Clean Ganga: New PPP policy in waste management will boost investment

19-Jan-2016 # Ganga Project Source: India Inc

The Indian government’s vision of a more integrated waste-water management policy got its first major boost with the launch of a new incentive-based corporate model.

This brings back momentum to the Namami Gange programme by taking the mission to its very roots – the local communities who stand to profit from not only a Clean India but also have the opportunity to explore its business potential. Bringing in the corporate sector also ensures greater efficiency in terms of delivery.

Flow of untreated urban sewage is one of the main reasons for pollution in the river Ganga. Under the latest plan, companies will collaborate on a public-private partnership (PPP) basis for urban sewage management. As part of the new model, a part of the capital investment of up to 40 per cent will be paid by the government through construction-linked milestones and the balance through an annuity over the contract duration of up to 20 years.

Companies will be able to bid for these contracts and the winning bidder will be responsible for running the existing sewage treatment plants, building new ones according to requirement, and maintaining and operating all of them for at least 15 years in line with specified quality standards.

A proposed special purpose vehicle (SPV) to be established under the Companies Act 2013 will provide the required governance framework and enabling functional autonomy.

Prime Minister Narendra Modi believes this “futuristic” development will transform his pet project: “This decision taken by the Union Cabinet on the ‘Namami Gange’ programme will reform the wastewater sector in India. Marking a paradigm shift, Hybrid Annuity based PPP model will now be adopted to ensure performance, efficiency, viability and sustainability.”

As part of the inter-connected thread that runs through the government’s various schemes, it is expected that revenue generated by selling the treated water would be sufficient to keep the sewage treatment plants running beyond the 15-year period. This would eventually also feed into the targets set for renewable energy sources for the country.

Datarest, a Dutch company, will study the distribution and flow in the Ganga after which a decision on hydel power projects is also expected.

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