PPP Journey - India

Evolution of PPP Water Sector

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  • 1990's

    Bangalore bulk water supply project

    Hyderabad bulk water

    Pune distribution, treatment, bulk water

    Goa bulk water

    Early initiative on PPP (failed)

    High tariff

    Political opposition

    Credit quality

    Lack of project preparation

  • 2000

    Not many initiatives due to earlier failure

    Sangli distribution, treatment and bulk water

    Sonia Vihar distribution

    Bangalore O&M and collection

  • 2005

    Failed projects:

     - BWSSB project

     - DJB Pilot circle

     - Mumbai K East

    Efforts to restart PPP (opposition by NGO) stalled many projects

  • ~ 2010

    Few projects took off after Government and multilateral push

    Chandrapur - distribution and bulk water - Gurukripa

    Latur - Hydro comp

    KUWASIP - Veolia

    Nagpur - Pilot project - Veolia

    Salt lake Kolkata - JUSCO

    Haldia - JUSCO

    Chennai desalination - IVRCL/Befesa

    Bhiwandi bulk water - SPML

  • 2015

    Earlier projects were mostly focused towards water. Government initiated PPP in wastewater through HAM

    Namami Gange

     - Varanasi STP

     - Haridwar STP

     - Mathura

     - Kanpur

     - Prayagraj

     - Kolkata

Key Highlights

  • Failure not because of drawbacks of PPP per se but because of drawbacks of the processes that were followed or because of the lack of enablers being in place
  • In India, private participation is required in order to build the infrastructure in addition to the improving the efficiency of the project
  • PPP has evolved over the years and reached the stage where successful projects are implemented
  • India runs fiscal deficit of 3.3% of GDP, which necessitates private investment

Following points are to be noted:

  • Earlier projects were focused towards water supply
  • The major players such as IVRCL, JUSCO, SPML, etc. are facing financial troubles
  • Lack of understanding about the project and underpriced quote resulted in the financial failure of the companies
  • Bids for Namami Gange saw participation from technically sound companies, however with little past experience in project development. This was mainly due to strategic importance of the project and well-structured contracts (IFC assisted) with sovereign guarantee
  • Recently, National Green Tribunal directed urban bodies to ensure treatment of sewage before discharge by March 2021. Massive investment is expected, part of it will be funded by Private companies through HAM model

Governmental Fund Allocation How It Will Be Released Now

Clean India Mission - Funding Pattern and Benefits

  • Urban Areas
  • Rural Areas
  • Rest
  • Govt of India: ₹ 14,623 Crore
  • Ministry of Urban Development: ₹62,000 Crore
    • State Governments: 25% (10% North Eastern States)

Ministry of Drinking Water & Sanitation:

₹ 1,34,000 Crore

  • PPP
  • Collection of User Charges
  • Swach Bharat Kosh
  • Corporate CSR Funding
Announced Plans for use of Funds
  • ₹ 4,000 each for 1.04 Crore urban households – Total Cost : ₹ 4,165 Crores
  • ₹ 619 Crores for 2.5 lakh public toilets (rural & urban)
  • ₹ 1,000 Crore for awareness creation
  • ₹ 15,000 per rural households without sanitation facilities
  • ₹ 54,000 per rural school without sanitation facilities
  • ₹ 20,000 Anganwadi toilets
  • ₹ 6 lakhs for community sanitation complexes

Investment Envisaged Under Smart City Mission

Break up of Projects in Phase 1 of 20 Cities
Break up of Projects in Phase 1 of 20 Cities
Investment on Infrastructure in Million USD
Investment on Infrastructure in Million USD