JAINOOR WATER PLANT REVIVAL

The defunct RO plant setup by Water Health India has been planned to be revived by Mandal Samkhya of Jainoor. This plant is planned to be run in collaboration with the local youth associations of Jainoor mandal along with the NDCCs.

The water plant is to be registered as a company with members of Mandal Samkhya and Youth association on its board. The NDCCs, Youth Associations and Mandal Samkhya can buy shares of the plant and profits will be distributed according to the shareholding.

The initial costs (Repairing, material, etc) of the water plant is to be borne by the company through the share capital. There should also be support from government departments like a MoU has to be signed with Mandal Parishad Office to bear the cost of the supply of water (TFC Funds) to the plant for next 10 years. Dept of RWS&S has to provide a water source for the plant as the plant does not have its own water source.

Action To be taken By Whom By which date

Providing own water source SE, RWSMoU to supply water for 10 years

MPDO, Jainoor

Mobilising NDCCs/MMS funds APM, JainoorMobilising Youth of Jainoor PMRDFRegistration of Company Legal

Coordinator, TPMU, Utnoor

Repairing the Water Plant EE, TWTraining of Youth to run the plant

PMRDF

Introduction

The RO plant existing in the premises of Jainoor Mandal Samkhya is setup by an NGO called WaterHealth India (WHI), a wholly owned subsidiary of WaterHealth International. WaterHealth International works with communities to get access to safe drinking water by setting up water purification plants.

There are two types of plants: To serve a population of over 10,000, a 65,000-litre (2700l/hr)

community water system (WH-65 CWS) is installed. For smaller villages, a modified system (WH-21 MCWS), with a

capacity of 21,000 litres (900l/hr) is used (Worth `14,50,000 out of which 40% bared by Jainoor Mandal Samkhya).

In Jainoor, WH-21 is installed. The cost of the plant was Rs 14,50,000 which was borne in ratio 60:40 by WHI and Jainoor MS. The contract was that WHI would run the plant for 8 years and then handover the plant to Jainoor MS. WHI would retain the profits earned for the first 8 years. This plant was working for two years until its operations stopped from August, 2011. Since then the plant is defunct. There has been a breach of contract by WHI and a notice has been sent by TPMU, Utnoor to WHI.

Since the plant has been defunct for quite some time and it is indeed a waste of a valuable asset meant for providing safe drinking water to villages of Jainoor Mandal, hence it was decided by the Mandal Samkhya that they would get the plant working and run it on their own or lease it to a private party based on the feasibility and a resolution for the same was passed in MS meeting of August-2012. (ANNEXURE – I)

As the plant has been ununsed for more than 1 year, some necessary repair works have to be carried out. An estimate of the approximate Repair Cost has been made by M/S Amrutha Water Supply, Utnoor. The cost has been estimated approximately to Rs1,80,000 (Annexure – II).

Other than the repair cost, approximate 20-50,000 may be incurred for buying necessary material like 200/400 ltr tank.

Below is the brief statement of initial expenditure to be made:

Budget Line Approximate CostRepairing Charges Rs 2,00,000Investment on Bottles(Rs 125 x 200)

Rs 25,000

Electricity Dues Rs 35,000Working Capital Rs 50,000Reserve Capital Rs 1,00,000Total Rs 4,10,000

Since this is a start-up, a reserve capital will ensure running of initial 2-3 months of the plant without any problems. With an amount of Rs 4,00,000 the plant can be revived and sustained. And in 3 months, the plant will reach a stage where it will start earning profits.

Jainoor Youth Association

Across Jainoor mandal, almost in every village one can see voluntary youth associations which are registered bodies, but have been remaining quite dormant. They were established so that youth could actively do some social work for the village. All the individual youth associations have a federation at mandal level.

When we floated the idea of reviving the water plant and running it on sustainable basis, many of the youth groups have shown interest. A Mandal level meeting of the youth was conducted and the President of the society has shown his willingness to run the plant on a sustainable basis as a private venture.

Hence, it was decided that it would be in the best interests of the community to involve the Youth and run the water plant in collaboration of Mandal Mahila Samkhya and Mandal Youth Associations.

Nutrition cum Day Care Centres (NDCCs)

NDCC is a novel concept which requires certain income generating activity to be taken up by each center for its sustainability. But, the closing down of NDCCs is quite often seen especially in TPMU areas. The centers run till their initial grant lasts. The CIF which is meant to generate income through internal lending is either unspent or used by NDCCs. NDCCs which were supposed to collect an amount of Rs 10 per day (Rs 300 per month) charge only Rs 100 per month in Jainoor mandal (Rs 100 was price fixed

when NDCCs were first established in 2006). This is further reducing the revenue earned by NDCCs.

Hence it was thought during Varshika workshop (Sept 2012) that the NDCCs may take up sales and distribution activity of water within their village and the commission thus generated can be used to run the centre.

Jainoor Adivasi Limited (JAL)

The Water plant is to be registered as a Private Limited Company under Companies Act to be called as Jainoor Adivasi Limited (JAL). The plant is to be run in collaboration with Jainoor Mandal Samakhya, Jainoor Mandal Youth Association and NDCCs. Each stakeholder is expected to buy shares of the company with a share price of Rs 100 per share. The amount of capital to be generated is to be used to running the plant

The WH-21 Water plant has a capacity of 900 liters per day. With an operating time of 8 hours per day initially, the plant can produce 8100 liters per day. Below is the brief of the revenue and the expenditure to be incurred by the plant.

Revenue- Expense AnalysisRevenues:Production of water at 9 hour operation 8100 lpdPrice (Paisa/liter) of water 25Gross revenue per month 60,750Recurring Expenses:Salary & Wages 15000Lease Amount 10000Electricity 5000Consumables 3000Transport cost @ Rs 500 per day 5000Total Costs 33,000Net Returns to enterprise and investment 27,750

At 8 hours on runtime per day below is the revenue generated by plant at its different capacities:

100% Capacity

80% capacity 60% Capacity 50% Capacity

LPD 8000 6400 4800 4000Cans@20ltr

400 320 240 200

Sales 60,750 48,600 36,450 30,000Expenses 33,000 33,000 33,000 33,000Profit 27,750 15,600 3,450 -3000

We can see that the breakeven is achieved at approximately 55% of capacity of the plant i.e. at 4500 litres per day which is to sell 200 cans of 20 ltrs each day.

Demand Analysis

For a supply of 8000lpd, we need to ensure a demand of 20ltrs per customer from atleast 400 buyers per day i.e. 12,000 buyers per month. Since the plant is located in Jainoor, we are expecting to make sales in GPs nearby Jainoor. Also, sales can be made to local Government offices and schools.

Prospective customers:

Category Potential Target

No of Customers

General Population from Jainoor, Marlawai, Daboli &Ushegaon GPs

1750 Households

20% 350

MRO, MPDO and other govt offices

10 100% 10

NDCC Centers 6 * 2 100% 12TWPS Schools for Midday Meals

6 * 2 100% 12

Ashram School @ Pochamloddi & Jainoor

20 100% 20

Total 400

Existing Market

There is a RO Water Purification plant existing in Jainoor mandal with a 1000 litre per hour capacity. The plant is currently selling water in neighbouring mandals of Narnoor, Sirpur(U) and Kerameri as well. The

price is Rs 10 per 20 ltr can which is double the price at which we are pursuing to sell.

Sales & Distribution

Sales & Distribution is a major challenge in this project. Improper mechanisms may increase the cost. Hence we are restricting our energy to only 5 villages and local Jainoor to start with.

Water processed at WHI plants is sold at the rate of 25ps per litre. Alternatively, customer can buy a monthly subscription of Rs 100 for which he is entitled 20 ltrs per day. A customer register traces buying patterns.

A 200/400 ltr water tank is placed at suitable locations (preferably at NDCCs/Schools) where customer can buy/fill water in their traditional pots. The smaller tanks are regularly filled by vehicles fitted with a 1000 ltr tank. This enables to reduce the maintenance cost. A person nominated by the youth group would voluntarily look after the distribution of water with 20 ltrs per subscriber.

The target villages (Annexure – III) and suitable locations are to be identified by PMRDF over due course of next one month by understanding the water usage patterns of the villages and finally shortlisting on 5 villages.

Action PlanWater which is never treated as commodity is taken for granted by everyone. Selling it at a price would take some effort to bring in the behavioural change. Ground work has to be done in campaign mode planned within the next one month as below:

Date ActionNov 5 – Nov 17

Visits to prospective villages; Conducting of Youth group meeting and VO meetings in at least 5 villages

Nov 11 Resolution to Invest in JAL by MSNov 17 Resolutions from atleast 5 NDCCs for investment

in JALNov 19 Resolution by Jainoor Youth for investment in JALNov 25 Repair of Water Plant to be completed

Nov 27 Opening Ceremony of Water Plant

Within next two weeks, all the mobilisation/motivation activities will be taken up in the target villages.

ANNEXURE – I

Resolution passed by Jainoor Mandal Samakhya

ANNEXURE - II

ANNEXURE - III

GP Revenue Village

Habitation NDCC Households

Marlawai

Marlawai 1. Marlawai Yes 75

Shivnoor1. Lambaditanda 522. Ganeshpur 693. Shivnoor Yes 43

Dubbaguda

1. Bheemjiguda 282. Laxmanpatelguda 153. Dubbaguda Yes 35

Daboli Lendiguda1. Gauriguda Yes 1582. Lendiguda Yes 78

JainoorJainoor

1.Sarpanchguda Yes 1132. Sonupatelguda 1233.WS Colony Yes 1034. SC Colony Yes 1355.Wadderguda 1386. Jainoor(Gouri Road to Masjeed)

Yes 99

7. Jainoor ( Sirpur(U) Road to S.C.Colony )

114

Powerguda1. Kothapowerguda 412. Powerguda Yes 32

Ushegaon

Ushegaon1. Ushegaon Yes 1002. Pochamloddy Yes 1303. Para Yes 74

Total 13 1755