Professional Documents
Culture Documents
ALANDUR- BACKGROUND
PPP
Brief:
Located 14Kms from Chennai (Kanchi District)
Comes under Chennai Metropolitan development Area
(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 people
Unregulated disposal of sewerage from septic tanks
Storm water + Sewage stagnation in open areas
Contamination of ground water
Mosquito Menace
Objectives:
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PPP
Sewage Network
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PPP STRUCTURE
PPP
TNUDF
Loan
O&M Contract
Sewerage
Lines
Alandur Municipality
GoTN
Loan/Grant
TUFIDCO
BOT Concession
Agreement
SPV
Sewerage
Treatment
Plants
Citizens/Community
SPV- First Sewerage Treatment Plant Pvt Ltd (FSTPPL) was created, Land was provided by Municipality to the SPV
2-stage bid process, key criteria being lowest cost for the sewerage system (90%) and lowest lease period for the STP
(10%)
Out of 13 bidders, The Project was awarded to IVRCL Infrastructures Ltd. (Had experience in similar projects)
IVRCL- Civil Works
Va Tech Wabag Technologies- Electro Mechanical Works (14 yrs)
Public Private Partnership
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TIME LINE
PPP
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FINANCING INFORMATION
PPP
Tamil Nadu Urban Infrastructure Development Corporation (TUFIDCO): The agency to coordinate, supervise and structure the finances for
the project, was also responsible for detailed studies on the feasibility of the project
Tamil Nadu Urban Infrastructure Financial Services Limited (TNUIFSL): The State Asset Management Company
Finances:
Crores Percentage
Remarks
7%
15%
16
39%
2%
12.4
30%
2.46
6%
Total
40.86
100%
Domestic (5000 per connection) + Commercial (10000 PC) + Industrial (10000 PC)
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PUBLIC CONTRIBUTION
PPP
Tariff
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%/Year
and stabilizing)
Industrial:
One time Deposit 10k/HH
Monthly: 750Rs/Unit
795, 842, 893, 900, 900.
(Rates increasing @6%/Year
and stabilizing)
Willingness to Pay
Campaigning
Active Canvassing
Educating the citizens,
welfare organizations
Support from media
We for ourselves
campaign
2-Installment Payments
Transparency and opinion
seeking in every step
Results
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PPP
Risk
Alandur Municipality
(AM), Private developer
Land acquisition
Government
Technology Risk
Financial Risk
Design Risk
Remark
The AM took responsibility under the Contract for key approvals, including road cutting, shifting of services and
environmental clearances
The developer was responsible only of the works related approvals
AM took the responsibility for directly acquiring the land for the construction of the STP
The key risk in respect of payment of capital cost for the sewerage system was the component of the cost that had
to be met through public contribution
Government
The risk was addressed effectively through extensive public consultation and interactions
The collection exceeded initial plans and the AM did not have to draw upon the debt as planned from TNUIFSL
Annuity Payment for the STP was contractually bound over the period of lease by AM
Based on willingness to pay survey, the Government had agreed to extend subsidy support to meet operational
Government
cost
There are no clear references to this in the agreement.
The design was prepared at the bidding stage and thereafter accepted by the Bidder during submission of proposal.
Government
Since the project was implemented without significant delays, the technology risk (upgradation) due to passage of
time did not arise
The AM bore the financial risk in respect of the Sewerage System while the Private developer bore the risk for the
STP
Government & Private The AMs capital investment plan was planned even before the bidding process, the key risk arose from the portion
Developer
of the capital cost that was to come from public contribution towards connection charges
For STP, the Private Developer was able to raise the capital funds effectively as re-payment was protected by the
annuity payments as assured by the AM
Design for the Sewerage System as well as the STP was developed by the AM as part of the feasibility study
The same was provided to the developer as part of the RFP document
Private developer
The Bidder had the option to comment on the design provided and suggest changes, if any
However, after the submission of bids, the Contractor was required to adhere to the design provided by the AM
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PPP
Risk
Remark
Construction Risk
Private developer
Private developer
Operations Risk
Private developer
The Construction Contract for the underground Sewerage System specified strict construction milestones linked
to the payment along with a one year defect liability period to address any construction related risk
Liquidated damages were prescribed in the contract for every day of delay limited to 10% of contact price
For STP, the construction risk was borne by the Developer as the investment was made by developer
The STP was constructed in two phases. The defect liability period for the STP extend one year beyond the lease
period of 14 years, during which the developer operated and managed the facility
The construction of the Sewerage System was based on detailed bill of quantities with rigorous clauses related to
cost over-runs
For STP, though the developer bore the construction cost, the design and cost was based on detailed costing predetermined at the bid stage.
As the construction cost was also the basis of the annuity payment determined in the bid, it was carefully
controlled.
Since the construction did not experience any time over-runs, cost over-runs were also controlled and the
project was implemented as per the original cost estimation
The performance parameter mainly referred to the treatment of sewage as fed into the STP during the lease
period
The Agreement prescribed a fine if the treated effluents failed to meet the required standards at the rate of Rs.
10,000 per day of default
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IMPACT OF PPP
PPP
Parameter
Before PPP
After PPP
Water borne sanitation facilities, septic/holding tanks for disposal of Underground sewerage system with direct connection to each
night soil
household
Unregulated disposal of sewerage in storm water drainage and low
lying areas
Rs. 8 crores out of the capital cost of Rs. 34 crores was through public
contribution
Collection of sewerage fee from the public (on a graded structure
amounting to a weighted average of Rs. 75 per connection) amounts
to Rs. 2 crores per month and covers both debt repayment and O&M
costs of the AM
Public participation
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KEY LEARNINGS
PPP
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Thank You
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