Evaluation of Water Services Public Private Partnership Options for Mid-sized Cities in India
Successful mid-sized cities will be vital to India’s growth and prosperity in the coming decades. Indian cities are home to over 375 million people now, and their population is likely to double by 2035. Yet water supply in most mid-sized cities fal...
| Main Authors: | , , , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24606978/evaluation-water-services-public-private-partnership-options-mid-sized-cities-india http://hdl.handle.net/10986/22042 |
| Summary: | Successful mid-sized cities will be
vital to India’s growth and prosperity in the coming
decades. Indian cities are home to over 375 million people
now, and their population is likely to double by 2035. Yet
water supply in most mid-sized cities falls short of
Government of India benchmarks for service, efficiency and
cost recovery. In many of them water flows in the pipes for
2 hours a day or less, its quality is poor, and it is
provided by utilities that cannot even cover their operating
costs. Following a brief introduction to the three city case
studies (section two), the report lays out the Indian water
sector’s unique challenges, and using case examples to
substantiate findings (section three). The challenges
include day-to-day operational issues associated with
running a utility, as well as policy and planning issues
that affect the utility’s governance and investment planning
to meet current and future demand. The results of a
financial viability gap analysis, applied to Bhubaneswar and
Coimbatore reveal the magnitude of improvements required,
and the key drivers that affect the utilities’ financial
performance (section four). These complex challenges make
traditional PPP models, Management Contracts, Concessions
and Leases, less amenable for use in mid-size Indian cities.
As section five describes, this is because the traditional
models are too risky for the operator or government or too
limited in scope to create lasting improvements. The
remaining sections focus on explaining the design and
procurement strategy for the two innovative PPP models, the
phased performance based contract and the Joint Venture (JV)
Partnership (section six and seven). These models have the
potential to deliver better results than the traditional
PPPs and business as usual scenarios. This is because in
addition to reforming dysfunctional utilities into focused
and accountable organizations, they are able to respond to
information uncertainty, include strong incentives, have
clear sources of funding, and promote capital efficiency. |
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