The cost incurred for the treatment of water & waste water depends upon various factors such as type of technology used, quality of the existing treatment facilities , potential for economies of scale, building or augmentation of water/waste water/sewage collection network. Presently in India very few states have achieved 100 % sewage collection and Chennai is one of those few states. However since the investment requirement for the network depends crucially on the size and density of the city, the cost of sewage collection is hard to generalize.
Exhibit 01 displays the estimated range of costs records for producing secondary level sewage treatment of some of the sewage treatment plants in India. As far as Urban local bodies are concerned many of them are not obligated to treat their sewage beyond the secondary level. But unlikely to this the Bangalore Water Supply & Sewage Board provides tertiary level treatment to the sewage collected.
Currently 4-5 sewage treatment plants under the BWSSB provides tertiary level treatment. Their reported production cost marginally high. The production cost 60 MLD Vrishabhavati Valley Sewage Treatment Plant is somewhere between 10-12 /KL. In the absence of tertiary treated STW, many industrial units chose to buy either raw sewage or secondary STW and treat it further to meet their water requirements (Tertiary Treatment). Madras Fertilizers in Chennai (MFL) and Rashtriya Chemicals and Fertilizers Limited (RCF) in Mumbai are some of the best cited examples of such entities. Both require portions of their water at the tertiary treated, reverse osmosis and demineralized levels of purity. MFL utilizes 60% of its water at the tertiary level while 40% is purified by applying reverse osmosis and demineralization. Table 01 showcase stage-wise cost of treatment and weighted average cost of treatment incurred by both Madras Fertilzers & Chemicals & Fertilizers Limited.
So far as fresh water supply is concerned as the demand for water grows the water authorities must continually augment their bulk water supply . Burgeoning urban populations and the growing imperative to supply water for more than few hours in a day will all require large investment in water supply infrastructure. Since the water supplied in most of the cities pump water from fresh water bodies and it usually needs very little treatment. Hence the infrastructure and the operating cost of the water supply pipelines are significant. Table 02 & Exhibit 02 displays the range of levelized cost and O&M costs in augmenting bulk water supply. It is pertinent to note that in terms of current cost water supply pipelines of 1 metre diameter costs INR 3 crore per km to build and it costs INR 1/KL over 10 km to pump.
The levelized cost ranges between INR 11/KL to INR 50/KL. However if water boards receive grant funding or concessional electricity rates for pumping then these costs might be reduced. Most cities already have bulk water supply infrastructure. It has been observed that water scarce Chennai has also made investments to supply the required 800 MLD of water supply. The cost of fresh water supply using both surface and ground water ranges from INR 5 to INR 10.5/KL for the former and INR 29/KL for the latter.
Level of Competition & Opportunities for Private Players Under Various Components
A.Maintenance & Sustainability of Water Resources
Management of water resources by the medium of dams, reservoir etc is dominated by the government authorities/utilities. Hence it generates a tough competition for a private player to enter into this domain. Therefore the size of opportunity for the private entities is very low.
B. Water Treatment
Treatment of water collected from the water resources involves the participation of both public & private entities. Many PPP are already operational handling purification process of water.
C. Water Supply & Management
Water supply and management segment again holds a government monopoly. The distinguished municipal corporations supplies the water to various end consumers. Hence the competition level is very high and the business opportunity size of the quite low for the private sector in India as of now.
D.Waste Water Management & Supply of Treated Water
Over the last decade or so the market opportunity size for the private sector in the water segment has expanded under this category. Significant number of PPPs has increased the number of private participants in this segment.
Infact, many waste water treatment projects are now completely operated & maintained by the many private players.
E. Desalination of Brackish Water & Sea Water in Coastal Areas
This component of water value chain comprises mainly of the private entities. Participation of government sector in the desalination process of treating brackish and sea water is comparatively low.
To know in detail about about Opportunity Track for Water & Waste Market Value chain players with focus on Industrial & Municipal category projects, Market Dynamics, Technology Trend and Robust Existing & Upcoming Industrial & Municipal Project Database in India, please visit our latest report : Water & Wastewater Market in India & Projects Database 2017