Mumbai Slum Sanitation Project (SSP) observations 


Mumbai Slum Sanitation Project Achievements:
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. Demonstrated feasibility of a demand-responsive, financially viable  approach to community toilet provision and O&M 
. More than 300 high-cost, high-quality (in many locations), potentially long service life and sustainable O&M cost toilet blocks (to be demonstrated) have been constructed 
. Commercially viable sanitation service provision in most locations and signs of a growing market for slum sanitation

Project Benefits of SSP:
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. Substantial reduction in open defecation
. Improved access, proximity and dignity
. Health benefits expected but not assessed
. Environmental benefits beginning to accrue

Challenges ahead:
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. Indifferent/poor toilet service provision in some SSP toilet block locations 
. "Appropriation" of facilities, by CBO sub-groups, to the detriment of universal access, forcing people into coping behaviour and pay & use 
. Emergence of a wide range of 'informal' delegation of toilet management 
. Land is a constraint in most slums - hitherto focussed on Demolition and Reconstruction (D&R)
. Greater efforts and incentives required to ensure that these benefits are sustainable


SSP I Toilet Block Financial Model:
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. Detailed financial model of SSP toilet block micro-economics built to estimate life-cycle costs, included:
    - All 'capital' costs: structure, services & mobilisation
    - Major repairs (currently MCBM responsibility)
    - Minor repairs (currently CBO responsibility)
    - Operations costs (salaries, water & electricity, cleaning materials, admin)
    - Potential revenue: pass costs, pay & use & other sources
. Model calibrated using data from existing commercial operators & MCBM 
. Toilet tariffs vary by more than order of magnitude per use: Rs. 0.14 to 2.0
. Sensitivity analysis for 12 key parameters
    - O&M most sensitive to: pay & use user fraction, monthly pass costs, loading levels
    - Long-term life cycle costs/breakeven/IRR most sensitive to: toilet life/concession length; capital subsidy, pay & use user fraction


SSP Toilet Block Financial Analysis: Findings
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. Commercial Operating viability of most blocks assured under appropriately floated tariff regime
. CBOs and 'toilet operators' have 'discovered' these conditions, but may be inhibited by MCBM guidelines and various local pressures 
. Long-term financial sustainability a more complex area that MCBM & CBOs have not as yet completely understood. But commercial Pay & Use operators understand this well
. Financial sustainability at twice current family pass rates (~ Rs. 40) possible in a long-run concession: > 25 years. Risks may be perceived to be too high except by CBO-based institutions. Possible case to build Cooperatives.
. Financial sustainability at various levels of capital subsidy increase the attractiveness to private entrepreneurs, enabling possible 'market saturation' at a faster pace. Supernormal profits at > 50% capital subsidy 
. No rational basis for 100% capital subsidy


SSP II Institutional Options: Sanitation Sector Management:
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I  Strengthened PMU within a BMC department
II   A New BMC department: Strategic Sanitation  Services Department (led by a full-time  DMC/AMC)
III   A City Sanitation Task Force
IV An autonomous Water and Sanitation Utility (of  BMC) manages toilet block provision


Program Delivery Options:
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. SSP I approach - Contractor/NGO partnership with large contracts (100 TBs+) for economies of scale.
. SSP I approach - Contractor/NGO partnership with smaller contracts (less than 100 TBs), to encourage more bidders for scale-up.
3. A minimum subsidy concession contract (10-30 year) approach, to incentivise O&M.
. Conventional design and build contracts for TBs
. Community group procurement of toilet blocks, as in the rural sector (but difficult due to quality standards required)


Options for management of SSP II community toilet block services:
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1. CBO manages the community toilet block directly through its own staff.
2. CBO oversight of a contract with a caretaker/private operator.
3.  A minimum subsidy concession approach
4. MCGM lets contracts to a private operator
5. A new Mumbai water & sewer utility lets contracts to private sector

Options 1 to 2 assume toilet blocks funded by MCGM, developed by contractor/NGO and handed over to CBO.
Options 3 to 5 could be used in case of repeated failure of CBO management of toilet blocks.
Options 1 to 3 are considered more viable and are examined in more detail


SSP II: STRATEGIC QUESTIONS:
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. Uniform state-wide policy for sanitation must be enforced
. A menu of technical options to be piloted on an area basis to codify and develop experience and confidence
. High scarcity driving the sanitation market. Dual approach of:
a) promoting demand-responsive sanitation provision 
b) supporting sustainable O&M management mechanisms 
 - Need for a city-wide strategic sanitation services function
 - Case for commercial development of sanitation provision
 - Flexibility in technical and management options
. Focus on sustainable O&M à Contracting and O&M options 
. Strategic Planning e.g. GIS database, reviews of norm, availability and mobilization of land
. De-regulation and de-centralization of user charges - CBO to determine tariff in order to recover all O&M costs
. Financing options, procurement and contracting issues

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