Nagpur: Finally, the Nagpur Municipal Corporation (NMC) has started the process to terminate the contract of private water operator Orange City Water Private Limited (OCW) and also reduced payment by around Rs67 crore per annum. For the first time in 11 years, the civic body has confirmed poor drinking water services by OCW, a joint venture set up by Vishvaraj Infrastructure Ltd (VIL) and France-based Veolia Water, and its failure to complete 24×7 water supply project.
On his last day as municipal commissioner on Friday, Radhakrishnan B issued show cause notice to OCW asking why contract executed with it should not be terminated. He also reportedly cut payment given to OCW from Rs17 per unit to Rs10.8 per unit.
A NMC official told TOI, “Average billing of OCW is around 300 million litres per day (MLD). Payment of OCW used to come to around Rs183.6 crore per annum at the rate of Rs17 per unit. Now, it will come down to Rs116.64 crore per annum at the rate of Rs10.8 per unit,” he said.
This is the first time the civic body has reduced payment of OCW. In last 11 years, NMC had increased operator’s payment citing rise in various parameters. At appointment on March 1, 2012, OCW’s payment was Rs7.9 per unit.
TOI had many times reported that NMC is forced to hike water tariff every year due to high payment given to OCW. Minimum water tariff was Rs5 per unit before appointment of operator and then hiked to Rs9 per unit. TOI had also highlighted OCW had failed to convert even one of total 103 water command areas in last 11 years despite the deadline of five years.
The latest action is a fallout of OCW’s failure on majority of parameters prescribed in the contract. Apart from failure of 24×7 Water Supply Project, OCW is being held responsible for not bringing down non revenue water (NRW) to 15% and consumption of drinking water to 150 litres per capita per day (LPCD), ensuring 100% metering, and end of contaminated supply, equal water distribution, improvement in billing and revenue etc.
An OCW director, KMP Singh, told TOI, “We have not received any such letter from NMC. We would be able to comment only after receiving any communication from NMC.”
BJP city president and MLC Pravin Datke said NMC should start strengthening its mechanism by appointing experienced engineers, requisite manpower etc, and then take back water works from OCW. “It will require at least six months. It is my personal view that this action should have been taken against OCW five years back,” he said.
Welcoming the decision of Radhakrishnan, Congress leader Praful Gudadhe said NMC should immediately oust OCW. “I have been saying from the first year that this company is a total failure. One-time-settlement (OTS) of over Rs400 crore given to OCW should be reversed too. Extra payment made to OCW since 2012 should be recovered,” he said.
Former corporator Manoj Sangole said action should also be taken against VIL and Veolia, as contract was awarded to these two companies. “Problems aggravated instead of reducing since OCW was appointed by NMC. Everyone should be told the problems caused by these two companies. We should inform all authorities that later gave contracts to these two companies based on city’s contract and 24×7 Water Supply Project,” he said.
The cash-strapped NMC was in profit from drinking water supply and plunged into huge losses after roping in OCW.
OCW Failures
* Not even 1 of 103 water command areas converted into 24×7
* Non-revenue water not reduced to 15%
* Consumption much more than 150 litres per capita per day
* Meters not installed in 100% houses
* Billing and revenue much below target
* Unequal water distribution, low pressure, contaminated supply continues
On his last day as municipal commissioner on Friday, Radhakrishnan B issued show cause notice to OCW asking why contract executed with it should not be terminated. He also reportedly cut payment given to OCW from Rs17 per unit to Rs10.8 per unit.
A NMC official told TOI, “Average billing of OCW is around 300 million litres per day (MLD). Payment of OCW used to come to around Rs183.6 crore per annum at the rate of Rs17 per unit. Now, it will come down to Rs116.64 crore per annum at the rate of Rs10.8 per unit,” he said.
This is the first time the civic body has reduced payment of OCW. In last 11 years, NMC had increased operator’s payment citing rise in various parameters. At appointment on March 1, 2012, OCW’s payment was Rs7.9 per unit.
TOI had many times reported that NMC is forced to hike water tariff every year due to high payment given to OCW. Minimum water tariff was Rs5 per unit before appointment of operator and then hiked to Rs9 per unit. TOI had also highlighted OCW had failed to convert even one of total 103 water command areas in last 11 years despite the deadline of five years.
The latest action is a fallout of OCW’s failure on majority of parameters prescribed in the contract. Apart from failure of 24×7 Water Supply Project, OCW is being held responsible for not bringing down non revenue water (NRW) to 15% and consumption of drinking water to 150 litres per capita per day (LPCD), ensuring 100% metering, and end of contaminated supply, equal water distribution, improvement in billing and revenue etc.
An OCW director, KMP Singh, told TOI, “We have not received any such letter from NMC. We would be able to comment only after receiving any communication from NMC.”
BJP city president and MLC Pravin Datke said NMC should start strengthening its mechanism by appointing experienced engineers, requisite manpower etc, and then take back water works from OCW. “It will require at least six months. It is my personal view that this action should have been taken against OCW five years back,” he said.
Welcoming the decision of Radhakrishnan, Congress leader Praful Gudadhe said NMC should immediately oust OCW. “I have been saying from the first year that this company is a total failure. One-time-settlement (OTS) of over Rs400 crore given to OCW should be reversed too. Extra payment made to OCW since 2012 should be recovered,” he said.
Former corporator Manoj Sangole said action should also be taken against VIL and Veolia, as contract was awarded to these two companies. “Problems aggravated instead of reducing since OCW was appointed by NMC. Everyone should be told the problems caused by these two companies. We should inform all authorities that later gave contracts to these two companies based on city’s contract and 24×7 Water Supply Project,” he said.
The cash-strapped NMC was in profit from drinking water supply and plunged into huge losses after roping in OCW.
OCW Failures
* Not even 1 of 103 water command areas converted into 24×7
* Non-revenue water not reduced to 15%
* Consumption much more than 150 litres per capita per day
* Meters not installed in 100% houses
* Billing and revenue much below target
* Unequal water distribution, low pressure, contaminated supply continues
