Setting an Example

Coimbatore implements a pioneering project for 24x7 water supply

Water supply distribution is being rendered as an intermittent service all over the country. The decision to provide continuous water service for 24 hours/365 days, with occasional minor interruptions, has been widely accepted by all the states. To this end, the Coimbatore City Municipal Corporation (CCMC) undertook the Coimbatore 24×7 water supply project to upgrade its existing water supply system in the core areas – a pioneering exercise for improving service levels. The contract to manage and operate the water distribution system was awarded to Suez Projects Private Limited on a public-private partnership basis.

The Coimbatore 24×7 water supply project is regarded as one of the flagship projects of the CCMC. Since its implementation, the city corporation has been able to save about 70 million litres of water by fixing more than 8,000 pipeline leakages. Going ahead, the 24×7 water supply model adopted by the CCMC is expected to be replicated by other cities willing to ensure uninterrupted water supply.

The ground reality

According to the Manual on Water Supply and Treatment published by the Ministry of Housing and Urban Affairs, the objective of a public-protected water supply system is to supply safe and clean water in adequate quantity, as conveniently and economically as possible.

While 24×7 water supply is being attempted in a number of cities, most of them have intermittent water supply. This can be attributed to factors such as shortage of human, financial and management resources, absence of an accurate consumer database, and a high percentage of unaccounted-for water. Apart from this, the water authorities reduce the supply of water in case of leakages in water pipes instead of fixing the leaks.

In an intermittent water supply system, the water pipes are full only for a few hours in a day. The leaked water re-enters the pipe during the non-supply hours along with external pollutants, putting the safety and cleanliness of the water in jeopardy. Further, most of the water supply systems in the country are supply based and not demand based, resulting in water shortage for consumers.

About the project

In perspective

The CCMC undertook the water supply distribution improvement project at a cost of Rs 29.72 billion, covering 60 wards in five zones that form a part of the old city area. The project was undertaken with financial help from the central government under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission.

The scope of the project’s work included the design, rehabilitation and implementation of the water supply infrastructure (construction of service reservoirs, installation of meters and valves, etc.) and the O&M of the distribution system. It also involved the construction of 32 new reservoirs/pumping stations; construction of 117 km of feeder mains and 1,867 km of distribution system; installation of supervisory control and data acquisition meters, flow meters, level and pressure transmitters, pressure data loggers, etc.; and implementation of 100 per cent smart metering. The key performing indicators of the project were reduction in the level of non-revenue water from the current levels of 30-35 per cent, improved water quality and customer relationship management.

One of the notable features of the project was the price bid, which was decided on the basis of the composite quote, which is a sum of the total works quote and the O&M quote. With regard to payment to the private contractor, the CCMC decided to make a staggered quartered annuity payment (both for the work done and O&M), enabling the authorities to plan the expenditure in advance.

The contract to manage and operate the water distribution system was awarded to Suez Projects Private Limited, while consultancy contracts were awarded to InfraEn India Private Limited (transaction adviser) and Fichtner Consultants India Private Limited (technical consultant for detailed project reports). The project involved a study period of one year, a construction period of four years and an O&M period of 25 years (including the construction period).

Coimbatore water supply project’s concession versus typical concession conditions

One of the key elements of the Coimbatore water supply project’s concession agreement pertains to payments to the concessionaire. Unlike a typical concession agreement, wherein the private contractor is responsible for the entire project cost resulting in high user charges, the CCMC bore around 20 per cent of the overall capital investment required for the project. Further, it was ensured that the concessionaire will recover the entire cost during the O&M phase of the project. The annuity payments were subject to meeting progress targets rather than through regulated tariff factoring in capex and efficiency curves.

Another key aspect of the project is that the ownership of its facilities lies with the authority and the operator is only responsible forservices, without any ownership transfer. Further, the water tariff is fixed and controlled by the government and the operator is only responsible for the collection of user charges. The operator will only provide services, and will be paid by the authority on a satisfactory performance basis under the staggered annuity model.

The CCMC also gave complete flexibility to the private contractor for finalising the project design. The city corporation followed the escrow mechanism for user charges and borrowed funds from a number of government programmes, thereby reducing the payment risks for the contractor. Lastly, the power cost of the project was incurred by the CCMC instead of by the concessionaire, giving the latter more scope to manage its costs.

With regard to the maintenance of the project, it has been decided that if the cost of maintenance activities is greater than 30 per cent of the replacement cost or 10 per cent of the monthly annuity payment for that year, whichever is lower, the CCMC will pay for all the major maintenance activities for the existing assets worth over Rs 500,000.

Conclusion

Owing to the increasing population and rapid urbanisation, which have been adding to the stress on the country’s finite water resources, it has become imperative for city corporations to ensure 24×7 water supply and improve water network management. The CCMC, with its unique approach to ensure round-the-clock water supply in Coimbatore, has been able to yield the desired result. This model can be replicated by other city corporations, too, to ensure unfaltering water supply.

Going forward, the CCMC is planning to install automated meter reading devices to monitor water usage. Besides, discussions are underway for the installation of meters with either ultrasonic or electromagnetic technology. Taking into consideration the success of the Coimbatore 24×7 water supply project, the CCMC has planned for a similar project to cater to the increasing population of the city.

Based on a presentation by P. Gopalakrishnan, Project Management Consultant, CCMC, at a recent India Infrastructure conference

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