Pressure Reduction National norm is 8 12 m, actual m Minimum Night flow Supply hours are in night to individual id storage tank Metering errors 90% meters are non working Real losses Vs Apparent losses You can only guess Leak Detection Technology Kindly let me know the technology which detect leak at 5 m pressure at underground pp pipe IWA Methodology or AWWA M36???
11 Water Efficiency Supply Side Efficiency Demand Side Efficiency Water Audit Energy Audit Tl Telescopic Wt Water Tariff with cost recovery Billing & Collection Pumping Treatment Transport Storage Distribution Consumer Connection Metering Customer Management & Awareness Slum Policy for Water Supply
12 Reforms for Water Sector Ring fencing By formation of NESL Accounting Cost recovery By Rationalisation of Tariff Functional Financial Double entry Accrual based accounting User charges for cost recovery Meterisation
13 NEED FOR REFORMS IN WATER SECTOR Annual expenditure of Municipal Corporation on water supply : Rs 106 crores Total demand from consumers against water bills: Rs 70.7 crores(deficit ( of Rs 36.5 crores) Total recovery against water bill : Rs 50 crores(arrears of Rs crores) STATEMENT OF WATER BILLING DEMAND TO CONSUMER AND IT S RECOVERY YEAR DEMAND RECEIPT % RECOVERY (IN Rs. CRORES) (IN Rs. CRORES) WATER SUPPLY MLD 370 MLD 490 MLD Municipal Corporation Makes Payment to Irrigation Department for : 540 ml/day (annual avg.) Municipal Corporation Supplies Treated Water to City : 530 ml/day Municipal Corporation Billing to all consumers against water supply: 245 ml/day (annual avg.) Total Water Losses /UFW/ NRW are 291 ml/day i.e. 54 % of supply. OPEX is Rs 3.30/ 1000 WTP ANNUAL ENERGY BILL OF Rs. 28 CRORE /YEAR
14 JNNURM Projects Cost In Rs crore Completi on Outcome to Improve Supply Side Efficiency Leak Detection 3.30 March Flow Meters from source to ESR Reduction in BW UFW to 2% from 23% Water Audit Feb x7 for connection by Sep 09 Replacement of consumer meter Reduction in UFW < 25% in Pilot Energy Audit July 2009 Replacement of All Pumps installed prior to Year 2000 with minimum efficiency of 70% Reduction in system head by 12m for Pench-1 Centralized monitoring system Infrastructure for equitable dist. Expansio n of Network Dec Connectivity to 572 layouts Population over 2.0 lakhs will be covered in piped water network
15 JNNURM Projects Cost In Rs crore Compl etion Outcome to Improve Supply Side Efficiency Kanhan March New Plant of 240 mld and Up 2011 discarding the old plant of 120 gradation mld with Pumps Pench-4 Part-1 Pench-4 Part March March 2011 Replacement of Canal by 2300 mm pipe Additional Raw water of 115 mld from reduction in water losses in canal New WTP of 115 mld at Godhani Trunk main up to MBR Pench March Service Reservoirs 25 nos. Part Feeder Mains 35 Km Pench March Distribution system of 225 Km Part
16 Benefits of Sanctioned Projects Under JNNURM : Water Sector Cost In Rs crore Completi on Outcome to Improve Supply Side Efficiency Total JNNURM Phase (250 m USD) March Total Production Capacity 765 mld to meet demand up to 2021 Rehabilitation R h ti of old Pumps and WTP and reduction in energy cost by 20% 10% of Area will be converted in to 24x7 NIT Phase-1 : Water Supply coverage to 1.5 lakhs Population (EWS/LIG)
17 NAGPUR WATER SUPPLY: Status After Implementation of approved Projects under JNNURM Phase-1 Losses 5 mld 265 mld Commercial losses/ theft/metering error Raw water Transmission by Pipe TREATMENT 535 mld Distribution 530 mld Recovery 220 mld Benefits after partial Implementation System Efficiency : 41% from 32% Physical losses Collection Losses 45mld Reduced financial losses by tariff revision Increased water supply to distribution by 40 mld Need much more to improve technical & commercial efficiency in distribution system
18 Strategy For Water Loss Control Water Audit ( ) Identification of the Water Losses (Technical & Commercial ) Leak Detection in Bulk water system (Supported by JNNURM) Installation of Flow Meters (Supported by JNNURM) Reduction in Raw water transmission losses (Supported by JNNURM) Pilot & DMA for Leak Detection ( ) Pilot of 24x7 water supply project to reduce UFW in Distribution System (Supported by JNNURM) DMA for leak detection plan to identify the causes (Supported by JNNURM) Full City Rehabilitation Plan ( ) Rehabilitation Plan Based on Water Audit and Pilot /DMA studies (Approved by JNNURM) O & M Strategy t for Sustainability ( ) 2035) Telescopic Tariff for conservation and cost recovery (Revised by General Body) PPP for Technical & Commercial Efficiency through 25 years O & M lease contract ( EOI received from 10 prospective bidders)
19 Pilot 24x7 Pilot Project Feature Connection including slum 10 slum areas Population Contract Study, Rehabilitate, Operate contract with Private operator. Penalty /bonus for targets in UFW, Quality, Customer services and Continuity of supply
20 Temporary Solution by Temporary Contract
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23 House Service Connection
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25 Near GPO
26 HSC a Major source of Leakages Breakdown of leakages 573, 37% HSC 983, 63% Pipes
27 Source of Losses (Physical + Commercial) House service connection : 63% of reported leak complaint Old conservancy lane / G I Pipes OldL Lead djoints /Valve leaks 70% of non working meters Illegal connections Poor quality of meters Absence of water accounting
28 Pilot 24x7 Project :Baseline for Private Operator KPI Baseline KPI Target KPI UFW level The NRW is assessed at 50% UFW below 30% for proportionate bonus Increase of volume Volume billed for FY = 21,7 Higher than baselines by billed compared to MLD on average. 10% for bonus FY This value shall be used for the costbenefit analysis of the rehabilitation plan. The baseline KPI for the assessment of bonus/penalties during O&M will be based on FY data. Continuity of 2to24hoursdepending on the area of 24/7 throughout the zone supply supply with minimum 2m pressure at customer tap Water Quality 63% of samples tested had a residual Residual chlorine higher chlorine level higher than 0,2 ppm than 0,2 ppm Time for handling customer complaints Not applicable Within 3 days
29 Rehabilitation Plan for Pilot 24x7 Replacement of 100% House service connection & Meters Replacement of old conservancy GI pipe Rehabilitation of Tertiary network Hydraulic modeling as per Master plan Installation of new billing system Customer Facility centre
30 Water Efficiency Targets Technical Efficiency : Ratio of Volume Billed & Volume Input Commercial Efficiency: i Collection of water charges vs Billed volume 30
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33 Conversion in to 24 33
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36 NRW -44% NRW -17% 36
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38 Project Results Sr Description Before After-Sep09 Remark No ( ) ( ) 1 Number of legal Addition by connection slum + Survey 2 Water Supply in mld 43 mld mld 3 New meter installed Unmetered Connection 1800 slum 5 Volume billed % increase 6 Estimated UFW 44% 17% 7 Converted in 24x7 nil 4300 It provide a Important base for fixing up benchmark for full city 38
39 Improvement in Demand Side Efficiency : Water Tariff for Conservation and Sustainability Water Tariff for full cost recovery for sustainable water business. Subsidized Tariff to Urban poor and low domestic consumption 55 lpcd Tariff at cost for domestic consumption up to 135 lpcd Premium Tariff for domestic consumption beyond 135 lpcd and non domestic usage Indexation with raw water and energy charges. It enable to pass additional cost (70% of operating expenses) directly to consumer as surcharge. Tariffs are sufficient to meet Operating expenses. Earning will be better with operational efficiency and reduction in Non Revenue Water.
40 Catagory Old Tariff /1000 Ltrs New Tariff Tariff Revision Residential Rs 3 to 4 Rs. 8 to 15 for > 8 units per month as per telescopic consumption Remark Minimum charges Replaced by Monthly access charges (Rs 56 for 15mm) Semi Residential NA Rs 8 to 18 >8 units Min access charges are Rs 100 Institutional Rs 12 Rs. 15 to 20 Commercial-1 Rs 20 Rs. 25 to 100 Commercial-2 NA Rs 60 to 540 Mineral water + Cold drink Slum Rs 25 PM Rs. 30 to 80 PM Kaccha, Concrete, Multifloor Indexation NA Energy + Raw water Directly passing to consumer as surcharge Annual Revision i NA 5% to MC and 10% No need to approval to 25% to GB from GOM
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50 PPP For Rehabilitation Program for Full City ( 90 m USD) Public Private Partnership Partnership Ownership : NMC Operation: Private Investment: Both NMC to decide Tariff NMC to decide Development Plan for City Pi Private Partner to Operate the system. Private Operator to earn profit through efficiency in Implementation and operations
51 Visible Project Benefits Water Supply Hours Water supply hours was increased from 4.30 hours to 24 hours Water Consumption: The water consumption was 440m3/day for a Bajiprabhu nagar with 4.30 hrs has increased to 24 hrs with 520m3/day and now reduced to 450 m3 of water consumption. With telescopic tariff and billing as per consumption will reduce. Pressure : Before conversion the average pressure at consumer water taps was 2-5 meters and now it reaches to m. It resulted in to energy saving for consumers as water reaches directly to overhead water tank. Quality: The continuous pressurized network has avoided the contamination The continuous pressurized network has avoided the contamination of water from leaking House service connections which were replaced under this project.
52 Visible ibl Project Benefits UFW: The average UFW was 69% in the zone was observed during base line study have been reduced to 33% in DMA of 144 regular connection and about of 150 slum dweller in Bajiprabhu nagar DMA. The UFW will reduce further after completion of slum connection rehabilitation. Commercial losses: Total billing volume was 137 m3/day has been increased to 338 m3/day (286 m3/day to regular consumer and 52 m3/day to slum consumer against nn billing to slum earlier). Lessons learnt: apart from technical lessons provided by demo zone a valuable feedback on consumer handling was learnt from this project will be used in full city 24x7 Water
53 NMC Strategy for Reforms in Water Sector Fixing of Benchmarking and Performance indicators through Water audit, Energy audit & Financial reforms. UFW/NRW reduction program with investment plan Assets Up gradation plan for better serviceability and efficiency Cost reduction program (Energy, Water & O & M Cost) Improvement in services to consumer special emphasis to urban poor Implementation ti of augmentation ti plans with inbuilt ilt efficiencies. i i Low cost Funds / Grant from Jn-NURM/ Tax free bonds/ PPP Performance based contract with 5 to 25 years of O & M with private participation i Rationalization of Water Tariff and Billing with Meterisation. Accountability of NMC towards consumer. Review of water supply master plan with inclusion of water reuse option.. Moving towards Continuous Water Supply in Nagpur
54 NMC Strategy Inadequate maintenance of existing assets Lack of operational expertise High UFW Strain on Water Resources Tariffs not rational MISMATCH BETWEEN INCREASING NEEDS & DECREASING RESOURCES Unsatisfied demand Poor cost recovery STRATEGY REFORMS IN WATER SECTOR INVESTMENT SUPPORT FROM JNNURM IMPLEMENTATION THROUGH PPP MODE FUNDING BURDEN ON NMC/STATE AUGMENTATION Strain on water resources Additional capital expenditure FUNDING CONSTRAINTS THROUGH COMMERCIAL SOURCES BWSSB-NOV '96
55 Implementation Options OPTION-1 : INVEST JNNURM MONEY KEEPING EXISTING MANAGEMENT PRACTICES AS IT IS WITH ASSUMPTION THAT ALL PROBLEMS ARE WITH PUMP AND PIPES. OPTION-2 : INVEST JNNURM FUND IN THE WATER SUPPLY SYSTEM AND IMPROVE THE MANAGEMENT & ACCOUNTABILITY.
56 ASSET UTILIZATION
57 24x7 WATER SUPPLY : OBJECTIVES Water for all and 24 x 7 supplies with focus on safety, equity, and reliability. Continuous water supply at desired pressure. No Contamination of water Reduction in water losses Better Accountability Better Service to Consumer Sustainability of system
58 Why Continuous Water Supply Water Supply Hours Non Supply Hours
59 Investment for Rehabilitation Replacement of House connection Replacement of consumer meters Replacement of deteriorated pipes and fittings Rehabilitation tato of ESR/GSR. Rehabilitation of Pench-II WTP Rehabilitation of Misc component Implementation of Slum Policy
60 Private Participation in Water Sector :Exist in NMC All new assets created since 1999 is managed though service contract. Existing assets also managed thru service contract for Pumping station/ WTP O&M / Valve operations/ Billing distribution/ Annual maintenance contract for Zonal level Disadvantages It is only a labor contract replacing retired employees. No link with performance No accountability towards consumer Short term Contracts break up in small parts with no feasibility for private investment t Contractor motivated for providing short term solution
61 Institutional Arrangement NMC Bylaws Subsidies O&M Customer services Rehabilitation Operator Contract fees per cum Paid volume NESL Service Tariff NMC A/C Water & Sewage Fund Customers Assets Development Raw water Electricity 61
62 Strategy For Water Loss Control Water Audit ( ) Identification of the Water Losses (Technical & Commercial ) Leak Detection in Bulk water system (Supported by JNNURM) Installation of Flow Meters (Supported by JNNURM) Reduction in Raw water transmission losses (Supported by JNNURM) Pilot & DMA for Leak Detection ( ) Pilot of 24x7 water supply project to reduce UFW in Distribution System (Supported by JNNURM) DMA for leak detection plan to identify the causes (Supported by JNNURM) Full City Rehabilitation Plan ( ) Rehabilitation Plan Based on Water Audit and Pilot /DMA studies (Approved by JNNURM) O & M Strategy t for Sustainability ( ) 2035) Telescopic Tariff for conservation and cost recovery (Revised by General Body) PPP for Technical & Commercial Efficiency through 25 years O & M lease contract ( EOI received from 10 prospective bidders)
63 Thank you 63
64 Balancing service standards tariffs and subsidies NO Specify Service Level Yes Satisfied Estimate Cost Implement Set tariff and Subsidies Subsidies in the form of part of expenses (electricity and or RW charges) / sale of surplus bulk water to outside 64
65 Proposed Model Type of Contract Contracting Authority O & M Contract (Asset ownership and sovereign rigths remains with NMC) NMC / NESL Scope of Contract t Integrated t O & M of water supply facilities from raw water to customer meters including Water treatment Duration and possible extension Transmission of treated water and distribution to customers Full customer services including but not limited to: meter installation, reading, billing, revenue collection (and deposit in to NMC a/c) and customer complaints handling. Inclusion : O & M, repairs, replacement, efficiency Exclusions: Expansion, New Projects, Upgradations 25 years. Extension subject to approval from General Body. 65
66 Proposed Model Service Area Pipe network with in NMC limits. i Communities i out side NMC on request of NMC/NESL Integration of existing Progressive full take-over of O&M over the first few years service contracts of the contract after completion of existing contracts For Kanhan & Pench IV, Operator will take over the responsibility of NMC for O & M. Funding of the investments required Funding of the initial 5-year investments under the lease (Approx: 385 crores): 70% grant under JnNURM (if possible) 30% balance from financial institutions and/or private operator Capital investments under the contract Managed by the operator/nmc Remuneration of the operator Fees for each unit (m3) paid by consumer or NMC (free 66 supply, if any) through NESL
67 Services Standards, Tariff & Subsidies, Risks allocation (1/3) Services Standards Network Coverage : 100% coverage within two years for existing distribution area and expansion within NMC limits. Water Quality: Potable water as per CPHEEO norms. Continuity of Water Supply : 12 hours within 3 years 24 hrs within 5 years on a phased manner UFW Target: >25% Customer Complaints : To be attended within stipulated time. 67
68 Allocation of Responsibilities and Risks Business Operator : O&M, Management and partial Investments Responsibilities NMC : Allocation of Risks Decide the level of subsidy versus tariff Establish tariff structure Secure availability of raw water Pay energy bills to energy providers Manage existing JnNURM projects upto WTPs Repay old loans and liabilities Pay subsidies to NESL Operator : Operational and commercial risks Investments risks (partial) NMC : Risk of volatility on energy and raw water Unit Prices Changes in law Investments risks (partial) 68
69 Institutional, legal and contractual issues (1/3) NMC Act NESL set-up Role of the NESL When operator in place Option 1: Make necessary amendments required (if any) to facilitate long term lease agreement Option 2: Frame the agreement within NMC act to meet the desired objectives NMC opted for Option 2 and O & M contract was redrafted as per CNC act. Independent company to be 100% owned by NMC Chairman Mayor, MD Municipal Commissioner, CEO Ex Engr WWD Composition of Board of Director 6 each from officials and elected representative Call for external assistance whenever required (tariff rebasing, auditing, monitoring ) Monitor the key performance indicators Monitor the operator technical and financial performance, its legal and contractual obligations Approve the rebasing of tariff as per contract 69 Make the decision regarding new projects
70 Institutional, legal and contractual issues (2/3) Resolving disputes Procedures & time table shall be strictly regulated in the agreement. For minor dispute, the NESL may take up the decision. Tariff Adjustments Arbitration ti or Court of Law will be next step. Tariff to be determined by NMC Tariff revision on yearly y basis as per approved formulae No link of operator fees with slab and category of consumer. 70
71 Institutional, legal and contractual issues (3/3) Governing law Mechanism for compliance The operator must comply with all Indian laws, regulations, orders and directives that may affect the lease contract Penalties to be applied to the operator in the event of breach of its obligations. Performance bond in favor of NMC to cover the performance failures with respect to the operator obligations. 71
72 Human Resources issues Transfer of staff Subject to mutual consent of NMC staff and operator, NMC staff could be deputed to the operator for the first 120 days of the contract for mobilization period. NO change in employment Before the end of third 120 days, operator will offer regular employment to the selected staff of NMC within 90 days of Personnel integration period after one to one negotiations. Employees will have option to go back to NMC within 180 days of change consolidation period If they do not accept the offer, they will go back to NMC. During deputation of NMC staff to the operator, they will continue to hold their seniority and benefits as per their present employment terms with NMC. During the term of deputation to the operator, NMC staff will be paid by the operator and their salaries and benefits will not be inferior to their existing terms of employment with NMC. 72
73 Selection of operator (1/2) Operator selection Quality Cost Based Selection with: - International pre-qualification process. - Competitive tender among pre-qualified bidders Technical proposal in two stage The technical proposal should include: - Methodology to improve efficiency to upgrade the system to 24x7 - Proposed organization structure & human resources plan - Customer services - Capital investment management - Operation & Maintenance plans Financial proposal after approved second stage technical proposal 73
74 Selection of operator (2/2) Operator selection The Financial Proposal shall include for each bidder: - The fees on paid volume No link with water rate tariff slab and type of consumer In absence of reliable consumer record and billing system (Avg billing) NESL shall assure the minimum pay of 250 mld for first five years. Sovereign Power will remain as function and responsibility of NMC Disconnection of defaulters. Deposit of revenue receipt ( water charges) in to a NMC acct. Tariff decisions Ownership of Municipal Assets Development and Up gradation of facilities. 74
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