Tamil Nadu Urban Infrastructure Financial Services ... - Municipal

8. Project profiles, analysis of risks and ESA considerations
This section follows from the Capital Investment Needs identified in the previous section and provides brief
profiles of select priority projects that need to be executed by Krish-M in the short term. These project profiles
provide a) Need for the project b) Project cost and phasing c) current status and technical assistance
requirements d) possible financial mix and risk factors and e) illustrative classification based on environmental
and social framework adopted by TNUDF.
8.1 Water supply
Project Description Comprehensive water supply scheme for piped water supply in all wards
Project Status DPR under preparation by TWAD.
Need for the project Water supply is only 60 LPCD while less than 63% of assessed properties have
house service connections, indicating the significant gaps in water supply service
levels and coverage. Therefore this project needs to be addressed on priority
Project
Components
Project Cost and
basis
This outlay is based on initial estimates provided by TWAD to Krish- M and exact
components and scope of DPR are not available. Assessments of normative gaps
that need to be addressed are highlighted below.
Supply augmentation, Transmission and primary storage for supply of at
least 10.37 MLD (by 2012) and 12.74 MLD (by 2027)
Local storage and pumping - Additional 2.19 ML of storage capacity by 2012
and another 0.38 MLD by 2027.
Investments in pumping and distribution network - Comprehensive
provision of protected piped water supply in all wards covering about 44 km of
roads in the short term.
Rapid scale up in House service connections – which would potentially
need to increase nearly 8-fold in the next 5 years to more than 15500
connections
Estimated at Rs. 6657 crore.
Based on discussions with Krish- M, initial estimate provided by TWAD .It is likely
to get escalated.
Revenue impact Direct incremental revenue impact as Krish- M intends to levy house connection
deposits and user charges. However, it has still not been decided whether Krish-
M or TWAD would be handling the maintenance of water supply
Financing mix Would be structured as a combination of grant, loan and own funds based on a
detailed appraisal of potential revenues and other possible credit enhancements
including escrow of part of property tax receivables and user charges and creation
of debt service reserve.
Risk factors and
other remarks.
ESA analysis and
tentative rating
Given the large size and the complexity of the project, it is important to follow best
practices in contracting out this project. Stringent quality considerations must be
adopted in selecting contractors. The contract could be structured on a BOT format
where the contractor is also responsible for maintaining the network, so that that
the risk of non-performance is shared. Further incentives and penalties should be
built into the contract to ensure timely completion of the project. To ensure
scalability, TWAD should ideally make the design amenable for 24x7 supply in the
future; even it does not envisage 24x7 supply in the short term.
E2 -Expected to have only moderate environmental issues. Mostly generic impacts
in nature
S3 - No social issues expected. Hence socially benign no social mitigation
measures required, need to submit SSR
CCP cum BP - Krishnagiri Municipality 70