1. FINANCIALLY SUSTAINABLE ASSET MANAGEMENT PLAN WITH A FOCUS ON IMPROVING SERVICE DELIVERY Performance Assessment Systems (PAS) Project 1 Session : OPTIMISING SERVICE DELIVERY FOR UNIVERSAL ACCESS Performance Assessment and Improvement

2.  INDIA Census 2011: 377 million i.e. 31.2% of the total population lives in towns (No. of towns: 5,161 in 2001; 7,935 in 2011.)  As additional investments are being made in UWSS services, there is a critical need to increase accountability for service delivery. Shift in focus from infrastructure creation to delivery of service outcomes  Benchmarking is now well recognized as an important mechanism for introducing accountability in service delivery (involves measuring and monitoring of service provider performance on a systematic and continuous basis)  MoUD has launched the Service Level Benchmarking (SLB) initiative covering water, sanitation, solid waste management and storm water drainage Background Sustained benchmarking can help utilities to identify performance gaps and introduce improvements through the sharing of information and best practices, ultimately resulting in better services to people

3. Missing Link – Asset Creation and Service Delivery Outcomes Leakage in transmission main WS distribution lines over storm drains Scene in a town receiving intermittent supply Issues of low pressure Wells as supply sourceConsumer metering

4. Missing Link – Asset Creation and Service Delivery Outcomes Non functional community toilet Septic tanks constructed on roads Collection, transportation and treatment systems Open defecation Sullage disposed in open drainsCleaning overflowing and blocked drains

5. Need to ASSESS PERFORMANCE… TRACK INVESTMENTS and OUTCOMES No/ little information on quality, service levels and financial sustainability of WSS services Limited information available on access of urban poor households to water and sanitation services Assessment of impact from past investments difficult Standardized information system for comparable and regular situational analysis Support improved allocation of resources and decision making Grants from state and central governments can be linked to local performance

6. Asset Information Framework Source: Saskatchewan MAIS Feasibility Study Being declared by 13 States as per 13 th Central Finance Commission requirements since 2010 Partially attempted by ULBs and under Municipal Accounting reforms New Project Development (and DPRs) need to be linked with SLBs Scope exists for exploring technical alternatives and innovative financing

7. Paradigm Shift Required From Asset Creation to Asset Maintenance / Management INVESTMENTSASSET CREATIONPERFORMANCE Focus on the targets of water and sanitation has been on increasing service coverage New Investments at Centre & States paying less attention to O&M, increasing the risk to performance outcomes Focus on the targets of water and sanitation has been on increasing service coverage New Investments at Centre & States paying less attention to O&M, increasing the risk to performance outcomes Less attention on improving the operation and maintenance (O&M) of existing assets Lesser expenditure on rehabilitation of exstg. infrastructure Corresponding reduction in quality of service delivery Less attention on improving the operation and maintenance (O&M) of existing assets Lesser expenditure on rehabilitation of exstg. infrastructure Corresponding reduction in quality of service delivery Inappropriate design Lack of O & M Performance failure = +

8. Sectors : Water supply, Waste Water, Solid waste Management & Storm Water PAS Annual Service delivery profile for 419 Cities in 2 States covering 32 Key indicators and 89 local action indicators Performance Assessment System Old city area Newly developing colonies Focus on Measurement, Monitoring & Improvement

9. PAS - Sector wise Indicators and LAIs 9 Key Indicators 38 Local action Indicators 9 Key Indicators 26 Local action Indicators 8 Key Indicators 12 Local action Indicators 4 Key Indicators 13 Local action Indicators 2 Key Indicators STORM WATER WATER SUPPLYWASTE WATERSOLID WASTEEQUITY

10. PAS SUPPORT TO SLB NATIONAL STEERING COMMITTEE MEETINGS ORGANISE CAPACITY BUILDING WORKSHOPS in over 400+ cities in two states Activities as National Technical Support Partner NATIONAL DATABASE FOR SLB BASELINE AND TARGETS MoU with Ministry of Urban Development on Roll out in ALL States Sustaining Momentum of SLB Initiatives The National Technical Support Partner will help mainstream SLB exercise through trainings for regular State and City level monitoring systems and its institutionalization.

11. 11 PAS Efforts : From Performance assessment to Strategic Management of Assets by linking with Service Delivery Indicators Stepping Stone to ASSET MANAGEMENT Performance Measurement Assessment on Asset Condition (Risks & Costs) Towards Integrated Asset Management INFORMATION ENGINEERING MANAGEMENT PERFORMANCERISKCOSTS

12. Support to ULBs through various Stages of Asset Management Plan Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Asset Information System Support to select ULBs for Development of models / Tools Decision-making, Actual Implementation of Model ISIP Support PIP Support Stages already being partially supported under PAS assessment Step 1 to 3 – Data oriented : ISIP Support Step 4 to 5 – Methodology and policy issues Step 6 – Actual Use of Info for Decision making by ULBs : PIP Support

13. 13 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad ‘PROJECT’ based approach Starting point is an assessment of funding resources available – SUPPLY DRIVEN Focus on developing INDIVIDUAL PROJECTS of various sectors Oriented towards achieving OUTPUTS ‘SERVICE’ based approach Oriented towards achieving OUTCOMES Focus on developing integrated SECTORAL SOLUTIONS Starting point is measurement of current performance and local priorities – NEED DRIVEN PAS Approach Conventional Approach Support to ULBs for Decision Making through PIP Model

14. IMPROVEMENT PLAN OPTIONS Performance Improvement Planning process 14 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad The emphasis in PIP Model is on moving away from ‘infrastructure investment plans’ to evolving ‘service improvement plans’ which include a wide set of actions including policy and process re-engineering. PIP Model starts with measurement of current performance levels. This is followed by identification and design of a set of actions to improve performance. Phasing and financial implications of these actions are assessed and a financing plan is developed. The Model enables comparison of various options in terms of their impacts on service levels and on ULB’s financial capacity to operate and maintain new infrastructure.

15. Steps of Performance Improvement Planning 15 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad PIP Model is developed as an excel based spreadsheet to facilitate interactive usage. The structure of the Model has been aligned with PIP planning process. It has three distinct modules, each for a stage of PIP planning process. The chart alongside denotes each sheet of excel workbook and its flow of sequence. BASE INFORMATION Water supply, wastewater and solid waste; Municipal finance past trends and future forecasts Excel sheet in PIP model : WSS info, Finance info, Municipal Finance Step 1.: ASSESS CITY PRIORITIES Review trends of key performance indicators and peer comparison Excel sheet in PIP model : Performance assessment Step 2. SELECT IMPROVEMENT ACTIONS Identify improvement actions to meet sector goals Excel sheet in PIP model : Performance assessment Step 3. DEVELOP IMPROVEMENT PLAN Design of actions in Improvement Plan – Phasing, quantity and costs Excel sheet in PIP model : WS Plan, WW Plan, SW Plan Step 4. REVIEW IMPROVEMENT PLAN Review impact on service performance Excel sheet in PIP model : Summary of Action Plan Step 5. MAKE FINANCIAL DECISIONS Sources of funds, Tariff structures & levels, Transfer surplus to WSS Excel sheet in PIP model : Action Plan finance, Financing Plan Step 6. REVIW FINANCING PLAN Review feasibility of Financing plan for CapEx and OpEx Excel sheet in PIP model : Financing Plan DATA ENTRY PERFORMANC E PRIORITIES ACTION PLANNING FINANCIAL PLANNING

16. Snapshot of performance assessment in PIP model Snapshot of performance assessment in PIP model - Identify city priorities 16 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad Local Action Indicators - indicated through graphs Key Performance Indicators - comparison against peer groups BASE INFORMATIO N ASSESS CITY PRIORITIES SELECT IMPROVEMEN T ACTIONS DEVELOP IMPROVEMEN T PLAN REVIEW IMPROVEMEN T PLAN MAKE FINANCIAL DECISIONS REVIW FINANCING PLAN

17. Snapsho t of entire structure for Action Plannin g in PIP model 17 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad Tabular boxes for calibration of improvement actions Visual display of impact of activated actions on performanc e

18. Snapshot of time series analysis of performance in PIP model 18 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad BASE INFORMATIO N ASSESS CITY PRIORITIES SELECT IMPROVEMEN T ACTIONS DEVELOP IMPROVEMEN T PLAN REVIEW IMPROVEMEN T PLAN MAKE FINANCIAL DECISIONS REVIW FINANCING PLAN

19. Approach to Financial Planning 19 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad Financial planning essentially involves a balancing act between meeting funding requirement from external and internal ULB sources of funds. It also assesses sustainability of these sources in long run. BASE INFORMATIO N ASSESS CITY PRIORITIES SELECT IMPROVEMEN T ACTIONS DEVELOP IMPROVEMEN T PLAN REVIEW IMPROVEMEN T PLAN MAKE FINANCIAL DECISIONS REVIW FINANCING PLAN

20. Snapshot of setting tariff structures in PIP model 20 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad Revision in tariffs for revenue enhancement to meet funding requirement of capital expenditure, operating expenditure & debt servicing. Tabular boxes for setting of tariffs sector- wise Visual display of impact on revenues BASE INFORMATIO N ASSESS CITY PRIORITIES SELECT IMPROVEMEN T ACTIONS DEVELOP IMPROVEMEN T PLAN REVIEW IMPROVEMEN T PLAN MAKE FINANCIAL DECISIONS REVIW FINANCING PLAN

21. Snapshot of CapEx and OpEx plan summary in PIP model 21 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad Snapshot of Operating plan summary and tariff structures Snapshot of Capital plan summary and external sources of funds BASE INFORMATIO N ASSESS CITY PRIORITIES SELECT IMPROVEMEN T ACTIONS DEVELOP IMPROVEMEN T PLAN REVIEW IMPROVEMEN T PLAN MAKE FINANCIAL DECISIONS REVIW FINANCING PLAN

22. Snapshot of Performance Improvement Plan Summary in PIP model 22 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad BASE INFORMATIO N ASSESS CITY PRIORITIES SELECT IMPROVEMEN T ACTIONS DEVELOP IMPROVEMEN T PLAN REVIEW IMPROVEMEN T PLAN MAKE FINANCIAL DECISIONS REVIW FINANCING PLAN

23. Sample of PIP Model Application – Comparison of PIP Options for a City 23 Performance Assessment Systems (PAS) project, CEPT University, Ahmedabad Three sanitation options were simulated for a city in PIP Model to assess its impact on services and finances: i)Conventional underground sewerage ii)Settled sewer system iii)On-site sanitation system The Model was simulated to provide similar outreach of services with all sanitation options, the financial impact of these options varied considerably. A sample result of these results are shown here. PIP options Capital FinancesOperating Finances Tariff increase required Base tariff = Rs.1465/HH/yr Sources of funds (Rs cr)Average/yr (Rs cr) Grants ULB funds PrivateTotal Capex Add. Opex Add. Revenue Internal funds Debt I) Business as Usual scenario with committed projects 42.69.1--51.70.9 Rs. 2066 II) Proposal with only Wastewater Technology Options A. Citywide Sewerage 76.19.97.01.594.52.31.2Rs. 3602 B. Citywide Settled sewer 60.514.7-2.077.21.41.7Rs. 2055 C. On-site sanitation system 42.615.7-4.7631.01.5Rs. 2055 Annual tariff increment required

24. Model Application - City Sanitation Plans in Small Towns  In partnership with State Government of Maharashtra (Water Supply and Sanitation Department, State utility (MJP) and local Municipalities  Plans cover elimination of open defecation, safe excreta disposal, black and grey management and solid waste management

25. Diagnostics of wastewater system – Sinnar Collection/StorageReuse/disposal Treatment Conveyance User interface Provide treatment sites Avoid indiscriminate dumping Avoid choking of drains through regular cleaning Need to be designed as per prescribed standards Avoid pollution of land and water bodies GREY WATER BLACK WATER 428 ML/Yr 803 ML/Yr 426 ML/Yr 1228 ML/Yr 1.3 ML/Yr Existing Links In the value chain Missing Links In the value chain Areas for Intervention in the value chain Periodic cleaning needs to be monitored Avoid soak pits where ground water tables are high

26. Wastewater Management- C itywide Conventional Sewer PROPOSAL FOR WASTE WATER MANAGEMENT Underground sewer in Old town area (78km) Sewage Treatment Plant ( 15 MLD) Underground Sewer for New developing areas (112km), Wastewater Management – Citywide Settled sewer Settled Sewer for New developing areas (112km), Settled sewer in Old town area (78 km) Settled sewer connected to Interceptor sewer (8km) Waste Water Treatment Plant ( 15 MLD) Suction emptier truck Septage treatment facility Soak pits for New developing Settled sewer in Old town area (78 km) Settled sewer connected to Interceptor sewer (8km) Waste water Treatment Plant ( 15 MLD) Suction emptier truck Septage treatment facility Wastewater Management- Mixed option

27. Costs of sanitation options differ greatly! Sanitation option Total CapEx (Rs. mn) Base case230 Sewerage1150 Settled sewer620 On-site and settled sewer 480 Sanitation option Total OpEx (Rs. mn/ annum) Base case80 Sewerage150 Settled sewer100 On-site and settled sewer 90 Capital expenditure on regular sewerage network is almost double the other options! Capital expenditure O&M expenditure

28. Financial implications – tariff increase required! Conventional sewerage~450% increase Other options ~150% increase

29. Thank You For more information on our Improvement Planning tools, please visit : www.pas.org.in