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

13

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

14

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

16

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

17

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.

►

►

19

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.

◄

20

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.

21

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)

22

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.

23

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 .

24

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: waterconvention@siww.com.sg

Water Convention is jointly organised by: