Opportunities and Challenges of PPP in Nepal:

Learning from Municipal Practices in Water and

Sanitation

Kapil Dev Gyawali

Urban Sanitation and Hygiene Advisor

WASH Expo

National Water Supply and Sanitation Training Centre, Nagarkot

18 March, 2015

Acknowledgement

• Public Private Partnerships for Urban Environment (PPPUE)• Pokhara Sub-Metropolitan City Office• Butwal Municipality Office• Dharan Municipality Office• Western Regional Hospital• Chandannath Municipality Office• Marigold Concern Pvt. Ltd., Butwal-12, Rupandehi

• Pokhara Waste Management Pvt. Ltd., Pokhara-8, Kaski

• Ramnagar Tole Sudhar Samittee, Butwal

• Krishnamandir Tole Sudhar Samittee, Jumla

• Sulochana Sunar, Jumla

• Biogas Plant Nirman Upabhokta Samittee, Dharan

• Shree Khanepani tatha Sar-safai Upabhokta Samittee, Dharan

Presentation Flow

• Relevance of PPP in Water and Sanitation

• PPP in Urban Water & Sanitation - Nepal

• Legal & Institutional Arrangements for PPPs

• PPP Practices in Municipalities

• Lesson Learned

• Opportunities and Challenges of PPPs

Relevance of PPP in Water and Sanitation

• Water & Sanitation: Purely Public Goods

• Management: Responsibility of Public Sectors

• Ground for excludability- Pay for use

• Existence of citizens demand

• Space of private investment & profit making

• In PPP, public sector can regulate contracts such that

pro-poor aspects can be incorporated, such as, cross-

subsidy, differential pricing, etc.

PPP in Urban Water & Sanitation - Nepal

• Legal and Institutional Arrangements

• Municipal Level – Several Practices

• Concept of Water Management Board & Companies

(KUKL) in KTM & Secondary Towns

Legal & Institutional Arrangements for PPPsLegal & Policy

• LSGR 1999 (first amendment-2006) provisioned “PPP Promotion Committee" in each local body

• PPP Policy (for Local Bodies), 2004 and PPP Guidelines (for Local Bodies), 2005

• Private Financing in Build and Operation of Infrastructures Act and Rules 2006, 2007

• National Urban Water Supply and Sanitation Sector Policy, 2009

• PPP White Paper, 2011• PPP Provisions in SWM Act, 2011• Sanitation and Hygiene Master Plan, 2011

Institutional • Environment Section as PPP Focal Point in MoFALD

• PPP promotion Committees in Municipal offices• PPP trainings by government agencies like LDTA,

UDTC, National Administrative Staff College

PPP Practices in Municipalities

Ramnagar Community Composting and Recycling Project, Butwal

(Practice of the PPP model in local level waste processing)

Implementing Agency

Butwal Municipality Office through Ramnagar Tole Sudhar Samittee

Contract Period

5 years

PPP Model Build Own Operate (BOO)

Private Operator

Marigold Concern P Ltd., Butwal-12, Rupandehi

Key Date Initial Contract Date- November, 2010

Municipal Waste Management in Pokhara Sub-Metropolitan City

(Practice of the PPP model in citywide solid waste management)

Implementing Agency

Pokhara Sub-Metropolitan City Office

Contract Period

2 years

PPP Modality

Management contract

(Sharing of 20 % revenue from tariff collection with PSMC)

Private Operator

Pokhara Waste Management Pvt. Ltd.Pokhara-8, Kaski

Key Date Initial Contract Date- October, 2008

Use of PPP Arrangements at WRH, Pokhara-Solid Hospital

Waste Management

Implementing Agency

Western Regional Hospital 

Contract Period 2 Years

PPP Modality

Management contract(Revenue sharing on sold recyclables)

Private Operator

Pokhara Waste Management Pvt. Ltd.Pokhara-8, Kaski

Key Date Initial Contract Date- January, 2012

After(Treatment Center)Before

Public Toilet Management- Chandannath Municipality, Jumla

Implementing Agency

Chandannath Municipality Office through Krishnamandir Tole Sudhar Samittee

Contract Period

2 Years

 

PPP Modality

Management Contract

Private Operator

Sulochana Sunar

Key Date Initial Contract Date- November, 2014

Community Biogas and Solid Waste Management,

Sarduline, Dharan

Implementing Agency

Dharan Municipality Office

PPP Model BOO(Build, Own and Operate)

Private Operator

Biogas Plant Nirman Upabhokta Samiti (a community based organization)

Revenue Stream

Tariff collection per user house against gas use

Swastika Gauraha Drinking Water Project, Dharan -13

Implementing Agency

Dharan Municipality

PPP Model BOO (Build Own and Operate)

Private Operator

Shree Khanepani tatha Sar-safai Upabhokta Samiti (a community based organisation)

Revenue Stream

Tariff collection per month per user house against water use

• Pro-poor aspects need to be incorporated in PPPs right from project

conceptualization

• Partnership with community organizations are effective in benefiting

targeted groups

• CCI’s play an important role in PPPs engagements in their capacity as

motivators of potential private sector players

• Developing specific policy and legal framework for PPP financing from

financial institutions is necessary

• No investment type PPP in Water and Sanitation: Model investment PPP

projects is essential as confidence building measures

• Seed Grant/Viability Gap Fund is very important in the success of PPP

• Need to establish PPP institution within DWSS

Lesson Learned

Opportunities and Challenges of PPPsOpportunities • Legal and institutional set up

• Understanding and demand• Proven better services in sanitation through Private

Sector(PS)• Municipalities nos. have increased to 191 that creates

enormous opportunity to PS• Govt. alone can not invest / needs private sector to

supply services

Challenges • Municipal Employees – duties more administrative, less developmental

• Business communities in confusion on how to partner with government and the ways to secure profit and security

References

• Compendium of PPP Practices in Municipalities 2012: Public Private

Partnerships for Urban Environment

• Glimpse of PPP 2012: Public Private Partnerships for Urban

Environment

• Presentation on Practices in PPP-Nepal Experience, June 2012:

Purusottam Man Shrestha, NPM, PPPUE/MLD/UNDP/Nepal

THANK YOU