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F.No.1/3/2023-PIU
Government of India
Ministry of Finance
Department of Economic Affairs
Infrastructure Finance Secretariat
ISD Division
(PIU)
STC Building, Janpath, New Delhi
Dated: 7 April 2025
Record of Discussion
Subject: Record of Discussion of the 47 meeting of the Empowered Committee (EC) for
Setting up of Integrated Solid Waste Management Project for Patna Cluster under PPP
mode.
Reference: 47" Meeting of the EC held on 26 March 2025
Sir/Madam,
The undersigned is directed to forward the Record of Discussion of the 47" meeting of
the EC held on 26" March 2025, under the Chairmanship of Secretary (EA), for information
and necessary action.
2: This issues with the approval of the Competent Authority.
Rahul Sing
To,
Ph Secretary, Department of Expenditure, North Block, New Delhi-01
CEO, NITI Aayog, Yojana Bhawan, New Delhi-01
Secretary, Ministry of Housing and Urban Affairs, Nirman Bhavan, New Delhi
Secretary, Urban Department & Housing Department, Government of Bihar
=
Copy to:
1. Sr. PPS to Secretary (EA)
2. Sr. PPS to JS (ISD)
Page 1 of 10Subject: Record of Discussion of the 47‘ meeting of the Empowered Committee (EC) for
Setting up of Integrated Solid Waste Management Project for Patna Cluster under PPP
mode.
1. The 47" meeting of the EC was held on 26 March 2025 at 17:15 hrs to consider the
proposal of the Urban Department & Housing Department (UD&HD), Government of Bihar,
for the Setting up of Integrated Solid Waste Management (ISWM) Project for Patna Cluster
under PPP mode.
2. List of attendees is placed at Annexure-l.
3. The basic details of the project are given in the table below:
Table 1: Details of the project
Setting up of Integrated Solid Waste Management Project
Project Description (Processing including Compost, Bio-methanation, MRF
cum RDF, Waste to Energy and Disposal Facility) for
Patna Cluster
PPP Model a Design Build Finance Operate Transfer
Sponsoring Authority ead & Housing Department, Government
Implementing Agency Patna Municipal Corporation (PMC)
Location Bihar, Patna
* Waste to Energy- 15-Megawatt Plant
* 01 Plant 100 TPD for Bio-Methanation
* 03 MRF cum RDF centers - 250 TPD each
Project Components and
* 01 MRF of 50 TPD
Capacity
* 01 MSW Processing Facility (Compost Plant of 700
TPC)
¢ 01 Sanitary Landfill (SLF)- 325 TPD
22 years and 6 months (including 2 years and 6 months
Concession Period
___| of construction period and 20 years of O&M)
Total Project Cost INR 514.59 crore
Page 2 of 10S.N. Particulars en
crore
1 | Compost Plant (TPD) 700 TPD 77
2 | Bio-methanation Plant (TPD) 100 18
TPD
3 | MRF + RDF Plant (TPD) 800 TPD 68
Estimated Capital Cost with 4 | 1 SLF 325 TPD 21.13
Break-up under major 5 | Waste to Energy 15-Megawatt Plant 270
heads of expenditure 6 | Environmental Cost 9.08
7 | Contingency Cost 23.16
A | Total CAPEX (Without Soft Cost) 486.37
8 | Finance Cost 2% of the Total Debt 1.59
borrowed by the Developer
9 | Interest During Construction 26.62
B | Total CAPEX 514.59
S.N. Particulars INR
1 Processing fee Per MT up to COD 480
2 Processing fee Per MT after COD 600
Estimated Revenue o Plastic Per MT 6,000
Streams of the Project 4 Metal Per MT 7,000
5 Bio- CNG Per MT 65,000
6 Power Tariff Per unit 6.38
7 Slurry Per MT 1,500
The proposal will be financed through a combination of
debt, equity and VGF grant. Other than the VGF, project
Source of Financing
finance will be done by the concessionaire with the
estimated debt-to-equity ratio considered of 70:30.
o A VGF of INR 154.38 crore, which is 30% of the Total
- Project Cost, has been requested from the
Government of India.
o If the VGF demand exceeds the Government of India
VGF
contribution (i.e. 154.38 crore, which is 30% of the
Total Project Cost), then the State Government will
provide the remaining VGF subject to the maximum
Capping as per the VGF guidelines.
100% (86 acres) of land is available with PMC at
Land Acquisition Status
Ramchak Bairiya, Patna
Project IRR: 14.01%
Financial Viability Equity IRR: 16.95%
Project NPV: INR 101 crore
Bidding parameter Lowest VGF
Bidding process Single Stage Two Envelope
Page 3 of 10. On behalf of the Chair, Joint Secretary (ISD) welcomed the attendees to the meeting and
requested the UD&HD, Government of Bihar, to make a presentation to the EC. With the
permission of the Chair, the Secretary, UD&HD made a detailed presentation on the project
proposal submitted to the EC.
. The primary purpose of the proposed project is to set up an ISWM facility of 1600 TPD in
Patna. It aims to process and safely dispose of municipal solid waste through technologies,
such as waste-to-energy, composting, bio-methanation, and material recovery, thereby
enhancing environmental sustainability and compliance with Solid Waste Management
regulations. The ISWM facility is to be implemented on a Design Build Finance Operate
Transfer (DBFOT) basis. The concession period is 22 years and 6 months, including a
two-and-a-half-year construction period. Apart from Patna Municipal Corporation, 11
smaller Urban Local Bodies (ULBs) in and around Patna shall be part of the Patna Cluster,
providing waste to the plant. Patna ULB, be the Lead ULB, will supply ~80% of the total
waste, and the remaining waste will be provided by other ULBs within the cluster.
. Under this ISWM facility, the concessionaire will develop and operate facilities including a
15-Megawatt Waste to Energy (WtE) plant, a 100 TPD Bio-Methanation plant, three Material
Recovery Facility (MRF) cum Refused Derived Fuel (RDF) centers of 250 TPD each, one
MRF of 50 TPD, a 700 TPD Compost Plant, and a 325 TPD Sanitary Landfill (SLF). The
Total Project Cost (TPC) is estimated at INR 514.59 crore. With a Tipping Fee of INR 600
per MT and a power tariff of INR 6.37 per KwH, the mode of selection will be the least VGF
demand. Based on the financial modelling, a VGF grant of INR 154.38 crore or 30% of the
TPC is sought from the Government of India. However, the Secretary, UD&HD committed
that if the VGF quoted by the selected bidder exceeds INR 154.38 crore or 30% of the TPC,
the Government of Bihar will cover the remaining balance, subject to the maximum capping
as per the VGF guidelines.
. After the presentation, the Chair asked the EC members for their observations. Department
of Expenditure supported the proposal and stated that they have no further comments to
offer.
. Director, Ministry of Housing and Urban Affairs (MOHUA) raised the following observations
and suggestions:
a) While significant improvements are achieved by the Patna ULB for solid waste
management, particularly in door-to-door collection, manpower deployment, and
machinery utilization, an adequate solid waste processing facility is still not there. This
integrated project will greatly benefit Patna and the adjoining region.
Page 4 of 10b) The tender document has been examined by MoHUA. A revenue model based on power
tariff only would require the power tariff to be around INR 12 per unit, which is not
feasible for DISCOMs. The proposed model, which includes a combination of tipping
fee, power tariff and VGF, is good for the project. MOHUA supports the project. Patna,
as the lead ULB, has sufficient revenue sources to cover the tipping fee.
9. Consultant, NITI Aayog raised the following observations:
a) lf the Bihar government is offering VGF over and above the Government of India VGF,
the combined VGF amount should be clearly mentioned as the ceiling in the bid
documents.
The VGF grant disbursement schedule shall be as per the VGF guidelines, and it should
be clearly mentioned in the bid documents.
The concession agreement is signed between the lead ULB and the concessionaire,
therefore, the payment obligation should rest solely with the lead ULB. It should be
clearly mentioned in the bid documents.
The DCA contains two sets of conditions for termination payments: one is pre-CoD and
the other during the construction period. However, the pre-CoD and construction period
are the same thing. This duplication may be removed accordingly.
Currently, the concessionaire is responsible for obtaining environmental clearance.
Based on previous PPP experiences, this responsibility should be better placed under
the authority. The Project Sponsoring Authority (PSA) is requested to review and
address this issue.
10.PD, NITI Aayog raised the following observations:
a) The State government may consider that for future projects, the concessionaire collects
the fee directly from the actual users rather than the ULB.
b) In the proposal, components such as Bio-methanation and other elements are included,
but the technical eligibility is restricted to only WtE plant experience. Since this is not a
highly specialized technology requiring specific experience, it is recommended to
extend technical eligibility to experience in the infrastructure sector as well. This could
increase the number of participants and competition and could lead to better bids.
Page 5 of 1011.JS(ISD) highlighted the following points:
a) The financial modeling of the project indicates project viability with VGF at 30% of the
TPC. However, market assessments may not align with this assessment of the authority.
Therefore, the Government of Bihar should decide the State component of the VGF
support, and the combined VGF amount should be clearly mentioned as the ceiling in
the bid documents.
12. The Chair raised the following observations:
a) What is the rationale for fixing the power tariff at INR 6.37 KwH, and is it fixed during the
concession period or supported by an escalation mechanism? Who will be responsible
for arranging a 20-year Power Purchase Agreement (PPA)?
b) What is the expectation for equity? How much equity needs to be brought in by the
concessionaire, presuming that 30% VGF will come from the Government of India?
c) What are the ULB obligations regarding the segregation and delivery of a minimum
quantity of waste to the concessionaire, and how will waste delivery be measured,
monitored, and billed?
d) What are the current household user charges for solid waste management in Patna? Is
Patna ULB’s financial health good enough to support the tipping fee liability, which
would approximately INR 36 - 40 crore per annum?
e) Are the bidding eligibility criteria restrictive? Will it attract sufficient competition?
f) Is a Joint Venture (JV) envisaged in the proposal, and can the JV partner bring in the
technical and financial capacity required as per the criteria?
g) By what time, the Government of Bihar will bid out the project?
13.UD&HD, Government of Bihar submitted the following to the queries raised by the EC
Members: -
a) VGF Ceiling: The state component of VGF to be given over and above the Government
of India approved VGF shall be fixed by the Government of Bihar, and the combined
VGF amount will be clearly mentioned as the ceiling in the bid documents.
Page 6 of 10b) VGF Disbursement - Payment for the mobilization advance shall be removed. It will be
mentioned in the bid documents that the VGF grant disbursement schedule shall be as
per the VGF guidelines.
Payment Mechanism: The payment to the concessionaire is the responsibility of the
lead ULB only. Further, the Government of Bihar is the guarantor for payments to the
concessionaire.
Termination clause: The duplication shall be reviewed and removed.
Environment Clearance: Currently, the responsibility of obtaining environment
clearance is within the scope of the concessionaire. It will be reviewed, and if required,
this responsibility may be shifted to the authority.
Tipping Fee: The tipping fee in similar projects (which includes collection,
transportation, processing, and disposal) across the country ranges between INR 1400
to 2400. As per the thumb rule, 30% is spent on the processing and disposal, whereas
70% is spent on the collection and transportation. Applying this to the average
benchmarked value of INR 2000, a tipping fee of INR 600 has been considered.
Power tariff: The power tariff is proposed after taking rates from the electricity
regulation authority and discussion with DISCOMs. In 2022-23, the rate came out as
INR 6.37 KwH, which has been used for the calculation of the proposed project. While
any future change in this may be determined by regulatory authority, significant
variations are not anticipated. Bihar is currently facing a shortage of renewable energy
and is purchasing it from Rajasthan and other states. Therefore, DISCOMs are eager to
purchase this power at this rate. Discussions with DISCOMs have been done, and
written communication from them to maintain this rate has been received.
Equity Contribution: As per the model, the VGF grant is deducted from the TPC of the
project, and the rest amount is to be arranged by the concessionaire in the expected
debt-to-equity ratio of 70:30.
Segregated Waste: Out of the 1600 TPD of waste generated, 1000 TPD will come from
Patna which has a robust mechanism of collecting more than 80% of waste as source-
segregated waste. The challenge is the lack of facilities to process the segregated
waste. For other ULBs, there are some issues, but the feedback mechanism will improve
their segregated waste collection once the proposed facility is available. A penalty
Clause of INR 750 per ton will be imposed on ULBs if they fail to provide the requisite
segregated waste.
Page 7 of 10j) Measurement of Waste: There will be computerized weight bridges for measuring the
delivered waste to the plant. In addition, an independent engineer will also monitor the
quantity of delivered waste.
k) User Fee and Financial Health of Patna ULB: Currently, in Patna, households are
charged INR 30 per month as a user fee. The number of households in the Patna cluster
is approximately 7,00,000, with user fee collection of approximately INR 25 crore per
annum.
|) Eligibility Condition: Stakeholder consultation on this project was held in August 2024
with 25 participants, including some from Japan. The proposed technical eligibility
conditions will generate enough competition, but in light of suggestions, we will further
review and make changes as required.
m) Bidding timeline: Within two months after EC approval, the Authority will bid out the
project.
n) JV: The provision for JV is included in the DCA, with a maximum participation of three
members.
14.The EC unanimously granted ‘In-Principle Approval’ for VGF support under the Sub
Scheme - 1 of the VGF Scheme to the setting up of the Integrated Solid Waste Management
Project for Patna Cluster with the following conditions:
a) The VGF support to be provided by the Government of India shall be following:
Project TPC Maximum Gol
(INR crore) VGF
(INR crore)
Setting up of Integrated Solid Waste 514.59 154.38 |
Management Project for Patna Cluster
b) The Government of Bihar should decide the state component of the VGF support, and
the combined VGF amount should be clearly mentioned in the bid documents, subject
to the maximum capping as per the VGF guidelines.
c) Environment clearance obligation shall be with the PSA and should not be left to the
concessionaire. This may also be included as part of the Condition Precedence.
d) Before bidding out the project, the Government of Bihar should satisfy itself regarding
the eligibility criteria in order to get enough competition for the project.
Page 8 of 10e) The VGF disbursal shall be done as per the VGF Scheme and Guidelines. This shall
Clearly be indicated in the bidding documents.
f) Revalidation of the recommendation of the project proposal by the EC is not required
for the following post-recommendation changes in the project cost/bid documents:
i. Any change in the date/time period for any time-bound actions like appointed date,
financial close, construction period, etc.
ii. Non-substantial change in risk allocation.
iii. Any other changes/modifications (except as stated above) in the project proposals
with the overall objective of making the projects successful.
iv. Further, the UD&HD, Bihar will decide whether the changes proposed post
recommendations of the project proposals by the EC fall within the threshold criteria
as stated above. All such changes with the threshold criteria as stated above shall
be appraised at the level of Secretary (UD&HD), Bihar without any further need for
revalidation by the EC and UD&HD, Bihar shall proceed with the process accordingly.
g) However, the following changes shall warrant revalidation of recommendation of project
proposal by the EC:
i. Any change in the formulation of pre-determined user charges/tariffs.
ii. Any change in the concession period by more than 20%.
iii. Any changes having an impact on the In-principle approved amount of VGF for Gol
on the higher side.
h) Necessary amendments to the bid documents to incorporate the decision of the EC
shall be undertaken by UD&HD, Bihar. Further, UD&HD, Bihar, to ensure that legal
vetting of documents is undertaken to ensure that there are no discrepancies in the
contract documents and to circulate to the members of the EC for the record.
i) ‘Final Approval’ for VGF support is contingent upon the compliance of all conditions of
the VGF Scheme.
15. The meeting ended with a Vote of thanks to the Chair.
RKKKKK
Page 9 of 10Annexure-|
List of the attendees of the 47" meeting of the Empowered Committee (EC) for setting
up of Integrated Solid Waste Management Project for Patna Cluster under PPP mode.
a. Department of Economic Affairs, Ministry of Finance
1. Shri Ajay Seth, Secretary, EA- In Chair
2. Shri Baldeo Purushartha, JS (ISD)
3. Shri. Rahul Singh, Director
4. Shri Rajender Singh, Section Officer
b. Department of Expenditure
1. Ms. Preeti Balyan, Joint Director
c. NITI Aayog
1. Shri. Partha Reddy, Programme Director
2. Ms. Nidhi Arora, Consultant
d. Urban Department & Housing Department, Government of Bihar
1. Shri. Abhay Kumar Singh, Secretary
2. Shri. Vijay Prakash Meena, Additional Secretary
e. Ministry of Housing and Urban Affairs, Government of India
1. Shri. Binay Kumar Jha, Director
Page 10 of 10