singapore experience in water financing
TRANSCRIPT
Fong Han LoongIndustry Development Department
PUB Singapore
Sharing of Singapore’s Experience in PPP in water infrastructure projects
High population 5.3M
High annual rainfall 2400 mm
Small Land Area 710 km2 land area
Average water demand 1.82 million m3/d (400 mgd)
Biodata of SingaporeSmall Island State
100% potable water at tap & 100% sanitation
Singapore in our early daysDifficult and Humble Beginnings
Water as one of the top National Agenda
“ … This (water)
dominated every other
policy. Every other policy
had to bend at the knees
for water survival.” Mr. Lee Kuan Yew
Prime Minister of Singapore (1965 – 1990)
at the Inaugural Singapore International Water Week (2008)
Water as one of the top National Agenda Water as one of the top National Agenda
searainstormwater management
collection of rainfall in drains & reservoirs
treatment ofraw to potablewater
reclamationof used water
collectionof used waterin sewers
supply of water to thepopulation & industries
treatment ofused water
desalination
Managing the complete water cycle
Principles for Sustainable Water SupplyPrinciples for sustainable water supply
Collect Every Drop of Rain That Falls on Singapore
• 2/3 of Singapore’s land area is water catchment
• Rainwater collected & stored in 17 reservoirs
• Tapping on more urbanised catchment (Marina, Punggol/Serangoon) with integration to optimise yield
Local Catchment Water
• More urbanised catchment & with integration of reservoirs More challenging raw water quality
• Upgrading needed Technological advancement • Increasing need to have more effective pollution control in urbanised catchments
Collect Every Drop of Rain That Falls on Singapore
•
Recycle every drop
Ulu Pandan WRP
Changi WRP
Kranji WRP
Jurong WRP
Collect Every Drop of Used Water
Deep Tunnel Sewerage System (DTSS)
Deep tunnel and outfall completed
Changi WRP
Digesters
Deep Tunnel Sewerage System (DTSS)
Recycle Every Drop of Water More Than Once
Kranji NWF 17 mgd
Changi NWF50 mgd
Ulu Pandan NWF 32 mgd
Bedok NWF18 mgd
• Current NEWater capacity can meet up to 30% of demand
• Ulu Pandan and Changi NEWater Plants supply NEWater to PUB under the Public- Private-Partnership (PPP) Approach.
NEWater
Singspring Desal30 mgd
Tuaspring Desal70 mgd
Desalinated Water
TuasSpring Desalination Plant (Hyflux subsidiary) 70 mgd, 25 year DBOO
plant Officially opened by
Prime Minister Lee Hsien Loong on 18 Sep 2013
Tuaspring Desal Plant (artist impression)
Singspring Desal Plant
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Public-Private Partnership (PPP)
Overview of Desalination and NEWater Design- Build-Own-Operate (DBOO) Projects
DBOO Project Structure
Payment Structure and Indexation
Challenges in Managing PPP project
Concluding Remarks
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PPP – A form of Best Sourcing
Best Sourcing
Build to Design
Design & Build
• Deliver projects and source services at the best value for money.
Traditional procurement of assets
PPP
DBOO * DBO **
• *DBOO: Design – Build – Own – Operate• **DBO: Design – Build – Operate
1st PPP Project - Singspring Desalination Plant
Date of Agreement : April 2003 Concession Company : SingSpring (Pte) Ltd Contract Term : 2005 – 2025
2nd PPP Project - Keppel Seghers NEWater Plant
Date of Agreement : January 2005 Concession Company : Keppel Seghers
NEWater Dev (Pte) Ltd Contract Term : 2007 – 2027
Case Studies
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3rd PPP Project - Sembcorp NEWater Plant Date of Agreement: February 2008 Concession Company: SembCorp NEWater
Pte Ltd Contract Term : 2010 – 2035
4th PPP Project - Tuaspring Desalination Plant Date of Agreement: April 2011 Concession Company: Tuaspring Pte Ltd Contract Term : 2013 – 2038
Case Studies
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PPP Procurement Process
Prequalification of bidders
Issue of Request for Proposal
Clarifications
Submission of the bids
Evaluation
Signing of the Agreement
Financial Close /Implementation by
Concession Company
DBOO Project Structure
Financier
Land Owner
Step-InAgreement
Concession Company
Water PurchaseAgreement
EquityInvestor
Shareholder’sAgreement
O&MContractor
EPCContractor
PUB
EnergySupplier
O&M Contract Land LeaseEPC ContractEnergy Supply
Agreement
FinancingAgreement
1. Project Structure Similar to International DBOO Projects
2. Includes the Water Purchase
Agreement,Third Party Agreements,Step-In Agreement.
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Water Purchase Agreement
• The Water Purchase Agreement (WPA) is the key agreement for the DBOO Scheme.
• It prescribes the contractual and legal rights of both parties.
• It contains the technical, commercial and legal terms and conditions for the supply and purchase of water.
◄
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Step-In-Agreement or Direct Agreement
• Step-In Agreement is signed amongst PUB, Concession Company and the Lenders/Financiers.
• Provides for the Lenders/Financiers to step-in and rectify concession company’s defaults.
• In the case of NEWater DBOO projects, it also provides for PUB to step-in to ensure service continuity.
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Payment Structure and Indexation
Payment structure based on fixed capacity payment and variable output payment.
Total Paymentsto Concession
Company
Fixed Capacity Payment (Based on available capacity)
VariableOutput Payment(Based on actual quantity of water
supplied)
Capital Recovery ChargeCapital Recovery Charge
Fixed O&M Charge(Subject to Singapore Consumer Price Index)
Fixed O&M Charge(Subject to Singapore Consumer Price Index)
Fixed Energy ChargeFixed Energy Charge
Variable O&M Charge(Subject to Singapore Consumer Price Index)
Variable O&M Charge(Subject to Singapore Consumer Price Index)
Variable Energy Charge(Subject to HSFO CST 180)
Variable Energy Charge(Subject to HSFO CST 180)
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Technical Specifications
• Concession Company primarily takes construction and operational risk. Therefore, they should be given significant latitude to provide innovative solutions to meet the public agency’s specified outcomes.
• The technical specifications of the four DBOO projects are performance-based.
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Challenges
(1) Monitoring the Performance of the Concession Company
Includes day-to-day monitoring of performance, assessing whether the contracted services are delivered to the specified standards and evaluating the remedial action taken by the Concession Company when performance standards are not met.
(2) Managing the PPP RelationshipLong term, interdependent nature of PPP project necessitates a good strong working relationship between the public agency and PPP provider.
(3) Managing the Organisational Changes Changes in management control of the Concession Company can happen. Public agency’s interest must not be compromised despite the change in management .
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Concluding Remarks
• The project has so far gone well because the contract were balanced. A rigorous selection process was adopted to ensure that the selected DBOO partner has the capacity to take on the project.
• Both have also adopted a partnership approach to reach a win-win implementation of the project.
Singapore International Water Week
1 – 5 June 2014
Sands Expo and Convention Centre,
Marina Bay Sands
1st to 5th June 2014
• The global platform to share and co-create innovative water solutions
• Key highlights include Lee Kuan Yew Water Prize, Water Leaders Summit ,Water Convention, Water Expo and Business Forum & Business Forums
• Held in conjunction with the 4th World Cities Summit and 2nd Clean Enviro Summit Singapore
Year No. of attendees
No. of countries participated
Value of deals, tenders & investments announced
No. of participating companies in Water Expo
2008
8,500* 79* S$380m 350
2009
10,000 82 S$2.2b 420
2010
14,000*
112* S$2.8b 514
2011
13,500 99 S$2.9b 604
2012
19,000+
104+ S$13.6b 750
* Jointly with World Cities Summit + Jointly with World Cities Summit and Cleanenviro Summit Singapore
Water Solutions for Liveable and Sustainable Cities
NEXT SIWW – Biennial Edition in 2014Better synergistic integration with 3 Events – truly holistic and integrated solutions approach towards sustainable urban development
Cross pollination of ideas and technologies, access to integrated solutions as well as outreach to a wider pool of policy makers, industry players and other key stakeholders
Highlights of the Water Convention 2012:
> 1,200 delegates from 60 countries 40 track-specialised parallel sessions 155 platform/oral presentations 176 poster presentations 4 Best Poster Awards (1 The New iPad & 3 iPod Touch) Keynote Speakers: Tan Gee Paw, PUB (Singapore); Glen Daigger, CH2M Hill (USA);
Rita Colwell, University of Maryland (USA); Rob Skinner, Monash University (Australia)
Themes of the Water Convention 2014:
THEME 1: DELIVERING WATER FROM SOURCE TO TAP
THEME 2: EFFECTIVE AND EFFICIENT WASTEWATER MANAGEMENT
THEME 3: WATER FOR LIVEABILITY AND RESILIENCE
THEME 4: WATER QUALITY AND HEALTH
THEME 5: WATER FOR INDUSTRIES
Highlights of the Water Convention 2014:
THE “HOT ISSUES” WORKSHOP Presentations and Panel Discussions on Emerging Issues
BEST POSTER AWARD Attractive Prizes to be won! Presenters will have the opportunity to interact with the judges and delegates during a dedicated poster session
Water Convention is jointly organised by:
We look forward to seeing you atSIWW 2014!1 – 5 June 2014
For more information, please visit: www.siww.com.sgOr email: [email protected]
Water Convention is jointly organised by: