Navi Mumbai is a port city of 0.8 million people in India. The Municipal Corporation (the city government) used to provide the water supply and sanitation services managed by the private sector through a large number of labour-based annual contracts (42 for water and 48 for wastewater). These contracts had focus on service delivery and were not efficiency oriented. The services were not satisfactory and customer complaints were unending. It was also difficult for the city to administer and control contractor performance for large number of contracts.
With the technical assistance of the USAID, the 42 contracts in water supply and 48 contracts in wastewater were transformed into 19 performance-based service (PBS) contracts for water supply and 6 similar contracts for wastewater services. The scope of these three- year PBS contracts included system operation, new connections, water and energy audits, repair and maintenance, and advisory services to the city. The results of this change in contractual arrangements brought astonishing improvement in efficiency gains. Revenues increased by almost 45 per cent, over a period of two-years the city reduced its annual energy consumption by 4.5 million rupees on sewerage contracts alone, and the chronic customer complaints almost completely disappeared.
Source: | India Infrastructure Report 2006; and David C. Mulford (India’s water and sanitation challenges, The Hindu, online edition, 22 March 2006. Available at <http://www.hindu.com/2006/03/22/stories/2006032205821100.htm>. |