PROJECTRESUMEKeyContractualParameters

PARAMETER TitleoftheProject PARTICULARS Improvement & Revamping of Existing Water Supply, Transmission and Distribution Network under the Command area of NangloiWaterTreatmentPlant,Delhi To renovate the Raw Water Main, WTP, connect the entire project area with piped network, migrate from intermittent and tanker supply to continuous system within a defined period, and achieve marked improvement in service and operational efficiency by reducingbothTechnicalandCommercialLossestopredefinedtargets. WTPCapacity40MGD BulkWatertoWTPisbeingsuppliedfromBawanaIntakeWorks.RawWaterFeederMainfromBawanaintakeworksto NangloiWTP(ApproxLength1214km)isincludedintheOperatorsscope. TheWTPtoberehabilitated/upgraded;andconstructionofrecyclingplant. PresentOutputatNangloiWTP:34MGD(ProjectArea22.33MGDandoutsideProjectArea11.67MGD) Supplytooutsideprojectarea(11.67MGD)includes: SupplytoBodellaUGR SupplytoCT2Dwarka SupplytoBPSatUttamNagar LossesatWTP:Approx.19.5%observedduringtheperiod(May2011July2011) SupplytotheprojectAreafromOtherSources: HaiderpurWTP:5.12MGD(willbediscontinuedaftercommissioningofDwarkaWTP(by2016)) KhyalaUGR:0.3MGD(shallbediscontinuedafter6monthfromInitialHandoverDate) BodellaUGR:0.28MGD(shallbediscontinuedafter6monthfromInitialHandoverDate) Tubewells&TankerSupply:2.27MGD
Draft for Discussion Page 1 of 13

BasicObjective

ProjectComponentsand basicdetailsExisting Situation

PARAMETER Total:7.97MGD

PARTICULARS

SupplytoBodellaUGRfromNangloiWTPwillbeshiftedtoHaiderpurWTPfromInitialhandoverDate. SupplytoCT2Dwarka,UjwaandDaulatpurUGRswillbeasBulkSupplyfromNangloiWTPtillDwarkaWTPiscommissioned fully. ProjectArea:NangloiWTPCommandwithanapprox.builtuparea65SqKms.(excludingUjwaandDaulatpur) PresentNetworkCoverage:(Planned99.3%,UAReg100%,UATBR49.3%,UA32.2%,Villages99.1%) ProposedNetworkCoverage(Planned100%,UAReg100%,UATBR100%,UA100%,VILLAGES100).Thecostof proposedNetworkisincludedintheCapexhowever,theimplementationofthesameshallbedoneprioritywisedepending upontheavailabilityofwater Populationinprojectarea: ExistingApprox.10,72,000(excludingUjwaandDaulatpur) ProjectedinYr(2027)Approx.16,16,000(excludingUjwaandDaulatpur) NoofConsumerconnections: Existing80,724(includingUjwaandDaulatpur) ExistingUGRs/BPSwithCapacities&Yrofcommissioning: Nangloi9.2MGcommissionedin2008 Najafgarh2.2MGcommissionedin1992 MohanGarden1.0MGcommissionedinJuly2009 Ujwa1.2MGcommissionedin2009 Daulatpur1.1MGCommissionedin2009 ExistingOHSRswithCapacities&Yrofcommissioning: Nangloi3LakhGallon ProposedUGRswithCapacities: Najafgarh8.0MG(InOperatorsscope) Mundka6.5MG(NotinOperatorsscope)
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Draft for Discussion

PARAMETER Lengthoftransmissionsystem:Approx.31kms Lengthofdistributionsystem:Approx.1127kms Thematerialwisedistributionisasfollows:

PARTICULARS

PipeMaterial AC(75mmto500mm) PVC(75mmto150mm) CI/DI(75mmto1000mm) MS(100mmto1500mm) PSC(600mmto900mm) GI(100mm)

Lengthinkm 105.7 34.7 973.9 4.8 8.0 0.024

BroadProjectScope

Noofborewells:Nos:126,Output1.55MGD PercapitaSupplyatpresentinProjectArea:150LPCDwiththeexistingnetworkcoverage AverageLPCDfortheProjectArea(includingunauthorised+Coloniesandvillagesnotundernetwork)65LPCD Tankersupply:in2010 NajafgarhUGR NangloiOHT PaschimViharOHT Nos.:59 Nos.:21 Nos.:22 Trips:410 Trips:137 Trips:66 Volumesupplied:0.49MGD Volumesupplied:0.16MGD Volumesupplied:0.07MGD NRW%:78% Capex RehabilitationofRawwaterFeederMainfromBawanaIntakeworkstoNangloiWTP. RehabilitationandautomationofNangloiWaterTreatmentPlantincludingconstructionofrecyclingTreatmentunit. Repair,RehabilitationandConstructionofUndergroundreservoirs(UGRs)/BPS/Tubewells Installation,replacement,Rehabilitation,AutomationofTransmission&DistributionsystemintheServiceArea; Replacementofexistingserviceconnectionsandmetersforallcategoriesofconsumers. OperationandMaintenance OperationandMaintenanceofRawWaterFeederMainfromBawanaRawWaterPumpHousetoNangloiWTP.
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Draft for Discussion

PARAMETER

BidVariablefor selectionofOperator

ItisenvisagedthatimplementationoftheentireRehabilitation&DevelopmentworksenvisagedinDPRprovidedbyDJB,willspread over3yrs. Option1: GrossOperatorRateRs.PerklofwaterBilledintheProjectArea GrossOperatorRateisinclusiveofOperatorsallO&Mexpenses,costofBulkWater,Electricitycharges,andalsofactorsinrecoveryof Operatorscapitalinvestment. Option2: NetOperatorRateRs.PerklofwaterBilledintheProjectAreawithPowerGuarantees. NetOperatorRateisinclusiveofOperatorsallO&MexpensesandfactorsinrecoveryofOperatorscapitalinvestment.

PARTICULARS OperationandMaintenanceofNangloiWaterTreatmentPlantandTransmissionandperipheralmains. OperationandMaintenanceofUGRs/Tubewellsanddistributionnetwork FixingofsystemleakageswiththeaimofreducingTechnicalLossesfromthesystemBilling,&Collectionofwatercharges fromConsumersintheServiceAreaanddepositingintotheProjectEscrowaccount; MeterReplacementtobeundertakenasandwhenrequired. Management,Operation&MaintenanceoftheProjectComponentsduringtheprojectperiod. CustomerServiceandGrievanceRedressal EnergyandwaterAudit

KeyContractProvisions PARAMETERS ImplementationFormat PARTICULARS PPPConcession ProjectCost(excludingRoadRepairs)tobeundertakeninthe3yrs o DJB:50%ofactualprojectcost,asGrant,subjecttoaceilingof50%ofcapitalcostestimatedinDJBsDPR&RFP. o Operator:Balance50%oftheactualprojectcost,andcostincurredbeyondthecapitalcostestimatedinDJBsDPR& RFP DJBsContributiontobereleasedthroughEscrowmechanism,asdescribedlater.
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Funding

Draft for Discussion

PARAMETERS ContractPeriod PARAMETERS ProjectFacilities

PARTICULARS The water demand and supply scenario was discussed and it was decided that the Project Period will be of 15 years including 6 monthsforDueDiligenceand2.5yearsforConstruction(COD)describedinthisdocumentasCOD.

PARTICULARS

Willinclude AllExistingAssetsofDJBintheProjectAreahandedovertotheOperator AllAssetsRehabilitated/RepairedbytheOperatorduringtheTermoftheConcession AllnewAssetsinstalledbytheOperator/DJBduringtheTermoftheConcession Ownership of Project EntirelyremainswithDJB,includingallnewassetsbuilt/installedbytheOperator. Facilities ScopeofWork/ Mobilisation/CompliancePeriod Operators Obligations Projectmobilisation,EstablishmentofSPCsoffice(s)intheprojectarea,deploymentofkeystaff&equipmentonsite, during different phases Comprehensiveassessmentofthewatersupplysystemintheserviceareaandestablishingthebaselineofexistingservicelevels, oftheConcession connections,billingandrevenuecollectionposition. ReviewofDPRprovidedbyDJBaspartoftheRFPandpreparationofOperatorsownImplementationPlan. o The plan should cover all findings related to baseline conditions; Consumer survey and demand assessment, details of hydraulic model; Engineering Designs; Project Cost / investment required; Funding and execution plan / methodology; Financial Management Plan and a specific O&M Plan laying down the practices proposed by the Operator for achieving the targetedKPIs. Obtaining approval of DJB ontheImplementationPlanandMISPlan Getting the Existing Assets (AllassetsoronlyvisiblestructureslikeWTP,UGRs,BPS,etc.?)valuedjointlybyDJBandOperatorwiththeassistanceofthird partyapprovedvaluers(forthepurposeofInsurance).Costofvaluationexercisetobesharedequally1. AchieveFinancialClosure

Rehabilitation&DevelopmentPeriod
1

DJBtocheckandinformaccordingly.
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Draft for Discussion

PARAMETERS

PARTICULARS TakeoverresponsibilityofthemanagementandO&Mofwatersupplyfacilitiesincludingmonthlybilling&revenuecollectionin theprojectarea, Adherencetospecificationsandstandards(CPWDManualandStandards) Replacementofalltheexistingmetersandhouseconnectionsandinstallationofnewmeters Themeterinstallationworktocommenceafter6monthsfromtheInitialHandoverDate. ReplacementofallACand PVCPipesintheprojectArea. ReplacementofCIandDI PipesintheprojectAreatotheextentrequired. FormationofDMZsof10,000connectionduringinitial3yearswhichthenwillbeconvertedintoDMAof1,500connectionsby theendof10thyear. Energy and water Audit to be undertaken by Operator on yearly basis. The operator should inform DJB about significant

problemsanditsremedialmeasuresincludinganticipatedfreshinvestmentthroughanAnnual PlaninadvancetoDJBsoas toallowDJBtomakenecessaryBudgetprovisions.

Adopt the computerized Billing or Revenue Management System of DJB for the Project Area, if necessary, and ensure that are installedandfunctioningproperly Operationalise the Escrow Account Generate & Issue Bills to Consumers on behalf of DJB, Collect and Deposit consumer paymentsintoescrowaccount UndertakeRehabilitation&DevelopmentWorksinaccordancewithapprovedImplementationPlan, o Operator to ensure that all DMZs in the distribution network aresetup, all bulk & consumer meters andPressure DataLoggersareinstalled,calibratedandfunctioning, IdentifyallillegalconnectionsandtakeappropriateactionasperinstructionsfromDJB Providenewconnectionswithmeters,replaceold/defectivemeters,provideindividualandgroupconnectionstoconsumersin urbanpoorarea. ArrangeSecurityofprojectestablishmentslikeWTPandUGR/BPS,offices,etc. TakeInsuranceCoverforallexisting,rehabilitatedandnewProjectAssets SetupaManagementInformationSystemandprovideinformationtoDJBontechnicalandcommercialaspects/performanceof theprojectondailybasisaswellasaggregatemonthly,quarterlyandannualbasis. SetupandoperateaConsumerservicecentre&helpline(24x7)

BaseServicechargeshallincludeallexpensesforoperatingandmaintainingthefacilityasprovidedintheconditionofcontractforO&M,exceptforthecostcoveredbytheother componentsandshallincludewithoutbeinglimitedtocostofstaffingandpersonnel,administrativeexpenses,costofroutinemaintenance,repairsandreplacements.
Draft for Discussion Page 6 of 13

PARAMETERS

PARTICULARS ToprovideRainWaterHarvestingatalltheDJBfacilitieswithintheprojectarea. Bytheendof30monthsfromInitialTakeOverDate,Operatorshouldachieve InstallationofmetersforallexistingConsumerconnectionsandBulkMeters CommissioningandtestingofWTPanddistributionsystemintheServiceAreaasperApprovedImplementationPlan AchievementofBaselineServiceLevelspostimprovement,andKPItargetsforO&MPeriod(jointlywithDJB) ComputerisedBillingSystemshouldbefullyfunctioning ObtainingCompletionCertificatefromDJBforRehabilitation&DevelopmentWorks

O&Mperiod Ensure continuous pressurized water supply to all registered consumers at prescribed service levels, including standby operationsthroughTankers. UndertakecalibrationofmetersasandwhenrequiredduringtheConcessionperiod Replacewatermeters(bulk+consumer)andServiceConnectionsasandwhenrequiredduringtheConcessionperiod EnsureminimumbasicsupplytounauthorizedcoloniesthroughtankersasperDJBPolicy,tillareacoverageis100% Undertake2%oftheexistingnetwork(notreplacedintheCAPEXPeriod)replacementeachyearduringtheO&Mperiod. ProvidenewserviceconnectionsandpreventproliferationofunauthorisedconnectionsintheProjectArea. Generate&issuebillstoconsumersonbehalfofDJB,collectanddepositconsumerpaymentsintoescrowaccount ContinuouslystrivetoimprovethelevelsofservicetoconsumersandachievethetargetedKPIs OperaterequisitenumberofConsumerservicecentre&helpline(anIVRsystembasedonKnos.onMTNLpattern).Shouldalso maintainmobileservicecenters. Handover of project facility to DJB at the end of Concession Period in good working condition (as per prescribed handover requirements) ManagementofBulkWaterShortage o Operator&DJBtomutuallyworkoutstrategiesformeetingtheservicestandardsinprojectarea o DJB(andOperator)tocommunicatetothePublicabouttheshortageanditsperiodofsubsistence o Operatorwillnotbeconsideredtobeindefaultduringsuchperiod(andDJBcompensatinghimthroughIdle/Basecharges 2)

GeneralObligationsduringentireConcessionPeriod Submit MIS Reports to DJB on technical and commercial aspects / performance of the project on daily basis plus monthly, quarterlyandannualreports. SubmitAuditedAnnualReportstoDJBandPMC
Draft for Discussion Page 7 of 13

PARAMETERS

EscrowMechanism

ConstructionEscrow FundsfromthisaccountpermittedtobespenttillRehabilitationandDevelopmentworks(RDCD) To be operationalised on/before the Initial Takeover Date and continue till end of works identified under Rehabilitation & DevelopmentWorks. Inflowstocomprisethefollowing: EquityContributionbyOperatorTobedepositedintranchesinaccordancewithImplementationPhasingPlan DebtfromLendersinaccordancewithImplementationPhasingPlan. Capital Grant from DJB To be disbursed in tranches after the Concessionaire has expended the Equity, and shall be disbursed proportionately along with the loan funds thereafter remaining to be disbursed by the Senior Lenders under the Financing Agreements. The Authority shall disburse each tranche of the Grant Support as and when due, but no later than 15 (fifteen) days of receiving a request from the Concessionaire along with necessary particulars. OutflowspriorityofCharges StatutoryDues&applicableTaxes; Payment to Contractors and Suppliers towards Rehabilitation and Development works in accordance with ImplementationPhasingPlan PaymentstobereleasedbyEscrowAgentonlyaftertheinvoiceshavebeencertifiedbythePMC/TPAorDJB,within30 daysofsubmissionofInvoices DJBRevenueEscrow Tobealsooperationalisedon/beforetheInitialTakeoverDate Inflowstocomprisethefollowing: ReceiptsfromConsumers(includingArrears)tobedepositedondailybasis; AuthorityscontributiontowardsshortfallintermsofGrosspaymenttoOperator;
Page 8 of 13

PARTICULARS MeetingtheDebtServiceObligationsasperFinancingAgreements IndemnifyingDJBagainstanyclaimsthatmayariseonDJBonaccountofanydefaultorinactiononthepartoftheOperator RefrainfromcreationofencumbrancesonprojectassetsexcepttoraisefinanceafterpermissionfromDJB. AnEscrowwith2ormoresubA/csmaybeestablished:OneforConstructionandOneforRevenueCollection EnablingprovisionunderSection62ofDelhiWaterBoardAct,1992 EscrowAgentAnyScheduled/NationalisedBankacceptabletoDJB

Draft for Discussion

PARAMETERS

PARTICULARS OutflowsWaterfall Statutorydues,ifany(separatesuba/c) PaymentofElectricityDues,salariesofDJBStaffandBulk WaterChargeswill bedirectlydebitedoninstructionsfrom DJB. While Sewerage Charges will also be part of the billing, but they will be set aside / credited toDJBs subaccount undertheEscrow. OperatorsSubA/c(forMonthlyPaymentstoOperatornetoftheabove) Balance,ifany,toDJBsubaccount AReserveequivalenttoOperatorsaveragenetpaymentfortwomonthswillbekeptasidebyDJB. In case the amount directed to Operators sub A/c after debiting Electricity Dues, salaries of DJB Staff and Bulk Water ChargesislessthanhisnetFeeentitlement,theshortfallwillautomaticallyflowinfromtheReserveA/cwhichinturn willbetoppedupbyDJBimmediately. SeparatesubaccountforRetentionMoneyduringtheConstructionperiod.TheRetentionmoneywillbedeductedatthe rate of 5% of the gross amount of each running bill. Any amount of greater than 5 Lakh in the Retention Money sub accountshallbegiventotheOperatoragainstanequivalentamountofBankGuarantee. TheamountintheRetentionMoneysubaccountshallbegiventotheOperatorafter6monthsofCoD.

Operators Remuneration NopaymentdueforCompliancePeriodof6months. DuringtheConcessionPeriod,Operatorsentitlement=QuotedRate@Rs.___Perklofwaterxminimumguaranteedvolume.There willbenoescalationfromInitialTakeoverDatetillCOD(CODperiodisenvisagedof30months). o However if Operator is ableto bill morethan minimumguaranteedvolume, it will paidon the basis ofactual volumeBilledbyit. OPTION1: OperatortobepaidonthebasisofGrossOperatorRatequotedbyhimRs.PerklofwaterBilledintheProjectArea. GrossOperatorRatewillfactor o O&MexpensestobeincurredbytheOperator, o CostofBulkWaterchargestobepaidtoDJB@Rs.__perkl., o ElectricitychargestobepaidbyDJB, o RecoveryofOperatorsInvestment OPTION2: Operator to be paid on the basis of Net
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Draft for Discussion

PARAMETERS

PARTICULARS OperatorRatequotedbyhimRs.PerklofwaterBilledintheProjectArea. o Operator, o Operatorsentitlement=Quotedrate(Rs.Perklofwaterbilled)xVolumeofWaterBilledxCollectionEfficiency However,IncaseofOption1,,NetFeepayabletoOperatorwillbe=[QuotedGrossrate(Rs.Perklofwaterbilled)x Volumeof WaterBilledxCollectionEfficiency][Paymentofelectricitycharges,BulkWatercharges] OperatorshallalsogetpaidfortheBulkWaterSupplytooutsideprojectAreaaspertherateintheConcessionAgreement. OperatorwillalsobeentitledtoreimbursementofServiceTaxfromDJBasapplicable.Sincethereisgenerallyatimelagbetween billingandcollections,Monthly PaymentstotheOperatorwill bereleasedinthesameproportionofthepaymentmadeinthe corresponding month of the previous year to the total annual payment of the previous year. Reconciliations against actual achievementswillbedoneonquarterlyandannualbasis. The Operator will be entitled to Escalation in quoted Rates as per a Rebasing formula which will be factor in change in costsoftheaboveinputitemsyearonyear. CollectionofPastArrears(beforeInitialTakeoverDate)ofDJB:As%oftheArrearcollected,slabsbasedonageofthedues; However,ifthepastarrearsarecollectedafterannouncementofsomeschemebyDJBthenonly%(significantlylesserthanthe above)willbesharedwiththeOperator Optimisation of Energy Costs: There could be set certain benchmarks for optimal energy consumption over the life of the concession.IftheOperatorisabletosavemoreenergy,heautomaticallybenefits,butifheexceedstheprescribedlevels,DJBmay considerwhethertolevyadditionalpenalties.Forthispurpose,asetofbenchmarkswillbegivenintheRFP.Operatorwillalso be required to specify his benchmarks for optimal energy consumption as part of his Implementation Plan after studying the projectarea,andwhicheverislower,willbeadoptedasthetargetforhisKPIs. FailurebyOperatortodepositConsumerpaymentsintothedesignatedEscrowA/cwithin1workingdaysfromdateofreceiptof paymentsPenaltylevied@Rs.10,000perdayofdelayforeachbill. Clearing of construction debris: removal from service area all surplus construction machinery and materials, waste materials (including without limitation, hazardous material and waste water) rubbish and other debris (including without limitation accident debris) Rs 5,000 for each day of delay after lapse of 3 Calender days from the day of complaint from Consumer or notice. PossibleScopeunderAdditionalCapex
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NetOperatorRatewillfactor O&M expenses to be incurred by the RecoveryofOperatorsInvestment

Incentives&Penalties toOperator

AdditionalCapex,
Draft for Discussion

DJB to select a third party contractor for executionoftheworksthroughatransparent,competitivetenderingprocesstodeterminetheoptimumcostfortheworks. DJBtofundtheentirecapitalinvestment. DJBtofundreplacementofpipeshavingdia morethan350mmintheprojectArea. Operator to supervise the execution of such worksandisexpectedtoincludesuchsupervisioncostinhisquotedrate. PaymentGuarantee DJBtosignaescrowagreementbeforeInitialtakeoverdatewithOperator,LenderandabankforsettingupofEscrowaccount (agreementdraftprovided) Mechanism Initial amount from DJB into the account should be equal to two months of the Operator Remuneration which shall be replenishedregularlyasperagreementconditions PurposeandmannerofutilizationofamountdepositedprovidedinEscrowagreement. Furtherinterestchargesondelayedpaymentareapplicable(delayindaysandrate:______) Standard Operators RebasingEveryFinancialyear RateAdjustment Coefficientstobedefinedbasedonthefactorofcosteachyear AspertheOPTION1forOperatorRemuneration: FactorstobeconsideredduringrebasingareBulkWater,PowerandO&MExpenses. AspertheOPTION2forOperatorRemuneration: FactorstobeconsideredduringrebasingareO&MExpenses(onWPIIndex) DJBtoformaseparate CommitteeforRebasingandmayincludeexpertsfromoutsideDJBlikeacademiciansfromIITs,Technical

PARAMETERS ChangeofScope,Change inLawitems

PARTICULARS o theProjectAreabuttobesuppliedwaterbytheOperator. Due to addition of Areas which are outside

experts in Water field, representative of DIPP (which undertakes WPI indexing activities), CPHEEO etc. to bring in more objectivityandtransparencyintheprocess.

Draft for Discussion

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Key Performance Indicators

S.No. KPI 1 2 3 4 5 6 7 8 9 Coverageofwatersupplyconnections Percapitasupplyofwater Extentofmeteringofwaterconnections* Extentofnonrevenuewater(NRW) Continuityofwatersupply Qualityofwatersupplied SLBasper MoUD 100% 135lpcd 100% 20% 24h 100% SLBtarget 2015 2016 2019 100%for 100%for areascovered areascovered inPhaseI inPhaseII Referchapter2 100%for areascovered inPhaseI 40% 100% 80% 100%for areascovered inPhaseII 33% 28% 100%for areascovered inPhaseI 100% 80% 2024

15%

100%for areascovered inPhaseII 100% 100% 95% 95%

Efficiencyinredressalofcustomercomplaints 80% Costrecoveryinwatersupplyservices 100%

Efficiencyincollectionofwatersupplyrelated 90% charges

90%forareas 95%forareas By2018 95%forareas coveredin coveredin coveredin PhaseI PhaseI

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Draft for Discussion

S.No. KPI

SLBasper MoUD

SLBtarget 2015

AdditionalKPIsnotprescribedbythe MoUD WaterlossintheWTP

1.5% achievablein 2014(atthe endof construction period) 2% 0.1forareas coveredin PhaseI

2016 90%forareas coveredin PhaseII 1.5%

2019 PhaseII 1.5%

2024

1.5%

2 3

Waterlossinthetransmissionmain Ph10Districtmeterdensity(No./1000 serviceconnections) (Numberofdistrictmeters/numberof serviceconnectionsx1000) Ph10=C11/C24x1000 C11Districtmeters(No.) C24Serviceconnections(No.)

2% 0.5forareas coveredin PhaseI 0.1forareas coveredin PhaseII

2%

2%

By20180.2 forareas coveredin PhaseII

*Note:1.PhaseIareaswhichhavenetworkcoverageatthestartoftheproject;PhaseIIFortheentireoperatorsareaexceptthecoloniesdevelopedafterawardof worktotheoperator

2.Meterinstallationwillstart6monthsafterinitialhandoverdate.Priorityofinstallationwillbereplacingnonfunctionalmeters,meteringunmetered connections,andreplacingfunctionalmeters,inthatorder.

Draft for Discussion

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