Greater Kandy Water Supply Project

1. Greater Kandy Water Supply Project National Water Supply & Drainage Board Greater Kandy Water Supply Project

2. Mahaweli Reach Hotel (where you are now) TEMPLE OF TOOTH ,KANDY

3. Objective of the project.....

6. Scope completed in ,Phase I. Stage 1

7. Project implementation GKWSP • Cost effectiveness • Economic Benefits • Equity • Environment Friendly • Minimize social Impacts • Public Inconvenience • Customer Satisfaction • Service level • Cost of service • Customer service

8. Promote (O&M) culture • Promote Technology Transfer • Pipe laying practice • M&E installation • Commissioning of water supply systems • Project management strategies • Policy changes on land acquisition • Recruitment of staff, promote ownership (select consumers) • Contractors capability (Q/A policy ) • Procurement of quality goods and services • Quality assurance measures • Product committee • Q/A indicators

9. Selection of Contractor • Loan Condition • Prime Contractor should be from donor country (50% material & goods from donor Country) • Pre Qualifications • 09 bidders collect the Documents • 03 Joint ventures submitted • All 03 Companies were qualified for final bidding

10. Selection Of Contractor • One company withdrawn from the bidding process before the pre bid meeting • Two Offers were available • 47% Higher than Engineering Estimate • 64% Higher than Engineering Estimate

11. Procurement process – stage Icost overrun Greater Kandy Water Supply Project

12. Why ….? • Lack of Competition • Donor country Goods are Very expensive

13. Due To … • Lack of Competition among contractors • Pre Qualification Criteria too stringent. • Limited time for Pre Qualifications period. (12 weeks) • Invisible force.

14. Lesson Learned Avoid special loan (50% goods from Donor country, limited only to Donor country) Paris declaration 2005-pricipales are to be implemented ) Special attention on procurement planning stage Packaging Pre Qualification criterion Encourage advance notices specification review to meet cost effectiveness eg. Pumps, Pipes and Fittings “ To achieve better results “ Greater Kandy Water Supply Project

15. Lessons learn • Advance notice to Interest parties • National Procurement agency web page • NWSDB web page • GKWSSP was the first project to display advance procurement notices in web pages under stage 11

16. Lessons learn • Avoid critical indicators on PQ process Minimum Requirements • A project experience of similar nature and complexity • project experience of similar countries, number of countries • Financial Capacity Credit facility Working Capital Ratio To select suitable contractor for better results

17. Lessons learn Contract Packaging • Number of lots are to be minimum but not one package. • Care fully examination of procurement lots based on past experience. (data base to be establishment by NPA for reference) • Identify lots for LCB,ICB separately. • Compare the Procurement delays number of Packages Vs Obtaining Competitive bids.

18. Consultancy Contract Remuneration Rates • Team Leader more than 20 Yrs Experience Rs Million Greater Colombo Flood control project(2004) 3.90 Greater Kandy (2004) 3.81 Kukule Ganga(1995) 3.26 Mahaweli System (c) 1996 3.21 ADB consultant Team Leader (2004) 1.86 Generally consultant rates very high…!

19. Remedial Measures • Consultants remuneration break down to be analysed. • ADB format is better. • Special Attention on analysing of O/H factor of the company. ( NPA shall prepare Data based assisting procurement committees & TEC ) • Quality & Cost Based Method (QCBS) preferred • Maximum remuneration rates were introduced. • Upper ceiling for consultancy budget • Promote local expertise “To achieve cost effectiveness” for achieve better results

20. Lesson learn • Avoid unnecessary influence of donors on implementation of projects • Measures to avoid delays by taking early decisions • Feedback to donors at the appropriate situation i. Loan request – if possible consider 2 donors at a time ii. Appraisal • Involves stake holders who are conversant with project • Long term sustainability • Packaging iii. Loan covenants ( repayment terms vs other condition) Paris declaration 2005 iv. Pre planning for loan negotiations • Cost of money • Risk managements measures (Inflation, charge of scope) • Project period • Time limits for donor concurrence

21. Land acquisition • Most economically beneficial land cannot be procured • Poor compensation • Delays of compensation • Lack of GOSL allocation Remedial measures to minimise social impacts to get the public cooperation • Alternative compensation method was proposed through a Cabinet Paper • Strengthen the follow-up and monitoring systems • Highlight the land acquisition issues and remedial measures within the donor projects and national level • Proposal to change the land acquisition process (long term with the assistance of donor forum) public cooperation for better results

22. Minimise effect to the environment • Pipe laying along major trunk roads and narrow minor roads • Construction of structures in residential areas • Poor reinstatement methodology • Lack of adequate staff to supervise • Delays of procurement of road reinstatement of contractors Remedial measures to achieve better results by minimising social impacts • Project Planning Workshop recommendations were partially implemented • Steering Committee to follow-up the trench reinstatement activities • Road restatement by utility agencies (first time in Sri Lanka) Overall economic benefits for better results

23. Lesson learn and implemented in stage ii “ for better results” • Stakeholders participation, specially with utility agencies to minimise the social & environmental impacts • Adequate contractual provisions with pay items for temporary reinstatement, repairs for alternative roads, temporary vehicle parks • Agreement with the users and the utility agencies on conditions to be adhere in trenching on roads • Necessity of improvement of implementation capacity on trench reinstatement • Technically • Procurement process • Integrated approach to find the solutions with the line of ministry and relevant 4 ministries , HEA, cabinet ministers (Cabinet paper on trenching)

24. Ensure quality products (goods and services) • Disbursement is the main criteria for project monitoring • Less value for quality products (by employer, utility agencies, media, decision makers, professional organisations) • Sufficient resources not available for quality control measures • MSD, Board of Directors, Ministries • Quality assurance policies are not attractive • Capacity building for contractors, construction industry act • Quality culture does not exist

25. To achieve project objectives (results) effectively • Commitment from the highest level (Cabinet Paper by MFI) • Effective planning of project • Effective monitoring system • Mobilization of patriotic resource personal within PMU and implementation agency • Assets management culture • Demand from the society (Cabinet of ministers, Politicians, Professional Organizations, Line Ministry, Implementation agency, O&M division, Consumers, Media) for quality products (goods and services)

26. Minimized Environmental, Social impacts • Workshop on trenching on highways with all stake holders • Land acquiring cabinet paper • Quality assurance systems • Steering committee on trench reinstatement • Land acquiring steering committee • Inter agency steering committee

27. Web based monitoring system by DFABM • Facilitates to secure funds • Facilitates to resolve inter department issues • Facilitate to resolve matters related to Donors and Treasury • Facilitates to identify issues which require attention of higher decision making level (Reporting to Cabinet) • eg: (Land acquisition, GOSL allocation) • Key performance indicators helps to improve follow-up mechanism

28. domestic sector Billing Rate 17/53 Rs/m3 all sector Billing Rate 25/70 Rs/m3 Kandy Domestic 15.0 Rs/m3 Greater Kandy Water Supply Project

29. NWSDB all sector Billing Rate 25/70 Rs/m3 Raw water Capital Cost (75% ) Capital Cost (25% ) O&M

30. National Water Supply & Drainage Board THANK YOU