Economic & Financial Instruments for Restoring Ganga

18th Mar 2015
OverviewLead DiscussantsProgramme AgendaGallery

India has emerged as the fourth largest economy in the world in terms of purchasing power parity on account of the post liberalization developments and advent of the information technology industry. Despite witnessing a decline in poverty and a rise in spending, a sizeable proportion of the populace lacks access to basic resources required for a healthy livelihood. Among these, water availability in general and access to safe water in particular have emerged as a key focus area in the policymaking arena given the pronounced problems that plagues the Indian populace. The surge in population has only added insult to injury with a significant and consistent reduction in per capita availability of water, which may eventually result in India becoming a water-stressed country.

Needless to say, that these issues can’t be tackled by the public sector alone, given their financial limitations, and the private sector needs to get involved actively in developing regulatory reforms and financial models which are mutually beneficial. As per the recent budget there is going to be a thrust on coverage of rural population with piped water supply schemes, planning for optimum use of sustainability component in water stressed blocks and using incentive funds to decentralize management of water supply schemes. However, there has been a significant cut in the budget allocation. This puts the onus on the private sector to fill the void through sustainability projects on a PPP model targeted at access to drinking water in rural regions in India. The water scenario is not restricted to issues of sanitation and supply but extends to maintenance of river health in the interest of sustainability. In this regard, for example, the government has provided 2100 crore for rejuvenation of the Ganga River Basin. However, estimates reveal that any effort to clean the Ganga will require international expertise coupled with utilization of advanced technologies and industry incentivisation. The IIT-C+ report estimates that the annual expenditure on sanitation, solid waste and water for the river basin will be to the tune of 2,00,000 crores and the whole process would require an investment of 6,00,000 crores. The problem of funding is further compounded by the fact that there is no identifiable water market that exists in India currently and lack of take-out financing for the water sector. Thus while there is a need for private sector involvement in India’s water market, there is also an onus on the policymakers to introduce reforms and instruments, which incentivize the industry in developing sustainable growth models.

Oval Observer Foundation is delighted to organize a workshop on Economic and Financial Instruments for Restoration of Ganga.

The GRBMP suggests that Government of India must move towards a Public-Private-Partnership (PPP) structure in some of components in water/waste sector since it offers immense opportunities for growth given the high level of waste generation and water pollution levels in Indian rivers. This requires huge investments to the tune of an estimated INR 600,000 crores (US$ 100 b) with high revenue generation potential. However, there are noted challenges within the PPP framework, which may thwart the development of a robust PPP models for the water/waste sector. Some of these challenges have been listed below and will be discussed during the course of the workshop for developing attractive risk return frameworks for potential investors and lenders for financing the Ganga River restoration plan.

• PPP models, although allow greater private sector participation, need a robust regulatory and market framework to allot risks are virtually non-existent and sustained support from grantor/ government is warranted.
• Challenging take-out financing/appetite for waste treatments/effluent projects in India.
• Mechanisms to cover the payment risks are virtually non-existent and sustained support from grantor/ government is warranted.opportunity for insurance companies/pension funds can be explored for stable cash flow generating projects.
• Lack of long-term concessionary finance stifles investment by private equity groups
• Poor secondary markets are another reason why the throughput of infrastructure assets is weak.
• Foreign exchange fluctuations deter international lenders from providing longer tenor financing which is easily available through global capital markets.

The workshop is structured so as to address two critical areas:
• Economic and Regulatory Conditions needed to make PPPs work
• Financial instruments that can accelerate asset

Dr. Vinod Tare, Professor, IIT Kanpur

Dr Vinod Tare is a Professor of Environmental Engineering and Management at the Indian Institute of Technology Kanpur and holds Sir M Visvesveriah Chair Professor instituted by the Ministry of Water Resources, River Development and Ganga Rejuvenation. He is a Civil Engineer, obtained his Master’s and Doctoral degrees in Environmental Engineering from IIT Kanpur, and subsequently did post doctoral research at the Illinois Institute of Technology, Chicago. Dr Tare has guided numerous masters’ and doctoral dissertations. He was the Chairman of the India Water Impact Summit 2013 held at the India Habitat Centre, New Delhi and International Conference on Water – Harvesting, Storage and Conservation (WHSC- 2009). Dr Tare is consultant/advisor to many government organizations, NGOs, Industries, and Institutions. He has developed environment-friendly passenger coach toilet system being deployed for Indian Railways, communities, house boats, Kumbh Mela, etc. Dr Tare is presently leading consortia of seven IITs for the preparation of Ganga River Basin Management Plan which has been submitted to the National Ganga River Basin Authority chaired by the Prime Minister.

Sanmit Ahuja, Vice-Chairman, Oval Observer Foundation

Sanmit Ahuja is the Vice Chairman of Oval Observer Foundation. His core expertise lies in Development Economics; Private Equity; Project Finance; PPP models and establishing innovation eco-systems. He is also spearheading the development of a major Institute of Excellence focused on Sustainability that will promote multi- disciplinary thinking bringing together Economics, Engineering and Finance as a new paradigm of delivering impact and innovation. He started his career in the early 90s in New York within the Insurance sector followed by a short stint in the media sector in England from 2000 onwards before moving onto the Development finance and Infrastructure development arena. He is largely based out of UK and India offices of the organisation. He has an Engineering degree from University of Pune, India and an MBA degree from London Business School.
He is a hands-on practitioner of infrastructure development and has numerous Directorships including:
• ETI Dynamics, a sustainability focused infrastructure development and innovation firm
• Zeus Enviro, an asset management and corporate finance boutique specializing in renewable energy and environment sectors.

• 1330 hrs: Registrations
• 1400 hrs: Welcome Address IIT-Kanpur, Oval Observer Foundation
• 1410 hrs: The Economic framework needed to rejuvenate and restore Ganga Vinod Tare, IIT-Kanpur Coordinator, Consortium of 7 IITs on Ganga River Basin Management Plan
• 1440 hrs: Open Q&A Moderated by Sanmit Ahuja, Vice Chairman, Oval Observer Foundation and a member of IITC+
• 1540 hrs: Refreshments break
• 1600 hrs: Financial Instruments that can accelerate the financing of GRBMP Sanmit Ahuja, Vice Chairman, Oval Observer Foundation
• 1630: hrs Open Q&A
• 1700: hrs Release of Urban River Basin Management Plan Projects – Vinod Tare, IIT Kanpur – Sanmit Ahuja, Oval Observer Foundation
• 1710 hrs: Close

images not found