PPP CASE STUDY:

SALT LAKE WATER SUPPLY

&

SEWERAGE NETWORK
Objective: To Study about the PPP project and to Understand the Structuring, Financing, Risk Profiling methods involved.

Abhishek Agarwal (2012E01)

CONTENTS

Project Details Project Need PPP Structure

Financing Structure
Risk Allocation Key Learnings Current Status

PROJECT DETAILS (I)

Location: Sector V, Salt Lake City, Kolkata Influence Area: 300 Acres End Users: Office Spaces and Govt Institutions

Plan: Kolkata Municipal Development Authority

Construction Period: 18 months Concession Period: 30 Yrs Contract Type: BOT

PROJECT DETAILS (II)

Scope of Work:

Construction of ESR, a rising main, USR Laying Pipelines

Construction of Sanitary Networks

Pumping Station Development of Waste Water System

Finance (Dev. Stage): JNNURM

PROJECT NEED

Absence of Organized Water & Sanitation Services Impeding Growth of IT Sector Setting Up of Facilities by the Users at their own

Cost

Indiscriminate Use of Ground Water by Users Untreated Sewerage dumped into River

PPP STRUCTURE (I)

KMDA & NDITA
Concession Agreement Nabadiganta Water Management Limited (NBWML)

JUSCO (74%) & VOLTAS (26%)

Funds from JNNURM & NDITA

PPP STRUCTURE (II)

SPV Responsibility Development, Design, Engineering, Financing, Procurement, Construction, Completion, Commissioning, Implementation, Management, Administration, Operation and Maintenance KMDA & NDITA Responsibility Provide the required Land Free of Cost Provide DPR approvals Provide Grants Provide Water

FINANCING STRUCTURE (I)

Water: 33.93 Crores (48.40%) Sewerage 36.15 Crores (51.60%)

Total Project Cost: 70.09 Crores

JNNURM 25.53 Crores (35%)

NDITA 22.78 Crores (32.5%)

NBWML 22.78 Crores (32.5%)

FINANCING STRUCTURE (II)

Tariff Structure For Water Supply-cum-sewerage: Rs. 25/KL One Time Connection Fee: Rs 10/Sq. Ft

Other Details
Equity IRR: 16.4% Avg./Min. DSCR: 1.9/0.9 D/E Ratio: 3:2 NPV: Rs. 1.4 Cr

RISK ALLOCATION
Risk Type Delay in Obtaining Permits Design Risk Operations Risk Financial Risk Risk Period 0-6 months Risk Bearer Private developer Both Comments Facilitated by NDITA. No issues were faced Final Approval was given by KMDA & NDITA. Hence both were responsible. Water to be supplied by Govt.. Hence both are responsible Cost overruns, revenue risk to be borne by private party.

Throughout

Throughout

Government & Private Developer Private Developer

Throughout

CURRENT STATUS

Exp. Commissioning: March 2010 Actual Commissioning: 4th January 2011

KEY LEARNING

Pre-project Assessment- Necessary Facilitation for Implementation by Govt.Important

Fulfillment of Govt. responsibilities on timeMust

THANK YOU