jusco presentation

8/7/2019 JUSCO Presentation

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JUSCO’s Water tariff

The views expressed in this presentation are the views of the speaker and do not necessarily reflect the views or policies ofthe Asian Development Bank (ADB), or i ts Board of Governors, or the governments they represent. ADB does notguarantee the accuracy of the data included in this paper and accepts no responsibi lity for any consequence of their use.Terminology used may not necessarily be consistent with ADB official terms.



• Jamshedpur city was created 100 years ago – in 1904 -

along with the Steel Plant set up by the Tatas at the villageof Sakchi

• The Company acquired 64 sq kms (approx 16,000 acres) tocreate a township for sustaining a high Quality of Lifenecessary to attract the best talent

• Zamindari Act, 1956 required land to be vested back toGovernment, which was given back in the 1985 on lease toTata Steel w.e.f. 1956

• As an obligation of this lease obligation with the GoJTata Steel is responsible for creation, operations,maintenance of all urban infrastructure, including water& wastewater infrastructure

Fact File



It’s mandate is to:

• Improve internal efficiency & customer service throughCUSTOMER DRIVEN EXCELLENCE

• Address the emerging need of the nation in the field ofinfrastructure creation and management

Town Division, Tata Steel was responsible for the creation,

operation and maintenance of infrastructure services atJamshedpur for all citizens (0.7 million) and not just itsemployees

In 2004, Tata Steel spawned the Jamshedpur Utilities &Services Company Limited (JUSCO), India’s only

comprehensive urban infrastructure company

Jamshedpur Utilities & Services Company Limited



Jamshedpur Today

• Area: 64 square kilometres

• Size: Among the 30 largest cities in India

• Law & Order: Local State Administration

• Demographic Profile: a microcosm of India; represents itsplurality in ethnic, linguistic groups, professionals, skilled andunskilled people

• Population: 0.7 million; only 20,000 of who are Tata employees

• JUSCO provides civic services on behalf of Tata Steel



Background – JUSCO’s Vision & Objectives

Acquire competenciesCapture emerging

markets

AchieveOperational Excellence

Adopt leading processes, develop competencies and build capacityAdopt technology, create environment that fosters innovation

VisionWe shall be a provider of best-valueinfrastructure and utility services

VisionWe shall be a provider of best-valueinfrastructure and utility services

MissionBuild a process and knowledge driven enterprise where a team of happy and

empowered employees creates best value through :care for Customer, culture of Excellence & Improvement, commitment to

Safety & Environment, concern for Community.



Backdrop : Indian Water Utilities

• Water is a politically sensitive subject

• Is highly capital intensive without adding value to customer

• Lack of effective & efficient service delivery

• Tariff does not recover cost of service and is rarely linked to consumption

• Predominately conventional treatment processes

Jamshedpur was no different

Low Willingnessto charge&

Low Willingnessto Pay

LowCollection/

Recovery LowMaintenance

Low ServiceLevel

Low Level ofInfrastructureLow

Investments

Low Equilibrium Cycle



Backdrop : Indian Water Utilities

For bringing about transformation JUSCO opted for:

Process innovation enabled by cost effective and

economically viable technology to improveservice delivery

Leading to increased customer satisfaction

ensuring recovery of cost

Aimed at becoming financially sustainable



Water System – ‘River-to-River’ Management

N

River Pump House

Water Treatment Plant (WTP)

Water Towers – 7 zones/ 11 towers

Sewage Pumping Stations (SPS) -10

Sewage Treatment Plant (STP)

264 MLD

190 MLD

46 MLD

64 MLD



JUSCO: Water Value Chain

Management Process driving Excellence

Leadership StrategicPlanning

PerformanceManagement

Information& Knowledge

Management

Investment

Management

RiskManagement

HRManagement

Billing &Collection

WaterProduction

MaintenanceManagement

QualityAssurance

E nab l i ng

WaterDistribution

CustomerManagement2

1

3 4

6

5

CustomerValue &

sustainability



Flat Rate water tariff – the historyObjectives

To bill customer an affordable price based on theirexpected consumption in intermittent supply areas.Overview

In order to achieve the above objective consumers arebilled based on two factors, one is plot area of consumer’spremises (sq. ft.) and other one is status of building

(Ground, Ground+1…..).

Consumers were divided and tariff is designed to chargeon subsidized rate to common man from past severaldecades. A total of four categories were existing as per

tariff.



Flat rate tariff during 80s, and 90s:-

Sl No Items/Particulars Applicable

prior to

1.1.1979

Applicable

with effect

from

1.1.1979

Applicable with

effect from

1.04.1980

Applicable with

effect from

1.03.1986

Applicable with

effect from

1.12.1991

Applicable with

effect from

01.12.1998

1Bustee Holdings Rs 5/- PM Rs 5/- PM Rs 10/- PM for single

storey + Rs 10/- for

each additional floor

or part thereof for

1/2 inch ferrule upto

1600sft plot size

Rs 15/- PM for single



or part thereof for


1600sft plot size




or part thereof for


1600sft plot size




or part thereof for


1600sft plot size

2Leased Holdings &

small houses. Plot

size- 1600 sft to

2500 sft

Rs 10/- PM Rs 15/- PM Rs 25/- PM upto



or part thereof.




or part thereof.

Rs70/- PM for single



or part thereof.

Rs110/- PM for single



or part thereof.(Plot

area 1600 sft to 2500

sft)

3 Large houses &

Bungalows Plot size

above 2500 sft

Rs 35/- PM Rs 45/- PM Rs 50/- PM upto

double storey + Rs

25/- for each

additional floor or

part thereof.




or part thereof.

Rs 150/- PM for

single storey + Rs

100/- for each

additional floor or

part thereof.

Rs 240/- PM for

single storey + Rs

160/- for each

additional floor or

part thereof.Plot area

above 2500 sft.

4 Commercial Plots Rs 50/- PM. Rs 75/- PM for single



or part thereof.

Rs 150/- PM for

single storey + Rs

100/- for each

additional floor or

part thereof.

Rs 240/- PM for

single storey + Rs

160/- for each

additional floor or

part thereof.



Flat rate tariff from June’2001 and existing (wef 01.04.2005):-

Sl No Items/Particulars Applicable with effect from 1.

06.2001

Applicable with effect from

01.04.2005 (Current)

1Domestic and Bulk

domestic customers

Rs 75/- PM for single storey + Rs 75/-

for each additional floor or partthereof . upto 1600sft plot size

Rs 120/- PM for single storey + Rs

110/- for each additional floor or partthereof . upto 1600sft plot size


105/- for each additional floor or part

thereof . upto 2500sft plot size






thereof . Plot size above 4000sft



thereof . Plot size above 4000sft



thereof . Plot size 2500sft to 4000sft



thereof . Plot size 2500sft to 4000sft

2 Commercial and other

holdings








240/- for each additional floor or partthereof . plot size 1600 to 2500 sft.


360/- for each additional floor or partthereof . plot size 1600 to 2500 sft.



thereof . plot size above 2500 sft



thereof . plot size above 2500 sft



Domestic & Domestic Bulk customers Commercial holdings/others

Area (sq. ft.)/ Bldgstatus

0 to1600

1600 to2500

2500 to5000

above5000

0 to2500

2500 to5000 above 5000

G 120 240 450 540 450 540 600

G+1 230 420 750 900 800 900 1000

G+2 340 600 1050 1260 1150 1260 1400

G+3 450 780 1350 1620 1500 1620 1800

G+4 560 960 1650 1980 1850 1980 2200

Flat Rate water charges (Current) Rs. per month

Now (from 1st Apr’2005) major two groups exist - Domestic and Domestic

Bulk Customers (under which 4 categories of plot area exist), andCommercial and other holdings (under which 3 categories of plot areaexist).



Volumetric water tariff

• During the period 1980 – 2005, only few hundreds of potablewater customers were metered (mainly industrial and fewcommercial customers).

• We introduced new telescopic volumetric tariff for all potablewater customer from 1st Nov’2007.

• We decided to give new connections to any potable water

customer only on metered basis.• We reduced the metered rate of potable water for domesticcustomers (common people).

• We categorized all potable water customers into five groups.

• Domestic customers

• Domestic bulk customers (Flat complexes)

• Industrial customers• Commercial customers

• Institutional customers (state / central govt., bank, etc..)



Principle of tariff design

Increasing block consumption charge

This design facilitates to support conservation

objectives by dividing a customer’s consumption intovarious usage blocks and charges a higher unit price

as a customer moves from one block to the next

Maximum benefit to Urban poor

Customer’s bill is calculated based on the consumption in

each block multiplied by unit price for each block



Meter service charge:For 15 mm dia. Water meter – Rs. 25.00 per monthFor 20 mm dia. Water meter – Rs. 50.00 per month

NEW VOLUMETRIC TARIFF EFFECTIVE FROM 1ST. NOVEMBER 2007

Reduction in tariff and Telescopic slabs of tariff introduced

Sl.

No.

Customer Type Consumption Block/ Month Old Rate – Rs. / KL New Rate

(Rs./ KL)

1 DomesticConsumers

Up to 10 KL11 to 25 KL

26 to 50 KL

Above 50 KL

7.97.9

7.9

7.9

5.006.00

8.00

10.00

1A Domestic Bulk

Consumers

(Housing Complex/

Apartment)

Up to 25 KL x Nos. of units

Above 26 KL to 50 KL x No.

of units

Above 50 KL x No. of units

7.9

7.9

7.9

6.00

8.00

10.00

2 Institutional / Govt. Up to 20 KL

21 to 50 KL

Above 50 KL

4.4

4.4

4.4

4.40

6.00

7.50

3 Commercial

consumers

Up to 50 KL

51 to 100 KL

Above 100 KL

7.9

7.9

7.9

8.00

10.00

12.00

4 Industrial

Consumers

Up to 500KL

Above 500 KL

9.9

9.9

12.50

15.00



Further Reduction in Metered water tariff from 1st Aug’2008:-

It was done - to subsidize the lowest tariff for common man- to accept changes of flat rate to metered connections

For Individual domestic customers

Existing tariff Revised tariff

Slab in

KL

Rate in

Rs. PerKL

Slab in

KL

Rate in Rs.

Per KL

0 - 10 5 0 - 30 5

> 10 to

25

6 > 30 to

50

6

> 25 to

50

8 > 50 to

70

8

> 50 10 > 70 10

For Bulk domestic customers

Existing tariff Revised tariff

Slab in KL Rate

in Rs.

Per

KL

Slab in

KL

Rate

in Rs. Per

KL

Up to 25

x Nos. of

units

6

Up to 30

x Nos. of

units

5

Above 26

to 50

x No. of

units

8

Above 30

to 50

x No. of

units

6

Above 50

KL

x No. of

units

10

Above 50

KL

x No. of

units

10



Affordable tariffs

Tariff comparison amongst prominent Indian Cities

0

10

20

30

40

50

60

70

80

90

Hyderabad

Vizag

Bangalore

Chennai

Delhi

Guwahati

Jamshedpur

Rs/1000L

Jamshedpur has one of the lower bands of water tariff. For the 1st time in the EasternIndia and among few top cities in India, Telescopic volumetric water tariff introduced inJamshedpur for various customer categories



How have we become able to sustain recoveries even

after reducing our tariff for most of the customers(during past five years, i.e. from FY’05 to FY’10)

• By investing for the replenishment of very old waternetwork.

• Reducing Unaccounted for water / Non revenue water(UFW / NRW).

• Reducing Specific Chemical consumption / Specific power

consumption (SCC / SPC).

• Keeping cost per KL almost constant (avg. CAGR – 7%).

• Increasing the revenue from water sale (avg. CAGR-17%).

• Reducing operating ratio (avg. CAGR – (6%)).



2.5

7.4

5.3

4.2

2.01.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

FY'05 FY'06 FY'07 FY'08 FY'09 FY'10

Reduced Non RevenueWater (NRW)

Reduced Specific PowerConsumption (SPC)

Reduced Specific ChemicalConsumption (SCC)

Improved Quality

Investment on Infrastructure &Technology - Rs. Crore

Impact on process efficiency due to

use of Technology & good practiceadoption in project area

Results



Process efficiency drives financial sustainability

Reduced NRW

Reduced SPC

Reduced SCC

Improved Quality



Financial sustainability drives customer value

Satisfacion level of consumers -

Water tariff

27

54 6550

40

010203040506070

Bangalore

Chandigarh

Jamshedpur

Pune

Bhubaneshw

ar

%

Source: Survey by AC Nielsen ORG Marg in2006

7.9 7.9 7.9

6.0 6.0 5.0

0.02.04.06.08.0

FY'05 FY'06 FY'07 FY'08 FY'09 FY'10

Potable water tariff (Rs./KL)

Sustenance volume tariff: 30Kl/Month



Customer value in turn drives financial sustainability

15.5

21.0

23.124.1

25.5

27.4

5.0

10.0

15.0

20.0

25.0

30.0

FY'05 FY'06 FY'07 FY'08 FY'09 FY'10

Total Water Revenue (Rs.crores)

7.9 7.9 7.96.0 6.0

5.0

0.02.04.06.08.0

FY'05 FY'06 FY'07 FY'08 FY'09 FY'10

Potable water tariff (Rs./KL)

Sustenance volume tariff: 30Kl/Month



Thank You

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