Micro-Utility

Micro-Utility

The Indian government has demonstrated a strong commitment towards Sustainable Development Goals (SDG) 6: for clean water and sanitation to all. The Swachh Bharat Mission (SBM), the flagship program of the Government of India, aims to eliminate open defecation and manual scavenging and also provide sanitation for all by October 2019 by constructing toilets (household, public and community). Under SBM a total of 94,041 and 1,14,447 public and community toilets seats respectively have been constructed so far. This represents 37% and 45% of the respective construction targets under SBM for community toilets and public toilets till 2019. The Central Government contributes 40% construction cost of a community toilet, by way of Viability Gap Funding, however, it does not provide any support for the construction of public toilets under SBM (Urban). To construct and maintain public toilets, Urban Local Bodies (ULBs) are encouraged to identify land, and leverage this land and advertisements to attract private sector to construct and manage public toilets under a PPP agreement.

Considering a minimum cost per seat of Rs 75,000/- per seat of public toilet and Rs 65,000/ per seat of community toilet, this tantamounts to an investment close to Rs 2,500 crores.This is a significant investment for ULBs, which are financially dependent on state grants to run their routine operations. Moreover, ULBs also need to source funds for maintenance of the newly constructed public and community toilets to sustain the infrastructure.

Therefore, ULBs need to figure out sources and operational models from which it can fund the construction & maintenance of public and community toilets.

The Micro-utility or Special Purpose Vehicle (SPC ) is a lean-structured, professionally managed model which can work as an enabler for the construction and maintenance of community and public toilets on public private partnership , using alternate funding sources (CSR, SBK, innovative revenue streams, etc.).

The IHUWASH National and City Innovation Hubs are working closely with ULBs to develop these SPVs or Micro-utilities leading to:

  • Achievement of objectives of Swachh Bharat Mission (sanitation for all)
  • ULBs will not have to pay for operation and maintenance of community and public toilets.
  • New revenue streams for ULB (rent from toilets)
  • Professional management of sanitation services to citizens
  • Institutionalized mechanism to use CSR funds, which can be replicated in other social sectors
  • Development of organized and efficient long-term private partnerships against annual contract renewal models
  • Generation of local employment and entrepreneurship opportunities