Strategies to tap Emerging
Opportunities for Small Players
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Systems for Public Welfare Scheme
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Emerging Opportunities in Water Business
PPP Opportunities in India
Importance of PPP in Water Value Chain
In India, water as a utility is still mainly under the purview of the respective state governments. However,
increasing PPPs in the sector is expected to soon gain ground in the water sector.
Private sector participation (PSP) is mainly driven by the current water stress scenario in the country, as analyzed in
the previous chapters, and offers a win-win option to stakeholders, as explained in the following section.
Importance for Public Sector Units
PSPs allow the public sector to derive benefits from the efficient and effective infrastructure and services offered
by the private sector. This is feasible due to the following:
a. PSP allows the Government to tap the private sector’s capacity to implement reforms in the sector. The
Government needs to indicate the services, as well as the desired outcomes/output, it requires. The private
sector can then propose and execute new options to meet the Government’s objectives.
b. Sharing of responsibilities: In a PPP project, the Government and the private sector share the responsibilities of
recommending a service, depending on each party’s knowledge level.
c. Finance: In a PPP project, access to private capital frees government capital, which can be used in projects with
higher public policy objectives.
d. Collaborative approach and adequate manpower facilitation is always welcome from Government participant in
PPP projects.
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Emerging Opportunities in Water Business
Importance for Private Sector
Private sector finds PPP projects important because of following reasons:
a. Business opportunities: The private sector can gain access to business opportunities, which were traditionally
only accessible to the public sector, through PPP.
b. Designing and recommending new options: PPP also allows the private sector to move from only constructing
assets according to clearly specified designs to designing and recommending new options. It provides more
opportunities to the sector to offer efficient options for public services.
Importance for Public
For general public PPP projects important because of following reasons:
a. Combining the knowledge levels of public and private entities: When structured appropriately, PPPs can
recommend public services that can better meet the requirements of the general public without compromising
public policy goals and needs.
b. Protection of public interest: The Government will also ensure that public interest is protected in all PPP projects
and that service recommendations address public needs at an appropriate monetary value when the private
sector is brought in to provide government services.
While service delivery through a PPP alters the means of service delivery, it does not change the Government’s
accountability to confirming that services are delivered — the department’s focus shifts from providing services to
managing service providers.
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Emerging Opportunities in Water Business
Case Study
JUSCO Case, Jamshedpur:1. PPP in Water Supply & Distribution:PPP is still a concept model in India’s water supply and distribution sector. Although JUSCO, a private entity, has been
immensely successful in providing water supply distribution services in Jamshedpur, this model has not yet been
replicated in other Indian cities. It has bee observed that consumers opt for JUSCO’s services over that provided by the
state-owned water supply an distribution system due to the following reasons:a. Consistency in Water Supply
b. Efficient service in distribution network
c. Good consumer grievance redressal mechanism
d. Continuous and assured supply of water
Despite the higher cost of the product and service provided, consumers have accepted the model without reservations.
This indicates that consumers in India are willing to pay higher prices for efficient services. JUSCO has also widened its
portfolio to seek out more opportunities for enhanced PPP opportunities in different municipal areas. Its services include:
a. Operating and maintaining water treatment and sewage treatment plants, and distribution networks
b. Building new water treatment and sewage treatment plants on EPC or BOOT basis
c. Providing technical and management support to improve the performance of water treatment and sewage treatment
plants, and distribution systems
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Emerging Opportunities in Water Business
d. Controlling Unaccounted for Water (UFW) or Non Revenue Water (NRW)
e. Creating 24 x 7 municipal water supply systems implementing GIS for asset management, including updating of
existing drawings
f. Providing customer support services, including call center facilities for prompt handling of complaints
g. Apart from Jamshedpur, JUSCO has also entered partnerships in two major projects at Haldia and Mysore.
JUSCO’s Haldia Project :-
Haldia Development Authority (HDA) has entered a concession agreement with Haldia Water
Management Limited (HWML). This is a JV between JUSCO and Ranhill utilities for the
development, and operation and maintenance (O&M) of the Haldia Water Supply Scheme for
25 years. Under the concession agreement, HWML will construct a 113.5 MLD new water
treatment plant and operate and maintain existing plants as well as the new one — total plant
capacity after the construction of the new plant will be 227 MLD.
The O&M includes operation and maintenance of water treatment plants, intermediate
pumping stations, series tube wells, existing as well as new pipe networks, customer
management, billing and collection, and renovation of existing plants and equipment.
Salient Features of Haldia Project :Construction of new 113.5 MLD water treatment plant in two equal modules, based on
Dissolved Air Floatation Technology (DAF)
Operation and maintenance of existing (113.5 MLD) and new 113.5 MLD water treatment plant
for 25 years
Provision of billing and collection services to consumers.
Management of customer complaints for existing and new customers
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Emerging Opportunities in Water Business
JUSCO’s Mysore Project :Phase I :- Preparatory Phase
•Preparing existing water infrastructure, service study and documentation
•Preparing and submitting O&M) plans
•Assuming management responsibility of existing water supply for day-to-day management
with existing service conditions
•Undertaking regular O&M activities such as repair and maintenance of distribution
network, customer complaint management, billing, collection, etc.
•Conducting topographical and door-to-door customer surveys to map network and water
infrastructure details, and compiling customer database
Phase II :- Rehabilitation Phase
•Operating, maintaining and improving facilities and provision of water services in
distribution operating zone
•Implementing final investment plan relating to procurement, construction (new network,
valves, meters, customer connections, creation of DMA, etc,.) and commissioning
• Implementing Integrated Management Information System (IMIS) customer complaint
management, billing and collection procedure and network management modules
• Monitoring and reporting progress and costs on a regular basis to employer
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Emerging Opportunities in Water Business
JUSCO’s Mysore Project :Phase III :- Management Phase
•Operation, maintenance and improvement of services to achieve performance targets
•The scope of PPP has widened with the initiation of the JNNURM model in India. Although the
model is at its nascent stage, it is evident from JUSCO’s experience that it can be successful in
the country.
Veolia’s Nagpur Project:In 2011, the Nagpur Municipal Corporation, state of Maharashtra, chose Veolia Water India to
run its entire water supply service for the next 25 years. Through its joint venture company—
Orange City Water (OCW)—with Vishvaraj Environment Limited, Veolia Water India is
implementing India's first Public Private Partnership contract to provide 24/7 water supply for
all. On behalf of the Nagpur Municipal Corporation, the company will supply drinking water
24 hours a day and seven days a week to all the 2.7 million citizens of Nagpur. This will require
an initial five-year period of work involving renovation, operation, and maintenance of six
drinking water production plants that produce a total of 750 MLD of drinking water; the
refurbishment and construction of 2,500 kilometers of pipelines.
Providing water for all is at the core of Orange City Water's work in Nagpur. Under the
supervision and the leadership of the Nagpur Municipal Corporation, the company will over a
period of time connect all the slum areas of the city to supply safe water from the network.
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Emerging Opportunities in Water Business
Business Propositions for Potential Investors in Water Business
a. Sub-contracting of discrete services, e.g., metering,
repairs and revenue collection
Exhibit 01 : Emerging Water Market in India
ILLUSTRATIVE
b. Contracts for operation and management of
systems (flat or performance-related fee)
c. Leasing systems from public owner in return for
rental fee, with revenues retained by lessee
Water Resources
d. Takeover and operation of a system for several years
, making required investments, generating increased
revenue and eventually returning assets to the
public owner
Long Term
Medium Term
Immediate
e. JVs with municipal or public partner for operation or
ownership (or both) of a system or water facility
City
households/
All Industries
Existing
Industrial
Clusters
Upcoming
SEZ/Industrial
Clusters
f. Full divestiture of a publicly owned asset to a
private company
Time in Years
Source: enincon Perspectives
A critical factor for private sector investment is the timing and segment of the value chain in which the investment
is needed. Above Figure clearly shows the probable timing of investment in the different segments of the value
chain and the revenue associated over time.
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Emerging Opportunities in Water Business
Exhibit 02 : Avenues for Private Investments (PPPS) in Indian Water Segment
ILLUSTRATIVE
Sr. No.
PPP Avenues in Indian Water Segment
1
River-interlinking schemes that will divert water from water excess areas to water
scarce ones
2
Water table and rainwater conservation projects at the district level
3
Desalination Projects
4
Water Supply & treatment projects in rural areas
5
Solar pump-based water supply and treatment schemes addressing power
shortage faced by water projects
6
Sewage and industrial waste water-recycling projects
7
PPP projects in BOOT/BOT route
Source: enincon Perspectives
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Emerging Opportunities in Water Business
Opportunity in Municipal & Industrial Water and Waste Water Treatment
Projects
Exhibit 03 : Water & Waste Water Solutions and
Services Market Split 2013
Exhibit 04 : Global Water & Waste Water Solutions
and Services Market (In $ Billion)
ILLUSTRATIVE
ILLUSTRATIVE
Industrial
Municipal
Maintenance & Monitoring
8%
13%
Design & Consulting
9%
8%
Build & Infra
Operational Services
23%
19%
20%
Treatment Equipment
Process Equipments & Pumps
Solutions & Chemicals
Source: enincon Perspectives
Global S&S Market Split in $ Billion
250.00
200.00
18
225
20.25
51.75
90
150.00
45
42.75
100.00
50.00
18
135
29.25
0.00
Source: enincon Perspectives
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Emerging Opportunities in Water Business
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