Task 4 Report – CETP Compendium

India

Consulting Services for Development of CETP Compendium

Under the project “Sustainable Environment- friendly Industrial Production (SEIP) Phase 2”

July 2021
 Task 4 Report

CETP Compendium

To the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

INDIA

Consulting Services for Development of CETP Compendium

As part of the Project

“Sustainable Environment-friendly Industrial Production - Phase 2”

PN: 18.2074.5001.00

GOPA Infra GmbH

Hindenburgring 18, 61348 Bad Homburg, Germany
Phone +49 6172 6817-0 Fax : +49 6172 25748 Email : [email protected]
Table of Content

1 ABOUT THE COMPENDIUM......................................................................................................................... 1

1.1 PURPOSE........................................................................................................................................................1
1.2 TARGET AUDIENCE...........................................................................................................................................1
1.3 HOW TO USE THE COMPENDIUM?.......................................................................................................................1

2 ABOUT THE EXISTING CETPS IN INDIA AND WORLDWIDE.............................................................................3

2.1 OVERVIEW......................................................................................................................................................3
2.1.1 Advantages of CETP...................................................................................................................................4
2.1.2 Challenges and constraints2......................................................................................................................4
2.1.3 State wise distribution of CETPs................................................................................................................4
2.1.4 Key issues associated with CETPs..............................................................................................................5
2.2 TECHNOLOGIES EXISTING IN INDIA AND WORLDWIDE..............................................................................................8
2.2.1 Typical treatment options.......................................................................................................................11
2.2.2 Best Practices in Wastewater Treatment as per EU BREF Document.....................................................12
2.3 CETPS PERFORMANCE/COMPLIANCE.................................................................................................................17
2.4 BUSINESS MODELS.........................................................................................................................................18
2.4.1 Full Public Ownership..............................................................................................................................18
2.4.2 Full Private Ownership.............................................................................................................................18
2.4.3 Public Private Partnership.......................................................................................................................19
2.4.4 Special Purpose Vehicle (SPV)..................................................................................................................21
2.4.5 Trustee Company as SPV.........................................................................................................................22
2.4.6 Role of Industrial Infrastructure Corporations........................................................................................22
2.5 COSTING ASPECTS INCLUDING CAPEX & OPEX..................................................................................................22
2.5.1 Capital cost..............................................................................................................................................23
2.5.2 Operational cost......................................................................................................................................23
2.5.3 Administrative and others.......................................................................................................................23
2.6 OPERATIONAL AND MONITORING ASPECTS INCLUDING EFFECTIVENESS OF OCEMS.....................................................23
2.7 MAJOR ISSUES/BOTTLENECKS INCLUDING (TDS, COD TREATMENT).........................................................................25

3 EXISTING FRAMEWORK OF CETPS.............................................................................................................. 27

3.1 POLICY FRAMEWORK AND LEGAL INSTRUMENTS...................................................................................................27

3.1.1 Policy Framework....................................................................................................................................27
3.1.2 Legal Instruments....................................................................................................................................29
3.2 INSTITUTIONAL FRAMEWORK............................................................................................................................33
3.3 INCENTIVE FRAMEWORK..................................................................................................................................35
3.3.1 Relevant references.................................................................................................................................36
3.3.2 Existing incentives in India.......................................................................................................................36
3.3.3 Proposed new / improved incentive arrangements................................................................................37

4 GUIDELINES FOR PLANNING AND DEVELOPMENT OF CETPS.......................................................................44

4.1 PLANNING AND DEVELOPMENT OF CETPS..........................................................................................................44

4.1.1 Site suitability criteria/assessment..........................................................................................................44
4.1.2 Planning Approach..................................................................................................................................44
4.1.3 Complying with Statutory requirements.................................................................................................53
4.1.4 CETP Design Considerations (prescribing the inlet or outlet quality standards and ensuring synergy). 53
4.1.5 Available Technologies (factsheets for various treatment options & combinations).............................65
 4.1.6 Cleaner and Greener Technologies (Resulting into waste minimisation, recycling/reusing and
conservation of chemicals, energy and water)....................................................................................................77
4.2 OPERATIONS AND MAINTENANCE......................................................................................................................79
4.2.1 Operational and Maintenance requirements..........................................................................................79
4.2.2 Organisational/ Management systems...................................................................................................79
4.2.3 User charges29..........................................................................................................................................80
4.2.4 Monitoring requirements........................................................................................................................84

5 BUSINESS MODELS AND CONTRACTING..................................................................................................... 85

5.1 BUSINESS MODELS.........................................................................................................................................85

5.1.2 Business model yardstick.........................................................................................................................87
5.1.3 Infrastructure components and regulatory boundaries..........................................................................91
5.1.4 Overview of CETP business models in India.............................................................................................94
5.1.5 Summary findings of existing business model arrangements...............................................................102
5.1.6 Formulation and evaluation of alternative business model options.....................................................102
5.2 PROCUREMENT MODELS...............................................................................................................................111
5.3 TENDERING PROCEDURES...............................................................................................................................111
5.4 CONTRACTUAL ARRANGEMENTS......................................................................................................................111

6 MAJOR AVENUES OF INTERVENTIONS BASED ON NATIONAL AND INTERNATIONAL BEST PRACTICES TO

IMPROVE PERFORMANCE/ COMPLIANCE STATUS OF CETPS............................................................................112

6.1 ROLES OF CETP OPERATORS, MEMBER INDUSTRIES AND SPCBS/PCCS..................................................................112

6.2 AUTOMATED MECHANISM TO MONITOR QUANTITY AND QUALITY OF EFFLUENT........................................................113
6.3 SKILLS AND TRAINING REQUIREMENTS..............................................................................................................113
6.4 STRENGTHENING OF REGULATORY REGIME........................................................................................................114
6.5 HEALTH, SAFETY AND SECURITY CONSIDERATIONS...............................................................................................114
6.6 ENHANCED REVENUE STREAMS.......................................................................................................................114
6.7 WATER POSITIVE INDUSTRIAL ESTATES..............................................................................................................114
6.8 WHAT IS A BUSINESS MODEL?........................................................................................................................115
6.9 MOST COMMON TYPES OF BUSINESS MODELS....................................................................................................115
6.9.1 Subscription model................................................................................................................................115
6.9.2 Bundling model......................................................................................................................................116
6.9.3 Freemium model....................................................................................................................................116
6.9.4 Razor blades model...............................................................................................................................116
6.9.5 Product to service model.......................................................................................................................116
6.9.6 Leasing model........................................................................................................................................117
6.9.7 Crowdsourcing model............................................................................................................................117
6.9.8 One-for-one model................................................................................................................................117
6.9.9 Franchise model.....................................................................................................................................117
6.9.10 Distribution model.............................................................................................................................117
6.9.11 Manufacturer model.........................................................................................................................118
6.9.12 Retailer model...................................................................................................................................118
6.9.13 How to choose the right business model ?........................................................................................118
6.9.14 The bottom line.................................................................................................................................118

7 TEN ATTRIBUTES OF EFFECTIVELY MANAGED WATER SECTOR UTILITIES...................................................120

7.1 PRODUCT QUALITY.......................................................................................................................................120

7.2 EMPLOYEE AND LEADERSHIP DEVELOPMENT......................................................................................................120
7.3 FINANCIAL VIABILITY.....................................................................................................................................120
 7.4 OPERATIONAL RESILIENCY..............................................................................................................................120
7.5 WATER RESOURCE ADEQUACY........................................................................................................................120
7.6 CUSTOMER SATISFACTION..............................................................................................................................120
7.7 OPERATIONAL OPTIMIZATION.........................................................................................................................121
7.8 INFRASTRUCTURE STABILITY............................................................................................................................121
7.9 COMMUNITY SUSTAINABILITY.........................................................................................................................121
7.10 STAKEHOLDER UNDERSTANDING AND SUPPORT..................................................................................................121
7.11 OUTCOME ORIENTED....................................................................................................................................121
7.12 IDENTIFY IMPROVEMENT OPPORTUNITIES..........................................................................................................121
7.13 FIT THE UNIQUE NEEDS OF INDIVIDUAL ORGANIZATIONS.......................................................................................121

ANNEX 1 EVALUATION OF CURRENT BUSINESS MODELS RELATIVE TO STAKEHOLDER OBJECTIVES..............123

BIBLIOGRAPHY................................................................................................................................................ 151

CONTRIBUTORS.............................................................................................................................................. 157

STAKEHOLDER CONSULTATION....................................................................................................................... 158

List of Tables

TABLE 2.1 STATE WISE DISTRIBUTION OF EXISTING CETPS.......................................................................................................4

TABLE 2.2: ISSUES ASSOCIATED WITH CETPS.........................................................................................................................5
TABLE 2.3 VARIOUS TECHNOLOGIES AVAILABLE FOR TREATING INDUSTRIAL WASTEWATER...............................................................9
TABLE 2.4: WASTEWATER CHARACTERISTIC - SPECIFIC TREATMENT OPTIONS.............................................................................11
TABLE 2.5 SELECTION OF TECHNOLOGY BASED ON WASTEWATER QUALITY.................................................................................12
TABLE 2.6 SUMMARY OF VARIOUS PRE-TREATMENT OPTIONS.................................................................................................12
TABLE 2.7: BIO-DEGRADABLE PARTICLES / BIOLOGICAL TREATMENT.........................................................................................17
TABLE 3.1 INCENTIVES FOR SETP DEVELOPMENT AND OPERATION OF CETPS (SOURCE CRISIL, 2019)..........................................36
TABLE 4.1: AVERAGE TECHNICAL SERVICE LIFE OF DIFFERENT TYPES OF ASSETS (SEGRAVE, 2014)..................................................49
TABLE 4.2 TREATED EFFLUENT QUALITY STANDARDS............................................................................................................51
TABLE 4.3 CRITERIA FOR THE DESIGN OF CETPS AS DEVELOPED BY NEERI IN CONSULTATION WITH MOEF...................................56
TABLE 4.4 BASIS FOR WASTEWATER CATEGORISATION...........................................................................................................59
TABLE 4.5 CLASSIFICATION OF WASTEWATER.......................................................................................................................60
TABLE 4.6 LITERATURE DATA ON SELECTED SPECIFIC ORGANIC COMPOUNDS..............................................................................60
TABLE 4.7 INLET COMMON METHODS AND PH VALUES FOR REMOVAL OF HEAVY METALS........................................................67
TABLE 5.1 INDUSTRIAL PARKS, OBJECTIVES / OUTCOMES AND TOOLS AVAILABLE.........................................................................88
TABLE 5.2 SUMMARY ASSESSMENT OF EXISTING BUSINESS MODEL OPTIONS FOR CETPS..............................................................95

List of Figures

FIGURE 2.1 TYPICAL ORGANISATION...................................................................................................................................25

FIGURE 4.1 PLANNING PROCESS OF A CETP........................................................................................................................45
FIGURE 4.2 COST SAVING POTENTIAL IN PLANNING PROCESS...................................................................................................46
FIGURE 4.3: APPROACH FOR SETTING-UP WASTEWATER TREATMENT SYSTEM.............................................................................47
FIGURE 4.4: MAIN PLANNING STEPS DURING THE CONCEPTUAL PHASE (MELIN, 2010)...............................................................48
FIGURE 4.5: DECISION TREE WATER POLLUTION CONTROL IN INDUSTRIES (MELIN, 2010)............................................................48
FIGURE 4.6: CATEGORIES OF EFFLUENT STREAMS.................................................................................................................55
FIGURE 4.7 TYPES OF FLOW EQUALIZATION.........................................................................................................................66
FIGURE 5.1 CURRENT GENERIC FRAMEWORK ILLUSTRATING MULTIPLE REGULATORY BOUNDARIES..................................................92
FIGURE 5.2 REDUCED REGULATORY BOUNDARIES.................................................................................................................93
FIGURE 5.3 CHEMPARK ORGANISATIONAL AND CONTRACTING STRUCTURE (SOURCE: WEBER SITES CONSULTING, 2017)................99
Abbreviations and Acronyms

BAT Best Available Technologies

BIAC Brandix India Apparel City
BLT Build-Lease-Transfer
BOD Biochemical Oxygen Demand
BOO Build Own Operate
BOOT Build-Own-Operate-Transfer
BOT Build-operate-transfer
BREF EU Best Available Techniques Reference Documents
BTO Build-Transfer-Operate
CAPEX Capital Expenditures
CETP Common Effluent Treatment Plant
CPCB Central Pollution Control Board
CRISIL Credit Rating Information Services of India Limited
DBOF Design-Build-Finance-Operate
DBOT Design-Build-Operate-Transfer
DIDOM Act Delhi Industrial Development Operation and Maintenance Act
DIPP Department for Promotion of Industry and Internal Trade
DPR Detailed Project Report
ELV Emission Limit Value
EU European Union
FAB Fluidized Aerobic Bed Reactor.
GETPL Gujarat Eco Textile Park Ltd
GIDC Gujarat Industrial Development Corporation
GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit
GoI Government of India
Ha Hectare
IGEP Indo-German Environment Partnership
IIUS Industrial Infrastructure Up-gradation Scheme
JV Joint Venture
MBBR Moving Bed Biofilm Reactor
MBR Membrane Bioreactor
MIDC Maharashtra Industrial Development Corporation
MLD Million Litres Per Day
MLSS Mixed Liquor Suspended Solids
MLVSS Mixed Liquor Volatile Suspended Solids
MoEF &CC Ministry of Environment, Forest & Climate Change
MPCB Maharashtra Pollution Control Board
NABET National Accreditation Board for Education and Training
NABL National Accreditation Board for Testing and Calibration Laboratories 
NEERI National Environmental Engineering Research Institute
NMCG National Mission for Clean Ganga
O&M Operation & Maintenance
OCEMS Online-Monitoring of Industrial Emission & Effluent
OPEX Operating Expenses
PETL Patancheru Enviro Tech Ltd.
PPP Public Private Partnerships
ROO Rehabilitate-Own-Operate
ROT Rehabilitate-Operate-Transfer
SBR Sequencing Batch Reactors

v
SCADA Supervisory Control and Data Acquisition
SCGJ Skill Council for Green Jobs
SEIP Sustainable and Environment-friendly Industrial Production
SEPA Scottish Environmental Protection Agency
SIDCs State Industrial Development Corporations / Agencies / Boards
SIIDCUL State Industrial Development Corporation of Uttarakhand Limited
SITP Scheme for Integrated Textile Park
SPCB State Pollution Control Board
SPV Special Purpose Vehicle
SSI Small Scale Industry
TSDF Treatment, Storage and Disposal Facilities
TSS Total Suspended Solids
UASB Up flow Anaerobic Sludge Blanket
UNIDO United Nations Industrial Development Organization
UPSIDC Uttar Pradesh State Industrial Development Corporation
WWTP Waste Water Treatment Plant
ZLD Zero Liquid Discharge

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1 ABOUT THE COMPENDIUM

1.1 Purpose

This Compendium on Common Effluent Treatment Plants (CETPs) has been prepared to provide the
stakeholders with an array of aspects from the objective, planning, technology selection, business models,
procurement and implementation, operation & maintenance as well as techno-legal considerations for
effective development and management of these public/ common utilities.
At the time of preparing this compendium there are about 191 CETPs being operated in India and many more
are at different stages of development/ construction. Challenges are faced in sustainable operation of these
mammoth common utilities which involves umpteen number and classes of stakeholders from industries to
regulators. As the environment regulations becomes stringent over the years, the existing systems has to be
rehabilitated and upgraded to meet the new standards or even to that of a paradigm shift to that of a Zero
Liquid Discharge based CETPs could pose even existential challenges to the very industries for which the CETP
exists. Newer business models and co-business opportunities keep evolving, innovative technologies and
techniques are being explored to keep the businesses afloat. The key to sustainable management of the CETP
involves a close co-operation and understanding between the CETP operator, member industries, owners/
managers of the industrial estate apart from the environmental regulators. The continued training and skilling
of the CETP personnel, is required to ensure smooth and efficient plant operations and these aspects are also
touched upon in this compendium.
The Compendium has also captured few international experiences, best practices, best available techniques
for the benefit of the users of this compendium. The diminishing water availability levels has even brought in a
drastic conceptual change to evolve the CETP utility from an effluent treatment service provider to a holistic
role of Integrated Water Resource Management utility wherein the complete cycle from source to sink in the
respective industrial area being managed by the utility. However, this demands a change in the vision and
outlook of the CETP operators as well as the immediate stakeholders associated with it.

1.2 Target Audience

This Compendium is to be a quick reference guide to the Developers, Planners, Regulators, Operators,
Academicians and Investors to have a fair understanding of the Techno-Managerial aspects and the interplay
involved in the effective management of CETP operations. The Compendium gives a gist of the critical aspects
with cross reference and links to a plethora of literature, case studies and handbooks available for those who
want to delve deeper on any of the specific aspects covered here.

1.3 How to use the Compendium?

This Compendium is a compilation of the practical experiences, case studies and lessons learned along the
evolution pathway of the CETPs in India, over the last three decades. The Compendium has also captured few
international best practices, Best Available Techniques to give the readers an exposure to CETP operations in
other developed and developing economies. The readers may use this compendium as a quick reference guide
to have a strategic overview of CETP / Industrial Waste Water Management Utilities, so that an investor or

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developer can take an informed decision prior to venturing into the business. Various business models in
vogue, Tariff Apportionment plans and the Techno-Managerial Challenges explained gives them critical inputs
on how to adopt and adapt innovative technologies and techniques to tackle the challenges posed by the
specific sector. The evolving scenario and the associated ancillary operations as explained in the Conclusions
section gives one a pointer to the future perspectives and a quantum change the Integrated industrial water
management infrastructure sector is heading to; and how has of late been attracting the interest of investors
and developers.

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2 ABOUT THE EXISTING CETPS IN INDIA AND WORLDWIDE

2.1 Overview

Common Effluent Treatment Plant (CETP) is a co-operative initiative by/ for a group of micro, small and
medium scale enterprises (MSMEs) to address the challenges of managing their trade effluents. The
Centralized Effluent Treatment Plants have gained traction among the MSMEs, particularly in one geographical
cluster to pool in their resources and synergize their efforts to treat the effluents generated in a sustainable
and economic manner, which they could not have achieved as an individual unit. The Water (Prevention and
Control of Pollution) Act 1974, mandates every industry generating trade effluents to provide adequate
treatment before disposal whether it is in stream, land, sewerage system or in sea.
MSMEs grapple with a number of issues / challenges like limited space and resources, limited access to capital
and lack of specialized manpower for operation and maintenance of the individual Effluent Treatment Plant.
Individual Effluent Treatment Plants (ETPs) generally face problems from lack of space, resources, capital cost,
and specialized manpower for operation and maintenance. Under these constraints, SSIs do not find it
economically feasible to set-up an individual full-fledged treatment plant for protecting the water
environment and meet the social obligation.
Keeping in view the key role played by SSI units in overall industrial development in the country and the
constraints in complying with pollution control norms individually by these units, the Ministry of Environment
and Forests & Climate Change (MoEF&CC) initiated an innovative technical and financial support scheme to
ensure their growth in an environmentally compatible manner.
The scheme promoted common facilities for treatment of effluents generated from SSI units located in
clusters through liberal financial assistance. The financial assistance provided under this Common Effluent
Treatment Plant (CETP) scheme was as follows: Central Government subsidy- 25% of the project capital cost,
State Government subsidy- 25% of the project capital cost, Loans from financial institutions- 30% of the
project capital cost, and Entrepreneurs’ contribution- 20% of the project capital cost.
The main objective of the CETP is to reduce the treatment cost to be borne by an individual industry and
protect the water environment to a maximum. Concept of CETP was introduced not only for abatement of
pollution but also as a step towards cleaner environment and service to the society at large. It was also
envisaged that after implementation of CETPs, burden of various regulatory bodies working for controlling and
monitoring of water pollution can be reduced to a great extent.
The CETP scheme was instituted initially for a period of 10 years with effect from the year 1991 but MoEF&CC
has decided to continue financial assistance under the scheme beyond this period, which continued till 2018.
Most of the CETPs constructed and commissioned so far were financed under the CETP scheme of Govt. of
India. Presently, there are about 191 CETPs in India, out of which 129 CETPs are complying with environmental
standards and 62 CETPs are non-complying.1 There are several advantages as well as challenges associated
with CETPs.

1
CPCB status report, 15 Sep 2020

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2.1.1 Advantages of CETP2

 Facilitates ‘economy of scale’ in wastewater treatment, thereby reducing cost of pollution abatement for
individual industry.
 Addresses the ‘lack of space’ issue faced by individual industries for full-fledged treatment facilities.
 Minimizes problem of lack of technical assistance and trained personnel for the treatment of wastewater.
 Reduced burden of various regulatory authorities in ensuring pollution control requirement.
 Homogenization of wastewater.
 Relatively better hydraulic stability.
 Eliminates multiple discharges in the area, provides opportunity for better enforcement i.e., proper
treatment and disposal.
 Provides opportunity to improve the recycling and reuse possibilities.
 Facilitates better organization of treated effluent and sludge disposal etc.

2.1.2 Challenges and constraints2

Consistency in compliance to the prescribed standards by the CETPs is constrained by many reasons, such as:

 Operating on ‘one-size-fits-all-basis’ especially in case of heterogeneous industrial clusters.

 Lack of access to capital investments, working capitals, specialized technical skills, inconsistent effluent
quality from member industries.
 Improper management of treatment units at common facility.
 Varied nature and scale of the industries, along with the addition of industries in a haphazard manner,
without proper planning.
 No provision to tackle the fluctuations in the pollution load and quantities, at individual member
industries.
 No separate treatment units to deal with hazardous and toxic effluents, etc.

2.1.3 State wise distribution of CETPs3

An assessment done by CPCB has revealed that 193 CETPs have been opted and installed in the country, which
serve 212 industrial areas/estates. State wise break down of number of existing CETPs is presented below:
Table 2.1 State wise distribution of existing CETPs

Existing CETPs
Zone / State Remark
Operational Non-operational Total
Northern Zone
Haryana 13 1 (u/c) 14 14 CETPs cover 17
industrial areas
H. P 1 - 1
J&K 1 - 1
Punjab 4 4
U.P 4 4 8
Uttaranchal 3 1 (u/c) 4
Chandigarh - - -
Delhi 13 - 13 13 CETPs cover 17
industrial areas
Central Zone
Chhattisgarh - - -
M.P. 1 1
Rajasthan 14 14
Southern Zone

2
Technical EIA Guidelines Manual for CETPs, MoEF, GoI
3
Assessment of the Need for Common Effluent Treatment Plants, CPCB

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A.P. 6 2+3 (u/c) 11 11 CETPs cover 17

industrial areas
Goa - - -
Karnataka 9 - 9 9 CETPs cover 13
industrial areas
Kerala 5 - 5
Tamil Nadu 49 - 49 49 CETPs cover 53
industrial areas
Pondicherry - - -
Western Zone
Gujarat 27 3 (u/c) 30
Maharashtra 27 - 27
Daman Diu and D&NH - - -
East Zone
Bihar - - -
Jharkhand - 1 (u/c) 1
Orissa - - -
West Bengal 1 1
N-E Zone
Ar. Pradesh - - -
Assam - - -
Manipur - - -
Meghalaya - - -
Mizoram - - -
Nagaland - - -
Tripura - - -
Sikkim - - -
Total 178 6 + 9 (u/c) 193 193 CETPs cover
212 industrial
areas

2.1.4 Key issues associated with CETPs

Table 2.2: Issues associated with CETPs

Administrative issues
Inadequate planning Due importance is not given for the planning of CETPs, due to which various issues arise at a later
stage.
Also, there is a time lag between conceptualization of a CETP and its actual operation date. During
this time, the type of industries envisaged in the design stage may change and an entire new set of
industries may emerge. Thus, there will be a mismatch between actual effluent quality and the
designed system to treat it causing non-conformity in the outlet treated parameters.
In the case of new industrial estates, provisions are not adequately made even if CETP requirements
are foreseen. The types of industries to be allowed or not to be allowed, the conveyance systems,
land requirements for CETP etc. are not well defined and adhered to later on while allotting plots to
industries.
Standard approach It is important to design the CETPs taking into consideration the treatability of effluents and all the
not followed complexities involved due to wastewaters being collected from several individual industries. Lab
testing and pilot testing procedures are not undertaken before initiating designing of the CETPs.
Proper approach should be followed for planning and designing of new CETPs or modernisation or
expansion of the existing CETPs.
Lack of standards for There are no specific set of standards for construction of CETPs. An important factor in decision-
CETP construction making is the expected service life of the assets to be built or already operating. The construction
standards will help chose the right kind of materials, address corrosion risks, take into consideration
resource efficiency and energy efficiency etc.

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Manpower/capacities Skill Council of Green Jobs (SCGJ) and National Skill Development Corporation (NSDC), Ministry of
Skill Development & Entrepreneurship, GoI conducts Training and Skills Certification for Wastewater
Treatment Plant Technicians and Helpers. As on date, deployment of skills certified personnel is not
mandatory. However, the recent tender by BIADA (Bihar Industrial Area Development Authority) for
establishment of CETP in Hajipur, Bihar has insisted on deployment of SCGJ certified personnel for
CETP Operations & Maintenance. The contractors are given two years window to ensure all O&M
personnel are SCGJ certified for the job.
Management issues
Feasibility studies The quantities of and quality of wastewaters, availability of treatment systems at the industry level,
options for conveyance systems, disposal options including recycle/reuse etc. are not adequately
studied. Non-availability of data and non-disclosure of data during surveys by the industries is a
major problem. Many a times, CETPs are over designed for much more than the effluent generated.
Technology selection No organized information is available for treatment of various quality of wastewater at CETP level,
& up-gradation especially for moderate to high COD, metal bearing effluents. No state of the art set-up available for
biological treatment treatability and sensitivity analysis of various Biological Treatment Options –
Conventional, MBR, SBR, MBBR, Attached Growth, information on available technologies &
technology transfer issues. Lack of Organize Knowledge on Advanced Treatment Technologies. So far
the treatment schemes speak of “Primary”, “Secondary”, “Tertiary” and “ZLD.”
Professional In some cases, the top management of CETP lacks professional attitude in the operation of CETPs,
management unable to deploy expert manpower and other resources required for successful operation of the
CETP. With CETPs left untrained and under educated operational staff, CETPs are often failed to
perform to the desired level in spite of their robust design.
Business models Quite often it is observed that what is most appropriate business model has not been analysed well
before setting up of a CETP. There are no guidelines on viable business models for setting up of
CETPs.
Procurement procedures are not well laid out for procurement of CETP services. No healthy and
competitive market has been developed for the CETP operators where valued and reliable services
can be appreciated.
There is a need for an enabling business environment for the financial institutions to fund CETP
infrastructure projects in the country.
Recovery of O&M CETP struggles to recover the operating & management costs, including interest on capital costs
cost invested, costs towards chemicals, electricity, manpower etc. Industries many a times complain that
the rates for user charges are not rationally fixed and requires revision from time to time, as may be
necessary, in a transparent manner.
Roles of multi-stakeholders are associated in running CETPs. However, the management models are
not well defined. For example, if the member/user industry of CETP is on the board of directors of
the CETP, there would be issues of conflict of interest and undue influence of decision making.
Framework issues
Issues with There is a need for guiding principles on clearer identification of stakeholders for CETP development
stakeholder and operations. As in case of Uttar Pradesh, apart from industries and industry associations, multiple
identification government departments and agencies are stakeholders of CETP such as UPSIDC, Area Development
Authorities, Urban Local Bodies and State Administration etc. Identification of each stakeholder and
their roles and responsibilities at the conception and pre-feasibility stage itself is critical to ensure
proper O&M of CETPs.
Issues with Inadequate stakeholder engagement can lead to non-functional or non-compliant CETP
stakeholder infrastructure in absence of systematic guidelines on stakeholder engagement and CETP
engagement management and operations. Examples of such cases are Bhadohi CETP, Tronica City CETP and
Rooma CETP in UP
CETP in Bhadohi developed by Bhadohi Industrial Development Authority (BIDA) was never operated
as the textile industries (for whom the CETP was developed) were NOT keen to join the same,
turning it into a defunct infrastructure. After construction of CETP by the Bhadohi Industrial
Development Authority (BIDA), carpet industries in the industrial cluster never connected their
effluents to the plant, preferring to treat them in ETPs on their own premises. The reason claimed by
the industries was limited trust in the management capacity of the operator.
Regulatory interventions
Regulatory The regulatory framework for the CETPs is fragmented. There are multiple regulatory boundaries
interventions and (between industry and the network, the network and the CETP, and the CETP and the environment.
their implications on This leads to a complex web of ownership, regulatory responsibilities and liabilities. As a result, it
stakeholders presents opportunities for liabilities to be pushed from one party to and undermining effective
regulatory enforcement measures.

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The regulatory framework imposes standards where this may be better for the CETP owner to
determine, e.g. it may be more efficient for the CETP to accept an effluent that is untreated than to
demand pre-treatment. This may lead to economically inefficient decision making by users and CETP
owners and operators.
Technical issues
Compliance of  Non-compliance of S.S & B.O.D. parameters due to lack in proper operation.
standards prescribed  Difficulties in achieving standards for parameters like colour, ammoniacal nitrogen, refractory
by SPCBs COD, TDS, surfactants etc.
Flow variation Due to holidays, power cut days, market demand, vacations member industry often runs at a lower
capacity or sometimes completely close down their production facilities which ultimately results in
low waste water generation than normal for certain time period. Waste water generation was noted
to be reduced to 70 to 20% capacity of CETP. Additionally, when these member units bring their
production activity to normal, the waste water flow to the CETP increases suddenly, sometimes even
exceeding CETP treatment capacity. As all of the CETPs are having primary, secondary facilities, this
activity results in to shock load to biomass and in most of the cases results in lower performance of
the CETP.
Characteristics This type of problem is faced by CETP established for heterogeneous clusters, where the members of
variation - change in the CETP producing different type of products and discharges effluent of different characteristics
raw materials at depending on their product mix. When products are changed to different category, it results in
industries (for sudden changes in wastewater profile, which ultimately disturb the performance of CETP.
heterogeneous Sometimes, the un-reacted raw materials from different industries find their way to the collection
clusters) system of the CETP and react with one another to form a product which may be very difficult to treat
or highly resistance to biodegradation. Due to this, BOD/ COD ratio change drastically resulting in
shock loads.
Maintenance - Rotary Generally, all the CETPs are having technical staff for regular maintenance of the CETP but in some
Equipment's & cases due to human error, proper maintenance of the critical equipment such as blowers, diffusers
Diffusers which results in breakdown of such equipment. CETP’s have non-retrievable fine bubble diffuser
assembly for biological process. This ultimately results in poor performance of the particular
treatment section as well as entire CETP. However, in some cases efficiency loss occurs due to wear
and tear in pumps, blowers and other rotating machines in spite of proper maintenance.
Biological process As every biological process is design based on certain inlet norms such as BOD/COD ratio,
issues Ammoniacal Nitrogen, TDS, temperature. Any drastic change in above parameters results in failure
of the CETP to treat the effluent to optimum level. Most CETPs are having fixed cycle conventional
biological process (continuous ASP process). Variation in temperature is also a major factor which
affects biological process. During winter, the ambient temperature drops is of 20 oC, while in summer
ambient temperature rises to 45-46oC. There is a lack of knowledge and expertise in Bio Tech
Engineering, Biomass Development / Redevelopment issues.
Power - interruptions Generally, for each industrial clusters /estate, power companies impose weekly one-day electricity
staggering days outage which is known as a “staggering day”. All CETP should have power backup system equivalent
to the load of entire CETP, but it is observed that CETPs are more concerned to provide power
backup to biological process than entire CETP, which results in drastic load reduction to biological
process for certain time-period. Power Generation based on Diesel or Natural Gas is almost two
times expensive than Grid Power.
Energy efficiency Poor Aeration Systems – Aerators, PD Blowers, Biological Treatment accounts for 50 to 60% Power
Consumption at CETP.
Sludge / hazardous  Huge generation of “Primary” and “Secondary” Sludge.
waste disposal  Inappropriate Sludge Dewatering Systems – SDB.
 No Bio Sludge Digestion systems.
Collection and It is observed that although CETPs are established and operated by the member industries but the
conveyance system effluent conveyance system is owned by different agencies such as GIDC. This results in lack of
and disposal system coordination towards operation and Maintenance, cleaning of the conveyance system and results in
overflowing of untreated wastewater in open areas. The CETP fails to receive effluent as per
designed capacity. Similarly, wastewater conveyance system for disposal of treated effluent from
CETP is also owned by different agencies. CETP operators does not have plausible stake in operations
of such facilities.
Various owners and In some cases, CETPs are operated and maintained by member industries but the effluent
regulators for conveyance system is own by some other agency. Due to this the routine maintenance as well as
drainage and disposal breakdown problems required longer time than normal. This results in treated and untreated
wastewater disposal at unauthorized places/ stoppage of industrial activities enforced by regulators.
Issues related to Zero Liquid Discharge through Reverse Osmosis & Multiple Effect Evaporator
Assembly.

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Lack of monitoring Quite often, CETPs do not have proper monitoring facilities at the inlet and outlet, both for quality
and quantity.
Waste salt disposal ZLD results in generation of hazardous solid wastes particularly waste salts that cause disposal
challenges. Due to scarcity of land and where TSDF facility is not available at reasonable distances,
the problems are even severe.
High cost of The high cost of operation of a ZLD is a major challenge. The typical O&M cost of a ZLD plant ranges
operation between Rs. 200- 250 per KL of wastewater treated. The recovery of water offsets the cost by Rs. 10
to Rs. 35 per KL, while recovery of Sodium Sulphate salt (in the case of some Textile dyeing CETPs)
reduces the cost by Rs. 30 to 40 per KL.
High power Carbon footprint of a ZLD facility is another major concern. The typical power consumption ranges
consumption from 30 to 60 Kwh/m3. The thermal evaporators alone consume about 8 – 10 Kwh/m3, in addition
to several tons of firewood used for the boilers.
Non-uniform Non-uniform application of ZLD standards across the country for similar industries has serious
application across the impact on the competitiveness of the industries in certain states, e.g. while industries in Tamil Nadu
country are forced to implement ZLD, industries elsewhere in the country are permitted to discharge into
rivers and sea.
Financial issues
Treatment charges Once the effluent load is booked, the industry may stop its operations due to market competition or
recovery from may move to other locations considering differences in tax benefits resulting in immediate revenue
members loss to CETP. CETPs are required confirmation of “Booked Load” for 90% of their installed capacities.
This results in lack of revenue generation to fulfil the recurring cost.
User charges are not designed to send economically efficient price signals and as such do not provide
incentives for optimal decision making by users, e.g. economically efficient levels of pre-treatment.
The contract relationships between operators and users are difficult to enforce resulting in non-
payment, non-compliance with agreements on volume and quality and other contract breakdowns.

2.2 Technologies existing in India and Worldwide4

Wastewater depending on its characteristics is subjected to different treatment options. Basic wastewater
treatment consists of a combination of physical, chemical, and biological processes and operations to remove
solids, organic matter and, sometimes, nutrients from wastewater.
Different forms of treatment exist depending on the quantity and quality of wastewater. The effluent from
industrial processes requires some form of pre-treatment prior to sending the effluents for further treatment
of CETP. This is mainly required when wastewater is carried through pipelines to minimize corrosion and
clogging and to prevent toxic constituents. For ensuring proper pre-treatment, standards are specified under
the Environment (Protection) Act, 1986 for the effluent quality at the inlet to CETPs. In addition, reduction of
wastewater quality and quantity at source is also an important component. The treatment system, in general,
includes:

 Conventional system (Physico–Chemical and biological treatment)

 Conventional with tertiary system (pressure filtration, activated carbon, additional physico–chemical
treatment)
 Additional system (MEE, Advance oxidation process, Ammoniacal-nitrogen removal)
Wastewater treatment can be divided into four/five major categories or steps based on design, and O&M:

 Segregation at source - Segregation of waste streams at source enables to treat differentiated stream as
per its specific characteristics which in turn would raise treatment effectiveness.
 Preliminary treatment - It involves a number of unit processes to eliminate undesirable characteristics of
wastewater. Processes include use of screen, grit chambers for removal of sand and large particles,
communitors for grinding of coarse solids, pre-aeration for odour control and removal of oil and grease.
 Primary treatment- It involves removal of settable solids prior to biological treatment. The general
treatment units include: flash mixer + flocculator + sedimentation

4
Technical EIA Guidelines Manual for CETPs, MoEF, GoI

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 Secondary treatment- It involves purification of wastewater primarily with dissolved organic matter by
microbial action. A number of processes are available but the ones that are mainly used are anaerobic and
/or aerobic treatment methods.
 Tertiary treatment - This mainly includes physical and chemical treatment processes that can be used
after the biological treatment to meet the treatment objectives.
Design of the actual treatment system for a CETP involves selection of alternative processes based on the
requirement/ability of individual treatment processes to remove specific waste constituents. Various
technologies available for treating industrial wastewater are given in the following table.
Table 2.3 Various technologies available for treating industrial wastewater

Preliminary Treatment
Screening  It is adopted to remove floating matter and shall be provided at the intake point
Grit Removal  Used when WWTP has to deal with rainwater which normally entrains a considerable amount of
sand
Oil and grease  Oil and grease are skimmed-off by passing the waste water through skimming tank. This process
Removal can be rendered more efficient by dissolved air flotation or vacuum flotation
Primary Treatment
Equalization  Applicable for wastewaters having different characteristics at different intervals of time and
where uniform treatment is required
 Each unit volume of waste is mixed thoroughly with other unit volumes of other wastes to
produce homogeneous and equalized effluent
 Gives better mixing of different unit volumes of effluents
Neutralization  Applicable for highly acidic and highly alkaline effluents
 Acidic effluents may be neutralized by treatment with lime or lime slurry or caustic soda
 Alkaline waste may be neutralized by treatment with acids
Sedimentation  Separation of suspended particles by gravitational settling and floating material
 Clarifies collected rainwater from solid content (sand or dust)
 Clarifies wastewater from inert contents (sand or comparable particles)
 Clarifies wastewater from reaction material (emulsified metal compounds, polymers and their
monomers)
 Separates heavy metals or other dissolved components after preceding flocculation process
 Removes suspended solids in the primary clarifier
 Removes biological sludge in secondary clarifier of a biological WWTP
Secondary Treatment
Aerobic Treatment
Activated Sludge  Applicable to all biodegradable industrial wastewater streams.
Process  The effluent from primary treatment processes are collected in aeration tank and are aerated
with mechanical devices such as fixed/ floating/diffused aeration/ oxygen injection etc.
Aerated Lagoons  The effluent from primary treatment processes are collected in lagoons and are aerated with
mechanical devices such as floating/fixed aerators.
Trickling Filters/Bio  In the trickling or percolating filter process the microorganisms are attached to a highly
filters permeable medium through which the waste water is trickled – or percolated
 Trickling filters are effectively used for the treatment of industrial waste water
 Used to treat urban and some industrial wastewater
 Used when effluent is highly loaded with COD
 Used to upgrade an existing activated sludge plant
Sequential Batch  The operation is in sequence of “fill , aerate , settle and waste sludge and draw treated waste
Reactors (SBR ) water but not with secondary clarifier
Sub merged Aerobic  This technology utilizes an aerobic fixed film process that is a combination of submerged
Fixed Film reactor attached growth and activated sludge process. This system is designed to be installed into a two
compartment, where the first compartment provides majority of BOD removal, and the second
compartment polishes the BOD. Rigid block-type media is submerged within the treatment

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module, providing surface area for microbial growth.

Membrane  Treats municipal and industrial waste water
Bioreactor  It is particularly suitable for effluents with high COD and /or ammoniacal nitrogen loads ;
envisaging recycling of waste water, stringent discharge regulations, sensitive receiving water
bodies, sludges which are hard to settle, upgrading existing plants, compact installations
Anaerobic Treatment: Used only as Pre-treatment for waste water which is characterized by high organic load (>2 g/l)
Applicable mostly for effluents of high BOD loads.
Anaerobic Contact  Anaerobic contact process (ACP) waste water is mixed with recycled sludge and digested in a
Reactor (ACR) sealed reactor, the waste water / sludge mixture externally separated (sedimentation, or
vacuum fine screening flotation) and the supernatant discharged for further downstream
treatment.
Up flow Anaerobic  In the UASB process, waste water is introduced at the bottom of the reactor, from where it
Sludge Blanket flows upward through a sludge blanket composed of biologically formed granules or particles.
(UASB)
Fixed-bed Reactor  In the fixed-bed or anaerobic filter process, waste water flows upward or downward (depending
on the solids content of the influent) through a column with various types of solid media on
which anaerobic micro-organisms grow and are retained
Biological Removal of Sulphur Compounds / Heavy Metals
 Much lower solubility of metal sulphides compared to their hydroxides
 Applicable to all waste water streams that contain a considerable amount of sulphate
Tertiary Treatment
Sand Filters  Removes undissolved pollutants such as suspended solids, undissolved phosphate and attached
organics
 Flexible for modifications in basic design structure to accommodate site specific criteria.
Carbon Filters  Activated carbon adsorbs organics
 Flexible for modifications in basic design structure to accommodate site specific criteria.
Micro Filtration  Applied when a solid free waste water for downstream facilities is desired such as reverse
osmosis or complete removal of hazardous contaminants
 Used in metal particle recovery
 Used in metal plating waste water treatment
 Used in sludge separation after activated sludge process in a central biological WWTP, replacing
secondary clarifier
Ultra Filtration  Removes pollutants such as proteins and other macromolecular compounds and toxic non-
degradable components
 Separates heavy metals after complexation or precipitation
 Separates components not readily degradable in sewage treatment effluents which are
subsequently recycled to the biological stage
 It is a pre-treatment step prior to reverse osmosis or ion exchange
 Removes SS along with attached COD as a polishing step and avoiding secondary clarification
Retention ponds  Used to avoid hydraulic overload of downstream facilities
 Separates solid pollutants (such as sediment, organic matter, dissolved metal compounds and
nutrients) from rainwater
 Applied to industrial sites with highly contaminated surfaces
Nano Filtration  Applied to remove larger organic molecules and multivalent ions in order to recycle and reuse
the waste water or reduce its volume
 Increase the concentration of contaminants to such an extent that subsequent destruction
processes are feasible
Reverse Osmosis (RO)  Separates water and dissolved constituents down to ionic species
 It is applied when a high purity water is required
 The segregated water phase is recycled and reused such as desalination, final removal of
degradable components if biological treatment is not available, heavy metals, toxic components
and segregation of pollutants with the aim of concentrating or further processing.
 It is often used in combination with post treatment techniques for the permeate
Ion Exchange  Applied to remove unwanted ionic and ionisable species from waste water

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 Its greatest value lies in recovery potential

 It recovers rinse water and process chemicals
Examples:
 Heavy metal ions – cationic or anionic, e.g. Cr3+ or cadmium and its compounds, with low feed
concentrations
 Ionisable inorganic compounds, such as H3BO3
 Soluble, ionic or ionisable organic compounds, e.g. carboxylic acids, sulphonic acids, some
phenols, amines as acid salt, quaternary amines, alkyl sulphates and organic mercury can be
removed.
 Ion Exchange is the removal of undesired or hazardous ionic constituents of waste water and
their replacement by more acceptable ions from an ion exchange resin, where they are
temporarily retained and afterwards released into a regeneration or backwashing liquid.
Evaporation  It is applicable to remove or concentrate inorganics

2.2.1 Typical treatment options5

Based on characteristics of the wastewater, appropriate technologies can be identified to arrive at the
probable combination of treatment technologies in a treatment scheme. One such guidance matrix is given
below.
Table 2.4: Wastewater Characteristic - specific treatment options

Characteristics Quality of Effluent Treatment Options

High TDS, and high COD and Waste is not easily biodegradable but  Thermal decomposition (based on
equivalently high BOD toxic calorific value)
 Chemical oxidation by hydrogen
peroxide, ozone etc.
 Evaporation + secured landfill
High TDS, High COD and high difference May be toxic; not suitable for biological  Chemical treatment (recovery,
between COD and BOD treatment; mostly inorganic salts precipitation etc.)
 Evaporation + secured landfill of
evaporated residue
High TDS, high BOD and low difference Highly organic effluent fully  Anaerobic + Aerobic treatment
between COD & BOD biodegradable  If quantity is less, incineration (based
on calorific value) + secure landfill of
incineration ash
High TDS, low BOD and low BOD Only inorganic salts, no need for  Solar evaporation
& COD difference biological treatment  Forced evaporation (after separation
of volatile organic matter)
 Membrane technologies
Low TDS, and high COD and Highly organic effluent, may not be  Thermal decomposition
equivalently high BOD easily biodegradable  Chemical oxidation by hydrogen
peroxide or ozone or sodium hypo-
chlorite etc.
 Chemical + biological treatment
Low TDS, High COD and high difference Highly inorganic effluent, not suitable  Chemical recovery
between COD and BOD for biological treatment  Chemical oxidation + biological
treatment
Low TDS, high BOD and low difference Organic effluent, fully biodegradable  Anaerobic + aerobic treatment
between COD & BOD
Low TDS, low BOD and low BOD & COD Low organic and low inorganic effluent  Recycle and reuse (after preliminary
difference treatment)

5
Common Effluent Treatment Plants: Overview, Technologies and Case Examples, GIZ-IGEP

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NEERI has developed a template which may be used as a broad guideline for selection of technology
depending upon the kind of wastewater that needs to be treated. The template is presented in the table
below.

Final ranking of pre-treatment technologies as per NEERI study are:

» OZ – ASP – PSF – ACF
» CP – ASP – CP – PSF – ACF
» CP – ASP – PSF – DMF – MF

[OZ – Ozonation, ASP – Activated Sludge Process, ACF – Activated Carbon Filters, CP – Chemical Precipitation,
PSF – Pressure Sand Filter, DMF – Dual Media Filter, MF – Media Filter]
Table 2.5 Selection of technology based on wastewater quality

WWC High BOD Low BOD High COD

High TDS (Highly organic effluent fully (Organic salt, no need for (Waste not easily biodegradable
biodegradable) biological treatment) but toxic)
Anaerobic + aerobic/ Solar, forced evaporation Thermal destruction
Incineration + secure landfill Membrane technologies Chemical treatment
Chemical oxidation
Evaporation + secured landfill
Low TDS Organic effluent, fully (Low organic & inorganic effluent) (Highly organic effluent not easily
biodegradable; Recycle and reuse after biodegradable)
Anaerobic + aerobic treatment preliminary treatment Thermal destruction
Chemical oxidation
Chemical + biological treatment
Highly inorganic effluent, not
suitable for biological treatment;
Chemical recovery
Chemical oxidation + biological
treatment
Source: Common Effluent Treatment Plants-State of the Art, NEERI 1991, sponsored by Ministry of Environment & Forests, Technical EIA
Guidance for Common Effluent Treatment Plants, ILFS Eco Smart Ltd., Hyderabad 2010, prepared for Ministry of Environment & Forests.

2.2.2 Best Practices in Wastewater Treatment as per EU BREF Document 6

The ‘Best Available Techniques; (BAT) describes the environmental standard that industrial installations in the
European Union (EU) have to apply in order to get the required operation permit. It means the most advanced
stage of production techniques and their methods of operation, which can be implemented in a particular
industrial sector under economically and technically viable conditions, and which provide the most effective
protection of the environment as a whole.
The EU Directive on Integrated Pollution Prevention and Control (IPPC) from 1996 – as well as its successor,
the Industrial Emissions Directive (IED) from 2010 – strive for the prevention or reduction of emissions to air,
water and soil, as well as waste reduction. To this end, it regulates which kinds of industrial installations need
a permit for operation, and it stipulates that permit conditions such as emission limit values and other
constructional or operational requirements have to be based on the application of BAT. Following table
presents a summary of the various treatment options and efficiency of removal that may be expected from
these options.
Table 2.6 Summary of various pre-treatment options

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Common Effluent Treatment Plants: Overview, Technologies and Case Examples, GIZ-IGEP

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Performance Treatment Option Efficiency (%)

High Chemical precipitationbio-oxidationchemical precipitationsand BOD: 84-93
filtrationactivated carbon adsorption COD: 80-90
SS: 77-98
Chemical precipitationbio-oxidationsand filtrationdual media filtration
Chemical precipitation (3 stage) media filtrationactivated carbon adsorption
Ozonationbio-oxidationsand filtrationactivated carbon adsorption
Moderate Electro coagulationbio oxidationchemical precipitationsand BOD: 68-79
filtrationactivated carbon adsorption COD: 60-73
SS: 64-78
Low Bio oxidationsand filtrationdual media filtrationactivated carbon adsorption BOD: 56-70
Chemical precipitationsand filtrationactivated carbon adsorption COD: 48-65
SS : 52-74
Catalytic oxidation BOD: 24-25
COD: 21-23
SS: 56-60

In order to define what is considered as BAT for a particular industrial sector, the EU implemented an
information exchange between its Member States, representatives from industry and non-governmental
organisations (NGOs). This process is coordinated through the European Integrated Pollution Prevention and
Control (IPPC) Bureau. The major outcome of this process are the so-called Best Available Techniques
Reference documents (BREFs), which were elaborated for all relevant industrial and agricultural sectors in the
EU (more than 30 sectors!). These documents provide a lot of useful information for the particular sector, e.g.
on the general techniques and processes in use, on the main environmental issues, on the current emission
and consumption levels, on BAT candidates and finally on the best available techniques for the sector. After
formal publication of the BAT conclusions in the European Gazette, they have to be implemented by the
competent authorities and put into practice within 4 years.
As a reference for an environmentally sound construction and operation of industrial installations, the BREFs
are also widely applied outside the EU. The BREFs are a valuable – but free of charge 7 – source of information
for Common Waste Water and Waste Gas Treatment/ Management Systems in the Chemical Sector, amongst
others.
The meaning of BAT is summarised below:

 Best - most effective with respect to the prevention and – where that is not practicable – the reduction of
emissions and the impact on the environment as a whole.
 Available - developed on a scale which allows implementation in the relevant industrial sector, under
economically and technically viable conditions, taking into consideration the costs and advantages,
whether or not it is used in the respective Member State.
 Technique - includes both the technology used and the way in which the installation is designed, built,
maintained, operated and decommissioned.

As elaborated in the BREF document, the main sources of waste water in the chemical industry are:
 chemical syntheses
 waste gas treatment systems
 conditioning of utility water
 bleed from boiler feed water systems
 blowdown from cooling cycles
 backwashing of filters and ion exchangers
7
Reference Document on Best Available Techniques in Common Waste Water and Waste Gas Treatment/ Management Systems in the Chemical
Sector can be downloaded from http://eippcb.jrc.es/reference/

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 landfill leachates
 rainwater from contaminated areas, etc.,

Their main impact is characterized by:

 hydraulic load
 content of pollutant substances (expressed as load or concentration)
 effect or hazardous potential on the receiving water body, expressed as surrogate or sum parameters
 effect on organisms in the receiving water body, expressed as toxicity data.

Waste gas emission appear as:

 ducted emissions, which are the only emissions that can be treated
 diffuse emissions
 fugitive emissions.

The main air pollutants are:

 VOCs
 sulphur compounds (SO2, SO3, H2S, CS2, COS)
 nitrogen compounds (NOx, N2O, NH3, HCN)
 halogen compounds (Cl2, Br2, HF, HCl, HBr)
 incomplete combustion compounds (CO, CxHy)
 particulate matter.
On treatment technologies, the BREF document covers following:

1. Separation or clarification techniques (to protect from clogging, damage, fouling)

Grit separation, Sedimentation, Air flotation, Filtration, Microfiltration/ultrafiltration
2. Physico-chemical treatment techniques (for inorganic or non-biodegradable waste water)
Crystallisation, Chemical oxidation, Supercritical water oxidation, Chemical reduction, Hydrolysis, Nano filtration/reverse
osmosis, Adsorption, Ion exchange, Extraction, Distillation/rectification, Evaporation, Stripping, Incineration
3. Biological treatment techniques (for bio-degradable waste water)
Anaerobic digestion process:
Anaerobic contact process, UASB, Fixed bed, Expanded bed, Biological removal of sulphur compounds & heavy metals
Aerobic digestion process:
Activated sludge process, Membrane bio-reactor process, Trickling filter, Expanded bed process, Bio-filter-bed
4. Nitrification/de-nitrification
5. Central biological waste water treatment
6. Waste gas treatment techniques
For VOC and inorganic compounds:
Membrane separation, condensation, adsorption, wet scrubbing, bio-filtration, bio-scrubbing, bio-trickling, thermal oxidation,
catalytic oxidation, flaring
For particular matter:
Separator, cyclone, electrostatic precipitator, wet dust scrubber, fabric filter, catalytic filtration, two-stage dust filter, absolute
filter (HEPA filter), high-efficiency air filter (HEAF), mist filter
For gaseous pollutants in combustion exhaust gases:
Dry sorbent injection, semi-dry sorbent injection, wet sorbent injection, selective non-catalytic reduction of NOx (SNCR),
selective catalytic reduction of NOx (SCR)

There are separate BREF documents to deal with the following:

Reference document Subject

Emissions from Storage (EFS) Emissions from tanks, pipe work and stored chemicals
Energy Efficiency (ENE) General energy efficiency
Generation of steam and electricity in pulp and paper
General Principles of Monitoring (MON) Emissions and consumption monitoring

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Waste Incineration (WI) Waste Incineration

Waste Treatments in Industries (WT) Waste Treatment
Some of the BAT options with reference to wastewater treatment as reflected in the EU BREF document are
described below:

 Wastewater collection system

- An adequate wastewater collection system plays an essential role in effective wastewater reduction and/or
treatment. It ducts the wastewater streams to their appropriate treatment device and prevents mixing of
contaminated and uncontaminated wastewater.
- Segregate process water from uncontaminated rainwater and other uncontaminated water releases. If existing
sites do not yet operate water segregation, it can be installed, at least partially, when major alterations are
made to the site.
- Segregate process water according to its contamination load.
- Install a roof over areas of potential contamination wherever feasible.
- Install separate drainage for areas of contamination risk, including a sump to catch leakage or spillage losses.
- Use over ground sewers for process water inside the industrial site between the points of wastewater
generation and the final treatment device(s). If climatic conditions do not allow over ground sewers
(temperatures significantly below 0 °C), systems in accessible underground ducts are a suitable replacement.
Many chemical industry sites are still provided with underground sewers and the immediate construction of
new sewer systems is normally not viable, but work can be done in stages when major alterations to
production plants or the sewer system are planned.
- Install retention capacity for failure events and fire-fighting water in the light of a risk assessment.

 Breaking and/or remove emulsions at source

For suspended solids (TSS) (TSS that include heavy metal compounds or activated sludge need other
measures), remove them from wastewater streams when they could cause damage or failure to downstream
facilities or before they are discharged into a receiving water. Common techniques are:
- Sedimentation / air flotation to catch the main TSS load
- Mechanical filtration for further solids reduction
- Microfiltration or ultrafiltration when solid-free wastewater is required.

 Recovery of substances
- Control odour and noise by covering or closing the equipment and ducting the exhaust air to further waste gas
treatment, if necessary.
- Dispose of the sludge, either by handing it to a licensed contractor or by treating it on site.

As heavy metals are chemical elements that cannot be destroyed, recovery and re-use are the only ways to
prevent them being released into the environment. Any other option causes them to be transferred between
the different media: wastewater, waste air and landfilling. Thus, for heavy metals, the following techniques
could be used:
- Segregate wastewater containing heavy metal compounds as far as possible.
- Treat the segregated wastewater streams at source before mixing with other streams.
- Use techniques that enable recovery as widely as possible.
- Facilitate further elimination of heavy metals in a final WWTP as a polishing step, with subsequent treatment of
sludge, if necessary.

The appropriate techniques are:

- Precipitation / sedimentation (or air flotation instead) / filtration (or microfiltration or ultrafiltration instead)
- Crystallisation
- Ion exchange
- Nano-filtration (or reverse osmosis instead)

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The inorganic salt (and/or acid) content of wastewater can influence both the biosphere of a receiving water,
e.g. small rivers when they are confronted with high salt loads, and the operation of sewerage systems, e.g.
corrosion of pipes, valves and pumps or malfunction of downstream biological treatment. In the case of one or
both of these possibilities, the best available technique is to control the inorganic salt content, preferably at
source and preferably with control techniques that enable recovery. Appropriate treatment techniques (not
including techniques for treating heavy metals or ammonium salts) are:
- Evaporation
- Ion exchange
- Reverse osmosis
- Biological sulphate removal (used only for sulphate, but when heavy metals are present, they are also
removed).

 Pollutants unsuitable for biological treatment are, e.g. recalcitrant TOC and/or toxic substances that
inhibit the biological process. Thus their discharge into a biological treatment plant needs to be prevented.
It is not possible to forecast which contaminants are inhibitors for biological processes in a wastewater
treatment plant, because this depends on the adaptation to special contaminants of the micro-organisms
working in the particular plant. Thus, the best available technique is to avoid the introduction of
wastewater components into biological treatment systems when they could cause a malfunction of such
systems and to treat tributary wastewater streams with relevant non-biodegradable part by adequate
techniques.
- Choice 1: Techniques that enable substance recovery:
o Nano-filtration or Reverse Osmosis
o Adsorption
o Extraction
o Distillation / Rectification
o Evaporation
o Stripping
- Choice 2: Abatement techniques without need of additional fuel, when recovery is not feasible:
o Chemical oxidation, but care must be taken with chlorine-containing agents
o Chemical reduction
o Chemical hydrolysis
- Choice 3: Abatement techniques entailing considerable energy consumption, when there is no other choice
to abate toxicity or inhibitory effects or when the process can be operated on a self-sustaining basis:
o Wet air oxidation (low-pressure or high-pressure variant)
o Wastewater incineration
- In cases where water supply and consumption is an environmental issue, techniques requiring considerable
amounts of cooling water or wet scrubber systems for exhaust air treatment need to be assessed, such as:
o Extraction
o Distillation / rectification
o Evaporation
o Stripping
 Biodegradable wastewater can be treated in biological control systems, either as tributary streams in
specially designed (pre)treatment systems, e.g. anaerobic or aerobic high load systems, or as mixed
wastewater in a central biological wastewater treatment plant, or as a polishing step behind the central
wastewater treatment plant. Thus, it is BAT to remove biodegradable substances by using an appropriate
biological treatment system (or an appropriate combination of them), such as:
- Biological pre-treatment to relieve the final central biological wastewater treatment plant from high
biodegradable load (or as a final polishing step). Appropriate techniques are:
o Anaerobic contact process
o Up flow anaerobic sludge blanket process
o Anaerobic and aerobic fixed-bed process

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o Anaerobic expanded-bed process

o Complete-mix activated sludge process
o Membrane bioreactor
o Trickling (percolating) filter
o Bio filter fixed-bed process
- Nitrification / denitrification are useful when the wastewater contains relevant nitrogen load.
- Central biological treatment- In general the BAT associated with emission level for BOD after central biological
treatment is < 20 mg/l. In the case of activated sludge, a typical application is a low-loaded biological stage with
a daily COD load of ≤ 0.25 kg/kg sludge.

Following table summarizes the treatment technology commonly adopted for soluble biodegradable
particles as per Best Available Techniques Reference Document (BREF) from the European Commission.
Table 2.7: Bio-degradable particles / biological treatment

Parameter Description Environment Benefit

Anaerobic Treatment Converts organic compounds in the BOD, COD
absence of air to products like CH4,
CO2, sulphides
Sulphuric Compounds/ Heavy Metals Sulphate to sulphides by SO4 reducing Sulphate, Zinc, Cadmium
bacteria
Reaction of HM with sulphides and
precipitation of HM sulphides
2nd reaction to convert excess sulphide
to sulphur
Aerobic Treatment Biological oxidation of dissolved organic BOD, COD, Phenols, N, TSS, Turbidity
substances with oxygen using the (MBR)
metabolism of micro-organisms
Nitrification / Denitrification Ammonium to nitrite and then to Total N
nitrate
Anoxic de-nitrification, nitrate to
nitrogen
Phosphorus (Biological) Sequencing and producing appropriate Phosphorous removal
conditions in the reactors
Phosphorus (Chemical) Addition of multivalent ions (Ca, Al, Fe) Reduction in effluent phosphorous
that form precipitates of sparingly content
soluble phosphates

2.3 CETPs Performance/Compliance8

The technologies used in various CETPs all over India have been built on the best available technology 9. In
many cases, the CETPs have been upgraded to adopt better technology, but the overall performance of the
CETPs in many cases is sub optimal. Central Pollution Control Board (CPCB) evaluated the performance of 78
operating CETPs in the year 2005 and came out with a status report10 with following main observation:

 Unsatisfactory performance of CETPs is largely due to poor operation & maintenance.

 Meeting the design inlet quality to the CETPs that inter alia depends on effluent quality from contributing
industries is key to achieving the standards for CETP effluent quality.
 High TDS in the raw influent reaching CETPs, and as a result in treated effluent of CETPs, is a widespread
problem.

8
Global good practices in industrial wastewater treatment and disposal/reuse, with special reference to CETPs, CPCB, MoEF, GoI
9
Waste-water treatment technologies: A general review., United Nations, 2003
10
Performance Status of Common Effluent Treatment Plants in India, A CPCB report, 2005

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The CPCB report had suggested that the performance of CETPs has been largely unsatisfactory because of poor
operation and maintenance therefore the SPCBs should conduct regular monitoring of CETPs and take action
against wilful defaulters. It further reiterated the fact that the SPCBs are required to prescribe specific set of
pre-treatment standards for influent to CETP from each industrial sector and enforce them diligently. The
report also recommended for need for area specific approach to tackle the problem of Total Dissolved Solids
(TDS). Attempt should be towards reduction in use of TDS contributing chemicals in industries by adopting
cleaner production technologies and recovery and recycling of chemicals from the waste streams.
As per the compliance status report compiled by CPCB (15 Sep 2020), there are total 191 CETPs, out of which
129 CETPs are complying with environmental standards and 62 CETPs are non-complying.

2.4 Business Models11

Smooth functioning of CETP is very much linked to the kind of business model adopted by the CETP. Several
business models are in practice for the CETPs. Most commonly used models are full public ownership, full
private ownership and Public Private Partnership. Brief details are given below.

2.4.1 Full Public Ownership

The government agencies, such as the State Industrial Development Corporations, finance construction and
operate the plant. These agencies own the industrial estates and are responsible for their infrastructure and
services. The advantages in this model are:

 Full control over necessary management and technical expertise that is required for planning, erection
and operation & management.
 Because the public body maintains other services for the industrial estate, such as water, power, roads
and drainage, the operation of a CETP could conveniently become part of the overall services being
offered to industries.
 Enforcement of legal and financial obligations on the individual industries may be less difficult than by
other arrangements. The enforcement may also be enhanced through the ease of coordination and
cooperation with other government agencies such as water and electricity boards.
The disadvantages with this model are:

 Potential inefficiency and ineffectiveness of the public sector enterprises.

 Environmental regulatory agencies may be more reluctant to impose standards and enforce compliance
on another government agency/public body.
 Slow response in case of trouble shooting, lack of qualified staff etc.

2.4.2 Full Private Ownership

The fully private ownership includes two types of arrangements:

 First is where an outside agency specializing in operating effluent treatment plants is contracted to
establish and manage the CETP. In order to attract outside agencies, a minimum profit must be
guaranteed to the agency to enter into contract. This contract arrangement is not very common in India
but there is a trend, however for industries to operate treatment plants on contract basis where public
sector owns and constructs the plant and private sector is contracted to manage and operate the facility.
 Secondly, a company is formed as a separate entity and industries association or individual units within
that estate would come forward for the formation of such a company under Section 25 of the Companies
Act or as a trust or as a society. It is beneficial that the industries producing waste are directly involved in
the financial and legal aspects in the CETP company, as their active involvement in the operation and
management of CETP will increase the success of a CETP.

11
Common Effluent Treatment Plants: Overview, Technologies and Case Examples, GIZ-IGEP

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For control over planning, appointment of private operator, and O&M of the CETP, often a Special Purpose
Vehicle is formed representatives of individual industries, industries association and industrial park
management.
Private bodies that take up construction and operation of the CETP, make investments. The company would
recover the capital costs, operating and maintenance expenses and a profit through a charge levied on
individual wastewater producers in accordance with the volume and composition of the wastewater treated.
The operating company enters into contracts with individual wastewater producers so that legal action can be
initiated in case of breach of contract. The legal relationship between the operating agency and the user of
CETP is well defined by a contractual arrangement between the parties. This company can incorporate
individual industries and industrial association as shareholders.
The private ownership often works on BOO (Build Own, Operate) model, in which project ownership of the
project remains usually with the private company. The private company gets the benefits of any residual value
of the project. A BOO scheme involves large amounts of finance and long payback period.
The disadvantages of this kind of partnership are:
- Monopoly by the private operator;
- Arbitrariness in user charges;
- Lack of control on defaulting industries by the operator; and
- Risk of quality of services by the operator.

2.4.3 Public Private Partnership

Under the public-private partnerships, there are infrastructure development models wherein a private entity
receives a concession from the private or public sector to finance, design, construct, and operate a facility
stated in the concession contract. This enables the project proponent to recover its investment, operating and
maintenance expenses in the project. The following models under PPP are used in the CETP projects.

2.4.3.1 BOT
In the Build/Own/Operate/Transfer (BOT, BOOT) arrangement, the private sector designs and builds the
infrastructure, finances its construction and owns, operates and maintains it over a period, often as long as 20
or 30 years. This period is sometimes referred to as the "concession" period. Such projects generally provide
for the infrastructure to be transferred to the government at the end of the concession period. During the
concession period, the private party is entitled to retain all revenues generated by the project and is the
owner of the regarded facility. The concession period is determined primarily by the length of time needed for
the facility’s revenue stream to pay off the company’s debt and provide a reasonable rate of return for its
effort and risk.
BOT finds extensive application in the infrastructure projects and in public–private partnership. In the BOT
framework a third party, for example the public administration, delegates to a private sector entity to design
and build infrastructure and to operate and maintain these facilities for a certain period. During this period the
private party has the responsibility to raise the finance for the project and is entitled to retain all revenues
generated by the project and is the owner of the regarded facility. The facility will be then transferred to the
public administration at the end of the concession agreement without any remuneration of the private entity
involved. The concession period is determined primarily by the length of time needed for the facility’s revenue
stream to pay off the company’s debt and provide a reasonable rate of return for its effort and risk.
Calcutta Leather Complex (CLC): M.L. Dalmiya & Co Ltd (MLD) on BOT basis. CETP designed with the support
of UNIDO.

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2.4.3.2 BOOT
During the concession period, the private company owns and operates the facility with the prime goal to
recover the costs of investment and maintenance while trying to achieve higher margin on project. The
specific characteristics of BOOT make it suitable for infrastructure projects for the social welfare but are not
attractive for other types of private investments.
Haridwar CETP: The CETP in SIIDCUL IIE is on Design Built Finance Operate & Transfer (DBFOT) – a variant of
Build-Own-Operate-Transfer (BOOT) basis. The Industrial estate hosts industries from different sectors and
sizes. The developer / concessionaire chosen was chosen on the basis of the one that offered the least
treatment cost / tariff to the industries; and the concessionaire recovers his cost and profit over the
concession period of 30 years.
Tarapore CETP, Maharashtra: M/s Superklean Env. Enggs. Pvt. Ltd., M/s Klean Env. Consultants Pvt. Ltd., M/s.
Jog Engineering Ltd. (an ISO 9001 Certified Construction Company) and M/s Ashta Siddhi Constructions Pvt.
Ltd. formed the CETP on BOOT basis.

2.4.3.3 BOO
In a BOO project ownership of the project remains usually with the project company. Therefore, the private
company gets the benefits of any residual value of the project. A BOO scheme involves large amounts of
finance and long payback period. Some examples of BOO projects come from the water treatment plants.
These facilities are run by private companies to process raw water, which is supplied by the public sector
entity and then filtered water is returned to the public sector utility to deliver to the customers.
PETL (Patancheru Enviro Tech Ltd.) was developed on BOO basis. The Andhra Pradesh Industrial Infrastructure
Corporation Ltd. (APIIC) built, owned and operated the CETP initially, and later transferred to PETL. Eventually,
PETL got installed ultra-filtration membrane bioreactor (UF MBR).
There are different models on which public private partnerships are working. One another variation could
be tripartite arrangement which has three parts:

 Ownership and financing of CETP by the public body (e.g., state industrial development corporation).
 The public body would have a contract with a private company to design, construct, and operate CETP for
a designated number of years. The company would recover operating and maintenance expenses and a
profit from the charge levied on individual wastewater producers in accordance with the volume and
composition of the waste.
 The operating company would enter into contracts with individual waste producers so that legal action
can be initiated in case of breach of contract. This company can incorporate individual industries and
Industrial association as shareholders. The legal relationship between the operating agency and the user
of CETP must be well defined by a contractual arrangement between the parties.
The SPV or the society or the public body, as the case may be, selects and enters into a contract with a private
company to design, construct, and operate CETP for a designated number of years. The company would
recover the capital costs, operating and maintenance expenses and a profit through a charge levied on
individual wastewater producers in accordance with the volume and composition of the wastewater.
Under the public-private partnership model, there are different infrastructure development models wherein a
private entity receives a concession from the private or public sector to finance, design, construct, and operate
a facility stated in the concession contract. This enables the project proponent to recover its investment,
operating and maintenance expenses in the project.
Formulation of the appropriate institutional and jurisdictional arrangements for ownership and operation of a
CETP is as important as a good engineering design. For overseeing a CETP, a Special Purpose Vehicle (SPV)
could be formed under an appropriate statute with representation from the key stakeholders of the CETP. A

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legal agreement is entered into between the SPV and its member units clearly delineating their relationship
and mutual obligations.
In additions to above models, other models ranging from the least to the most private involvement are 12:

 Full public ownership, in which the government finances construction and operates the facility. The type
of capital financing and funding of operations determine the extent to which the facility is subsidized or
pays for itself.
 Contract services, in which the public sector owns, designs, and constructs the facility and the private
sector is contracted to manage and operate the facility.
 Turnkey facility, where the public sector owns and finances a facility that is designed, constructed, and
operated by the private sector. Few examples are-
- Kagal CETP Pvt. Ltd., Maharashtra: A turnkey project of 10 MLD has been done by a private company at Kagal
Industrial Area. In this facility, the Maharashtra Industrial Development Corporation (MIDC) is the facilitator
and the Maharashtra Pollution Control Board (MPCB) is the monitoring authority.
- CETP at Apparel Park at Doddaballapura is on turnkey basis including operate and maintain the treatment
plant for a period of 3 years.
- Pallavaram CETP (PTIETC) is set up on Turnkey basis and implementation of CETP by a private company.
 Developer financing, which involves the financing of construction or expansion of a facility by the private
sector in exchange for the right to build houses, stores, or industrial facilities.
 Privatization, which results in private ownership, construction, and operation of a facility. The public
sector provides some financing based on a public decision to provide services.
 Merchant facilities, which are fully private; the private sector decides to provide

2.4.4 Special Purpose Vehicle (SPV)

In order to manage a CETP, a Special Purpose Vehicle (SPV) is registered under an appropriate statute. A legal
agreement between the SPV and its member units clearly delineating their relationship and mutual obligations
should be executed and reflected.
Key features in SPV model are:

 Capable of acquiring, holding and disposing of assets.

 An entity, which would undertake only the activity of asset securitization and no other activity.
 Must be bankruptcy remote, i.e., the bankruptcy of Originator should not affect the interests of holders of
instruments issued by SPV.
 Must be bankruptcy proof, i.e., it should not be capable of being taken into bankruptcy in the event of any
inability to service the securitized paper issued by it.
 Must have an identity totally distinct from that of its promoters/ sponsors/constituents/ shareholders. Its
creditors cannot obtain satisfaction from them.
 Must be tax neutral, i.e., there should be no additional tax liability or double taxation on the transaction
on account of the SPV acting as a conduit.
 Must have the capability of housing multiple securitisations.
Company as a SPV: Structuring the SPV as a Company under the Companies Act, 1956, has certain legal and
regulatory issues as well as entity level taxation issues. A company formed under the Companies Act, 1956
cannot be bankruptcy proof since under Section 433 of the Companies Act can wind it up. A Company as SPV
can remain bankruptcy remote if there is true sale from Originator of SPV.
Brief about a few of the SPVs that are managing CETPs in India are presented below-

 PETL: SPV is registered as a society on “No Profit, No Loss”. They are having SPV and Board of 7 members
for management and operation. They treat the wastewater and sell the treated effluent. The received
amount is used in O&M (operation and maintenance) and shared by industries.
- Vatwa CETP, Gujarat is run by the Association of industries at Vatwa. The SPV is registered as a Society.

12
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- Butibori CETP Pvt. Ltd., Maharashtra: It is an SPV of M/s SMS Infrastructure Ltd. and Butibori Manufacturers
Association. The objective of this company is to treat the effluents generated by the Industries in the MIDC
Industrial Estates. In this facility, MIDC is the facilitator and the Maharashtra Pollution Control Board is the
monitoring authority. Capacity of CETP is about 5 MLD.
- SMS Waluj CETP Pvt. Ltd., Maharashtra: It is an SPV of M/s SMS Infrastructure Ltd. and Waluj Industrial
Association. The CETP handles wastewater from the Waluj Industrial Area. In this facility MIDC is the facilitator
and MPCB is the monitoring authority. Capacity of CETP is about 10 MLD.
- Pallavaram CETP (PTIETC): The Pallavaram CETP, joining with other six other CETPs in Tamil Nadu, formed an
SPV by name M/s Chennai Environmental Management Company of Tanners (CEMCOT) for implementation of
the project.
- Naroda CETP: SPV registered as a Company under Section 25 of the Companies Act 1956.
- Vatva CETP: It is managed by a Cooperative Society named The Green Environment Services Cooperative
Society Limited formed by the member units of GIDC Estate, Vatva.

2.4.5 Trustee Company as SPV13

The Trustee Company is similar to a Trust with only the role of the Trustee being undertaken by a Company.
With individuals becoming increasingly averse from acting as Trustees, a Company may act as the Trustee. The
characteristics of the Trustee Company:

 A Company under the Companies Act, 1956 which would act as the SPV.
 It would acquire the receivables by assignment from the Originator and hold them in its capacity as
Trustee.
 The Trust Deed should ensure that the Company can act as the Trustee and also hold in Trust separate
tranches of receivables pertaining to different transactions
 The SPV/Trustee are not liable for the good performance of the assets.
 The administration of the SPV's assets for any transaction may be subcontracted back to the Originator or
to any other servicer through an Administration Agreement describing the different tasks to be performed
by the Originator (in its capacity as Administrator).
A few examples of Trustee Company are:
- Pali CETP Maharashtra is managed and maintained by the Pali Water Pollution Control Research Foundation
(PWPCRF) Trust.
- Balotra CETP is managed by Balotra Water Pollution Control and Treatment Trust Balotra, Rajasthan.

2.4.6 Role of Industrial Infrastructure Corporations

The industrial infrastructure corporations responsible for development of industrial estates/parks can play
important role in planning/establishing of CETP. Their role includes:

 Initiation of a process for setting up of CETP/STP in the existing as well as new industrial parks on need
basis.
 Earmarking of required land for CETP/STP under common amenities on lease basis or nominal lease
rentals.
 Facilitating to tap the funds for CETPs/STPs under various schemes of both Central and State
Governments.
 Facilitating industry associations/member industries in implementing CETP scheme.
 Facilitating formation of SPV/JV Company by member industries of industrial estate/park, preferably as a
not- for- profit Company.
 To enter into legally binding agreement with SPV clearly delineating their relationship, mutual obligation
and defining roles and responsibilities of each of the parties.
 While industrial infrastructure corporations facilitate laying of pipeline/sewer from individual industries to
CETP, the responsibilities of disposal pipeline from CETP to outlet for discharge of effluent should be of
SPV/JV.

13
Source : (http://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/10796.pdf)

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 To take necessary steps to constitute “Tariff Committee” in consultation with SPV/JV and the operator of
CETP for determining and amending from time to time, as may be necessary, the tariff or user charges to
be paid by member industries for treatment of their wastewater.

2.5 Costing aspects including CAPEX & OPEX14

Cost estimates (capital and O&M) for all the treatment options and annual estimates may be assessed. In
general, treatment costs would include regular collection and treatment charges. To ensure financial flow and
stability, certain portion of the equity shall be collected from the member industry, as a non-refundable
membership charge. Often a regulatory mechanism shall be established to check the defaulting member
industries in respect of payment. The attributes to be considered for cost calculations include following:

2.5.1 Capital cost

 Land
 Process know-how
 Equipment and electrical
 Civil including administrative building and process units and internal roads and / or approaches
 Stand-by DG Sets
 Piping (preferably High Density Poly Ethylene (HDPE) of suitable pressure rating
 Instrumentation (plant) such as
- flow meters (at entry, to Aeration tanks and outlet)
- D.O. meters in aeration tanks
- TOC meter
- TDS meter
- VOC meter, etc., as required by SPCB
 Laboratory equipment for analysis including instrumental analysis
 Piping in the industrial estate or for tankers

2.5.2 Operational cost

 Power (state electricity Board and Diesel for stand-by DG Sets)
 Fresh drinking water / bore water for chemical solution preparation
 Transportation charges of effluent if planned to collect by gravity after collection of sample and analysis or
road tankers
 Sewage water charges (if provided)
 Plant maintenance and repairs
- Mechanical
- Electrical
- Instruments
- Sludge disposal charges
 Laboratory chemicals and glassware
 Plant process chemicals (consumables) like lime, alum, poly electrolyte, etc.
 Effluent and sludge analysis charges by external agency once in 6 months by a MoEF approved laboratory
for comparison with in-house analysis
 Electrical spares
 Mechanical spares
 Consultancy charges (if required)
 R&D activity expenditure

2.5.3 Administrative and others

 Salaries and benefits
 Overtime
14
Technical EIA Guidelines Manual for CETPs, MoEF, GoI

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 Auditors charges
 Bonus, medical and other benefits

2.6 Operational and Monitoring aspects including effectiveness of OCEMS15

No matter what ownership arrangements are made, two distinct areas of organisation and management are
required. One which deals with policy and another with operation. Depending on the final choice of ownership
arrangement, the policy making body may reside in or outside the institution or company managing the CETP.
The operational part would always rest with the CETP operator.
The policy making body can take the form of a Board of Directors or Advisory Committee. Generally, the Board
would consist of the Chairman, Managing Director and other directors, as well as members selected from the
shareholders of the company. Whether SIDC is part of the company or not, it should be represented on the
Board at least in an advisory capacity. However, other State Government agencies, and especially the Pollution
Control Board, should not be represented on a Board of Directors as this would in most cases result in a direct
conflict of interest. If deemed necessary for those agencies to have input into the operation beyond their
official capacity, they can be included in an advisory committee along with consultants and other experts as
well as representatives from industries in the industrial estate.
The day to day operations would be controlled by a plant manager assisted by the required operational,
laboratory, maintenance and general support staff. A typical organisation chart is presented in the figure
below.
In order to ensure the successful operation of the CETP, there are a number of conditions which must be
fulfilled by the CETP operator and the individual waste producers utilizing the plant.
Some operational issues are highlighted here as they are very important for the successful operation of a
CETP:

 All new industries in an industrial estate must meet the pre-treatment standards for the CETP as a
condition for consent to operate and to be connected to the common effluent collection system.
 Existing industries in an industrial estate must also meet the pre-treatment standards for the CETP as a
condition for being connected to the common effluent - collection system.
 The CETP operator should be granted the right of entry for sampling purposes and the right to impose
sanction such as fines and service cut-offs.
 The operator should be allowed to adjust the cost recovery formula to take into account inflation,
unforeseen costs and variations in flow and loading to the plant which is not automatically corrected by
the formula for calculation of charges.
 A standard service contract that clearly spells out the obligation of the users of the CETP -and the CETP
operator should be decided upon in consultation with all concerned parties. It should include the
following specifications on the part of the facility users and the CETP operator;
- The user is responsible for meeting the pre-treatment requirements.
- If the user does not meet the pre-treatment requirements, the treatment service will be withdrawn, and the
offending user will be responsible for all additional cost imposed on the CETP operator due to the failure to
meet its obligations.
- The user is responsible for prompt payment of fees. The treatment service may be withdrawn by the CETP
operator in case of non-payment and legal action may be taken.
- If the user meets the pre-treatment standards, the CETP operator is responsible for treating the influent to a
level that meets the standards for such effluents. If it is unable to do this due to problems with its operation
not caused by lack of pre-treatment on the - part of its users, then he is responsible for all costs ensued.
- If the upset in operations and resulting non-compliance is a result of a user not meeting pre-treatment
standards, then the CETP operator is responsible for excluding the offending user from the CETP influent and
for recovering any additional costs that ensue from the offending user.

15
CETP Compendium, NEERI, 1992

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- The CETP operator is responsible for maintaining an ongoing effluent flow and characteristics monitoring
program so that the operation and maintenance cost formula may be corrected to reflect actual rather than
established conditions as well as an aid to maintaining proper CETP operations.
- The point at which the effluent becomes the responsibility of the CETP operator should be clearly defined.
8

Chairman

Managing Director

Director Operation Director Technical Director Finance

Members of the Board

Plant Manager

Lab-in-Charge Maintenance Supervisor Project Engineer Accounts Officer

Mechanics, Electrician, Environmental Account Billing & Purchase

Chemist Gardener, Security Staff Engineer

Monitoring Operation R&D Planning & Execution of R&D

Dev. Works

Equipment Estate Security

Administrative Support Staff, Typist etc.

Figure 2.1 Typical organisation

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2.7 Major issues/bottlenecks including (TDS, COD treatment)

The conventional wastewater treatment plants are generally not designed to treat high Total Dissolved Solids
streams (TDS), which requires specialized treatment or in cases where the treated effluent need to be recycled
and the effluent need to be treated for TDS reduction involves a series of additional infrastructure like multi-
stage Reverse Osmosis plant followed by other contraption to concentrate the reject stream through
evaporation and crystallization route prior to being and disposed-off in secured landfills. This process needs to
be incorporated when the CETP has to go in for Zero Liquid Discharge options. However, specialized entities
offer services like centralized evaporation facility which may be availed to outsource the concerns of managing
the high TDS waste streams.
The high COD contributed by recalcitrant or refractory substances makes the effluents difficult to treat and if
one encounters with such type of streams from member units, it is always advised to identify and segregate
such wastewater streams and treat them separately utilization appropriate treatment techniques like Fenton
Oxidation. Please refer to chapter 4.1.5 and 4.1.6 for more details.

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3 EXISTING FRAMEWORK OF CETPS

CETPs in India were developed under various models such as Government owned, industrial association
owned, industrial parks owned, privately owned etc. The operations of CETPs have been noted to have
adopted various models such as operated by Developers, operated by Contractors and operated by
departments. The recent trends in Government policies have shifted the development and operation of CETP
to be managed through SPVs (Special Purpose Vehicle) companies with a single business agenda of
development and / or Operation of CETPs bringing in transparency in the process of development &
operations of CETPs as well as improved overall performance of CETPs on self-sustainable basis.
The CETPs are governed by EPA Act, 1986 and The Water Act, 1974 mainly, besides other laws which are
applicable other that Environment & Pollution Control Laws. The operations and performance of CETPs
monitored by State Pollution Control Boards with Central Pollution Control Board acting largely as regulatory
monitoring agency to monitor and control water pollution.
NMCG under the Ganga Act and Section 5 of EPA Act 1986, are given special powers to monitor and control
pollution in River Ganga. The Powers conferred are the same as of PCBs under Section 5 of EPA Act 1986.
NMCG under these acts and provisions thereof is empowered as Regulator of water pollution in Ganga River.
Ministry of Textiles (MoT) with a mission of development of textiles industries in India has a special role for not
only textiles industries but for development of CETPs as well. MoT provide financial assistance to textiles
clusters through various incentive and assistance schemes, e.g. Scheme of Integrated Textiles Park and Eco
Textiles Parks. Under such Schemes, Ministry of Textiles provides financial assistance subsidizing the cost of
development of CETPs inside designated/notified Textiles Parks as a part of the industrial infrastructure.
Recent developments of judicial activism through active interactions of Citizens and NGOs have forced CETPs
to bring under the jurisdiction of National Green Tribunal – The National Green Court of India. In last 5 years a
series of directives have been passed by NGT effecting CETPs, most of which have been accepted by Central
and State Pollution Control Boards as instruments of enforcement. 16

3.1 Policy Framework and Legal Instruments17

3.1.1 Policy Framework

3.1.1.1 Scheme of the Ministry of Environment & Forests, GoI

The Ministry of Environment & Forests (MoEF) has been implementing a centrally sponsored scheme for CETPs
since 1991. In the light of the operational deficiencies in the earlier scheme of 1991 and taking into
consideration the development of pollution control technologies over the years, the financial constraints on
the part of SSI proponents and the recommendations of the State Pollution Control Boards, MoEF came up
with revised guidelines for central assistance to CETPs. As per the revised guidelines, the financial assistance
for a CETP project shall be as follows:

16
Strategy paper for SMCG, Support to Ganga Rejuvenation (SGR) Project, Sep 2020
17
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 The central assistance (subsidy) will be restricted to 50% of the total project cost. The modified ratio
proposed in respect of central share: state share: proponent share will be 50:25:25. Out of the proponents
share, at least 40% of contribution has to be from the proponent and balance 60% is to be raised through
loan to the proponent from Banks/ Financial Institutions.

For CETPs involving primary / secondary/ tertiary treatment, financial assistance would be provided by the
Government of India to the tune of 50% of maximum Rs. 1.50 crore / MLD capacity, subject to a ceiling of
Central assistance of Rs. 15 crores per CETP. For CETPs involving primary/secondary/ tertiary treatment
and ZLD (zero liquid discharge) treatment, financial assistance would be provided by MoEF to the tune of
50% of maximum Rs. 4.50 crore / MLD capacity, subject to a ceiling of Central assistance of Rs. 20 crores
per CETP.
 Central subsidy shall be released subject to two conditions:
o The state subsidy is made available to the CETP project;
o Bank guarantee for an equivalent amount has been procured by the SPCB/ PCC
 No assistance will be provided for meeting recurring or operation and maintenance costs.
 The central assistance will be provided only to meet capital costs towards following items:
o Plant and machinery for primary, secondary, and tertiary treatment.
o On site laboratory with standard set of instruments.
o Zero Liquid Discharge (ZLD) and related technologies.
 From MoEF, the central assistance will be available for:
o Establishment of new CETPs in an industrial estate or a cluster of SSIs.
o Up gradation/ modernization proposal for CETPs earlier financed through the MoEF shall be
considered for one-time funding. However, there has to be adequate justification for the same and
the time interval between the commissioning of the existing CETP and the submission of proposal for
up gradation/ modernization to the Central Government should not be less than & years.
 MoEF shall prepare a panel of technical institutions for technical evaluation of a CETP proposal/ DPR.

3.1.1.2 Modified Guidelines of Micro and Small Enterprises – Cluster Development Programme (MSE-CDP)
As part of the Cluster Development Programme, the modified guidelines have been published for micro and
small enterprises, summary of which are given below-

 Point 9 refers to hard interventions which includes creation of tangible “assets” as common facility centres
(CFCs) like effluent treatment plant, marketing display/selling centre, common logistics Centre, common
raw material bank/sales depot, etc.
 The GoI grant will be restricted to 70% of the cost of project of maximum Rs 15 crore. GoI grant will be
90% for CFCs in North East and hill States.
 Clusters with more than 50%, (a) micro/ village, (b) women owned, and (c) SC/ST units. The cost of project
includes cost of land (subject to max. of 25% of project cost), building, pre-operative expenses, preliminary
expenses, machinery & equipment, miscellaneous fixed assets, support infrastructure such as water
supply, electricity and margin money for working capital.
 The common facility should be maintained by the SPV with certain conditions.

3.1.1.3 IIUS- Industrial Infrastructure Up-gradation Scheme 2003 (under DIPP)

The IIUS – Industrial Infrastructure Up-gradation Scheme, launched in December 2003, is a Central
Government Scheme. The objective of the Scheme is to enhance competitiveness of the industry by providing
quality infrastructure to existing industrial clusters through Public-Private Partnership mode (PPP). CETPs are
also eligible under this Scheme. The funding pattern is presented in the table below.

Source Percentage Of Project Remark

Central grant Up to 75% of the project cost with a Up to 90% of the project in case of
ceiling of 50 crores. The ceiling has North Eastern States, Jammu &
been raised to Rs. 60 crore under recast Kashmir, Himachal Pradesh and

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Source Percentage Of Project Remark

IIUS Uttarakhand
Industry contribution/ user contribution Minimum 15% of the project cost is Minimum 5% of the project cost in case
mandatory. of North Eastern States, Jammu &
The SPV has to arrange the additional Kashmir, Himachal Pradesh and
fund. Uttarakhand
State government May contribute if it likes
Central grant for creation of capital assets only, not for working capital

3.1.1.4 Small Industries Cluster Development Programme

The Small Industries Cluster Development Programme of the Ministry of Micro, Small and Medium Enterprises
of GoI provides fund support to CETP under the category of support provided for, (i) Developmental (DV) and
(ii) Commercial (CL).
Contribution of the Ministry to the total cost of the project is decided keeping in view the willingness of other
stakeholders and partners like state governments, industry associations, firms in the cluster etc. Implementing
agencies (including state governments, cluster beneficiaries and/or their SPVs) are expected to mobilise
resources to fund the remaining costs, as detailed in the guidelines issued on the Scheme.

3.1.1.5 Guidelines for Centrally Sponsored Scheme for Integrated Processing Development Scheme (IPDS)
The Textile Ministry, Govt. of India had in the 11 Five Year Plan launched a scheme for Integrated Textile Parks
th

(ITP). Based on the experience of the above scheme as well as the peculiar challenges faced by the textile
processing sector the Ministry has decided to formulate a new programme called as “Scheme for Integrated
Textile Processing Development” (IPDS).
IPDS proposes to establish 4-6 brown field and 3-5 green field projects addressing the needs of the existing
textile clusters. Eligible projects under the scheme would cover the following:

 Group A – Water treatment & effluent treatment plant and technology (including marine, riverine and
ZLD).
 Group B – Common infrastructure such as captive power generation plants on technology preferably
renewable/green technology,
 Group C – Common facilities such as testing laboratories and R&D centres.

3.1.1.6 Scheme for Integrated Textiles Park (SITP)

The ‘Scheme for Integrated Textile Parks (SITP)’ was approved in the 10 Five Year Plan to provide the textile
th

industry with world-class infrastructure facilities for setting up their textile units by merging the erstwhile
‘Apparel Parks for Exports Scheme’ (APES) and ‘Textile Centre Infrastructure Development Scheme (TCIDS)’.
The scheme targets industrial clusters/locations with high growth potential, which require strategic
interventions by way of providing world-class infrastructure support. The project cost covers common
infrastructure and buildings for production/support activities, depending on the needs of the ITP.
This Scheme is implemented through special purpose vehicles (SPVs), where industry associations/group of
entrepreneurs are the main promoters of the integrated textiles park (ITP). At each ITP, there would be a
separate special purpose vehicle (SPV) formed with the representatives of local Industry, financial institutions,
state and central government.

3.1.2 Legal Instruments

Key national laws for the prevention and control of industrial pollution include the following: 18

 The Water (Prevention &Control of Pollution) Act, 1974

18
Analysis of existing environmental instruments in India, UNDP, India

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 The Water (Prevention & Control of Pollution) Cess, Act, 1977

 The Air (Prevention & Control of Pollution) Act, 1981
 The Environment (Protection) Act, 1986 and the Environmental (Protection) Rules, 1986;
 The Hazardous Waste (Management and Handling) Rules 1989, 2003, 2008
 The Bio – Medical Waste (Management and Handling) Rules 1988, 2003
 The Municipal Solid Wastes (Management and Handling) Rules 2000
 The Plastics Manufacture and Usage Rules, 1999
 The Noise Pollution (Regulation & Control) Rules, 2000
 The Batteries (Management and Handling) Rules, 2001
 Environmental Impact Assessment Notification, 2006
 National Environmental Policy, 2006
 Fly Ash Management Rule, 2008

One of the main environmental management instruments is:

 an Environmental Impact Assessment (EIA), subject to public hearing and approved by MoEF&CC;
 a Forestry Clearance, which requires a project proponent to deposit a compensatory afforestation
payment; and
 a Consent to Establish (CTE) and Consent to Operate (CTO), issued by SPCBs.

A CTE is granted after an evaluation of the potential environmental impact and of the design of pollution
control installations (OECD, 2007). Conditions for pollution control measures are part of a CTE. Upon
verification of compliance with these conditions, a CTO is issued with emission and effluent limits based on
industrial sector specific standards, as well as self-monitoring and reporting schedules. Most small-scale
industries operate without any permits. These instruments are supplemented with economic instruments and
other incentives, such as matching grants for the common effluent treatment plants (CETP) or “green awards”
introduced by most SPCBs.
The enforcement powers include emergency measures of disconnecting water or power supply and facility
closure, which are widely used in some States. According to the Hazardous Wastes (Management and
Handling) Rules of 1989, SPCBs can, with CPCB approval, impose administrative fines for any violation of those
rules.
Brief details are given below.19
“Consent” is required to be taken from the regulatory authorities for establishment as well as operation of
CETPs under the Water (Prevention and Control of Pollution) Act, 1974 for discharge of effluents and under the
Air (Prevention and Control of Pollution) Act, 1981 for emission of air pollutants from the process of treatment
are applicable to CETPs. The State Pollution Control Board in the State or the Pollution Control Committee in
the Union Territory, as the case may be, is the regulatory authority to grant “consent”. While granting consent,
the quantity of effluent/emission and concentration of pollutants, the mode of collection, their treatment, the
mode of disposal of effluent and compliance with standards are taken into consideration.
In addition to the air and water acts, the Environment (Protection) Act, 1986 also applies to CETPs. In
Schedule–1 of the Environmental (Protection) Rules, 1986, the standards for emission or discharge of
environmental pollutants are prescribed, including primary treatment standards that are to be complied at the
inlet to CETP.
Also, as per the Environmental Impact Assessment (EIA) notification of Ministry of Environmental & Forests,
GoI dated 14.9.2006 of the Environmental (Protection) Act, 1986, setting up of any new CETP and the
modernization or expansion of any existing CETP, requires to undergo through the Environmental Impact
Assessment process and seek prior Environmental Clearance. All CETPs fall under Category ‘B’, however
‘General Conditions’ apply, as per which under certain conditions the CETPs could fall under Category ‘A’.
19
Common Effluent Treatment Plants: Overview, Technologies and Case Examples, GIZ-IGEP

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The EIA process involves the public in an open and participatory manner and allows for the effective
integration of environmental considerations and public concerns into decision making. The EIA study has to
comprise following:

 Project description and need

 Pertinent institutional information
 Identification of potential impacts
 Description of effected environment
 Impact prediction
 Impact assessment
 Impact mitigation
 Selecting the proposed action
 Preparing the written documentation
 Environmental monitoring and management plan
The Environment (Protection) Act, 1986 is also applicable for proper management of hazardous waste
generated during treatment of effluent, as per the Hazardous Waste (Management, Handling &
Transboundary Movement) Rules, 2008 under this Act. Under these rules, “authorization” is required for
generation, handling, collection, reception, treatment, storage, recycling, reprocessing, recovery, reuse and
disposal of hazardous wastes.
In addition, Delhi and Rajasthan are the two states, which have attempted to address the framework
requirement for running the CETPs. In the case of Delhi, it is known as an Act since it is passed by the
legislative assembly and in the case of Rajasthan a set of guidelines has been issued. Details are given below.

3.1.2.1 Delhi CETP Act

Delhi has enacted a special law on CETPs. The Delhi Common Effluent Treatment Plants Act, 2000 was passed
by the legislative assembly of the National Capital Territory of Delhi. It provides the framework and mechanism
for recovery of the dues as arrears of land revenue in respect of the capital and recurring costs of common
effluent treatment plants setup in the industrial estates in the National Capital Territory of Delhi and matters
connected therewith or incidental thereto. The Act defines constitution, powers and functions of appropriate
authority to run CETP in the National Capital Territory of Delhi.
Following are the key features of this Act:

 Have provisions for the recovery of the dues as arrears of land revenue in respect of the capital and
recurring costs. Any amount due under this Act (including any interest or penalty payable under clause 10
or clause 11, as the case may be) from any person may be recovered by the Government in the same
manner as an arrear of land revenue. Provided that the appropriate authority may for the reasons to be
recorded in writing, allow payment of amount due is instalments.
 Any area included in the jurisdiction of any CETP Society shall be registered under the Societies
Registration Act, 1860 (21 of 1860).
 The CETPs shall be operated and maintained effectively and efficiently by the CETP societies subject to
such conditions as may be specified by a notification issued by the Government.
 In case the Government considers that the CETP society has failed to effectively and efficiently discharge
its duties of operation and maintenance then after giving due notice as prescribed by rules, the
Government may by notification in the Official Gazette authorize any non-government organization, local
body or any such other authority as it may consider fit to operate and maintain the plant efficiently and
effectively.
 Constitution of appropriate authority responsible for up gradation and technology.
 Penalty would be imposed on the person for failing not paying the due amount.
The Delhi Common Effluent Treatment Plant Rules, 2001 has the following important provisions for the CETP
Societies:

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 To collect contributions from industries located in the estate towards the cost of construction,
maintenance, operation and up-gradation of CETP.
 To manage, maintain and operate the CETP in accordance with the prescribed standard of the
Environment (Protection) Act, 1986 (29 of 1986), the Water (Prevention and Control of Pollution) Act,
1974 (6 of 1974), and the Air (Prevention and Control of Pollution) Act, 1981 (14 of 1981).
 To upgrade technology of the installed CETP as per future requirements.
 To arrange CETP funds by way of contributions, grants or loan with or without security or on the security
of a mortgage charge or on hypothecation or pledge of overall or any of the immovable or movable
properties/stores/consumables belonging to the CETP Society.
 To allow entry and inspection of the CETP and related installations/offices/ documents, stocks,
consumables, stores, etc. to the officers of the authorities/local bodies.
 Apportionment of recurring cost: The recurring cost of the CETP shall be completely by the occupiers in
the estate.

3.1.2.2 RPCB Guidelines

In connection with abatement of pollution in the textile industry, the Rajasthan Pollution Control Board (RPCB)
has issued a set of guidelines, which has direct implications on the CETPs catering to these textile industries.
The pertinent points are:

 In industrial clusters like Pali, Jodhpur, Balotra etc., the industrial units are treating the raw effluents
through Common Effluent Treatment Plants (CETP), which are established, operated and maintained by a
Trust elected by the member units.
 Separate guidelines have been provided for the member units and the Trusts for clear demarcation of role
and responsibilities.
 The standards for inlet of CETP and treated effluent quality of CETP are to be followed.
 For each CETP and its constituent units, the State Board will prescribe standards as per the local needs and
conditions, and will be applied to the small scale industries, i.e., industries with total discharge up to 25
KLD.

3.1.2.3 Tamilnadu- Guidelines for CETP Membership, Disposal of Sludge by Textile Units and Tanneries 20
Tamilnadu, being the state housing most of Tanneries CETP and Textiles Clusters, issued guidelines in 2018, via
special directions, guiding certain procedures and limitations on CETP membership and transfer issued thereof
& Disposal of Hazardous Waste in compliance with Hazardous Waste Management Rules 2016.

3.1.2.4 CPCB- Guidelines for Management, Operation and Maintenance of CETP – 2001 21
The Federal Environmental Regulator – Central Pollution Control Board (CPCB) published the first
comprehensive guidelines for Management, Operation and Maintenance of CETPs way back in 2001, after a
prolonged period beyond the erstwhile MoEF scheme for CETPs was announced and some of CETPs started
their operations. The guidelines presented the guiding principles for overall CETP management, wastewater
collection systems, technical details on CETP units and operation and maintenance thereof, Manpower
requirement and monitoring of performance.
These guidelines, although they were never updated and contain some outdated information for today’s
standards, are still considered as Principal Guidelines for CETPs on aspects mentioned above.

3.1.2.5 CPCB- Global Good Practices in Industrial Wastewater Treatment and Reuse/Disposal with special
reference to CETPs 21
In their maiden attempt toward knowledge sharing on CETPs, CPCB made a first attempt to inform on and
promote advanced technologies and best practices in Wastewater Treatment. This was done through this

20
CETP reference document, Support to Ganga Rejuvenation (SGR) Project, August 2020

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collection of available knowledge and best practices in treatment technologies, evolution and development of
CETP systems and, for the first time, details on sludge management practices.
However, this document remained no more than a knowledge sharing document and de-tails therein were not
included in guidelines for CETPs.

3.1.2.6 CPCB – Guidelines for Zero Liquid Discharge (ZLD) including CETPs21
CPCB has published a technical guiding document mentioning techno-economic feasibility of various
technologies and process routes to achieve ZLD in a selected industry spectrum. This guideline also explains
feasible technology and economics of Zero Liquid Discharge at CETP level under multiple scenarios.
The recent guidelines (Rev 2019) also allows industries and CETPs to use their treated wastewater for irrigation
purpose under certain terms and conditions so as to comply with “ZLD” Conditions.

3.1.2.7 CPCB – Guidelines (Revised) for Real Time Effluent Quality Monitoring Systems (RTEQMS) 21
CPCB Published guidelines on Real Time Effluent Quality Monitoring Systems and revised them in 2018. The
Latest Guidelines focuses on requirements and quality assurances for Real Time Monitoring of Wastewater
Discharge Quality.

3.1.2.8 MoEF&CC – Technical EIA Guidance Manual for Conducting EIA for CETPS 21
This guiding manual prepared by MoEF&CC explains almost all the aspects that the regulator appraises to
consider the CETP for the recommendation and grant/rejection of Environment Clearance under the EIA
Notification 2006 (under EPA Act 1986). This guiding document provides a comprehensive overview of CETPs
from regulatory compliance aspect and various steps involved in the process of Environmental Permits (EC).

3.2 Institutional Framework21

To set the framework for the CETP assessment and advisory, the first step is to identify the key stakeholders in
the private and public sectors.
Regarding wastewater production, industries can be categorized into three segments:

 Those who are allowed to discharge treated wastewater on land or in water body (including municipal
sewers);
 Industries discharging their partly treated wastewater to CETPs and;
 Industries who maintain Zero Liquid Discharge (ZLD) in absence of any discharge /disposal mechanism for
treated wastewater.
The stakeholders of CETPs include industries and other important players that play a vital role in the
functioning of the Wastewater Treatment Segment. They may be summarized as:

Stakeholders Responsibilities
NITI AAYOG NITI Aayog (National Institution for Transforming India) is the
successor in interest to the Planning Commission. NITI
Aayog’s entire gamut of activities can be divided into four
main heads, viz. Design Policy & Programme Framework,
Foster Cooperative Federalism, Monitoring & Evaluation and
as Think Tank and Knowledge & Innovation Hub.
Min. of Jal Shakti, GoI In charge of development and regulation of the country’s
water resources. Currently (2020) in the process of
developing a National Water Policy for Reuse of Treated
Wastewater.
Ministry of Textile, GoI Responsible for the formulation of policy, planning,
development, export promotion and regulation of the textile
21
CETP Reference Document, Support to Ganga Rejuvenation (SGR) Project, Aug 2020

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industry in India.
Ministry of Environment, Forests & Climate Change, Govt. Planning, promoting, coordinating, and overseeing the
of India (MoEF&CC) implementation of environmental and forestry programmes
in the country.
National Mission for Clean Ganga (NMCG) Implementing arm of ‘Namami Gange’, the central
government’s flagship scheme for rejuvenation of the river
Ganges.
Central Pollution Control Board (CPCB) Provides technical assistance and guidance to the State
Boards and are responsible for implementation of legislation
relating to prevention and control of environmental
pollution.
Central Ground Water Board (CGWB) Responsible for providing scientific inputs for management,
exploration, monitoring, assessment, augmentation and
regulation of ground water resources of the country.
National Green Tribunal (NGT) Effective and expeditious disposal of cases relating to
environmental protection and conservation of forests and
other natural resources.
The Federation of Indian Chambers of Commerce and To promote interest in local business possibilities. It provides
Industry (FICCI) educational opportunities and assists businesses with the
latest marketing and promotional techniques.
State Mission for Clean Ganga (SMCG)/ Extended arms of NMCG at state level and equally
State Program Management Group (SPMG) empowered under sec. 5 E(P) Act in the 5 Ganga states.
State Pollution Control Boards (SPCBs) Implement the directives from CPCB and advise the state
government on any matter concerning the prevention,
control or abatement of environment pollution.
Regional Development Authorities Development and regulation of area/region specific plans
including civic services and infrastructure.
Water Authorities - Jal Nigam / Jal Sansthan Development and regulation of water supply & sewerage
services and for matters connected therewith.
State Industrial development Corporations and Industrial Key Government agencies involved in planning, development
development Authorities and promotion of industrial infrastructure in the states.
State Textile Industries/Department of Textiles Promote development of industries across textiles value
chain, provide incentives and growth initiatives, formulate
policies for textiles industries within the state.
Industry Associations for different industries or industrial Industry Associations represent the industries in the
areas industrial estates who are the beneficiaries of the common
utilities developed. Their voices need to be heard as they will
be the direct implementers and beneficiaries of the
regulations and without their co-operation, implementation
of the new rules is cannot be successful.
CETP Developers and Operators Departments of Government such as SIDCs or Industry
Associations or Group of Industries or Industrial Park
authorities who develops, Operates and Maintain the CETPs
and are directly responsible for sustainable and successful
operation and compliance of regulatory norms.
Waste Water Technology and Equipment Supplier Companies in the business of equipment and treatment
technology, direct beneficiaries as a result of development of
CETPs.
Environmental Professionals/ Environmental Laboratories/ The professional agencies/ bodies, professionals, companies,
Academia/ Training & Skill Development Agencies/ academia and institutions who are direct beneficiaries
Accreditation bodies like NABET/ NABL through providing Engineering Services, Vetting Services,
Laboratory Analysis, Skill development courses and pro-
grams
Community, NGOs Individuals, Group of Persons - Directly and indirectly
benefited or adversely impacted by Development and
Operations of CETPs.

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Following simplified diagram represent some of the most important stakeholders of CETPs;

3.3 Incentive Framework

Abstract
Incentives
This incentive framework builds on the earlier work by CRISIL (2019) to examine current and possible future
incentive mechanisms that can be used to encourage environmentally sustainable practices by industry and
the industrial parks they operate within.
This framework identifies incentives by the category of the incentive target beneficiary, i.e. investors, park
operators and industry within the parks.
Investor incentives have previously been based on financial support for investment but this has, over time,
proved to be ineffective in ensuring longer term environmental sustainability and have merely helped to
depress prices for services to help compete with those parks that are failing in their obligations. Alternatively,
investors are more likely to respond positively to other incentive mechanisms such as:
- more robust regulatory enforcement of non-compliant parks to level the playing field,
- removal of internal regulatory barriers that can distort decision making and create uncertainty,
- the provision of derogations to give comfort to investors adopting existing but failing parks to afford them
reasonable opportunity to invest to the required standards without the risk of prosecution in the interim,
- fiscal support through tax benefits, including linking taxes to environmental compliance,

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- other incentives such as easing the conducting of business (permit applications etc.) partnership with the
private sector, reputational incentives, and external incentives (improved transport links etc.)
Industrial park and CETP operational incentives including: fiscal support to encourage training etc.,
environmental taxes with charges based on the degree of environmental harm imposed by the CETP, and
supporting improved governance through self-regulation etc.
Industry / user incentives including: fiscal and customs duty incentives, reputational, robust enforcement of
parks that are not compliant with statutory environmental obligations, and greater use of cost-reflective
charges.

3.3.1 Relevant references

A recent report, CRISIL, Baseline analysis of existing incentive mechanisms for industrial wastewater
management, November 2019, provides an in-depth analysis of current and past incentive mechanisms
applied in India and in some other countries. This chapter does not seek to reproduce this past work but to
refer to it where appropriate and to build on it for the development of new proposals.
The CRISL report shows that incentives for CETPs are largely focussed on inducements to promote capital
investment for the construction of the facilities. This includes taxpayer funded grant financing from central and
state governments and fiscal incentives such as accelerated depreciation. Incentives beyond inducements to
promote capital investment in India, e.g. to promote good environmental practice, have been limited in
number and effectiveness. These largely comprise certification schemes and awards.
This incentive framework describes (in summary form) the existing incentives identified in the CRISIL report
and proposes further incentives that may be needed to further promote the development of the CETPs and
good environmental practice by both CETP operators and the industries that use them.

3.3.2 Existing incentives in India

The CRISIL report provides a detailed summary of the incentives for CETP development and operation
(reproduced in the table below).
Several of the capital subsidy schemes have been discontinued or are no longer open to new applicants.
Others are industry specific, e.g. leather or textiles, and are therefore limited in scope. Furthermore, the CRISIL
report suggested that capital subsidy support was not preferred by industry largely due to the time and effort
involved in the applications. Fiscal support (tax breaks such as accelerated depreciation) was generally
preferred.
The CRISIL report suggested that the certification incentives have proved to be largely ineffective in promoting
longer lasting environmental improvements in wastewater management. For those schemes offering
accreditation industry has focussed on easier aspects such as packaging etc. and the financial awards are often
too small to incentivise the investment to meet the required standards.
Table 3.8 Incentives for SETP development and operation of CETPs (source CRISIL, 2019)

No. Existing Scheme Incentive Aspect of industrial Beneficiary of the

wastewater management incentive
incentivized
1 CETP Scheme Capital subsidy of up to 75%  Construction of CETP/ZLD MSE industries
2 IPDS Capital subsidy of up to 75%  Construction of CETP/ZLD Textile industries
3 MSE-CDP Capital subsidy of up to 70%-80%  Construction of ETP MSME industries
Capital subsidy of up to 60%-70%  Construction of allied State government
infrastructure agency
4 Modified IIUS Capital subsidy of 75%  Construction of CETP/ZLD State government
agency

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Capital subsidy of 50%  Construction of allied State government

infrastructure agency
5 CLCSS Capital subsidy of 15%  Construction of CETP MSME industries
6 Sub-scheme of Capital subsidy of 70%  Construction of CETP/ZLD Leather industries
ILDP and allied infrastructure
7 MIIP (UK) Capital subsidy of 30%  Construction of ETP Large industries
8 HIIEP (UK) Capital subsidy of 30%  Construction of ETP Large industries
9 Clean Capital subsidy of 75%  Adoption of clean SMEs
Technology technology
10 ZED certification Recognition in the form of graded ratings  Implementing systems for MSME industries
waste reduction, pollution
80%, 60% and 50% for micro, small and
control and maintenance of
medium enterprises respectively for
pollution control equipment
rating and hand holding assistance
 Achieving outcomes in terms
25% concession in loan processing of resource efficiency and
charges at SBI and YES Bank for gold or
pollution control
higher rating
0.25 %reduction in interest on loans
from SBI for diamond and platinum rated
MSMEs
11 Eco-mark License for use of Eco mark logo on  Compliance with effluent Consumer product
products standards manufacturing
industries
12 Responsible License for use of Responsible Care Logo  Comprehensive Chemical industries
care management of wastewater
collection, treatment and
disposal
13 National & RG Recognition and cash prize of Rs. 1 lakh  Innovation in pollution Industries from the
awards (0.1 mn) control 17 polluting
Recognition and cash prize of Rs. 2 lakh  Innovation in clean categories
(0.2 mn) technology
14 Steel Awards Recognition and grant of Rs. 1 crore (10  Adoption of ISO 14001 and Steel industry
mn) for labour welfare any other innovation in
industrial wastewater
management
15 Green Rating Graded rating of industry  Environmental sustainability Large scale
project meeting global benchmarks industries

We refer the reader to examine the CRISIL report for a more detailed assessment of the existing incentives for
CETP development and operation in India.

3.3.3 Proposed new / improved incentive arrangements

3.3.3.1 Incentive targets

One of many online dictionary definitions of incentive is ‘A thing that motivates or encourages someone to do
something or work harder’ (Oxford English Dictionary). On this basis the incentives for CETPs should result in a
behaviour change from what they would otherwise do if there was no incentive. By extension, there is no need
to provide an incentive if the desired behaviour is realised without it, or that the behaviour change is better
realised by other means.
For the CETPs the desired behaviours are:

 Development of CETPs to the right standards utilising best available technology.

 Upgrading / rehabilitation of existing but failing CETPs
 Attracting finance for development and upgrading of CETPs.

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 Sustainable long-term operation of the CETPs meeting and improving upon the statutory limit values for
wastewater treatment and disposal.
 Efficient operation of the facilities at minimal cost to industry without adversely affecting the
environment.
 Overall sound environmental practice that is supported by robust governance measures at all levels,
including industrial users.
Incentives are not confined to subsidies for investment and can take many forms and target different aspects
of CETP design, development and operation. Incentives on their own are insufficient to deliver the outcome of
an improved environment. They need to be accompanied by enforcement (through effective regulation) and
good governance at all levels. Many of the above behaviours are probably best delivered by robust
enforcement measures, e.g. non-compliance with standards subject to financial penalties and enforcement
notices. Furthermore, incentives should not be provided to satisfy a legal obligation, i.e. people or industry
should not be rewarded for not breaking the law.
A review of potential incentives is presented below that can be adopted in India subject to any necessary
changes to existing legal instruments. We have sub-divided the incentives to those activities / participants that
are expected to result in a behaviour change resulting from the incentive. The areas and participants
considered are:

 Investor / development incentives

 Operational incentives
 Industry / user incentives
In addition to considering potential incentives we shall examine any current disincentives and how they could
be mitigated.

3.3.3.2 Investor / development incentives

The investors and developers of industrial parks (and CETPs in particular) are principally concerned with
financial viability and that their investments can earn a return on capital that reflects the risk profile of the
investment. Currently, the returns are low and the risks are high, especially the potential liabilities for non-
compliance with environmental obligations. The consequence is a lack of investor interest in the sector and,
possibly, a shortage of appropriate sites for industry to develop and flourish. Incentive mechanisms and other
actions should therefore be designed to reduce the risk and raise the returns.

3.3.3.2.1 Capital support for the construction of new CETPs and the upgrading of existing failing CETPs
In the first instance we ask why the returns are low. Currently, industry can experience a financial disincentive
to locate in a site that is fully compliant with environmental requirements as the user charges could be higher
than the charges imposed from a site where the level of compliance is much lower. This is not a level playing
field in that non-compliant CETPs have an unfair cost of service advantage over compliant CETPs. Incentives by
way of grants to support capital investment reduce the level of capital invested and therefore reduce the
expected total return on capital. This reduction is passed on to industrial users as charges marginally lower
than they would otherwise be. Consequently, the net result of such grants is to depress charges to industry
that are competitive with non-complaint CETPs rather than to encourage environmental compliance.
In the longer-run, competition between non-compliant and compliant parks will result in a ‘race to the bottom’
and the new parks will face pressures to lower charges even further resulting in a lack of capital maintenance
and subsequent failing infrastructure. Over 20 years of capital support to CETPs in India has delivered this
unfortunate outcome, despite the best of intentions.
Taxpayer funded support for capital investment does nothing to reduce the risks inherent in CETP
development and operation. In fact, it could be argued that by encouraging new facilities to compete with

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existing failing facilities the risk exposure is increased, i.e. greater probability of environmental liabilities, both
criminal and financial.
Lastly, the concept of taxpayers subsidising industry is questionable and is certainly contrary to the ‘polluter
pays’ principle. Taxpayer funded state support for industry in this manner could also be interpreted as anti-
competitive and possibly contrary to international free trade agreements.
Before financial incentives for capital investment can prove viable it is first necessary to ‘level the playing field’
through regulatory enforcement and other measures imposed on existing failing CETPs.
The CRISIL report suggests that investors do not necessarily support grants due to the administrative burden in
applying for them.
Recent policy decisions in government have suggested a shift away from taxpayer funded support for CETPs in
future and that other measures are needed.

These findings were presented in a stakeholder workshop. Contrary to our findings and conclusions with
respect to the limited benefits of providing capital subsidies, together with recent government policy changes,
there appears to be a body of opinion that considers that taxpayer funded support for capital investment is
necessary for economic development.

3.3.3.2.2 Regulatory barriers and incentives

The uneven playing field described above extends to the differences in regulatory enforcement experienced by
state bodies and the private sector. To a large degree, the SIDCs are insulated from regulatory enforcement
actions, i.e. one state body (the SPCBs) imposing financial penalties on another state body (the SIDCs) is
irrational. Consequently, private sector investors are reluctant to invest in a sector where they are exposed to
regulatory risk but many of their competitors are not.
Furthermore, the chapter on Business Models has identified internal regulatory boundaries that can result in
unclear liabilities and the opportunity for parties to avoid liability and pass it on to others. This uncertainty
increases the risk perception for potential private sector investors. The replacement of these internal
regulatory boundaries with contract provisions will help to remove some of this uncertainty and reduce risk
perception.
The Business Models chapter encourages the private sector to be fully engaged in the development of new
industrial parks and to adopt existing parks (including their CETPs and associated infrastructure). Investment in
new parks would not require financial support through grants provided the unfair advantage that existing and
failing CETPs enjoy was removed through more robust regulatory enforcement.
However, upgrading of existing facilities presents a specific risk for investors in that they may find themselves
liable for non-compliance between adoption of the facilities and the completion of any necessary
refurbishment. The chapter on Business Models recommends that the regulatory framework in India be
amended to accommodate derogations as used in many other countries, the EU in particular, to afford
reasonable opportunity for investors to undertake the necessary activities to ensure compliance with
environmental obligations within a specific time and without the risk of liability in the interim. This will
significantly reduce risk, comfort investors, and encourage compliance within a specified time limit.

3.3.3.2.3 Fiscal support

The tax regime in India provides for an income tax benefit for water pollution control equipment through
accelerated depreciation. Such assets can be depreciated at an accelerated rate of 40% (100% prior to 2018) as
compared to 15% for the purposes of income tax assessment. It should be noted, though, that the quantum of
this benefit has been recently reduced. Such support will help to improve the short-run return to investors
relative to other non-environmental projects and may help to influence investment decision making in this
direction. It may also positively influence capital maintenance investment decision making. However, in a

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competitive environment this may not necessarily translate into improved environmental performance but
rather reduced charges to the industrial users.
Another fiscal option could be to link income taxes to environmental compliance. For example, an industry
that operates in an industrial park that is non-compliant with the prescribed environmental standards could be
subject to a higher tax rate (or rewarded with a lower tax rate for those operating in a fully compliant park).
This could prove controversial in that it may encourage dubious accounting practices, e.g. transfer pricing 22, to
avoid any such additional taxes or to maximise any reduced taxes.

3.3.3.2.4 Other incentives to promote investment

Ease of doing business: The CRISIL report describes several areas where disincentives may exist notably
barriers to the ease of doing business. These barriers include: cumbersome bureaucracy in granting permits
and consents, complex application procedures for grants (where applicable), over-intrusive regulation and
more. Where possible such activities could be streamlined for greater efficiency but without undermining the
protection of the environment.
Partnership with the private sector: State governments can also promote investment in the sector through
greater cooperation with the private sector utilising joint venture agreements where the state government,
through the SIDC, contributes the land and the private sector the investment in the infrastructure. This option
is elaborated in more detail in the chapter on Business Models.
Protection of reputation: Government should promote the need for good environmental practice. The
authorities should be more proactive in demonstrating the need of industry to support a cleaner environment,
especially if by not doing so it could have an adverse impact on their reputations and hence sales. This could
encourage industry to locate in new parks where environmental compliance is good, which, in turn, will
improve the financial viability of the investment in the CETP and other associated infrastructure.
External incentives: The decision making for both investors in park development and industry that chooses to
locate in a particular park is not confined to the services that can be provided. Investment decision making will
also be driven by externalities. These include: location and proximity to the markets for their goods, quality of
the transport links to the park, e.g. road, rail and in some cases air links, the quantity and skills of the available
labour force in the area, and other local supporting infrastructure such as health, education, emergency
response and others. These aspects are outside the direct control of the investors in the industrial parks but
should be considered by State governments in their overall industrial development strategies. Good quality
services and labour in the location of the industrial park will undoubtedly influence the decision making of
investors.

3.3.3.3 Industrial park and CETP operational incentives

The principal operational incentive to maintain compliance with the minimum standards should be regulatory
enforcement. There is little or no justification to provide an incentive to comply with the law.
Despite the necessity to comply with legal obligations governments have a role to play to help make this more
achievable through fiscal, regulatory and other means.

3.3.3.3.1 Fiscal support to operational activities

Training support and tax breaks: Improved operational performance could be supported by the provision of
taxpayer funded training and development programmes using local training establishments (universities,
colleges and similar). Alternatively, or additionally, consideration cold be given to tax incentives to promote

22
Transfer pricing is an accounting practice that represents the price that one division in a company charges another division for goods and
services provided. Transfer pricing allows for the establishment of prices for the goods and services exchanged between a subsidiary, an affiliate,
or commonly controlled companies that are part of the same larger enterprise. Transfer pricing can lead to tax savings for corporations, though
tax authorities may contest their claims. (source: Investopedia)

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employee training, an example being the recent introduction of double tax deduction for training in Thailand 23.
Such a measure could be introduced in India specifically for training expenses related to environmental
protection.

3.3.3.3.2 Environmental taxes

The state governments could consider emulating the German model of effluent taxes. These are applied to
direct dischargers, i.e. discharges from industries and municipal sewage outlets. In the case of Industrial parks
these taxes would apply to the park/CETP operator. The tax is based on a prescribed fee per damage unit 24
discharged into the environment based on the consents awarded to the operator. Should an operator be able
to reduce the number of damage units discharged into the environment the operator could apply for a lower
consent level of discharge (subject to verification) which would reduce its taxes. Conversely, exceeding its
consented levels the operator would be subject to disproportionately higher taxes.
This process effectively encourages operators to not only adhere to the statutory limit levels but also to take
measures to improve their treatment systems to a level that is better than the statutory limit levels. This can
be further encouraged by providing an environmental tax reduction for a limited period if treatment facilities
are constructed or improved25.
Furthermore, taxes based on pollution load will focus the operators on how their users (industry) are behaving
and seek to pass on the charges to them in such a manner as to encourage better behaviour by them. This is
discussed in more detail in Section 3.3.3.3.3.4.

3.3.3.3.3 Self-regulation by the industrial park management

The current regulatory framework in India is based on direct monitoring of the CETPs’ discharges by the SPCB
and the monitoring of the individual industries’ discharges into the internal conveyance network. The chapter
on Business Models recommends the removal of the internal regulatory barriers and for it to be replaced with
contracted arrangements between the park operator and industrial users.
The concept of self-regulation could be extended to rewarding consistently compliant industrial parks with a
less intrusive regulatory regime based on self-reporting of performance but subject to occasional, rather than
regular, regulatory inspection by the SPCBs. This will require the introduction of a mechanism to determine
who qualifies for such lighter touch regulation and those that do not.

3.3.3.4 Industry / user incentives

Aside from the incentives to develop the industrial parks incentives may be employed to encourage industries
to locate its activities in the park and once there to conduct their activities in an environmentally sustainable
manner. These include fiscal and customs duty incentives, reputational gains, charging arrangements,
locational benefits, and disincentives to remain in non-compliant parks.

23
To stimulate domestic tourism and the Thai economy, on 4 February 2020, the Cabinet approved a measure relating to corporate income tax
proposed by the Ministry of Finance.
Under this measure, a company or legal partnership can deduct twice the amount of expenses actually paid for arranging training in Thailand for
its employees. This deduction shall apply to:
 expenses for training rooms, accommodation, transportation, or other related expenses for domestic training; and
 service fees paid to tour operators under the law governing the tourism business and guides for domestic training.
The expenses to which this deduction applies must be incurred from 1 January 2020 to 31 December 2020. This deduction must follow the rules,
procedures, and conditions prescribed by the Director-General of the Revenue Department. (source: Mazars,
https://www.mazars.co.th/Home/Insights/Doing-Business-in-Thailand/Tax/Double-deduction-of-expenses-for-domestic-training )
24
Since January 1, 1997, the tax rate has stood at 70 DM (36 EUR) per damage unit. A damage unit represents either 50 kg of chemical oxygen
demand (COD), 25 kg nitrogen, 3 kg phosphorus, 2 kg organic halogens, 20 g mercury, 100 g cadmium, 500 g chromium, 500 g nickel, 500 g lead,
or 1,000 g zinc (See RIZA, 1995b: 102 for full details). 50 kg of COD translates into about 2.5 inhabitant equivalents (i.e.), so that the effective rate
per i.e. is presently 27.50 DM (14.4EUR) per i.e. Expressed per kilogram of nitrogen, the tax rate is 2.80 DM (1.4 EUR), and per kilogram of
phosphorous, the tax rate is 23.33 DM (12 EUR)
25
In Germany Charges ‘can be reduced by 50% (75% before 1998) if abatement measures are introduced or sewage treatment plants are
constructed or improved. Furthermore, dischargers have the option to “offset the costs of investments in pollution control equipment against their
charges,” which in the case of municipalities can take the shape of 3‐year exemption from the tax.’ (source: EPI Water, WP3 EX-POST Case studies
-Effluent Tax in Germany, 2011).

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3.3.3.4.1 Fiscal and customs duty incentives

Several examples of successful industrial parks in India are created in Special Economic Zones where the
industries operating within them enjoy tax and customs privileges that are not available to the domestic
market. These are most relevant to export industries. In the domestic market in India it would prove difficult to
provide special treatment to selected industries with the result that any fiscal measures would apply to all
industry and it may prove difficult to direct a specific incentive towards good governance with respect to
environmental protection.

3.3.3.4.2 Reputation incentives

The CRISIL report cites several initiatives to promote green credentials of industry, e.g. the ECO mark system.
The report suggests that they may help but the impact is minimal, largely due to the small benefits that result
from them. These systems can be enhanced by encouraging industry’s customers to only buy from accredited
organisations. In a free market it is not possible for government to dictate customer behaviour but
government (Central and State) could take a lead and confine their procurement of goods and services to only
those organisations that are accredited with the appropriate certifications such as the ECO mark.
Other benefits of accreditation may include reduced consent fees and other financial rewards and privileges.

3.3.3.4.3 Penalties and taxes passed through to user charges

As mentioned in previous sections, the positive reputation of a park that is compliant with environmental
obligations may be attractive to industry, but this needs to be balanced against the potential for higher costs
and hence higher user charges relative to those imposed in a park that is non-compliant. To strengthen the
incentives effective enforcement action against non-compliant parks is necessary. As a minimum the non-
compliant parks would need to be subject to financial penalties that, when passed through to industrial users,
were equivalent to the differences in charges, possibly even more so to reinforce the need to upgrade. The net
behaviour change from industry would be either to relocate to a compliant park or to impose commercial
pressure on the existing park to improve compliance to remove any surcharges.

3.3.3.4.4 Cost reflective charges to users

An earlier report (2000)26 by GOPA Infra for GIZ as part of the project ‘Support to Ganga Rejuvenation, Phase II,
Uttarakhand and Uttar Pradesh’ considered the concept of cost-reflective charging arrangements utilising the
Mogden formula which is based on charges set according to the volume of wastewater discharges and the
quality of the wastewater (using BOD and TSS as the determining parameters but could also include other such
as pH).
Charges determined on a cost-reflective manner provide economically efficient price signals to the industry.
This should encourage them to manage their discharge (volume and quality) to maximise their profits. If an
industrial user considers the charges to be too high measures could be taken to reduce them, e.g. invest to
improve the user’s pre-treatment process, improve operational practices to reduce discharge and/or improve
wastewater quality and other measures. Alternatively, the consumer may decide that the CETP and its charges
are more efficient than investing or changing working practices. Whatever the decision, and provided the
charges are cost reflective, it will not only be economically efficient but can provide long-term sustainable
environmental protection.
A fundamental principle of this is that the internal regulatory barriers need to be removed and replaced with
contract provisions as these barriers distort the decision making, i.e. industry is currently compelled to adhere
to the statutory limit values through pre-treatment even if it is more efficient for the CETP to deal with the
wastewater that has not been pre-treated.
The GOPA report suggests that the charges should be set on contracted capacity and quality agreements
rather than actual volume and quality.

26
GOPA, Development of a financial tool for CETP sustainability and a guiding document for CETP contract, 2000.

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For cost reflective charging to be introduced using the Mogden formula or similar requires an appropriate
legal, institutional and regulatory basis supported by the necessary physical infrastructure, financing
arrangements and human resources.

 The physical infrastructure needs to be in place. This includes:

o Unrestricted access to flow measurement equipment to ensure that users stay within their
contracted volume capacities.
o Unrestricted access to wastewater quality measurement equipment to ensure that users stay within
their contracted quality parameters. Where necessary the operator will need access to suitably
equipped laboratory services.
o The adoption of cost-reflective charging systems based on contracted capacities are demanding with
respect to office support for billing of charges, revenue collection, accounts, recording of data,
analysis of data, asset management planning, cost management, enforcement and more besides.
These functions will need the support of necessary office infrastructure, e.g. computer(s),
telephones, internet access etc., with a realistic budget for office consumables together with suitably
qualified staffing.
 The introduction of cost reflective charging depends on an appropriate financing structure including:
o Working capital which could be alleviated to some degree if charges were paid in advance (say
quarterly) rather than arrears.
o Additional capital requirements, e.g. emergency repair works where the users are called upon to
contribute (pro-rata to their capacity agreements).
o Operating cost recovery.
o Financing for system expansion or upgrading when necessary.
 Internal regulatory enforcement of compliance with contract terms and legal obligations:
o Excess capacity charges (volume and quality) including scale and duration of such charges.
o Applications to increase or decrease capacity agreements and how they are applied.
o Extra-ordinary measures in the contract for persistent contravention of capacity agreements, non-
payment and other contraventions. These may include: late payment charges, financial penalties,
instructions to remedy, temporary suspension of the service and, in the extreme, permanent
revocation of the service and capacity sold to other users. In instances where the law is broken, e.g.
meter tampering that is considered to be a deliberate attempt to defraud, then referral to the legal
process should be considered.

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4 GUIDELINES FOR PLANNING AND DEVELOPMENT OF CETPS

4.1 Planning and Development of CETPs

4.1.1 Site suitability criteria/assessment

Many a times, the priority of the industrial estate developers would be to maximize the allocation of prime
plots that attracts maximum commercial value to businesses and the utilities are designated to the off prime
locations.
However, certain key factors that need to be considered while selecting the CETP site is to ensure that the
recurring costs like that requiring pumping of effluents are minimized. Hence, the preference goes to the plots
with the lowest contour to which the effluents can be conveyed by gravity with nil or minimal intermittent
pumping requirements. However, the site needs to be protected and cordoned off against flooding and the
storm water drains constructed to take water away from the site.
The land constraints or extent of land available also impact the selection of the technology and in case of such
constraints one need to select appropriate technologies that have lower footprint. This may also cause an
increased CAPEX and OPEX.
The other factors being:

 The soil bearing capacity of the land can impact the cost of foundations of the water bearing
structures and other civil structures which can considerably impact the CAPEX. Marshy lands or the
ones with high water table can also impact the civil structures, lead to seepages, etc. It is also better
to avoid legacy dumpsites and with overhead high tension lines.
 Ease of physical Access to the site is another key factor as truck movements are required not only
during the construction phase, but also for chemical handling, plant operations etc.
 Availability of electricity in sufficient quantity and quality, nearest substation, power outages/
frequency of power disruptions, power tariffs, availability of dedicated power supply line.
 Storage provisions: Depending on the distance from allied facilities like secured landfill, fuel and
chemical supplies one need to build sufficient facilities for storage of wastes and chemicals/ fuel to
ensure uninterrupted operations.
 Mode and Point of disposal of treated effluent can impact the capital costs for laying of the pipeline
acquiring land/ right of way as well as the likelihood of pumping and dispersal mechanism required.

4.1.2 Planning Approach

27
The planning of a CETP is not a stand-alone activity and has to be integrated with the overall planning of the
industrial park development to ensure the right placing of the CETPs and to ensure optimal life cycle cost, for
example by minimizing pumping and other Operational expenses. However, this may not be possible in the
case of a brownfield industrial park where a CETP has to be established in the left over space within the
industrial park or the additional land that is acquired for the CETP. The implications of such a compromise

27
Guidelines for wastewater conveyance systems, storm water management and common effluent treatment plants in industrial parks, GOPA
Infra GmbH

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could be increased capital and operational costs, which effectively are transferred to the member industries
operating in those industrial parks.
From the effluent management perspective, the planning of a homogenous/ dedicated industrial park would
be much easier compared to a heterogeneous/ multi-sector industrial park. The factors, which influence the
proper planning and operation of the CETPs, include the following:

 Identifying categories of effluent generating member industries;

 Estimating qualitative/quantitative fluctuations of effluent (equalization/ homogenization / modules)
based on sector specific factors/ benchmarks;
 Specify pre-treatment requirements at industry level;
 Specify segregation of effluent streams at individual member industry;
 Decide on collection and monitoring mechanisms and combinations where required;
 Conduct Treatability studies (to assess biodegradability, interferences) and choose appropriate
technology;
 Mode of disposal, point of discharge;
 Cost sharing/ Tariff mechanisms; and
 Institutional Mechanisms (Financial, Operational, Monitoring, etc.).
Industrial estate/cluster

Identification of waste water

Location of CETP generating industries

Dry inventory of waste water

generating industries for
Feasible disposal methods
qualitative/quantitative analysis

Wet inventory actual sampling

Selection of best feasible to support characterization, if
mode of disposal possible/required

Assimilative capacity & recipient Choice of collection systems

water bodies/treated water (Pipeline/tanker) based on
quality requirements characteristics

Explore optimization by segregation of

Output (quality required) Input specific streams/pre-treatment

Choice of treatment scheme

Is the selected treatment scheme No

techno-economically acceptable?

Yes

Establishment and effective operation

and management

Figure 4.2 Planning process of a CETP28

28
Technical EIA Guidelines Manual for CETPs, MoEF, GoI

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Detailed design allows a precise description of the building in advance. The quality of components can be
described and proof during site supervision is possible. The same standard in different projects of the
Authority allow cost savings in operation of maintenance, e.g. storage of spare parts. The detailed design is
more time consuming because there is no overlap of the design and construction phases, however, cost-saving
potential is high during the early design phases (see Figure below).

Figure 4.3 Cost saving potential in planning process

The studies conducted during the planning phase or thereafter constitute the technical component of the bid
document, which would be the basis for the potential bidders to respond effectively to the Request for
Proposals. The Project Specific Conditions/ Particular Conditions should essentials be derived out of these
studies.
29
The planning for a new CETP or up-gradation of an existing CETP is a complex and challenging procedure
involving multiple stakeholders and authorities. The planning stage is of highest importance since it defines the
treatment concept including the choice of technological solutions and sizing of the treatment plant.
A systematic and scientific approach for taking decisions on the measures to be implemented is very critical in
attaining sustainability in the operation of the CETPs. Pilot testing and lab testing procedures must be followed
before taking any decisions to make any major construction or installations of equipment etc.
The main steps involved in planning and execution of the physical measures in a CETP comprise;

 conceptual planning and feasibility study;

 preliminary and detailed design;
 preparation of tender documents and procurement;
 construction and supervision;
 commissioning; and
 project management.

A step-by-step approach is required to arrive at solutions for a CETP before their implementation. A systematic
approach, including problem analysis, lab testing, pilot testing etc. is essential for planning a CETP. The general
approach to be followed for setting up of a CETP is given in the figure below. The important steps involved in
identifying the solutions and arriving at basic design of the CETP are given below:
 Problem analysis.
 Identification of alternatives/concepts for wastewater treatment.
 Proofing of principles – this is required to verify that the identified concepts/solutions would work. This is
done through lab testing of the solutions.

29
Common Effluent Treatment Plants: Overview, Technologies and Case Examples, GIZ-IGEP

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 Parameter studies – systematic studies are required to vary a number of model parameters to arrive at
optimisation of process conditions for treatment of wastewater.
 Assessment of energy, materials and resource consumption.
 Comparison of alternatives for treatment of wastewater and arriving at preferred concept.
 Pilot tests – undertaking of pilot tests to ascertain the viability of the identified technical solutions.
 Pre-basic design of the CETP based on the identified solutions.

Figure 4.4: Approach for setting-up wastewater treatment system30

A participatory approach will involve all involved stakeholders and avoid neglect of their interest in centralised
(top-down) decision making. This will also ensure that measures at the source support the centralised
solutions. An important factor in decision-making is the expected service life of the assets to be built or
already operating. The time frames are of particular importance for the cost estimates (material selection,
quality standards, corrosion risk, etc.) and the depreciation periods used in life cycle costing for the feasibility
studies. Complying with Statutory requirements.

4.1.2.1 Up-gradation/modernisation of a CETP

When an existing CETP has compliance issue with the required effluent standards, the
up-gradation/modernisation concept should address first of address all the current shortcomings
regarding the non-compliance with environmental standards. Secondly, it should consider an increase of
the plant capacity, if required, with regard to the volumetric flow and load of key parameters such as
COD, TDS, and ammonical nitrogen to accommodate future developments. The key aspects to be
considered are:
 evaluation of the present situation and a realistic diagnosis of the deficits;
 evaluation of requirements for performance improvement; and
 evaluation of requirements of modernisation and up-gradation.

30
Presentation by Ms. Jyoti Pawar, Bayer Technology Services, Mumbai

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The main steps to be followed during the conceptual phase are summarised in the figure below.

Figure 4.5: Main planning steps during the conceptual phase (Melin, 2010)

4.1.2.2 Control at source at industry level

All measures for planning of a CETP should be supported by efforts to reduce the discharge of problematic
pollutants at the source. Figure below gives an overview of the decision process at the industry level on
whether to send the effluent to CETP or not.

Figure 4.6: Decision tree water pollution control in industries (Melin, 2010)

4.1.2.3 Conceptual planning and feasibility study

This planning stage is of highest importance since it defines the treatment concept including the technological
solutions with their main elements as well as the basic data relevant for sizing of the treatment plant. The
technological concept has to be embedded in the socio-economic framework to identify the necessary

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measures for achieving financial viability, environmental sustainability and overall feasibility of the chosen
approach. Thus all major decisions are to be taken during this planning stage.
The complexity of problem requires typically an adaptive, integrated and participatory approach (Segrave,
2014). The adaptive concept allows for flexibility and extendibility to achieve compliance and sufficient
treatment capacity in a changing context with an increasingly uncertain future. A sufficient level of integration
prevents that fragmented and simplistic approaches are applied to complex interrelated systems. A
participatory approach will involve all involved stakeholders and avoid neglect of their interest in centralised
(top-down) decision making. This will also ensure that measures at the source support the centralised
solutions. An important factor in decision-making is the expected service life of the assets to be built or
already operating. Table below illustrates typical depreciation periods of the different elements of a water and
wastewater management system. The time frames are of particular importance for the cost estimates
(material selection, quality standards, corrosion risk, etc.) and the depreciation periods used in life cycle
costing for the feasibility studies.
Table 4.9: Average technical service life of different types of assets (Segrave, 2014)

Type of Asset Indicative Technical Service Life (years)

Water intake/abstraction 40
Civil engineering/buildings 40
Mechanical components 25
Electrical components 20
Process automation facilities 10
Transport pipelines 60
UF Membranes/HF 8
Membranes NF/HF 5
Seawater RO Membranes 4
Replacement activated carbon (new) 2
Replacement activated carbon (regeneration) 15
Other (filter sand etc.) 10

When developing a concept for an existing plant the decision process influenced by a sound evaluation of the
present situation and a realistic diagnosis of the deficits as well as requirements for performance
improvement, modernisation and upgradation. The following list gives an overview of key actions during the
initial planning phase:

 Acquisition of basic data

o Acquisition of basic data (inlet, outlet, concentrations, volumes, energy demand, waste production)
o Compilation of existing documents (design reports, plant documentation, internal/external reports,
previous studies, population forecasts, industrial developments)
o Legal standards and requirements (present and future developments)
o Projection of the future quantities and qualities of the effluents to be treated

 Problem analysis and identification of present shortcomings

o Visual inspection (overall performance, tear and wear, maintenance, etc.)
o Observations of staff and administration/management
o Review of design
o Survey of previous measures and approaches that failed
o Recalculation of unit processes
o Compare design values to present requirements
o Identification of defaulting units

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o Diagnosis of main technical and operational issues

 Development of action plan

o Identify required operational measures for immediate trouble shooting
o Identify unit processes and integrated approaches (e.g. source control vs. end-of-pipe methods) to
meet present and future requirements in wastewater treatment and waste management
o Compilation of potential treatment trains
o Define requirements for lab testing and pilot testing (proof of principle, parameter studies, etc.)
o Develop action plan and timeline for operational, technical and supportive measures such as
trainings
o Initiate corrective measures (operation, etc.)
o Initiate additional studies (lab, pilot trials)
o Extension concept

 Master plan
o Compile and evaluate of data for development of industries and production sites
o Identify numbers and locations of effluent treatment facilities (production sites, clusters of similar
factories, common effluent treatment plants)
o Define treatment standards to be achieved
o Evaluate alternative wastewater management concept (centralised vs. decentralised treatment,
combinations, clusters, etc.)
o Develop risk management concept (redundancies, energy supply, waste disposal, etc.)
o Develop master plan

 Conceptual design and feasibility study

o Identify potential technology providers and availability of units in lab, bench and pilot scale
o Execute lab and pilot tests (onsite and/or in commercial labs)
o Define optimum process conditions based on executed tests
o Identify demand of energy and chemicals and waste production
o Comparison of alternative options based on cost estimates
o Compare potential treatment trains achieving same level of compliance (using cost-benefit analysis,
life cycle costing, life cycle assessment, etc.)
o Identify and evaluate socio-economic boundary conditions
o Development of technical extension concept
o Conduct feasibility study (evaluation of technical, economic and environmental dimension of the
project)
o Develop implementation concept (short, medium, and long term)

 Planning and construction

The approach for the planning and construction phases depends mainly from the overall management and
financing concept, i.e. the level of involvement of private and public funds, who owns and operates the
facilities, etc. Generally, all forms of public-private-partnerships and forms of financing, construction and
operation are feasible. Further information is available from the GPP (Green Public Procurement Criteria for
Waste Water Infrastructure) published by the European Commission (EC, 2013).

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4.1.2.4 CETP Standards31

As per the notification by MoEF&CC dated 01.01.2016, for each Common Effluent Treatment Plant (CETP), the
State Board will prescribe Inlet Quality Standards for General Parameters, Ammonical-Nitrogen and Heavy
metals as per design of the Common Effluent Treatment Plant (CETP) and local needs & conditions.

Table 4.10 Treated Effluent Quality Standards

Max. permissible values (in milligram/litre except for pH and Temperature)

Into inland surface water On land for irrigation Into sea
General Parameters
pH 6-9 6–9 6-9
Biological Oxygen Demand, 30 100 100
BOD3, 27 o C
Chemical Oxygen Demand 250 250 250
(COD)
Total Suspended Solids (TSS) 100 100 100
Fixed Dissolved Solids (FDS) 2100 
2100 
NS*
Specific Parameters
Temperature, o C Shall not exceed more than 5oC Shall not exceed more than Shall not exceed more than
above ambient water temperature 5oC above ambient water 5oC above ambient water
temperature temperature
Oil & Grease 10 10 10
Ammonical –Nitrogen 50 NS* 50
Total Kjeldahl Nitrogen (TKN) 50 NS* 50
Nitrate- Nitrogen 10 NS* 50
Phosphates, as P 5 NS* NS*
Chlorides 1000 1000 NS*
Sulphates, as SO4 1000 1000 NS*
Flouride 2 2 15
Sulphides, as S 2 2 5
Phenolic compounds (as 1 1 5
C6H5OH)
Total Res. Chlorine 1 1 1
Zinc 5 15 15
Iron 3 3 3
Copper 3 3 3
Trivalent Chromium 2 2 2
Manganese 2 NS* 2
Nickel 3 NS* 3
Arsenic 0.2 NS* 0.2
Cyanide, as CN 0.2 NS* 0.2
Vanedium 0.2 NS* 0.2
Lead 0.1 NS* 0.1
Hexavalent Chromium 0.1 NS* 0.1
Selenium 0.05 NS* 0.05
Cadmium 0.05 NS* 0.05
Mercury 0.01 NS* 0.01
Bio-assay test As per industry- specific standards As per industry- specific As per industry- specific
standards standards
*NS-Not specified
Notes:
31
https://parivesh.nic.in/writereaddata/ENV/envstandard/envstandard2.pdf

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1. 
Discharge of treated effluent into sea shall be through proper marine outfall. The existing shore discharges shall
be converted to marine outfalls. In cases where the marine outfall provides a minimum initial dilution of 150
times at the point of discharge and a minimum dilution of 1500 times at a point 100 m away from discharge
point, then, the State Board may relax the Chemical Oxygen Demand (COD) limit:
Provided that the maximum permissible value for Chemical Oxygen Demand (COD) in treated effluent shall be
500 milligram/litre.

2. Maximum permissible Fixed Dissolved Solids (FDS) contribution by constituent units of a Common Effluent
Treatment Plant (CETP) shall be 1000 milligram/litre. In cases where Fixed Dissolved Solids (FDS) concentration
in raw water used by the constituent units is already high (i.e. it is more than 1100 milligram/litre) then the
maximum permissible value for Fixed Dissolved Solids (FDS) in treated effluent shall be accordingly modified by
the State Board.
3. In case of discharge of treated effluent on land for irrigation, the impact on soil and groundwater quality shall be
monitored twice a year (pre- and post-monsoon) by Common Effluent Treatment Plants (CETP) management.
For combined discharge of treated effluent and sewage on land for irrigation, the mixing ratio with sewage shall
be prescribed by State Board.
4. Specific parameters for some important sectors, selected from sector-specific standards
Sector Specific Parameters
Textile Bio-assay test, Total Chromium, Sulphide, Phenolic compounds
Electroplating Industries Oil & Grease, Ammonia-Nitrogen, Nickel, Hexavalent Chromium, Total Chromium, Copper,
Zinc, Lead, Iron, Cadmium, Cyanide, Fluorides, Sulphides, Phosphates, Sulphates,
Tanneries Sulphides, Total Chromium, Oil & Grease, Chlorides
Dye & Dye Intermediate Oil & Grease, Phenolic compounds, Cadmium, Copper, Manganese, Lead, Mercury, Nickel,
Zinc, Hexavalent Chromium, Total Chromium, Bio-assay test, Chlorides, Sulphates,
Organic chemicals Oil & Grease, Bio-assay test, Nitrates, Arsenic, Hexavalent Chromium, Total Chromium, Lead,
manufacturing industry Cyanide, Zinc, Mercury, Copper, Nickel, Phenolic compounds, Sulphides
Pharmaceutical industry Oil & Grease, Bio-assay test, Mercury, Arsenic, Hexavalent Chromium, Lead, Cyanide, Phenolic
compounds, Sulphides, Phosphates.”

For each CETP and its constituent units, the State Board will prescribe the standards as per the local needs and
conditions; these can be more stringent than those prescribed above. SPCB can also prescribe ZLD based on
the sensitivity of area.

4.1.2.5 Checklist of Key Steps necessary for Planning, Operations and Management of CETPs 32

 Pre-conception & pre-feasibility report

 Stakeholder identification and Engagement Plan
 Master planning – From Wastewater Collection to Disposal (Collection, Conveyance, Treatment and
Disposal)
 Environmental Permits with due considerations on sensitivity of location
 CETP Standards, Applicable Laws & Regulations, Special Directions / Orders of Hon’ble Supreme Court of
India & Hon’ble NGT
 Constitution of CETP Development & O&M Mechanism – Constitution of By-Laws, Bi-Party/Tri-Party /
DBOF / DBOT / BOOT Framework and Agreements
 Development & Validation of CETP Treatment Processes & Engineering
 Procurement Planning & Project Management
 CETP Commissioning, Testing, Guarantee Trial Runs and Handover
 Technical References on treatment technologies
 Operation and Maintenance
 Debottlenecking of Technical Issues
 Financial Planning & Sustainability
 Life Cycle Planning
 Occupational Health & Safety (Including HSM, HW, Chemicals, Electrical & Mechanical Hazards)
 On-Site & Off-site emergencies, Emergency Preparedness planning
 Energy Efficiency & Renewable Energy

32
CETP Reference Document, Support to Ganga Rejuvenation (SGR) Project, Aug 2020

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 Treated Wastewater Recycling

 Zero Liquid Discharge
 Integrated Sludge Management Plan
 Innovation and R&D
 Environmental Monitoring Plan & CSR
 Human Resources Planning and Skill Development

4.1.3 Complying with Statutory requirements

CETPs are generally categorized as Category B projects for Environment Impact Assessment and issuance of
Environmental Clearances which can generally be obtained from the State Environmental appraisal
Committee. Screening of the project shall be performed at the initial stage of the project development so that
proponents are aware of their obligations before deciding on the budget, project design and execution plan.
CETP projects in case of new industrial estates may be treated as parallel projects for consideration instead of
inclusion in the entire industrial estate for the purpose of clearance, to offer the flexibility and to optimize the
time in establishing the CETP, if desired by the proponents. The classification of Category B projects into
Category B1 or B2 will be determined based on whether or not the project or activity requires further
environmental studies for preparation of an EIA for its appraisal prior to the grant of environmental clearance.
The necessity of which will be decided, depending upon the nature and location specificity of the project. All
Category B1 projects require EIA studies and public consultation.
The Environmental Clearance issued to the project comes with a set of stipulated environment management
and reporting conditions, which needs to be complied with.
Post receipt of Environment Clearance for the project, the project proponent needs to obtain Consent to
Establish from the State Pollution Control Board/ Pollution Control Committee before starting construction
activity. The proponent should seek Consent to Operate from the State Pollution Control Board/ Pollution
Control Committee post successful commissioning of the CETP.
The CETP is also expected to get authorizations / clearances for Hazardous Waste Management, obtain
membership from the nearest Common Hazardous Waste Treatment Storage & Disposal facility and / or with
the approved recyclers of hazardous wastes / Cement kilns.
Online Continuous Effluent Monitoring systems are mandated by the Central Pollution Control Board and are
monitored closely by the National and State level environmental regulators. THE CETP operator needs to
ensure data is transferred seamlessly to the servers of the regulators.

4.1.4 CETP Design Considerations (prescribing the inlet or outlet quality standards and ensuring
synergy)33
To avoid in-consistence compliance to prescribed norms, establishment of CETP requires a proper planning to
overcome the shortfalls such as:

 operating on ‘one-size-fits-all-basis’
 lack of access to capital investments, working capitals, specialized technical skills
 inconsistent effluent quality from member industries
 improper management of treatment units at common facility
 varied nature and scale of the industries, along with the addition of industries in a haphazard manner,
without proper planning
 no provision to tackle the fluctuations in the pollution load and quantities, at individual member
industries.
 no separate treatment units to deal with hazardous and toxic effluents, etc.

33
CETP Compendium, NEERI, 1992

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CETPs serving similar kind of industries will have greater operational ease due to their similar nature of
characteristics, which will also facilitate in choosing the right treatment scheme with greater certainty.
Whereas, the CETPs serving effluents from heterogeneous industries require greater knowledge and skill for
consistent compliance to the prescribed standards. Factors, which influence the proper planning and
operation of the CETPs include following:

 Categories of member industries

 Wastewater inventory
 Qualitative/quantitative fluctuations of effluent (equalization/ homogenization / modules)
 Pre-treatment requirements
 Segregation of effluent streams at individual member industry
 Collection and monitoring mechanism
 Treatability study and choice of technology
 Mode of disposal

 Categorisation of member industry - CETPs can be classified as those serving homogenous industries
(textiles, tanneries, etc.) i.e. all member industries falls in same industry sector and involves in similar
operations; and those serving heterogeneous industries including chemical industries
For homogeneous industries, it can be considered that quality and quantity can be predictable however,
the heterogeneous industries require detailed inventory of the member industries in terms of quality,
quantity and flow fluctuation and the same is an essential step in planning a CETP.

 Wastewater inventory – Wastewater inventory involves data collection from member industry by
collection information in form of questionnaire (known as dry inventory) which includes questions related
to production per day, wastewater quantity, type of products, raw materials being used, water balances
and also estimated quality and quantity of water if recycling of wastewater is proposed in the CETP
planning.

Data collected from the industries are processed to revalidate the categorisation. Grab and composite
samples are collected (from the existing units) and depending on the analysis of the results, the pollution
loads are arrived (known as wet inventory). The treatment of industrial wastewaters to meet the ultimate
discharge standards for given specific mode of disposal, often requires segregation of wastewater streams
at source (individual industry level); and grouping of the streams based on their compatibility and in
consultation with the CETP management, in order to streamline the treatment schemes and their
operation to the desired efficiencies. Wet inventory specifically aims at the wastewater streams which
cannot be mixed with the conventional biological treatment and to specifically design the additional
treatment requirements either at central facility or at the individual unit based on techno-economic
considerations.
 Qualitative/quantitative fluctuations of effluent (equalization/ homogenization / modules) -
Quantitative fluctuations specify the volume of equalization tank. Besides, modular design of common
effluent treatment plant (CETP) is an important aspect for proper handling of varying hydraulic load
(frequent product changes-corresponding hydraulic loads, etc.).

Qualitative fluctuations specify/correct the capacity of holding/equalization tanks to homogenize the

influent characteristics or to avoid shock loads. Qualitative fluctuations can be determined by identifying
characteristics of effluent – physical and chemical characteristics.
o Physical characteristics of the effluent can be determined by parameters such as:
- Temperature - to assess solubility of oxygen and oxygen transfer in aeration tank,
- Colour and odour - to provide specific treatment such as membrane filtration/ chemical
treatment,
- Total and volatile suspended solids - to identify requirements of pre-settler.

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o Chemical characteristics of the effluent can be determined by parameters such as:

- pH - to protect biological system from sudden pH change,
- Carbonaceous substances are determined by COD/BOD/TOC - combination of these
analysis data can suggest biodegradability of effluent and suggest requirement of specific
treatment such as advance oxidation.
- Toxic metals and compound – Certain metals such as Chromium, copper are toxic to
biological process, if identified during planning stage, suitable removal treatment can be
suggested such as precipitation.

 Pre-treatment requirements- Effluent from industrial processes requires some form of pre-treatment
prior to sending the effluents for further treatment at CETP. This is mainly required when wastewater is
carried through gravity lines to minimize corrosion & clogging; and to prevent reductions in biological
treatment process efficiency due to toxic constituents.
o Pre-treatment standards for sulphides, sulphates and pH are concerned with preventing corrosion of
concrete parts in gravity pipes and also the anaerobic conditions leading to the formation of
hydrogen sulphide leading to the fire accidents.
o Limits for the discharge of oil, grease, grit and heavy sediments are prescribed in order to prevent
clogging of pipelines.
o Limits to heavy metals and toxic organics would ensure proper performance of biological treatment
and minimize accumulation of contaminants in residual sludge.
As per the notification by MoEF&CC dated 01.01.2016, for each Common Effluent Treatment Plant (CETP),
the State Board will prescribe Inlet Quality Standards for General Parameters, Ammonical-Nitrogen and
Heavy metals as per design of the Common Effluent Treatment Plant (CETP) and local needs &
conditions.34

 Segregation of effluent streams at individual member industry- Effluent streams could be broadly
segregated for combining appropriately, based on their suitability for a specific treatment choice. A typical
model approach for segregation of streams is given in below Figure.

Effluent

At individual
industry level

High TDS & High cod &

low COD low TDS

CETP CETP

Figure 4.7: Categories of effluent streams35

 Collection and monitoring mechanism - Prevailing modes of collection of effluents from individual
industries to CETP are as follows:

34
https://parivesh.nic.in/writereaddata/ENV/envstandard/envstandard2.pdf
35
Technical EIA Guidelines Manual for CETPs, MoEF, GoI

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o Tankers - Tankers are more reliable in terms of ensuring the quality, but causes traffic and related
impacts, long waiting of tankers till the effluent quality conforms to the influent quality, illegal
disposal.
o Pipes - This option would be feasible in case of homogeneous member industries. Piping system is
especially suitable where all the individual units are located close to each other or when the
industrial estate is completely developed and fully occupied with industrial units. However, in this
system, each individual industry has to make provision for storage of pre-treated effluents in their
premises with sufficient detention time and locking arrangement.
o Open channels - Open channels covered with concrete generally turn out to be economical but are
vulnerable to rainwater entry and illegal disposal.
o Combination of the above - A combination of these three systems may be adopted in actual practice
depending on local conditions e.g., open channel with factory premises, tanker conveyance up to
terminal pumping station and terminal pumping station to CETP by pumping system.
 Treatability study and choice of technologies - Objectives of the treatability studies include:
o converting the chemical composition of the wastewaters into environmental parameters to
understand the nature of the effluent.
o conceptualizing the possible treatment schemes by conducting lab-scale studies to support the
hypothesis in respect of the conceptual treatment scheme and also to arrive the operating
parameters.
Based on the stream-wise chemical composition, and the data provided by the member industries, CETP
promoter/ operator has to conduct the treatability studies to determine the specific treatment and
recycling technologies as well as to arrive at the capital and operational costs.

The approach to provide effluent treatment at low cost is an important factor to be considered and
depends on appropriate designs which are diverse in nature and scale of operations. Based on
characteristics, the appropriate technologies can be identified to arrive at the probable combination of
treatment technologies in a treatment scheme.

 Mode of disposal - Disposal of treated effluents from a CETP can be done in the following modes:
o Surface water bodies
o On land for irrigation
o Marine outfall
o Public sewers
Local conditions, topography etc., of a given location, determines the cost-effective disposal option.
Disposal mode-specific treated effluent standards are available i.e. for discharge into surface water bodies,
for on land treatment and for marine disposal. For discharge into public sewers, the general standards for
discharge of effluents may be referred.

CETP handles wastewaters from various types of industries and obviously, the nature of the mixed
wastewater is highly varying in terms of characteristics and flow. A systematic and holistic approach is
therefore very much essential to design a CETP. NEERI in consultation with MoEF has developed the
criteria which can very well be looked as an approach for designing a CETP. These criteria are enumerated
in table below. Some of the important criteria given in the table can be used as important steps while
designing a CETP and are discussed below in detail:
Table 4.11 Criteria for the Design of CETPS as Developed by NEERI in Consultation with MoEF

Criteria for the Design of CETPS as Developed by NEERI in Consultation with MoEF

Inventory of industries
Flow and characteristics of wastewater
Classification of industry based on wastewater quantum generated
Classification of wastewater based on biodegradability (A, B, C & D)

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Design of conveyance system

Free from problems
Optimized scheme
Treatability study
Bench scale
Pilot scale
Segregation of wastewater
Pre-treatment of wastewater (C & D)
Assessment of available technologies for designing of CETF to develop treatment packages and optimization based on spatial
distribution of CETP
Ranking of technology options
Reuse/recycling and resource recovery
Disposal of treated effluents
Cost estimation based on optimized CETP
Cost benefit analysis
Scheme for sharing financial burden
annualised capital cost
O&M for different types of wastewater (A, B, C & D) based on flow and mass
Possibilities of using cleaner technologies
Process
Water consumption
Raw material
Energy requirement
consideration of waste from one industry to be used as raw material for another industry
Textile
Engineering
Leather
Rubber and plastic
Miscellaneous

4.1.4.1 Inventory of Industries

Basic information regarding each industry existing in the industrial estate for which CETP is to be designed
needs to be collected to know:

 Whether industry is a dry industry or wet industry

 Classification of industry
 Wastewater generation rate
 Characteristics of wastewater
 Existing treatment units, if any
 Scope for waste minimization measures such as recycle/reuse, recovery of by-products, waste strength &
volume reduction, process modifications, adoption of cleaner technologies etc.

4.1.4.2 Classification of Industries

4.1.4.2.1 Classification of industries based on products

In Industrial Estates it is a common practice to divide the industries into 10 individual groups (86):

 Dye and dye intermediate

 Pharmaceutical
 Pesticides
 Fine chemicals

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 Paper and pulp

It is difficult to find accurate definitions for the individual groups. Some groups can easily be separated, e.g.
Textile and Engineering industries, while other groups have more vague borders, e.g. Dye industries and Fine
Chemicals Industries, and some industries could even be included in more than one of - the groups listed.

4.1.4.3 Classification of Industries Based on Capital Investment Cost

A second-commonly used grouping of the industries is to divide them according to the Capital Investment
Costs (CIC). In this, two categories given by the Government of India are present 36:

 Large scale industries where CIC are more than Rs. 10 Crore.
 Small scale industries where CIC are below Rs. 10 Crore.

4.1.4.4 Classification of Industries Based on Water Consumption

Industries can also be divided on the basis of water consumption as large scale and small scale as follows:

 Large scale industries consuming more than 50 m3/d

 Small scale industries consuming less than 50 m3/d
This division is at present used in India in Gujarat State to impose different effluent standards on small and
large scale industries. In other states, the figure is 100 m 3/d in the division between large scale and small scale
industries. The industries can also be classified in four major categories, viz.

 High water consuming e.g. textile and paper board mills

 Medium water consuming e.g. chemical, dyes and pharmaceuticals
 Low water consuming e.g. paints & varnishes, rubber, plastic
 Dry industries - e.g. table packing industry

4.1.4.5 Classification of Industries Based on Wastewater Generation

The industries can also be classified on the basis of wastewater generation rates. One such classification is
shown below for illustration:

Type of industry Wastewater Generation, m3/day

Small scale < 50
Medium scale 50-100
Large scale > 100

4.1.4.5.1 Classification and characterisation of wastewater

In case of industrial estate housing heterogeneous type of industries, different types of wastewater are
generated causing the admixture of wastewaters not easily amenable to treatment. In view of the variations in
wastewater characteristic with differing response to treatment, it is necessary to characterise the wastewater
and classify into different categories. The wastewater can be categorised as follows (87):
WWC ‘A’ - Amenable to biological degradation directly or after acclimatisation
WWC ‘B’ - Pre-treatment essential prior to biological treatment or post treatment for TDS removal
WWC ‘C’ - Non-biodegradable
WWC ‘D’ - Toxic to biological treatment
Based on these categories, the wastewater from individual units should be segregated. The basis of
segregation is given in the figure below. For simplification, if units generating wastewaters belonging to WWC
‘D’ i.e. wastewater containing chemicals toxic to microorganisms are limited in number as compared to WWC
‘C’, these two can be clubbed together.
36
https://msme.gov.in/know-about-msme

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Industrial wastewaters under each category can further be classified depending on their amenability to
biological treatment as illustrated in the figure below.
Some information regarding environmental data of some specified organic compounds available in literature is
given in the figure below. Column 3 of this figure gives the treatability of the compounds by a threshold limit
value in a common biological treatment plant according to a system performed by the Swedish Water and
Waste Water Association. The system divides the substances into three classes:

 Treatable substances
 Limited treatable substances
 Non-treatable substances
The second cIass is divided into three subgroups (IIa lIb and IIc) according to increase in toxicity of the specific
compound.
Referring to the Swedish system, it is possible to classify eleven of the specified compounds. As can be seen
from the table below; Literature Data on Selected Specific Organic Compounds, all eleven compounds are
grouped in class II or III. Four of the compounds are classified as non-treatable substances. The remaining
compounds which could be grouped, can be treated in a biological system, but only in small concentrations
excluding aniline.
The last column of this table includes data of experience in biological degradation (COD removal) by the use of
activated sludge. As seen from the column, there is some rather low limits in concentration for many of the
compounds for which adoption into activated sludge has been possible.
Characterisation of untreated combined wastewater from an industrial estate is an extremely important and
an essential stop to determine the design parameters of the CETP scheme. At least following parameters must
be determined in order to finalize the design ‘parameter values’:

 pH
 BOD5 at 20°C
 COD
 Suspended solids
 Total dissolved solids -
 Oil & Grease
 Sulphate
 Chloride
 Total nitrogen
 Phosphorus
Equally important is the characterisation of the wastewater generated from individual industrial unit. This is
required to evaluate the necessity of segregation/pre-treatment and to estimate BOD/COD load and
suspended solid bad based on which financial apportionment is generally done. Treatability studies should also
be carried out to assess the feasibility of physico-chemical as well as biological treatment of combined
wastewater.
Table 4.12 Basis for wastewater categorisation

Basis for waste water categorization

Chemical Reaction WWC Explanatory Noted Pre- Acceptability in CETP
treatment
High SS Highly A Non-toxic solids NP Acceptable
settleable Highly settleable
High SS Colloidal needs A Non-toxic solids settleable after NP Acceptable
coagulant coagulation
Organics Highly A Org. solids in solution and/or NP Acceptable

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biodegradable suspension, highly biodegradable

Organics Slowly A Org. solids in solution and/or NP Acceptable
biodegradable suspension, slowly biodegradable,
example benzene series
Inorganic Acid B Mineral acids produced or used in N & SEP Acceptable on neutralization
s excess
Inorganic Alkali B Alkalies produced or used in excess N & SEP Acceptable on neutralization
s
High TDS Precipitable B Raw or product materials are CP & SEP Acceptable on precipitation
soluble in water
High TDS Membrane C Highly soluble solids need NIP Require expensive collective
separation membrane separation treatment using membrane
separation
Organics Refractory D Naphthalene anthracene used as NIP Requires expensive collective
raw material and/or product treatment of ozonation then to
CETP
Organics Toxic D Metal complex organo-chlorine NIP Requires expensive collective
pesticides carbonates treatment or incineration
NP: No Pre-treatment N & SEP: Neutralisation and solids separation
NIP: No Individual Pre-treatment CP & SEP: Chemical Precipitation and Solids Separation
Table 4.13 Classification of wastewater
Classification of Wastewater
Category Description
A Biodegradable without pre-treatment
A1 High TSS, highly settleable, non-toxic
A2 High TSS, colloidal, need coagulation, non-toxic, settleable after coagulation
A3 Organic, high biodegradability, soluble or suspended
A4 Organic, low biodegradability, soluble or suspended solids
B Biodegradable after pre-treatment
B1 Inorganic acids, acceptable after neutralization
B2 Inorganic alkali, acceptable after neutralization
B3 High TDS, acceptable after precipitation
B4 High TDS, acceptable after membrane separation
B5 High TDS, refractory, acceptable after ozone treatment
C Non-biodegradable
C1 Organic, refractory, non-biodegradable
D Toxic to biological systems
D1 Organic, toxic, metal complexes, pesticides, require incineration treatment

Table 4.14 Literature data on selected specific organic compounds

Literature Data on Selected Specific Organic Compounds
Organic Compound Treatment Possibilities Biological effect on COD Removal in Activated Sludge process*
Class Mg/L
1 2 3* 4
Aniline IIa 100 < 20 mg/L, adoption possible
Anisidine N - < 500 mg/L, adoption possible
Benzene III - < 50 mg/L, adoption possible
Chloroaniline N - < 16 mg/L, adoption possible
Chlorobenzene III - Possibly no adoption
Chloronitrobenzene III - Possibly no adoption
Dichloroaniline IIc 10 N
Dinitrochlorobenzene III - N

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Naphthalene II 10 Possibly no adoption

Naphthol II 10 < 30 mg/L, adoption possible
Naphthylamin derivative N - No adoption-nonbiodegradable
Nitrobenzene N - < 14 mg/L, adoption possible
Nitrophenol N - < 17 mg/L, adoption possible
Phenol IIb 10 < 80 mg/L, adoption possible
Toluene IIc 10 N
Toluidine N - < 15 mg/L, adoption possible
Xylene IIC 10 Possibly no adoption
* Source: Vershueren K. “Handbook of Environmental Data on Organic Chemicals” IInd edition, 1983
* Threshold value given by Swedish Water and Wastewater Association
* N: No information given

4.1.4.6 Conveyance System

Effluents of individual industries can be conveyed to CETP by the following:

 Tankers
 Open channels
 Piping systems -
 Combination of all - these.
Each of the above modes of transport have some advantages and disadvantages. If the industrial estate is in
early stage of development and accommodates mostly small scale industries, tankers are probably the best
alternative.
The collection and transportation system is one which cannot be easily and economically expanded at latter
stage (unlike treatment and disposal system). Therefore, the collection system has to be provided with
adequate spare capacity to meet future requirements. On the other hand, if collection system is erected in the
early stages of development (provided with extra capacity for future requirements), lot of money get blocked
without much return. Secondly, since the system would be overdesigned with respect to the present flow,
settling of suspended solids may occur within the piping systems. In such situations, conveyance of
wastewater by tankers may be a better choice. AS many places, topography of the area may permit use of only
tanker conveyance system.
Open channel system is ‘vulnerable for rainwater entry and may impose excessive loadings on treatment plant
during rainy season. Piping system is especially suitable where all the individual units are located close to
each other or when the industrial estate is completely developed and fully occupied with industrial units. Open
channels covered with concrete covers generally turn out to be economical as compared to sewers.
A combination of these three system may be adopted in actual practice depending on local conditions e.g.
open channel within factory premises, tanker conveyance up to terminal pumping station and terminal
pumping station to CETP by pumping system.
If the industrial estate is divided into many phases or blocks, individual collection system and collection sump
can be designed for each phase or block. The wastewater can then be pumped from these collection sumps to
a main sump for onward conveyance.
Final design of a collection network takes into consideration the topography, undulations, road alignments,
flow characteristics, ground water table, infiltration, appurtenances, flushing requirements etc.

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4.1.4.7 Treatment Process Options for CETP

In instances where economic processes of material recovery, by-product production and effluent reuse fail to
prevent a residual waste bad from an industry exceeding the stipulated effluent standards, it becomes
necessary to resort to waste treatment methods before discharge. The combination of unit processes and
operations making up a treatment process option depends upon the characteristics of a particular waste and
the effluent standards imposed. It is only normal for a designer to attempt to use lowest cost solution to a
waste treatment problem but this is especially important under the economic restrictions in India.
Various treatment options can be outlined for a combined wastewater flow. The treatment schemes generally
consist of the following steps:

 Removal of floating oil and other floating solids by screening

 Removal of gritty material
 Primary treatment for removal of suspended solids
 Secondary treatment to remove residual organics and- nutrients
 Activated carbon adsorption
 Chlorination
 Sand filtration
 Removal of cations and anions by ion exchange, demineralisation or reverse osmosis.
Physico-chemical treatment followed by biological treatment will treat the wastewater to make it fit for inland
surface water disposal. 1f process grade water is required to recycle/reuse the treated water, any of the
following treatment options may be adopted depending on the grade of the process water to be reused:

S. Treatment Option End Use

No.
1 PC + AC + RO + IE High grade process water; TDS < 100 mg/L
2 PC + AC + RO Low grade process water; TDS < 1000 mg/L
3 PC + AC + IE Low grade process water; TDS < 800 mg/L
4 BP + AC + RO + IE High grade process water; TDS < 100 mg/L
5 BP + AC + RO Low grade process water; TDS < 1000 mg/L
6 BP + AC + IE Low grade process water; TDS < 800 mg/L
7 BP + AC Low grade process water; TDS ≃ 9000 mg/L
8 BP Low grade treated water; TDS ≃ 10000 mg; BOD ≃ 20 mg/L
PC - Physio chemical; BP - Biological Process; IE - Ion Exchange
AC - Activated Carbon; RO - Reverse Osmosis

The treatment processes can be implemented in phases viz.

Ist Phase On land disposal for irrigation

BOD – 100 mg/L
SS – 100 mg/L
Treatment option - (PC + BP) or only BP
2nd Phase Inland water bodies disposal
BOD < 20 mg/L
SS < 30 mg/L
Treatment option - PC + 2 staged BP
3rd Phase To produce low grade process water for reuse
BOD – Nil
SS – Nil
TDS < 1000 mg/L
Treatment option - (PC OR BP) + AC + (IE OR RO)

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4th Phase To produce high grade process water for reuse

BOD – Nil
SS – Nil
TDS < 100 mg/L
Treatment option – (PC or BP) + AC + RO +IE

In the first phase outlined above, the combined wastewater can be anaerobically treated to generate energy in
the form of methane-rich biogas which can be used in the CETP campus in residential quarters of the operating
personnel.
The treatment options indicated are given only for illustration purpose. The actual treatment options available
will vary depending on quality of raw water and end use desired.
Treated effluent has a considerable fertilizer value, in addition to providing water to areas where ram is limited
in certain parts of the year. Provided adverse effects of the effluent are controlled, there is therefore a
considerable economic and environmental benefit in utilizing this waste for a useful agricultural purpose.
In India, studies have been conducted on reuse of treated effluent for agricultural purposes under the
sponsorship of the CPCB One such example is the study conducted by GIDC in Baroda for use of the effluent
from the Effluent Channel Project, which caters for the combined wastewater from many large industries
around Baroda and also from several hundred industries at the industrial estate at Nandesari near Baroda. In
this case, cotton, tobacco and lentils ware grown on land set aside for this three-year trial. Fresh water and the
required fertilizers was applied to plots as control, while other land was -irrigated by 100% effluent or a
mixture of effluent and fresh water in equal proportions. According to the GIDC, the results have been quite
encouraging.
If the control plot is taken as 100% yield, then the 50/50 mixture of effluent/fresh water produced yields of 90-
55%. The 100% effluent irrigation gives a lower yield of 60-70%, most likely due to excess nitrogen fertilization
and too high total dissolved solids in the effluent.

4.1.4.8 Treated Water Distribution System

A treated water storage reservoir must be provided in CETP campus with a holding capacity of minimum 2-3
hours, if the treated water is intended for reuse/recycling. Otherwise, treated water may be disposed of either
for on land irrigation or in inland water courses or in municipal sewers depending on the quality of treated
water and options available for disposal. If the treated water is to be disposed-off, the distribution system
should preferably consist of open drama. If the treated water is to be recycled/ reused, the treated. water
should be pumped from storage reservoir to elevated storage reservoirs (ESR) to be located at least one in
each phase or block of industrial estate. The treated water distribution system must be optimised using
various methods available.

4.1.4.9 Cost Benefit Analysis

The cost estimates for all the treatment options available should be made for evaluation purposes. The cost
should cover both capital and 0 & M coat. The total annualised cost for option also need to be determined.
Considering ‘No loss - No profit’ basis, cost of treated water of various process grade should be calculated. The
cost of treatment has to be paid by the individual member industry. The treated water of process grade comes
as an additional benefit for the industrial estate and can be sold back to the individual member industry at a
concessional rate. The money so generated will be the revenue for the CETP authorities. An assessment for
use has to be made for allocation of treated waters of various grades. This can be done by the CETP authority
in consultation with industries. The allocation of treated waters can be categorised under the following heads;

 Land application including green belt development.

 Treated water exclusively for washing purposes.

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 Treated water for process requirements depending upon its quality.

4.1.4.10 Ranking of Treatment Options

Selection of a proper treatment alternative has got prime importance during planning for any pollution control
programme. Due considerations and proper weightage must be given to the advantage (strong points) and
also to the disadvantages (weak points) of each treatment alternatives available. Neither treatability at lower
cost nor only process reliability at higher cost should be taken as a sole factor to he considered for a given
situation. An integrated approach, is therefore, needed which takes into account various criteria such as
environmental risks, health risks, aesthetic risks, annualised costs, reuse potential, institutional requirements,
land requirements and process reliability during selection of a proper treatment alternative. One must realise
that inadequate and improper management of any treatment alternative is likely to pose significant risks and
adverse impacts on health, aesthetics and environment. Therefore, ranking of the various available
alternatives should be carried out to arrive at the most appropriate alternative which minimises adverse
impacts and maximizes social benefits through enhanced economic output. The exercise essentially involves
ranking of the alternatives based on above mentioned criteria and comprises of the following steps, viz.

 The various alternatives should be ranked on the basis of the defined environmental criteria and reuse
potential in accordance with the laboratory findings, design data and cost estimates.
 A total score of 1000 is apportioned between the assessment criteria in each case based on their
importance as well as subjective judgement.
 The alternatives are evaluated against each criterion and assigned scores.
 Total score for each alternative is computed.
 Alternatives are ranked by comparison of total scores.

4.1.4.11 Sharing of the Financial Burden

In order to operate the CETP effectively and efficiently, it is necessary that the individual industrial units pay
for the capital and O & M costs.
Equitable sharing should be the main objective while developing a financial appointment method. The direct
as well as indirect benefits derived by CETP should be proportionately distributed to the member industrial
units. Though this is practically very difficult, attempt8 have to be made towards achieving this condition. No
industry should be benefited at the coat of other industry as far as financial appointment is considered.
Equitable sharing can successfully be carried out if there is sufficient competition in the market to prevent the
charge from being posed on to the consumer and the level of charge is equivalent to the level of damage or at
least to the coat of treatment. In implementing these charges, it is necessary to ensure that they are not
merely taken as a license to pollute. An important aspect of effluent charges is that these encourage the
industry to look at pollution as basically an economic problem. Insignificant as it may seem, there is a vast
psychological difference between introducing a charge on effluents and applying a standard.
Number of formulations are now available to device sharing of financial burden but probably none is the ideal
method ensuring 100 percent equitable or proportionate sharing. The methods available for cost-sharing are
described in subsequent sections.
It is to be kept in mind that generally the methods of arriving at a figure of cost-share range from the very
simple to the highly complex. The simplest involves some inequities. The more complex method eliminates
some of these inequities at the sacrifice of simplicity and ease of administration. Therefore, there is no ideal
method. In practice, a compromise is reached where little sacrifice is made in both.
There are various methods available for sharing of the financial burden;

 Quantity method
 Quantity-Quality method
 Malz formulation

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 Roman formulation
 Mogden formulation
 Modified Mogden formula
 Fukashiba CETP formulation
 Borough of Glossop STP Formulation
 Sanitation districts surcharge formula
 Chemtech formulation
 Graduated payments formulation
 Drainage service charge formulation
 Barnard and Eckenfelder formulation
 Cost recovery based on plot size
 Cost recovery based on water consumption
 GBMSD methodology
 Flecksedar methodology
 Watson et al recommendations

4.1.5 Available Technologies (factsheets for various treatment options & combinations)
A single wastewater treatment process cannot be useful for treatment of industrial wastewater for achieving
desired disposal norms, generally, common effluent treatment plant is established for treatment of
wastewater containing following treatment sections:

 Preliminary Treatment
 Effluent Equalization
 Physico-Chemical Treatment (Primary treatment)
 Biological Treatment (Secondary Treatment)
 Polishing treatment (Tertiary Treatment)
 Zero liquid discharge system
Preliminary Treatment – Raw influent entering the treatment plant may contain many kind of materials
including solids and floating materials. Preliminary treatment involves a number of unit processes to eliminate
undesirable characteristics of wastewater. Processes include use of screen, grit chambers for removal of sand
and large particles, comminutors for grinding of coarse solids, pre-aeration for odour control and removal of
oil and grease.

 Screening: It is adopted to remove floating matter and shall be provided at the intake point. The
screening method employed depends on the design of the plant, the amount of solids expected, and
whether the screen is for constant or emergency use only.
The screen may be coarse (having 2-to-4 inch opening) or fine (having 0.75 to 2 inch opening). Generally,
Coarse screen are installed followed by fine screen. The screen may be manually cleaned screens or
mechanically cleaned type.
Manually cleaned screens are operated manually using a long tooth rack. It involves operator’s
interventions during entire duration of the plant operation. Failure to clean the screen frequently can lead
to septic wastes entering the primary section, surge flows after cleaning the screen, and also low flows
when the screens are jammed and require cleaning.
Mechanical screens use a mechanized rake assembly to collect the solids and carry them out of the
wastewater flow for discharge to a storage hopper. The screen may be continuously cleaned or cleaned
on a time or flow controlled cycle. It requires very less interventions from the operator, however, as with
all mechanical equipment, operator vigilance is required to ensure proper operation and proper
maintenance. Maintenance includes lubricating equipment and maintaining it in accordance with
manufacturer’s recommendations.
 Grit / solid removal: Used when WWTP has to deal with rainwater which normally entrains a considerable
amount of sand.
 Oil & Grease removal: Oil and grease are skimmed-off by passing the waste water through skimming tank.
This process can be rendered more efficient by dissolved air flotation or vacuum flotation.

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Effluent Equalization - Among the most effective waste management procedures is equalization of the waste
stream. The ETP receives wastewater from different manufacturing sections while in case of CETP, it receives
wastewater from different manufacturing units and needs to equalize the effluent before starting treatment.
Equalization can be of two types: flow equalization and constituent equalization.
Flow equalization refers to changing the variations in rate of flow throughout the processing and clean-up
cycles to a steadier flow rate that is more nearly equal to the average flow rate for that period. Equalization
can be either online, as diagrammed in or offline, as diagrammed in below figure.

Figure 4.8 Types of flow equalization

Constituent equalization refers to the concentration of the target pollutants in the waste stream throughout
the 24-hour day. The concentrations of individual constituents discharged to CETP from industrial unit
typically vary over wide ranges as processes are started up, operated, shut down, and clean-up takes place and
required to be equalized before transferred to treatment units of CETP. Some amount of constituent
equalization always takes place during flow equalization itself. In fact, it is standard practice to design for flow
equalization, and then operate to attain the degree of constituent equalization needed to achieve treatment
objectives. It can be completed either by manually, or automatically, decrease rates of flow during periods
when constituent concentrations are high.
Physico Chemical Treatment - Commonly known as primary treatment is comprising of coagulation,
flocculation and sedimentation.
 Coagulation & Flocculation: Coagulation agents such as Lime, FeCl3, FeSO4, Poly aluminium chloride
(PAC) are used to enhance coagulation. Afterwards, polyelectrolytes are added to create large flocs of
coagulated mass to facilitate better settlement and removal during sedimentation.
 Sedimentation: It is last stage of primary treatment section, coagulated mass present in wastewater is
allowed to settle and remove as sludge from bottom of sedimentation tank, typically called clarifiers
 In many cases there is a need to provide treatments for removal of specific constituent such as heavy
metals, cyanide, ammonia and many times refractory COD; in specific stream or in the inlet effluent.
o Removal of Heavy Metals: the standard procedure for removing metals from wastewaters is alkaline
precipitation. Alternative methods include precipitation of the metal as the sulphide, precipitation as
the phosphate, precipitation as the carbonate, or co-precipitation with another metal hydroxide,
sulfide, phosphate, or carbonate. Common methods and pH values for removal of heavy metals are
provided in below table. A step-by-step approach that can be used to develop an effective, efficient,
cost-effective treatment technology is as follows:
- Identify one or more insoluble compounds of which the target pollutant is an ingredient.
- Identify one or more soluble compounds that are reasonably inexpensive sources of the
remaining substances in the insoluble compound(s).

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- Perform experiments in the laboratory to confirm the technical and financial feasibility of
each promising treatment method.

Table 4.15 Inlet Common Methods And pH Values For Removal Of Heavy Metals
Heavy Metal Precipitation / removal method
Chromium Reduction to trivalent state by bi-sulphite or metabisulfite, followed by precipitation at pH 8 to 9.5
Copper pH 10 to 12 or as the sulphide (by adding sodium sulphide). Evaporative recovery of ion exchange for
recovery.
Lead pH 10 to 11 or precipitation as carbonate (by adding soda ash) or as the phosphate (by adding
phosphoric acid or a soluble phosphate)
Manganese Oxidation to insoluble manganous dioxide by chemical oxidants (free chlorine residual, ozone,
potassium permanganate), ion exchange
Mercury Precipitation as the sulphide, as pH values between 5 to 8. Also, ion exchange, coagulation and
activated carbon.
Nickel pH 11 to 12, precipitation as the carbonate or sulphide at neutral pH
Selenium Dissolved selenium is removed by precipitation at pH 11 to 12 or by co-precipitation with iron at pH 5.5
to 8 with alum at pH 6. Undissolved selenium is removed by sedimentation and /or filtration.
Silver Considering commercial value, ion exchange removal followed by recovery of silver.
Zinc pH value can be set considering other substance present in the wastewater, typically phosphate
precipitation at pH 8 to 9.

o Removal of ammonia: Ammonia removal is generally achieved using following methods:

- Ammonia Stripping process: ammonia stripping is widely used method for ammonia
removal mostly accompanied with phosphate removal. In this method, pH of wastewater
is raised to pH 11 using lime, air coming out of stripper is scrubbed using acid solution
and ammonia is recovered as ammonia salt. This salt is further treated to reproduce
ammonia and reused. This method is mainly used during large scale operations.
The ammonia-stripping process has the advantages of low cost, removal of ammonia with
a minimal addition of dissolved solids, simplicity, and reliability. However, it has the
disadvantages of poor efficiency in cold weather and the potential for scaling problems
that may reduce its efficiency, and it raises concerns, whether valid or not, over ammonia
gas discharge. The new stripping-recovery system overcomes many of these problems,
but at the has high process costs.
- Breakpoint chlorination: Chlorine gas is added to wastewater containing ammonia
nitrogen, typically at slightly alkaline pH and in presence of excess chlorine, ammonia is
converted to nitrogen gas.
The breakpoint chlorination process has the advantages of low capital cost, a high degree
of efficiency and reliability, insensitivity to cold weather, and the release of nitrogen as
nitrogen gas. It has the disadvantage of adding a substantial quantity of dissolved solids
to the effluent in the process of removing the ammonia, handling of chlorine gas, the
process controls required are relatively complex, and it requires a downstream de-
chlorination process.
o Removal of cyanide: wastewater from several industries including electroplating, refining gold and
silver ores contains cyanide in significant amount. Even traces of cyanides need to remove from the
wastewater before discharge to sewers due to the highly toxic nature of cyanide. Most commonly
used method for removal of cyanide from wastewater is alkaline chlorination. Chlorine and sodium
hydroxide are used to convert cyanide into cyanate and later to carbon dioxide and nitrogen.
Precautions are required while handling cyanide effluent and chlorine gas, optimum pH and ORP
values are key to achieve good detoxification of the effluent, if pH is not maintained the reaction can
produce toxic cyanogen chloride.

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Thermal oxidation & Catalytic oxidation: Certain effluent having highly toxic organics such as PCBs,
refractory COD, which are resistant to biodegradation are best destroyed by thermal oxidation. This
is an incineration process where heat is applied by means of fuel and harmful organic chemicals are
converted into carbon dioxide, water, and oxidized ions and molecules such as sulphate, sulphur
oxides, and nitrogen oxides. This process requires complex process controls and high operation cost
is involved. Sometimes, noble metals are used known as catalyst to achieve oxidation at lower
temperature, then the process is known as catalytic oxidation.
 Advance Oxidation Process - Free radicals are powerful oxidizers that can convert many organics all the
way to carbon dioxide, water, and fully oxidized states of other atoms that were part of the original
organic pollutants, including sulphates and nitrates. A free radical, then, has one unpaired electron and
has the same number of electrons as protons. A negatively charged ion, in contrast, has an even number
of electrons, each paired with another electron of opposite spin, and has more electrons than protons.
Free radicals can be generated by the following methods:
o Adding hydrogen peroxide.
o Adding hydrogen peroxide to a solution that contains ferrous ions, either present in the wastewater
or added along with the hydrogen peroxide (Fenton’s reagent).
o Adding hydrogen peroxide, then irradiating with ultraviolet light.
o Adding ozone and hydrogen peroxide.
o Adding ozone and irradiating with ultra violet light
a. Oxidation with Hydrogen Peroxide
Hydrogen peroxide has the chemical formula H2O2 and is an oxidizing agent that is similar to oxygen in effect
but is significantly stronger. The oxidizing activity of hydrogen peroxide results from the presence of the extra
oxygen atom compared to the structure of water. This extra oxygen atom is described as “peroxide oxygen”
and is otherwise known as “active oxygen.” Hydrogen peroxide has the ability to oxidize some compounds
directly; as shown following.
The oxygen — oxygen single bond is relatively weak and is subject to break-up to yield •OH free radicals:
The two •OH free radicals sometimes simply react with each other to produce an undesirable result; however,
the radical can attack a molecule of organic matter, and in so doing, produce another free radical. This is called
a chain-initiating step. As previously discussed, in free radical oxidation of organics, this process continues and
the organics are broken down all the way to carbon dioxide and water.
b. Hydrogen Peroxide Plus Ferrous Ion (Fenton’s Reagent)
Hydrogen peroxide will react with ferrous ions to produce ferric ions, hydroxide ions, and hydroxyl free
radicals as shown in below equation.
Fe+2 + H2O2 → Fe+3 + OH- + •OH
The hydrogen peroxide thus dissociates into one hydroxide ion (nine protons and ten electrons [OH -]) and one
hydroxyl free radical (nine protons and nine electrons [•OH]), as shown in below equation.
H2O2+ e− •OH + OH-

In this case, there is only one •OH free radical, as opposed to two •OH free radicals, when hydrogen peroxide
breaks down in the absence of ferrous ions as discussed previously. The single •OH then attacks a molecule of
organic material, also previously discussed, initiating a chain reaction (chain-initiating step) with the result that
the organic material is eventually oxidized all the way to carbon dioxide and water.
c. Hydrogen Peroxide Plus UV Light
When hydrogen peroxide is added to an aqueous solution, which is simultaneously irradiated with ultraviolet
light (UV), the result is that the hydrogen peroxide breaks down more readily into •OH free radicals than when
the UV light is not present, as illustrated in below equation, two •OH free radicals are produced.

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UV
H2O2+ e− 2 •OH

There are, therefore, significantly more hydroxyl free radicals to enter into chain-initiating steps, as discussed
previously, than in the case without UV light.
Ultraviolet light greatly increases the oxidative power of hydrogen peroxide, in a manner similar to that of
metal activation (Fenton’s reagent). Although it has not been made clear how the reaction proceeds, it seems
likely that the ultraviolet energy enables hydrogen peroxide to either separate into two hydroxyl free radicals,
each having nine protons and nine electrons, as illustrated in below equation,

UV
H2O2+ e− 2 •OH

or to obtain an electron from some source, probably the target organic compounds, and thus dissociate into
one hydroxide ion (nine protons and ten electrons (OH-) and one hydroxyl free radical (nine protons and nine
electrons (•OH), The hydroxyl free radicals then go on to enter or perpetuate a chain reaction, as shown
previously.
H2O2+ e− •OH + OH−

d. Oxidation with Ozone

Ozone, having the chemical formula, O3, is a gas at ambient temperatures. Ozone has physical characteristics
similar to oxygen but is a far stronger oxidizing agent. Ozone reacts with organic compounds in a manner
similar to that of oxygen, adding across double bonds and oxidizing alcohols, aldehydes, and ketones to acids.
Ozone requires less assistance than oxygen, as from heat, catalysts, enzymes, or direct microbial action.
e. Ozone Plus Hydrogen Peroxide
Addition of both ozone and hydrogen peroxide has the effect of oxidizing to destruction many organics such
more strongly and effectively than by adding either ozone or hydrogen peroxide alone. When both ozone and
hydrogen peroxide are present in water containing organics, •OH free radicals are formed through a complex
set of reactions. The result of the complex reactions is that two •OH radicals are formed from one hydrogen
peroxide and two ozone molecules.
H2O2+ 2O3 2(•OH) + 3O2

The •OH radicals then react with organics to form carbon dioxide, water, and other smaller molecules. As an
example, •OH radicals react with trichloroethylene and pentachlorophenol. The products in both cases are
carbon dioxide, water, and hydrochloric acid.
C2HCl3+6•OH 2CO2 + 2H2O +3HCl
C6HCl5O +18•OH 6CO2 + 7H2O +5HCl
The ozone plus hydrogen peroxide system has the advantage, compared to, say, Fenton’s reagent, that ozone
itself will react in a first order reaction with organics, resulting in further reduction of pollutants.
In addition to the formation of •OH radicals, there may also be formation of oxygen free radicals, as follows:
H2O2 + O3 → 2 (•O) +H2O
Oxygen free radicals may then enter into chain reactions to break up organics as shown in below equations.
This chain reaction may continue to destroy many organics in addition to those destroyed by ozone and the
•OH radicals.
f. Ozone Plus UV Light

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Ozone can be used in combination with ultraviolet light, in some cases, to produce more rapid and more
complete oxidation of undesirable organic matter than with either ozone or ultraviolet light alone below
equation illustrates this alternative process:
Organic matter+ ozone+ UV light→CO2+ H2O+ O2

Here, again, free radicals may or may not be involved.

g. Chlorination of Hydrogen Sulphide to produce Elemental Sulphur

Hydrogen sulphide is objectionable for several reasons, including its contribution to crown corrosion in sewers
and its malodorous character. Hydrogen sulphide can be oxidized to elemental sulphur as shown in below
equation.
H2S + Cl2 2HCl + S0

It may then be necessary to neutralize the hydrochloric acid by one of the usual methods.
Additional methods of oxidizing hydrogen sulphide to either sulphate ion or elemental sulphur (both odor
free) include the following:

 Raising the level of dissolved oxygen (beyond the level of saturation at atmospheric pressure) by adding
oxygen under pressure.
 Adding hydrogen peroxide.
 Adding potassium permanganate.

Biological Treatment- All forms of biological metabolism involve the disassembly of organic compounds (the
food) and reassembly into new cell protoplasm (growth) and waste products If the source of oxygen is
molecular O2 dissolved in water, the process is termed “aerobic,” and is depicted in below equation.
Organic matter + dissolved oxygen → carbon dioxide + water
If the source of oxygen is one or more dissolved anions, such as nitrate (NO-3), or sulphate (SO-24) and if there is
no (or very little) dissolved molecular oxygen present, the process is termed “anoxic,” and is depicted in below
equation.
Organic matter + nitrate/sulphate anions → carbon dioxide +ammonia / hydrogen sulphide + methane
If there is no oxygen present, either in the molecular O2 form or in the form of anions, the condition is said to
be “anaerobic.” Under anaerobic conditions, cell metabolism takes place as a result of substances other than
oxygen; functioning as the ultimate electron acceptor as mentioned in below equation.
Organic Matter + e- → Reduced organic compounds + CH4
The dissolved and suspended organic matter of the primary treated wastewater is removed by biological
process involving bacterial and other microorganisms in secondary treatment. These processes may be aerobic
or anerobic.

 Aerobic Biological Treatment - The primary treated wastewater can be treated for aerobic oxidation in
activated sludge units, aeration lagoons, trickling filters, oxidation ditch or oxidation pond.
o Conventional Activated Sludge Process - Aerobic biological treatment is given to primarily treated
wastewater in the aeration tank, where the wastewater is degraded by microorganisms like bacteria.
Majority of wastewater treatment plants employ activated sludge process in the secondary
treatment plant to achieve removal of organics in the most economical way. The aeration tanks,
secondary clarifier and recycling pump together form the activated sludge plant.

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In an activated sludge plant, a mixed culture of microorganism is treated to survive in a particular

environment and to degrade organic being served to them as food. These trained microorganisms
house themselves as flocks of solids, commonly referred to as MLSS (Mixed Liquor Suspended
Solids). The conventional plants are generally designed to maintain 3000 to 4000 mg/L MLSS in
aeration tank.
As the primary treated wastewater enters the aeration tank, equivalent flow is displaced to the
secondary clarifier carrying along with the same concentration of MLSS as maintained in aeration
tank. The microorganisms present in these solid flocks are valuable and need to be recycled back
into the aeration tank. Since these trained or activated microbes are recycled back as sludge from
clarifier, the process is termed as 'activated sludge process'. Below figure is showing typical
‘activated sludge process’.
o Extended Aeration Activated Sludge Process - The extended aeration modification of activated
sludge has the design objective of lower costs for waste sludge handling and disposal, at a sacrifice
of higher capital costs because of larger tankage and more land area per unit of BOD loading. There
may be a savings in O&M costs resulting from a lower level of intensity required from the operators,
but there is an increase in the amount of oxygen required per kilogram of BOD in the influent
because of the increased amount of auto-oxidation (there is some increase in aeration via the
surface of the aeration tank because of the larger surface area). The reduction in amount of wasted
sludge to be disposed-off per kilogram of BOD removed results from the increase in auto-oxidation
(use of the contents of the cells of dead microbes for food) because of a longer sludge age.
Generally, the extended aeration modification of activated sludge process is characterised by low
sludge wasting rate, MLVSS level of 2,000 to 2,500 mg/L and Hydraulic retention time of 20 hours or
more.
o High-Rate Modification of Activated Sludge Process - The high-rate modification of the activated
sludge process in which the MLVSS concentration is maintained at a significantly higher
concentration than in normal for conventional processes, and hydraulic retention time is significantly
shorter than “normal.” The high-rate process can be used to treat readily biodegradable wastes such
as fruit-processing wastewaters, but effective equalization is required to prevent short-term changes
in waste characteristics. Advantages of the high-rate process are that it is effective in overcoming the
problem of the tendency toward bulking caused by dominance of filamentous organisms in the
aeration tank systems, as well as lower construction costs because of smaller tankage.
Disadvantages include relatively intense operational control requirements, as well as relatively large
quantities of waste sludge because of less auto-oxidation.
o Contact Stabilization Modification of Activated Sludge Process- The contact stabilization
modification differs from the conventional process in that the activities that normally take place in
the aeration tank adsorption of polluting substances onto the microorganisms, then metabolism, or
conversion of these substances to more microorganisms plus waste products are separated.
The untreated wastewater is mixed with return sludge in a relatively small “contact tank.” The rapid
process of adsorption of pollutants takes place here. The mixture then moves on to an aeration tank,
or “stabilization tank,” where microbial metabolism takes place. The aeration tank is also relatively
small, compared to conventional activated sludge, because only the sludge, after separating from
the bulk liquid in the clarifier, proceeds to the aeration tank. The bulk liquid is either discharged from
the clarifier as final wastewater or is subjected to further treatment, such as disinfection, sand
filtration, or another process. Because only the sludge (with its load of adsorbed organic material)
proceeds to the aeration tank, energy requirements for mixing are lower.
The principal advantage of contact stabilization is the lower capital cost because of smaller tankage;
however, this modification is useful on only wastes that are rapidly adsorbed. In general, those
wastes are characterized by a high proportion of dissolved, relatively simple organics.
o Sequencing Batch Reactor Modification of the Activated Sludge Process - The sequencing batch
reactor (SBR) process is a modification of complete mix activated sludge. The two principal
sequential processes of activated sludge—aeration and settling—take place in the same tank.
Settling occurs, after sufficient aeration time for treatment has taken place, after turning off all
aeration and mixing. Then, clarified supernatant is decanted, the reactor is refilled with fresh,
untreated wastewater, and the cycle is repeated. Waste sludge is withdrawn immediately after the
react phase has been completed. An SBR is normally operated in six sequential stages, or phases, as
follows:

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 Fill phase. The reactor is filled until the desired F/M ratio has been reached.
 React phase. The reactor is mixed and aerated. Treatment takes place.
 Sludge wasting phase. A quantity of mixed liquor that corresponds to the quantity of solids, on a
dry basis, is withdrawn from the completely mixed contents of the reactor. For instance, if a 10-
day sludge age is desired, one-tenth of the volume of the reactor is withdrawn each day.
 Settle phase. Aeration and mixing are terminated, and the reactor functions as a clarifier.
 Decant phase. Clarified, treated wastewater is withdrawn from the top one-quarter to one-third
of the reactor.
 Idle phase. The system can be mixed and aerated at a low rate for a few days at a time needed
between periods of waste generation.

There are several modifications to the basic procedure outlined previously. For instance, it has been
found advantageous in some cases to either mix, aerate, or both, while filling is taking place. In these
cases, the first one or two stages are referred to as the “mixed fill phase,” followed by the “react fill
phase” (stages 1 and 2), or just “the react fill phase” (phase 1).
Among the several important advantages of the SBR process is its capability of having the react
phase extended for as long as is necessary to achieve the desired degree of treatment. In this
respect, it is good design practice to have at least two parallel SBR units, each of at least half the
design capacity. In the absence of a parallel unit, a collection tank designed and operated as an
equalization basin, can receive and store wastewater until the SBR unit is able to receive more
wastewater.
o Aeration Lagoons - Aerated lagoons usually consist of earthen basins equipped with mechanical or
diffused aeration equipment. There is no secondary clarifier except for a quiescent zone at the
outlet. There is no controlled sludge return from the bottom of this quiescent zone. As an alternative
to the quiescent zone, a separate pond is sometimes used, in which case the pond is referred to as a
polishing pond. In other cases, a mechanical clarifier can be used. A considerable number of pulp
and paper mills, in fact, have installed mechanical clarifiers as part of aerated lagoon systems. These
alternatives are desirable if the design of the lagoon makes use of complete mix conditions as a
method to avoid short-circuiting. There are two distinct types of aerated lagoon systems: (1) aerobic
and (2) partially mixed, facultative.
An aerobic lagoon must have sufficient mixing to suspend all of the solids and must have enough
aeration capacity to satisfy all of the BOD removal aerobically.
A partially mixed, facultative lagoon requires only enough mixing to keep all of the liquid in motion.
A significant portion of the biological and other solids resides at the lagoon bottom and undergoes
anoxic and anaerobic degradation. Enough aeration is applied to maintain aerobic conditions in only
the upper 2 to 3 feet of liquid.
In short, aerated lagoons are cement tanks having depth of 3 to 5 m and are lined with rubber or
polythene. The wastewater from primary treatment processes are collected in these tanks and are
aerated with mechanical devices for around 2 to5 days. During this time, a healthy flocculent sludge
is formed which brings about the oxidation of the dissolved organic matter.
o Fixed Media System / Trickling Filter - The trickling filter is an attached or fixed growth biological
treatment unit that converts soluble and colloidal organics to settleable solids to be separated from
the wastewater in a post filter clarifier. As the wastewater flows down the filter, a thin layer
develops on the media surface. This thin layer of bio-film is composed of a very large and diverse
population of living organisms including bacteria, protozoa, rotifers, algae, fungi, crustaceans, worms
and insect larvae.
The bed of media can be less than 1 m to more than 10 m deep and the media can be either natural
substances or a manmade material. Various types of media have been used like rock, stones, bricks,
slag-coal, wooden slabs, shell plastic molded random media etc.
o Moving Media Systems / Moving Bed Biological Reactor -These involve the synthetic small sized
media, which are fluidized in the reactor by artificial air supply by compressed air released at the
floor of the reactor. This brings about the circulatory movement of these media into the tank
contents. The trade names are Fluidized Aerobic reactor (FAB), Moving Bed Biological reactor
(MBBR) are also Fluidized Anaerobic reactor.

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The microbial film that develops over the surface of the fluidized media permits the metabolism.
Secondary settling is needed in the case of FAB and MBBR. In the case of FAB, additional further
treatment may also be necessary.
 Anaerobic Biological Treatment- Anaerobic wastewater treatment, accomplished through microbiological
degradation of organic substances in the absence of dissolved molecular oxygen. Anaerobic technologies
that are capable of treatment performance comparable to aerobic systems, at significantly lower overall
cost. Additionally, anaerobic systems are capable of treating some substances that are not readily treated
by aerobic systems, such as cellulosic materials, certain aromatic compounds, and certain chlorinated
solvents. There are two types of anaerobic wastewater treatment systems: suspended growth and
attached growth, as is the case with aerobic wastewater treatment systems. Attached growth systems are
commonly referred to as fixed film (FF) systems.
Suspended growth systems are those in which anaerobic microorganisms feed on the organic content of
wastewater in a vessel or lagoon that contains no managed support medium to which the microorganisms
attach. As microbial growth takes place, it is retained in the reactor by settling before the treated
wastewater is decanted. The microbes form particles that grow to a size that is dictated by the solids
management characteristics of that particular system. In general, the solids management capability and
characteristics differentiate between the several types of anaerobic treatment systems in common use.
Attached growth systems, otherwise known as fixed film systems, have a support medium, often called
“packing,” to which the anaerobic microorganisms attach as they grow. The media can be stationary or
not. Stationary media include rocks, coal, plastic or metal discs, and plastic packing. Sand is an example of
media that is not stationary.
o Up-flow Anaerobic Sludge Blanket (UASB) - The UASB system is one of the more technologically
advanced high-rate anaerobic wastewater treatment systems. These systems are capable of
removing 80% to 90% of COD from wastewaters having influent COD concentrations as low as 2,000
mg/L with hydraulic retention times of 8 to 10 hours. The principle components and operational
characteristics of the UASB system are:
 An influent distribution system
 A sludge “blanket” consisting of beads of active anaerobic (and/or anoxic) microorganisms,
formed as described previously
 A gas collection system
 A wastewater collection and discharge system that excludes air from the interior of the reactor.
 As influent wastewater enters the reactor via the influent distribution system, it flows up through
the sludge blanket. Depending on the rate of flow, the velocity of the rising influent causes a
certain amount of expansion of the sludge. Furthermore, depending on the cross-sectional area of
the sludge blanket, there is certain variability in the distribution of the influent wastewater.
o Mixed, Heated Anaerobic Digester - The mixed, heated anaerobic digester, usually arranged in two
stages. It represents an advanced version of the “old” anaerobic treatment technology, in which only
mixing and temperature elevation were used to reduce required hydraulic retention time. The
principal objective of mixing was to improve contact between active microbes and organic material,
often in solid form. The objective of heating was simply to take advantage of the fact that almost all
microbial metabolism doubles in rate for each 10°C rise in temperature. As an attending benefit,
some organics, more soluble at the elevated temperature, are more readily metabolized because of
their more direct availability to the microorganisms.
Methane harvested from the treatment process itself is normally used to heat the digester contents.
This accounts for the fact that the process is simply not economically feasible if the organic content
is less than that represented by 8,000 to 10,000 mg/L COD.
o Expanded Bed Reactor - The expanded bed system is among the most technologically advanced
anaerobic wastewater treatment options. This technology was developed with the objectives of
 Achieving the maximum possible active microbe-to organic matter ratio,
 Optimizing the effectiveness of contact between organic substances and microbes, and
 At the same time, minimizing the energy requirement to expand, or “fluidize,” the bed as well as
to pump wastewater through the system.
The objective of maximizing the F/M ratio has achieved through use of a “packing medium” that
has a surface-to-volume ratio that is as large as possible. The objective of maximizing the

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efficiency of contact between microbes and organic matter was achieved by utilizing the up flow
(fluidized bed) configuration. The objective of minimizing the energy needed to fluidize the bed
(expand the bed, in this case) was achieved by utilizing material of low specific weight (specific
gravity only slightly greater than one) as the packing medium.
o Bio Nutrient removal - Biological Nutrient Removal (BNR) is a process used for nitrogen and
phosphorus removal from wastewater before it is discharged into surface or ground water.
Generally, incorporated in biological treatment system. Nitrogen can be removed by facilitating
nitrification and denitrification during designing of biological treatment system. Phosphorous can be
removed by facilitating growth of Polyphosphate-accumulating organisms (PAOs) that can remove
large amount of phosphorous from the wastewater.
Polishing treatment (Tertiary treatment) - Polishing treatment is additional set of treatments provided to
secondary treated wastewater for the purpose of removal of fine particles, residual microorganisms and
disinfection purpose.

 Disinfection - Disinfection of treated wastewater can be achieved using three methods: Chemical
disinfection which utilizes disinfection chemicals viz. chlorine, ozone etc; Physical disinfection which
utilizes physical methods viz. ultraviolet radiation, microfiltration; Biological disinfection which utilizes
biological process viz. detention lagoons. Brief Description of each component /process is below:
o Chemical disinfection - Process in Brief: Chemicals such as chlorine gas, monochloramine, Ozone,
Chlorine Dioxide, hydrogen peroxide (with or without ozone) are used. These chemicals are mixed
with diffusion system with stored or flowing wastewater. Adequate contact time is provided so that
these chemicals reacts properly with wastewater.
 Chlorine: Chlorine remains the most widely used disinfectant chemical in drinking water
treatment for both primary disinfection of treated water and for the maintenance of a residual in
distribution systems. It is also commonly used in the oxidation and removal of iron and
manganese in water treatment upstream of disinfection.
 Monochloramine: Monochloramine is formed when ammonia and chlorine are dosed, and react,
under well controlled conditions. The process is known generically as “chloramination”. Good
process control is essential to prevent the formation of strong tastes and by-products. The
disinfection capability of monochloramine is poor compared with chlorine, and it is generally used
to provide a disinfectant residual or preservative, during distribution, rather than being used for
primary disinfection.
 Ozone: Ozone is a powerful disinfectant compared with either chlorine or chlorine dioxide. It is
the only chemical that can provide effective inactivation of either Giardia or Cryptosporidium at
dose levels not much greater than those used routinely for water treatment. It is, however, an
expensive disinfection technology in terms of capital and operating costs.
 Chlorine dioxide: Chlorine dioxide is a more powerful disinfectant than chlorine, and the pure
chemical does not form THMs by reaction with humic substances. Chlorine dioxide is generated
on demand, usually by reaction between sodium chlorite and hydrochloric acid; it can also be
made by reaction between sodium chlorite and chlorine, although careful control is required to
ensure by-product formation is small. Chlorine dioxide is likely to be substantially more expensive
than chlorine.
 Hydrogen Peroxide: The use of hydrogen peroxide in the treatment of potable water has been
limited. This is in part due to its instability in storage and the difficulty in preparing concentrated
solutions. It is a strong oxidizing agent, but a poor disinfectant achieving little or questionable
inactivation of bacteria and viruses. Hydrogen peroxide can be stored onsite but is subject to
deterioration with time and is a hazardous material requiring secondary containment for storage
facilities. Although of little value itself, hydrogen peroxide has been used in conjunction with
other disinfectants to achieve improved oxidation of organic matter. Its use with ozone and
ultraviolet light produces increased concentrations of hydroxyl radicals. These are short-lived,
very strongly oxidizing chemical species, which react with the organic matter.
o Physical disinfection
 Ultraviolet radiation: The disinfection of treated wastewater via ultraviolet (UV) radiation is a
physical process that principally involves passing a film of wastewater within close proximity of a
UV source (lamp). The efficiency of UV disinfection depends on the physical and chemical water

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quality characteristics of the wastewater prior to disinfection. With a better quality of wastewater
comes a more efficient UV disinfection process. The advantage of the UV disinfection process is
that it is rapid and does not add to the toxicity of the wastewater. There have been no reports of
by-products produced from UV disinfection that adversely impact on the receiving environment.
UV disinfection does not result in a lasting residual in the wastewater. This is a disadvantage when
wastewater must be piped or stored over significant distances and time (particularly relevant to
reuse schemes) as re-growth of the microbial population is considered a risk.
 Membrane filtration: Membrane technologies disinfect treated wastewater by physically filtering
out microorganisms. This disinfection process does not require the addition of reactive chemicals
and as such, no toxic disinfection by-products are produced. Key membrane technologies include:
- reverse osmosis;
- ultrafiltration;
- nanofiltration; and
- microfiltration.
Microfiltration is the most commercially viable technology for the disinfection of treated
wastewater. The wastewater passes through membrane fibres, hollow cylinders permeated with
millions of microscopic pores. These pores allow wastewater to flow through the same fibres that
act as a physical barrier to particles and microorganisms.
o Biological disinfection
 Lagoons: The storage of secondary treated wastewater in pondage systems (nominally 30 days)
allows natural disinfection to take place before discharging or reusing the treated wastewater.
 Fine filtration: when there is need of removal of fine particles from the treated wastewater for recycling
purpose following processes are used as per the requirement of final treated quality of wastewater
required.
o Sand filter and Carbon filter – Secondary treated wastewater is passed through batteries of vessels
packed with graded sand and activated carbon. The packed sand vessel removes coarse particles and
activated carbon removes fine particles such as bacteria and also facilitates residual odour and
colour removal.
o Micro screening - Micro screening is an advanced treatment process used to reduce suspended
solids. The micro screens are composed of specially woven steel wire fabric mounted around the
perimeter of a large revolving drum (commonly known as disk filters). The steel wire cloth acts as a
fine screen, with openings as small as 20 mm (or millionths of a meter) that are small enough to
remove microscopic organisms and debris.
Zero liquid Discharge system - Zero Liquid Discharge (ZLD) implies that the industries are not discharging any
effluent, either on the land or in the water body or at any other place i.e. recycling the same in the process
entirely without releasing any effluent.
ZLD accomplishment may need physical & chemical treatment, followed by biological system to remove
organic load. The treated effluents can be then subjected for concentration and evaporation. The
concentration method quite often involves the adoption of Reverse Osmosis (RO) and Nano Filtration (NF)
methods. The evaporation methods involve drying/evaporation of effluent in multi effect evaporators (MEE).

 Thermal route : Zero Liquid discharge (ZLD) refers to installation of facilities and system which will enable
industrial effluent for absolute recycling of permeate and converting solute (dissolved organic and in-
organic compounds/salts) into residue in the solid form by adopting method of concentration and thermal
evaporation. ZLD will be recognized and certified based on two broad parameters that is, water
consumption versus wastewater re-used or recycled (permeate) and corresponding solids recovered
(percent total dissolved / suspended solids in effluents)
 Objective to treat wastewater in ZLD System: general objective is to recover water, which can be
recycled. Also in some cases to separate constituents such as salt, solvents from the wastewater which are
difficult to treat in conventional Effluent Treatment Plant and to separate valuable by-products from
wastewater (case specific, such as Brines, Salts)
 Components/ Processes involved in ZLD System:

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o pH Neutralization unit (Primary Treatment)

o Solvent Stripper unit (Required only for solvents bearing wastewater)
o Biological Effluent Treatment
o Reverse Osmosis
o Evaporation System
o Dryer / Crystallizer
 Brief Description of each component /process:
o pH Neutralization unit (Primary Treatment)

Most of the ZLD plants have this unit to neutralize the pH.

Required when wastewater is acidic or alkaline in nature

In some plant (such as textile, chemical industries), the treatment is also involve flocculation and
sedimentation.
o Solvent Stripper unit (Required only for solvents bearing wastewater)
Widely used in solvent bearing wastewater, such as pharma and chemical industries.
In this unit, Wastewater is subjected to distillation at lower temperature (than boiling point of
water) to distil out solvents from the wastewater.
o Biological Effluent Treatment

Considering the cost-effectiveness of the treatment, biological treatment is used in most of the
ZLD system.
 Primary treated wastewater (or wastewater after stripping out solvent) is subjected to biological
treatment unit, where activated biomass (floccs of various kind of microbes) degrades organic
load present in wastewater.
 This treatment is effective when dissolved solids are on lower side and wastewater having good
biodegradable organic load.
 When wastewater is having high amount of inorganic dissolved solids (in-case of wastewater from
metal processing, processes involves high amount of acids and alkalis etc.) biological process in
not effective, in that case wastewater is directly fed to evaporation section, after neutralizing it
with alkali or acid as per nature of wastewater.
o Reverse Osmosis

Evaporation system requires high amount of energy and very costly treatment. Therefore, to
reduce load to evaporation system, reverse osmoses is employed.
 In this treatment unit, wastewater is fed to membrane with the help of high-pressure pumps, so
due to the pressure dissolved solids are separated from wastewater and water is recovered.
 Reverse osmosis process generates two streams of wastewater, one is called “Permeate”, which is
filtered water having very low dissolved solids (TDS) and another is called “Reject”, which is having
high amount of TDS.
 Permeate stream is reused and reject stream is fed to Evaporation system.
o Evaporation System
 In Evaporation unit wastewater is heated to its corresponding boiling point under vacuum and
converted to water vapour.
 Vapours are converted to water using condensers, called “Condensate”
 Condensate water is reused,
 The remaining portion of the wastewater is having high amount of salt, with high temperature,
 This brine solution containing mixed salt concentrate is then fed to dryer / crystallizer section.

o Dryer / Crystallizer
 Dryer or Crystallizer is used to dry concentrated salt/mixed salt concentrate resulting in hydrated
salts in solid form.
 The mixed salt so received is generally disposed-off in TSDF site, in some cases it is reused and
further processed to recover salts, heavy metals as the case may be.

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 Pros and Cons of ZLD treatment:

o Pros:
 Water can be recovered and reuse, thereby saving natural resources.
 In some cases, salts generated during treatment, are also reused.
 Ability to treat non-biodegradable wastewater or wastewater having solvents in high amount.
 Effective in the areas water scarcity is prevailing.

o Cons:
 Considering multiple kind treatment units employed, skilled manpower with vigilant monitoring is
required.
 Break-down of any one treatment unit can affect operation of entire ZLD system.
 Very high capital cost.
 Very high operation cost.

 Utilisation of Effluent in Irrigation 37- Adopting ZLD practices may not be feasible in many cases in view of
techno economic reasons. However, the treated wastewater of an industry may also be utilised for
irrigation. This type of utilisation/application is considered an efficient approach for managing/conserving
water resources, compensating water shortages caused by seasonality or the irregular availability of water
sources for irrigation throughout the year.

Meeting the prescribed norms shall not be the only criteria for use of treated wastewater in irrigation, the
requirement of water for irrigation will also be a limiting condition and this depends upon various factors,
as follow:
o Crop: This is the main subject determining the water requirement, such as, paddy crops (in
general) need more water than trees.
o Climate: In tropical and subtropical climate especially in arid regions, irrigation frequency is
higher. However, in slightly moist conditions the frequency decreases.
o Irrigation type: There are various irrigation types, namely, flood irrigation, sprinkler, rain gun, drip
irrigation, etc., which influences the water requirement for irrigation.
o Soil condition: The various soil types, such as loam, clay, sandy, clay loam, sandy loam etc.,
determine the crop types and also alters the irrigation system thus determining the water
requirement.
o Soil permeability: The soil permeability, which is also known as water conductivity of the soil,
determines the water retention capacity. This determines the cultivable crops, which in turn
determines the water requirement for irrigation.
o Total Salt Concentration: Total salt concentration (for all practical purposes, the total dissolved
solids) is one of the most important agricultural water quality parameters. The plant growth, crop
yield and quality of produce are affected by the total dissolved salts in the irrigation water.

4.1.6 Cleaner and Greener Technologies (Resulting into waste minimisation, recycling/reusing and
conservation of chemicals, energy and water)38
 Removal of sulphate and other pollutants using ultrasonic reactors-
Sulphate-rich waste waters are treated using the following process steps:
o Reaction of the sulphate in the water effluent with aluminium hydroxide chloride under acidic
conditions (ideally with pH < 1.3). The quantity of aluminium hydroxide chloride that is required is
proportional to the concentration of sulphate within the effluent.
o Neutralisation with lime slurry or liquid lime (the optimum pH has been found to be 11.5).
o Treatment in an ultrasonic reactor at a controlled rate where sulphate can precipitate. The
amplitude and power of the ultrasonic vibrations are controlled to optimise the efficiency of
sulphate removal. Within the ultrasonic reactor, the reaction chemistry and kinetics are altered so

37
Guidelines for Utilisation of Treated Effluent in Irrigation, CPCB, Sep-2019.
38
Best Available Techniques (BAT) Reference Document for Common Wastewater and Waste Gas Treatment / Management Systems in the
Chemical Sector Industrial Emissions Directive 2010/75/EU (Integrated Pollution Prevention and Control), 2016

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that calcium aluminium sulphate oxide is formed. This material is a very fine precipitate, almost
colloidal in nature, and it has been found that flocculation is started by the addition of Epofloc L1-R
(a heavy metal precipitant which is a carbamine). Not only does this ensure the removal of any
heavy metals that are present, it also removes any excess aluminium. The material is flocculated
using an anionic polyacrylamide. The resultant supernatant is clear and colourless. The precipitant
produced in the process has been analysed using x-ray fluorescence and diffraction and has been
identified as a type
of zeolite.
o Clarification where sludge is removed and treated in a filter press and can then be disposed of or
reused/recycled. The technique can be applied as an end-of-pipe technique or included within a
waste water treatment plant. An example of this is within a treatment plant, e.g. for chromium
removal.
o Advantages - The technique is used to remove the following contaminants from waste waters:
 sulphate (up to 99.7 % reduction);
 COD (up to 55 % reduction);
 phosphate (up to 99.9 % reduction);
 heavy metals (up to 99.7 % reduction).
The resultant filter cake produced has a lower moisture content and is often non-hazardous and can
be disposed of in a suitable landfill site. It can sometimes be reused in the following applications:
 as an alternative raw material in the cement industry.
 as a treatment material for paint wastes, e.g. spray booth waste;
 In waste stabilisation / solidification;
 In the treatment of contaminated soils.
 Photocatalytic oxidation with titanium dioxide - The technique is a low-temperature system based on
photocatalysis that can degrade a range of organic compounds as well as destroy microorganisms in
aqueous effluents. A variation of the technique can also be used to treat gas effluents. a mixture of the
target material to be treated, the catalyst and water is passed as a thin slurry film over a series of plates
and exposed to UVA light. If sufficient degradation of the target material occurs, then the treated mixture
can be passed through a catalyst recovery system, after which the water and treated target material can
be released into the environment by discharge through a conventional water treatment system; the
catalyst can be recycled for further use in the process.
o Advantages - The photocatalytic process can be applied to industrial waste waters for:
 general organic pollutant destruction.
 specific pollutant degradation such as pharmaceutical- or pesticide-contaminated waters.
 toxicity reduction.
 biodegradability improvement.
 BOD/COD removal.
 odour and colour improvement
 Combined electrochemical oxidation - Electrochemical processes can be classified into two main groups:
o Direct electrolysis (also called 'anodic oxidation', 'direct oxidation' or 'electrochemical incineration')
by anodic oxidation in which the pollutant reacts at the anode surface with adsorbed hydroxyl
radicals;
o Indirect electrolysis where the pollutant reacts in the solution with an electro generated reagent
produced at the anode (e.g. O3, ClO-, Cl2, ClO2) or at the cathode (e.g. H2O2). Combined
electrochemical oxidation processes combine electrochemical, photochemical and catalytic
oxidation to achieve optimal results in the degradation of toxic and non-biodegradable organic
substances. The following combination can be used:
 anodic oxidation and cathodic generation of hydrogen peroxide (H2O2);
 cathodic generation of hydrogen peroxide and UV irradiation;
 catalytic electrochemical oxidation (in situ generation of hydrogen peroxide and specific
catalysts);
 electrochemical generation of oxidising agents (e.g. H2O2, O3), UV irradiation and varied catalyst.
o Advantages -

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 Generally safe operation

 Compared to techniques such as chemical oxidation, there is no transportation and storage of
dangerous reactants (e.g. chlorine dioxide)
 Relatively low consumption of energy (because of mild temperature and pressure to operate)
 Can apply for treating waste waters with TOC < 5 000 ppm
o Disadvantages
 Low reaction rate in case of electrode fouling (by reaction products)
 Supercritical water oxidation - Supercritical water oxidation (SCWO) is a special application of the high-
pressure variant of wet air oxidation. The oxidation reaction takes place in the supercritical region of
water, i.e. temperatures \ over 374 °C and pressures above 22.1 MPa. Wastewater is brought to the
supercritical pressure by a high pressure pump before it enters the economiser, where the feed is
preheated by the reactor effluent. At start-up, or if the organic concentration in the wastewater is less
than 4 %, the feed has to be heated further to reach the supercritical temperature range. When oxygen is
added to the feed, the temperature in the reactor will rise to about 600 °C.
o Advantages
 All organic content, irrespective of its properties, is destroyed.
 Very high destruction efficiency is achieved at relatively low temperatures, resulting in NOX-free
emissions.
 No dioxins are generated.
 Very short reaction time is necessary, resulting in short residence time and thus in low reactor
volume
 Can be combined with other downstream treatments.
o Disadvantages
 Traces of nitrous oxide (N2O) and acetic acid are likely to be found.
 Inorganic solids precipitate and might cause corrosion.
 Elevated chloride concentrations lead to increased corrosion thereby requiring specific types of
steel.

4.2 Operations and Maintenance

The Operation & Maintenance of the CETP in a safe and sustainable manner and in compliance with the
environmental regulations is key to the sustenance of various member industrial units connected to the CETP.
The closure of CETP for techno-commercial or legal reasons would essentially lead to the closure of the
effluent generating industries in the industrial area or disruption of their production and hence evolves as the
critical environmental infrastructure/ asset of an industrial estate.

4.2.1 Operational and Maintenance requirements

The key factors that go into the operation & maintenance of the CETP can be classified as follows:

 Managing the Quantity & Quality of effluents reaching the CETP.

 Effective Treatment of the effluents to meet the stipulated environmental regulations in a safe and
sustainable manner, through process control.
 Disposal/ Reuse of treated effluent as stipulated by the regulators or in accordance with the requirements
of the buyers.
 Safe disposal of the CETP sludge and other hazardous waste generated in the CETP.
However, to achieve this the CETP needs to effectively manage its key resources, viz. Trained/ Skilled human
resources, optimal use of resources like chemicals, fuel and electricity and proper upkeep of the plant and
machinery to ensure its prolonged life.

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4.2.2 Organisational/ Management systems39

Proper Institutional Mechanisms are to be in place to ensure the infrastructure established is effectively and
sustainably managed. Most often CETPs are managed as a Co-operative with the Industry Association taking
the initiative to form the SPV and administer the Operations & Maintenance of the CETP in the interest of its
Members. This would essentially require the SPV to actively engage with the Stakeholders, particularly the
Member Industries, SIDC, SPCB, District Administration representatives, Bankers, etc.
SPV must also form Core Committees to administer and manage specific tasks like;

 Administration
 Finance & Tariff Review
 Monitoring, Surveillance & Enforcement
 Environment, Safety, Health & Regulatory.
The cost-effective treatment must be supported with a system of regular collection / payment of treatment
charges by each member unit, while maintaining its effluent quality within acceptable norms are some of the
prerequisites. The system of payment should be legally supported to provide a check for non-payment of dues
and to take actions against defaulters. The guidelines 40 for the key stakeholders of CETPs, which is
implemented in Rajasthan under the initiative of Rajasthan State Pollution Control Board. viz.;

 Guidelines on Institutional Role & Responsibility of Industrial Park Owner (SPV) for overseeing the
functions of CETP Operations,
 Guidelines for Selection of O&M Agency for Operations & Maintenance of CETPs
 Guidelines for the Member Units of the SPV

4.2.3 User charges29

4.2.3.1 Mechanisms: for fixing or modifying user charges for the treatment of wastewater
To Sustain CETP operations, it is particularly important to ensure that cash flow is not constrained, and the members
pay their dues well on time. To avoid conflicts and ensure a fair, equitable and transparent pricing policy, and clear
understanding of the deliverables/ services that the member units get must be clearly indicated to them.

4.2.3.1.1 Criteria for cost

The cost sharing should be decided in such a way that volume of effluent becomes an important norm, but its
share in the total cost should not be such as to encourage bypassing of dilute streams and conveying highly
toxic / non-biodegradable waste to CETP. The treatability factor should also be given due consideration in cost
estimation. An effort by the industry to segregate toxic, highly acidic / highly basic, or toxic metal bearing
waste be made to explore the possibility to de-toxify / neutralize or to attempt the recovery of metals by
installing recovery plants, which are feasible and economically viable on account of their pay-back potentials.
It must be understood that the costs are dynamic and there should be built in mechanisms to ensure review at
periodic intervals to review the tariffs and then decide upon the mechanisms to adjust the pricing. Given
below are a few formulations that may be considered to arrive at a justifiably fair and equitable
apportionment of the costs incurred or funds needed to cover all O&M costs.

4.2.3.2 Cost sharing systems

Equitable sharing should be the prime objective while developing a financial apportionment model for the
CETP. The direct and indirect benefits accrued by the CETP also need to be proportionally distributed amongst
its members. Though it is difficult to cover all aspects, realistic models have been developed for financial
apportionment of the costs. The concerned SPV body can decide on the most suited and viable system based
39
Guidelines for wastewater conveyance systems, storm water management and common effluent treatment plants in industrial parks, GOPA
Infra GmbH
40
http://environment.rajasthan.gov.in/content/dam/environment/RPCB/Guidelines/For%20CETP%20Trust.pdf

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on the local situation and feasibility to implement. The system exercised in most of CETPs operational in India
is partly based on Quality-Quantity method with case specific modifications.

4.2.3.2.1 The quality method

The Quality Method is the simplest Method and is applicable for joint treatment of sewage and low strength
industrial wastes. The total cost of CETP Operations and the cost for debt service are divided by total volume
(quantity) of effluents handled to arrive at the Service Charge to be levied per cubic metre of effluent. If the
effluents from the industries are generally uniform in nature, this approach is acceptable. However, in highly
industrialized areas, the user generating dilute effluents ends up subsidizing the users with high strength
effluents, which would then not be a fair or equitable method of charging the users.

4.2.3.2.2 Quantity – quality method

In the Quantity – Quality method charges are proportional to the benefits from the treatment plant. The
calculation of treatment costs can be summarised in the following steps:

 Step-1: Identify the critical design - parameters for the treatment plant. Let us assume they are BOD, SS
and volume.
 Step-2: Workout fixed cost (depreciation, loan repayment etc.) and operational cost on annual basis, for
all major components like conveyance system, pumps, clarifiers, digesters etc.
 Step-3: Identify the variables (BOD, SS, volume) and the extent of dependence the variable is considered
for design specification for the given component. e.g. Conveyance system and digesters are designed
based primarily on volume and SS respectively, whereas for clarifier, volume and SS are equally
considered.
 Step-4: Workout apportionment of the total treatment cost (fixed and operational), based on the function
of the variables.
 Step-5: Depending upon design specification of the plant, against critical parameters, work out the cost
component for unit volume treated, kg BOD removed and kg SS removed.
 Step-6: Calculate the cost of treatment for effluent from any industry based on unit cost component as in
Step-4 and effluent characteristics in terms of quantity (volume) and quality (BOD, SS etc.) for the given
industry.
This is considered the most equitable method in practice. However, to administer this, the SPV/ CETP operator
need to monitor the quality parameters of each user apart from the flow.

4.2.3.2.3 Malz formulation

The Malz Formulation is based on “Polluter Pays" principle and provides an acceptable measure for pollution
control if a rational and simple method could be established to estimate the cost of fulfilling the legal
obligations of each industry member of the CETP. This procedure is based on the volume and degree of
noxiousness of wastewater contributed to the system for an equitable distribution of annualized financial
burden, which was developed by Malz and used in USA.
The factors considered in cost computation are volume, degree of noxiousness ‘S’ of wastewater and dilution
factor ‘V’ to ensure survival of fish (48 hr. exposure).

A = Settleable matter, mg/L

B = COD of settled sample, mg/L
TDS = Total dissolved solids mg/l
F = Fish Toxicity
Ao, Bo & TDSo = Effluent Discharge Standards as specified by SPCB.

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The noxiousness degree ‘S’ is estimated from the dilution factor, V expressed in appropriate slabs rather than
in discrete numbers to account for deviation in sampling and analysis of wastewater.

Dilution Value (V) Noxiousness Degree (S)

1-2 1
3-4 2
4-6 3
6-7 4

Annual treatment cost apportioned to each polluter is calculated as follows:

Q = Annual flow of an individual industry

Z = Total cost of collection/ conveyance & treatment

Note: The formula for calculating dilution factor, V and slabs for determining degree of noxiousness, S can be
appropriately changed to suit specific case.

4.2.3.2.4 Roman formulation

In Roman Formulation, it is presumed that the scale of operation makes the overall treatment cost in a CETP
comparatively less than the cost to be borne by individual small-scale units on their own. Roman (74)
proposed the following formula, which is widely used in Poland to calculate the share of each participating
member units of the CETP.

Iu Amount expressing share of the participating industrial unit

Qu Average daily effluent flow from the given industrial plant discharged to the CETP in m 3/day.
Q Average daily effluent flow from all industrial plants discharged to the CETP in m 3/day.
Io Construction Costs of the CETP
Id Construction costs of all additional facilities for transport of effluents to the CETP, expressed as BOD 5 in kg
O2/m3.
Su Average Strength of the mixture of the given industrial unit, expressed as BOD 5 in kg O2/m3
S Average Strength of the mixture of all effluents discharged to the CETP, expressed as BOD 5 in kg O2/m3
e Cost of the treatment plant units depending on the pollution load to construction costs to the whole
treatment plant

Roman Formulation is propounded on two assumptions, viz.

 The share towards cost of building a CETP should correspond to the amount and strength of discharged
effluent.
 The cost of effluent conveyance facilities to the CETP to be shared proportionate to the quantum of
effluent discharged by each member unit, irrespective of the distance of transport.
The amount of penalties for transgression of requirements for effluent discharge depends on the pollution
load contained in the discharged effluent above the admissible limit and the type of polluting matter. The

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penalties imposed are much higher than the actual cost incurred for the treatment. In Poland, Penalties and
imprisonment were applied depending on the size of damage caused by the pollution.

4.2.3.2.5 Chemtech formulation

This formulation was developed by Chemtech Consultants (80) and is based on the proportion of the CETP
usage. Industries are to pay according to the load they impose on the CETP – both in terms of hydraulic load
(volume of effluent) and Pollutant load (chemical, physical and biological conditions of the waste) that have
direct influence on the capital and operational cost of CETP.
The formulation is as given below:

CCi Capital Cost contribution by the ith industry (INR)

Qi Volume of Wastewater generated by the ith industrial plant and discharged to the CETP in m3/day.
Q(T) Total Wastewater flow to the CETP in m3/day.
CC(Q) Flow dependent cost of the CETP (INR)
B(i) BOD load of the effluent from the ith industrial plant and discharged to the CETP in kg/day.
B(T) BOD capacity of CETP in kg/day
C(i) COD load of the effluent from the ith industrial plant and discharged to the CETP in kg/day.
C(T) COD capacity of CETP in kg/day
CC(B) BOD and COD Capacity dependent cost of the CETP (INR)
CC(A) Cost of Common facilities for the CETP (INR)
a Factor that is a function of the ith industry’s design flow.

Cost of neutralisation is not considered, as this operation should be part of pre-treatment by the individual
industry.
Connection fees: Recommended to be charged separately based on the actual cost of labour and materials at
the time of connection, distance from collection system, size of piping and other existing conditions at site.
Recovery of Operations & Maintenance Costs:
The suggested formula for calculating O&M recovery from individual units is as follows:

CM(i) Operation & Maintenance Cost for the ith industry (INR)
CM(T) Total Operation & Maintenance Cost of the CETP (INR)
PF(i) Pollution Factor for the ith industry

If BOD(i) and or COD(i) values result in PF(i) < 1, then PF(i) = 1

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It is convenient to express the individual industry’s contribution as a combined figure, capturing the Cost for
Capital Recovery as well as the Operations & Maintenance costs. This will allow the SIDC or if the CETP
Operator is a private investor to recover all costs plus profit. The formulas maybe combined to work out a
single payment schedule and is as follows:

CO(i) Total Annual Contribution by the ith industry (INR)

CO(T) Total Income required by the CETP Operator (INR)
A Minimum contribution by each industry

4.2.3.2.6 Graduated payment formulation

Graduated Payments Formulation is based on the following concept:

 Large industries pay marginally higher cost

 Cost paid by smaller industries is fixed as minimal amount thus eliminating intricate accounting
procedures.
Generally, large industries are few in number in any industrial estate, but are the major contributors to the
flow. A differential pricing mechanism could help the industries in micro and small scale industrial units
contributing to less than 10 m3/day of effluents to pay a minimal fixed amount for being connected to the
CETP.
The Chemtech Formulation for the annual contribution from each industry, CO(i), can be easily corrected by
eliminating all but the minimum contribution, A for small industries:

4.2.4 Monitoring requirements

The Monitoring requirements in a CETP are of two types, viz, (i) Statutory requirements and (ii) Commercial /
Process Requirements.
As per the statutory / regulatory requirements the CETPs have to install Online Continuous Effluent
Monitoring Systems at the Inlet and Outlet of the CETP and have the data transmitted to the servers of CPCB
and SPCBs.; apart from the monitoring requirements specified in Environmental Clearance/ Consent to
Operate Conditions. The CETP operators need to mandatory follow the frequency of monitoring and type of
monitoring and reporting specified including that by third party NABL approved laboratories.

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Process Controls: To ensure proper management of the treatment processes various sensors, SCADA and
other instrumentation along with sampling and laboratory analysis are taken up and the processes are
monitored to ensure efficient operations and to adopt requisite corrective measures depending on the
variations in effluent quality, quantity and other process conditions. Warning Systems must be installed for
detection of any emergency conditions like Chlorine Leaks.
Monitoring & Surveillance: Monitoring of Surveillance of the discharges from the industrial units and the
conveyance network is required to keep track of the violations to both protect the CETP from undue spikes /
process disruptions as well as to ensure rational billing process.
Security & Surveillance & Personnel Monitoring systems may be adopted by the CETP to ensure that the
premises are secured and unauthorized personnel / access is restricted.

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5 BUSINESS MODELS AND CONTRACTING

5.1 Business Models

Abstract
Business Models
Many of the CETPs in industrial parks in India do not fully comply with environmental standards due, in part to
unsustainable and/or ineffective financing, management and institutional arrangements. An analysis of the
business models supporting the CETPs reveal that they are designed specifically to address the wastewater
treatment issues and are not always aligned with the wider business models for the parks as a whole. Internal,
and sometimes unclear, regulatory boundaries, and separation of ownership and operating responsibilities of
the CETP and the conveyance system can create inefficiencies and opportunities to avoid liabilities. State
ownership of the industrial parks can result in deprived financing for necessary investment in capital
maintenance whereas ownership of the CETP by the users in the industrial park can create conflicts of
interests between environmental obligations and commercial profits.
Our analysis examines the performance of several business models for CETPs currently employed in India from
the perspective of all the stakeholders from the Government of India through to individual citizens. This
reveals that although greater private sector involvement in the development and subsequent operation of the
CETPs can improve performance it does not eradicate several of the principal failings.
The analysis, drawing on examples of a few successful industrial parks in India and the standard model
employed in Germany, reveals that a successful business model for the CETPs cannot be developed in isolation
of the wider business model for the industrial park/cluster as whole. The examples demonstrate that the best
practice models for industrial parks are those where the overall responsibility for infrastructure development
and operation is in the hands of the private sector. In India, such a model will change the role of the SIDCs
from industrial park developer and owner to that of facilitator.
This chapter recommends that new industrial parks be developed as private sector ventures and consideration
be given to the option of semi-privatising existing industrial parks through the use of JV agreements between
investors and the SIDCs. For the latter the SPCBs may need to provide time limited derogations to investors to
afford reasonable opportunity to upgrade the infrastructure to meet the environmental standards. In both
cases, internal regulatory boundaries should be replaced with contract boundaries.

The issue of business models for CETPs in India has been examined briefly in previous studies and reports in
response to their reported poor performance in terms of both financial and environmental sustainability.

5.1.1.1 Report by IGEP (2015)

In 2015, the Indo-German Environment Partnership (IGEP) 41 examined the technology and operation of CETPs
in India. The IGEP report’s principal focus was on the technology and performance in the main but it also
examined the business models and how they may have an impact on the performance of the CETPs. The IGEP
study was focussed on the CETPs rather than the industrial parks as a whole and their consideration of

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business models was focussed on their construction rather than longer term sustainability. The conclusions in
the main suggested that greater private sector involvement will result in improved performance but stopped
short of presenting details as to how this can be achieved.

5.1.1.2 Analysis by Weber Sites Consulting (2017)

In 2017, Weber Sites Consulting, a German consulting firm specialising in the development and operation of
industrial parks prepared a report42 on behalf of GIZ that took an in-depth examination of a selection of
industrial parks in India and compared them to similar parks in Germany. This report considered the whole
business park as a single entity rather than focussing on the CETPs. This report concluded:
There are no uniform industrial parks management structures or models in India. Due to lacking effective
industrial area management structures in the industrial areas, there are limited synergies and services in the
industrial areas. Some key concerns are:

 The industrial park development agencies do not in general take the role of the operator of the park, but
limit themselves to the role of a developer.
 Lacking cost effective common infrastructure and services in the industrial parks, including safety &
security, waste management, wastewater management, fire services, emergency management, repair and
maintenance of roads, parks, green belts, street lamps, lacking internal and external transportation
systems etc.
 Lacking models for collecting user charges or operating costs or other management costs, and for capital
costs on infrastructure development.
 Industrial areas not sufficiently attractive for investors.
 The common effluent treatment plants established in the industrial areas in India are facing problems of
taking action on defaulters, collection of user charges etc.
Existing management structures in German industrial parks reveal that sophisticated management provide a
powerful tool to enhance the competitiveness of industrial parks. The transfer of the German approach to
India and the application of the tools in the industrial areas would offer an approach to improve the situation
of the relevant parks.
The analysis brought to light, that in the legislation in the States of India such as the GIDC Act in Gujarat, and
the DIDOMA Act in Delhi, and in the mission of SIIDCUL in Uttarakhand, many of the addressed responsibilities
and obligations of industrial park operators are already considered – but not yet operational. Though the
situation is different in the three States, the knowledge transfer between them will facilitate their
implementation in the respective State.
This report made several recommendations:
From there it is derived, that the establishment of new management structures in Indian industrial areas will
be possible in providing the knowledge of examples for best practice and the corresponding toolbox, which is
comprised of:

 the establishment of corporations which are dedicated to operation and the development of the individual
park
 a set of KPI for the operation and development of industrial parks
 amendments in the corresponding legislation by means of additional articles to stipulate authorizations,
responsibilities, duties, and obligations
 a set of contracts concerning the ownership of the industrial park including the obligations of the parties
required for the specific situation prevailing in each industrial park
 a set of contracts concerning the provision of customized services to resident companies including
specifications of service levels, expected service quality, control procedures, and claims in case of default
 an efficient and effective organization to cover all governance issues in the industrial park

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 the enforcement of the industrial park owner and operator to impose sanctions on companies in case of
default
 the implementation of internal regulations (by-laws) in each industrial park with the
empowerment to enforce compliance.
With concrete activities to be started in 2017, the basis will be laid to introduce uniform management
structures into Indian industrial parks and to increase the attractiveness of the industrial parks hand in hand
with their international competitiveness.
In our investigations we found little evidence to suggest that these observations are no longer valid today,
although we have identified a few examples where much of the recommendations have already been applied
with outstanding success. This is discussed in more detail in subsequent chapters.
We concur with the conclusions and recommendations made by Weber Sites Consulting.

5.1.1.3 Other references

There are limited references available for the examination of CETP business model in India. Most reports
consider technology and engineering rather than the longer term operational and management aspects or at
best offer only some passing references to them.

5.1.2 Business model yardstick

Before the business model framework can be analysed we need to set a yardstick against which the models
can be measured. For this we consider the needs of all stakeholders. The ideal business model shall be the one
that can deliver the best overall outcome as measured against the yardstick.
In India, as in several other countries in the world, CETPs are built to serve industrial users within an industrial
park/cluster. What sets the India system apart, however, is that the CETPs are often regarded as a separate
entity to the overall industrial park’s services rather than one component of an overall package of services
including: roads and parking, street lighting, power, water supply, telecommunications, drainage, solid and
hazardous waste disposal land more. This is reinforced by the attention given to CETPs by policies, legal
instruments, environmental protection, financing and operational aspects being the responsibility of multiple
institutions (environmental regulators, different government departments, and others), rather than
considering the complete industrial park as a single economic entity. To properly understand the needs of
stakeholders we need to look, in the first instance, at the bigger picture of the industrial park as a whole.
We set out in the table Error: Reference source not found our understanding of the objectives and expected
outcomes of industrial parks from the perspective of the wide range of stakeholders from the Government of
India to individual citizens and the tools available to them to achieve best such objectives and outcomes.

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Table 5.16 Industrial parks, objectives / outcomes and tools available

Stakeholder Objective / outcome Principal tools available

Central Government  Maximisation of economic development through promotion of industrial  Policy and legislation to support the promotion of industrial parks in a
output and exports, employment. manner that can deliver the best outcomes. This includes legislation to
 Protection of the environment and optimisation of natural resources. enforce compliance with environmental standards where necessary.
 Financial and fiscal (tax) incentives to support development subject to any
restraints, e.g. agreements to limit state aid support to industry.
State Government  Maximisation of economic development through promotion of industrial  Policy and legislation.
output and exports, employment.  Financial and fiscal incentives.
 To attract industry to the state, either from other states or from abroad.  Provision of land and other resources.
 Protection of the environment and optimisation of natural resources.  Consents to develop (including licensing where applicable)
 Institutional expertise through state development agencies / boards.
Central Pollution Control  Protection of the environment and natural resources.  Regulations and standards for pollution control including limit levels for
Board (CPCB) discharges into the environment (air, land and water).
 Guidance and directives to State Pollution Control Boards.
 Guidance to policy makers in the Government of India.
State Pollution Control Board  Protection of the environment and natural resources.  Monitoring of the activities of industry and the industrial parks to ensure
(SPCB) compliance with regulations.
 Enforcement where necessary.
State Industrial Development  Industrial parks developed and fully functioning.  Financial support from state and Central government.
Corporations Agencies /  Revenue from the parks to recover costs (capital and recurrent)  Effective procurement procedures to develop the parks within efficient
Boards (SIDCs) budgets.
 Robust agreements with industrial users to ensure compliance with
contracted commitments with respect to operational practices and
financial obligations.
Investors  Parks constructed to a high quality and maintained at that level to ensure  Direct involvement in investment decision making including provisions for
that the investment’s value is protected. quality of materials and workmanship.
 A revenue stream sufficient to meet debt service to specified levels, e.g.  Loan agreements and covenants.
debt service coverage ratios.  Collateral provided by way of realisable assets and/or guarantees
 A revenue stream sufficient meet shareholder returns on equity (Central, state government or financial).
expectations  Charging arrangements to ensure profitability of the park as a going
 Security against default. concern.
 Liquidity, i.e. the investment is tradable.  Proper and effective competitive tendering to ensure best value in site
 Efficient / best value investment. development.

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Stakeholder Objective / outcome Principal tools available

Industrial Park Developers /  Detailed scope of work including design criteria to be applied.  Proper and detailed site investigations.
Contractors  Site selection appropriate for needs.  Agreements with owners and users with respect to design criteria.
 Best value for construction.  Detailed design in accordance with best available practice appropriate to
 Handover of assets to respective parties, e.g. power infrastructure to be needs.
adopted by power utilities etc.  Tendering and contract award procedures
 Effective construction supervision and project management.
 Effective training to operating staff on handover.
Industrial park / CETP Owners  A revenue stream sufficient to meet costs including debt service,  Title over assets where appropriate.
operating costs (to pay operators where applicable) and any other  Collateral provided by way of realisable assets and/or guarantees
necessary costs, including returns on capital. (Central, state government or financial).
 Long-term assurance of revenues  Long-term lease agreements with industrial tenants setting out all terms
 Protection against liability for damages as a result of non-compliance with and conditions necessary to ensure proper use of assets in accordance
statutory regulations and / or failure to meet service obligations with with any agreed limits to use and payments (including cost-reflective
users. charges to optimise behaviour responses). Agreements to properly
 Longer term-protection of asset value through proper maintenance of allocate risks to the party best able to manage the risks.
assets.  Agreements with operators to include security guarantees / insurance
that can indemnify park owners.
 Agreements with operators setting out obligations with respect to
environmental compliance including obligations with respect to
monitoring and reporting.
 Insurance.
 Agreements with operators to ensure effective capital maintenance of
infrastructure where this is an operator responsibility.
 Agreements with regulatory agencies with respect to obligations and
defined regulatory boundaries, especially environmental regulation.
 Licences where appropriate.
Industrial park management /  A revenue stream sufficient to meet operating costs (including lease /  Agreements with park owners (and principal management / operator in
operators (including sub- concession fees where applicable). the case of sub-contractors).
contractors)  Proper behaviour by users to ensure proper functioning of the  Agreements with tenants (where applicable) setting out payment terms.
infrastructure.  Cost reflective charging arrangements, e.g. based on quantity and quality
 Efficient behaviour response by industrial users based on price signals and of effluent.
other incentives.  Training and support from park developers / contractors.
 Protection against liability for damages as a result of non-compliance with
statutory regulations and / or failure to meet service obligations with
users.
 Capital maintenance and expansion investment procured properly and on
time to ensure continued long-term performance of the infrastructure.
 Proper functioning infrastructure.

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Stakeholder Objective / outcome Principal tools available

Industrial tenants  Well-functioning, reliable and affordable facilities (roads and parking,  Comprehensive agreements with park owner or operator setting out all
drainage, electricity, telecommunications, water supply, wastewater and obligations and terms including fair and impartial appeals processes.
other services).  Infrastructure installed to ensure effective monitoring where required for
 Long-term assurance of the quality of services. regulatory and /or payment purposes.
 Efficient management of the site include rapid responses to issues related  Clearly defined regulatory boundaries.
to services provided.
 Simple ‘one-stop-shop’ relationship with park owner or /operator rather
than dealing with multiple parties for different services.
 Rents and charges to be fair and cost-reflective as reasonable possible.
 Protection from adverse commercial impacts of bad publicity related to
park activities, e.g. serious pollution from the park could result in loss of
commercial opportunities from international clients that place a high
value on environmental protection.
 Indemnity from prosecution or liability for failings by park management,
e.g. pollution incidents.
General public  Improved economic development and knock-on benefits of the park’s  Successful park performance that is attractive to industry.
activities.  Reliance on regulatory agencies to properly oversee activities to ensure
 Employment opportunities. compliance with all environmental and safety regulations.
 Protection of the environment.  Public consultation processes for site development and operation.
 Public safety.  Communications and use of media.
 Legal.
 The ballot box.

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Although this analysis is focussed on the CETP aspects we have to consider the impacts on the overall
industrial park framework. Furthermore, it is highly probable that the design of a most effective business
model for wastewater treatment cannot be considered in isolation of the business model of the industrial park
as a whole.
Our analysis of existing and proposed alternative industrial park options is based on comparing each option to
how it can meet the objectives set out in the yardstick above.

5.1.3 Infrastructure components and regulatory boundaries

5.1.3.1 Multiple boundaries in the India model

In examining the business model options for the CETPS in India we have identified a specific feature in the
institutional and regulatory framework that has a material impact on the business model framework, i.e.
internal regulatory boundaries. The wastewater infrastructure in the industrial parks generally comprises four
principal components:
1. Metering and monitoring facilities at the point where the wastewater leaves the industrial user’s
premises.
2. Wastewater collection and conveyance (the sewer systems).
3. Wastewater treatment (the CETPs themselves), including discharge of treated wastewater to the
environment.
4. Sludge treatment and safe disposal.
The owner / operator of the CETP is generally responsible for the last two of these components and in some
cases the first. However, the responsibility for the collection and conveyance is generally not a CETP
responsibility and is usually left to the industrial park owner or operator, normally the SIDC. The only occasion
all four elements fall under a single management is when the CETP itself is under full public ownership by the
SIDC.
In the first instance the SPCBs are required to regulate the industries themselves including setting limit levels,
monitoring and enforcing all industrial discharges that directly enter the environment including air, land and
water. The unbundling of conveyance and treatment results in an additional regulatory burden in that the
SPCBs also regulate discharges into the conveyance system, including setting of limit values, monitoring and
enforcement, well before it enters the environment. The SPCBs also regulate the wastewater after it has been
treated at the CETP at the point where it is released into the environment. Furthermore, any failures in the
conveyance system that result in discharges to the environment are also subject to SPCB regulation. This is
illustrated in the figure Error: Reference source not found.

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Industry
Owner – private

Regulatory boundaries

Conveyance
Owner /operator–
development agency /
board

CETP
Owner/operator – SPV, private,
industry association etc.

Figure 5.9 Current generic framework illustrating multiple regulatory boundaries.

A recent ruling by the Green Tribunal 43 highlighted the resource constraints faced by the SPCBs, especially
unfilled posts, that hinder the proper carrying out of their duties. The multiple environmental regulatory
boundaries within the industrial parks add to the SPCBs’ resource pressures. Aside from increasing the
regulatory burden on SPCB this framework of regulation at several points in the flow chain within the
industrial park also presents opportunities for significant regulatory conflict and ambiguity with respect to
liability. This can also lead to sub-optimal decision making with respect to infrastructure development,
examples include but are not limited to:

 Disputes between CETP operators and industry with respect to liability in the event of a failure of the CETP
to comply with wastewater discharge standards.
 Industry deliberately ‘gaming’ the system to comply with SPCB standards by diluting its effluent but
placing additional burdens on the CETP operator. A report by Toxics Link (2000) 44 highlighted several
examples of improper behaviour by industries to circumvent compliance and avoid pre-treatment through
dilution and other methods, even though these actions result in environmental harm.
 Regulation over the SIDC’s responsibilities (the conveyance system) may not be consistent with the level
of regulation over private entities due the state-owned nature of the organisation. Penalties, especially
financial, in some respects, are meaningless, i.e. the state imposing a penalty on itself.
 The development of the treatment options may be sub-optimal. For example, it may be more efficient all
round for the CETP to treat wastewater at a higher level of wastewater loading than to require individual
users to undertake their own treatment to meet limit levels set by the SPCBs. While those limit levels exist
the individual industries have no choice but to install pre-treatment to meet the required levels even if
there is a cheaper alternative available through the CETP. Similarly, but less probable, in some cases pre-
treatment by individual industries to a higher quality standard as than set by the SPCB may be more
economically efficient than a CETP solution.

43
Green Tribunal, (05.02.2021),Aryavart Foundation (Applicant) Versus M/s Vapi Green Enviro Ltd. & Ors. (Respondent(s)), Order Original
Application No. 95/2018, (M.A. No. 1029/2018 &, I.A. No. 326/2019, I.A. No. 81/2020, I.A. No. 183/2020 & I.A. No. 184/2020).
44
Toxics Link, (2000), Common Effluent Treatment Plant - A solution or a problem in itself,

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5.1.3.2 Removal of internal regulatory boundaries as a partial solution

These issues, and more besides, suggest that part of the solution to the business model framework could
involve the reduction of the multiple regulatory boundaries and to confine boundaries to only those points
where wastewater and other pollutants enter the environment. These boundaries are:

 Individual industries:
o Discharges into the atmosphere.
o Waste disposal to land.
o Wastewater discharge to the environment (but not to the wastewater conveyance system). This
includes legitimate discharges and any unplanned accidental or deliberate non-permitted
overflows and discharges that leave the industry directly into the environment.
 Wastewater conveyance network:
o Structural failures and overflows that result in discharges of untreated wastewater into the
environment.
 CETP
o Treated wastewater discharges into the environment.
o Disposal of wastewater sludge to the environment.
o Failures and overflows that result in discharges of untreated or partially treated wastewater into
the environment.
In effect, the regulatory boundary should be determined by the point at which waste and other products enter
the environment. This is illustrated in the figure Error: Reference source not found.
A principal feature of this approach is that the CETP and the conveyance system are treated as a single entity
and managed as such. The following assessment of management models shall consider the impacts of the
current separation of responsibilities and how their amalgamation could potentially alleviate the problems
faced.

Industry
Owner – private

Inflow to network
regulated by contract
agreement

Conveyance & CETP combined

Regulatory boundary
Owner/operator – SPV, private, industry
association etc.

Figure 5.10 Reduced regulatory boundaries

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5.1.3.3 Regulatory boundaries in industrial parks in Germany

In Germany, there are laws for direct or indirect discharge in water bodies. The Federal Water Act requires
that each discharge needs an approval to be applied for by individual industries. For those industries located
within in industrial parks the legislation requires the industrial user to obtain and abide by the conditions of an
“indirect discharger permit”. This authorisation is generally required regardless of where the wastewater is
discharged to, including a private wastewater facility dedicated to the proper treatment and disposal of
industrial waste water. This includes on-site sewage treatment plant operated by a third party within an
industrial park. This is similar to the arrangements in India but with one major difference in that the
authorities can exempt the indirect discharger from the permit requirement if he has an equivalent
contractual arrangement with the operator of the private wastewater facility. This, in effect, removes the
regulatory boundary and replaces it with a contract obligation between the park owner / operator and the
industry as illustrated in the figure above. Furthermore, without an externally imposed regulatory boundary
pre-treatment requirements are generally not always necessary as the wastewater treatment plants are
designed to treat the range of products expected from the users in the park.

5.1.4 Overview of CETP business models in India

5.1.4.1 Model formats

The 2015 report by the IGEP provides an analysis of the existing business models for CETPs applied in India.
This report considers the principal models applied in India falling into three groups of models. They are:

 Full public ownership: Government agencies, such as the State Industrial Development Corporations
(SIDCs), finance construction, own and operate the complete industrial park including the CETPs and
associated infrastructure45. These agencies may elect to let out certain activities in the form of
maintenance contracts, most notably for the operation of the CETPs. The SIDCs are the landlords for the
development and enter into lease agreements with their tenants, i.e. the industries using the site.
 Full private ownership: There are a few complete industrial parks operated on the basis of full private
ownership. Where full private ownership is applied it is generally for individual components of the
industrial park, e.g. the CETP. This arrangement may comprise a private company that is already active in
the sector or through the creation of a corporate entity dedicated for this purpose, i.e. a special purpose
vehicle (SPV) either under Section 25 of the Companies Act or as a trust or as a society 46. An alternative
model is the build own operate (BOO). Full private ownership requires revenue streams sufficient for
longer-term recovery of investment expenditure and a return on capital invested.
 Public private partnerships (PPP): There are a range of public private partnerships including: management
contract; divestiture, concession; build-own-operate-transfer (BOOT); build-own-operate (BOO); build-
operate-Transfer (BOT); build-lease-transfer (BLT); build-transfer-operate (BTO); rehabilitate-operate-
transfer (ROT); and rehabilitate-own-operate (ROO). For the purposes of this analysis we have focussed on
those that relate to the procurement of new facilities and their subsequent operation. These include:
BOOT, BOT, BLT, and BTO47. The models in use in India are generally limited to BOT and BOOT and
focussed on specific components, in particular the CETPs. These two models are very similar in that private
investor secures the right to build and operate a facility for a defined concession period and charges users.
The principal difference between the two models is the legal status of ownership during the concession
period. Although there are subtle differences in the way these assets are procured, financed and owned
we consider them to be largely similar with respect to an assessment of their operational and financial
performance and we therefore consider them as a group.
45
Other organisations may adopt elements of the infrastructure once constructed, e.g. the local electricity distribution company may adopt the
electricity network infrastructure. The local authority responsible for highways may also adopt roads and drainage infrastructure although we
understand that this rarely, if ever, happens. Water supply and wastewater services are rarely adopted by local municipal utility organisations
46
The SPV would normally be created and by the industries to be served by it within the industrial park and will be represented on the SPV
board.
47
The remaining (management contract, divestiture, concession, ROT and ROO) relate to options for existing facilities to be reformed into a new
structure. We understand that effective privatisation of existing facilities is not on the current policy agenda but should be the subject of another
policy study for the future.

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The IGEP report cites many examples of these models and highlights their relative strengths and weaknesses.
Chapter 2.4 provides an outline description of relevant models as an extract of the IGEP.
Although these are described as ‘business’ models their principal purpose appears to be directed towards
facilitating the procurement of the infrastructure rather than its longer-term sustainability. This report
examines the wider interpretation of the business model framework to consider the wider institutional
relationships between all the stakeholders regardless of the contract relationships. In the subsequent
subsections we examine the wider relationships between the various stakeholders, focussing on wastewater
treatment but considering the industrial park as whole where relevant.

5.1.4.2 Analysis of the business models for CETPs employed in India

Annex Error: Reference source not found provides a detailed assessment of the three principal models that are
used in India as measured against the objectives of the many stakeholders. The results of the analysis are
illustrated in table below. We have assessed the degree to which the model satisfies the needs and
expectations of all the stakeholders as weak, fair or good. These assessments are largely relative, i.e. if a
particular model serves a particular stakeholder materially better than the alternatives its rating will reflect
such a difference. This assessment is largely subjective but it is nonetheless sufficient to arrive at a
comparative level of performance.
Table 5.17 Summary assessment of existing business model options for CETPs

Stakeholder Fully publicly owned Fully privately owned Public private partnership
model model (SPV company or (BOO, BOOT)
trust)
Central Government Weak Fair Good
State Government Weak Fair Good
Central Pollution Control Board (CPCB) Weak Weak Fair
State Pollution Control Board (SPCB) Weak Weak Fair
State Development Corporations / Fair Weak Fair
Agencies / Boards (SIDCs)
Investors Weak Fair Fair
Industrial Park Developers / Good Fair Good
Contractors
Industrial Park / CETP owners Fair Fair Good
Industrial Park Management / Weak Weak Good
Operators (including sub-contractors)
Industrial tenants Weak Fair Good
General public Weak Fair Good

The analysis is based on an assessment of the robustness of the various models. In practice there may be
specific examples of models that perform contrary to the results of this analysis largely due the commitment
of the individuals in the SIDC, operator and industry to adhere to expectations rather than the strength of the
business model itself.
The analysis suggests that the fully publicly owned model is the least likely to satisfy the needs and
expectations of the many stakeholders. The only entities that appear to be partially or well satisfied with this
arrangement are the SIDCs themselves and their contractors. The areas of concern with this model relate to:

 A burden on the state and Central government treasuries.

 Multiple regulatory boundaries creating opportunities to avoid responsibilities.

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 Limited powers of environmental enforcement (the state imposing penalties on itself is meaningless). The
state government’s economic interests in attracting and keeping industrial investment in the state may
unduly influence the degree to which the SPCB can exercise its functions 48.
 Poor track record in raising revenues sufficient to meet longer term capital maintenance obligations
resulting in deterioration of assets.
 Poor enforcement of revenue collection resulting in insufficient resources to properly operate the
facilities.
 Industry badly served by the infrastructure that may have adverse impacts on its commercial activities.
 General public dissatisfaction resulting in legal actions and environmental protection featuring high on the
political agenda.
Some but not all of these concerns are resolved in part through the SPV model, notably the partial removal of
state and Central government financial burdens. Some issues remain and further concerns are introduced
including:

 Potential conflicting interests with respect to the need to assure sufficient finance to maintain the CETPs in
the longer term versus the commercial interests of the industrial users. When the users themselves are
also the owners of the CETP these conflicts of interest are real and probable.
 The problems associated with multiple regulatory boundaries persist and even worsen with the separation
of ownership between the CETP and the conveyance system.
The PPP models considered are a significant improvement but with respect to environmental protection and
investor interests they are still less than ideal. The remaining and additional areas of concern are:
 The issue of multiple regulatory boundaries is unresolved.
 The responsibility for the conveyance system, outside the normal PPP arrangement, remains with the
SIDC. The performance of the CETP is, to a degree, dependent upon the performance of the conveyance
system which is the weak link in the chain.
 Multiple administrative responsibilities are created, e.g. PPP operator and SIDC having separate
responsibilities and quite different contractual arrangements with the industrial tenants.
 A mismatch between PPP contract life and the useful lives of the assets can create tensions between
investors and users, i.e. investors require recovery of investment expenditure costs over the contract
period pushing user charges higher than they would otherwise need to be. This is exacerbated by lenders
to PPP contracts that generally demand short repayment terms that can create cash flow pressures 49.
 The longer term nature of the PPP contracts does not always provide for consumers to benefit from
efficiency gains or protect PPP operators from the risks of a changing operating / regulatory environment.
 A PPP contract is always at risk of default. In the event that that the PPP contractor is unable to secure the
revenue stream necessary to finance its activities and reward shareholders the contractor could simply
walk away. This is not an improbable prospect; there are many instances, albeit in other sectors, where
PPP contracts have broken down, e.g. several UK rail franchise operators have simply walked away when
the franchise was no longer profitable. Robust measures to reduce or eliminate this risk are possible, e.g.
financial guarantees and other instruments, but these will add to the cost and have the potential to
undermine the viability of the PPP initiative.

5.1.4.3 Successful business models for industrial parks in India and elsewhere
Although the totally privately owned and PPP options as described above have their potential weaknesses this
does not mean that they are guaranteed to fail. In fact, with proper design they can and have proved to be
48
Green Tribunal, (10.07.2019), News item published in "The Asian Age" Authored by Sanjay Kaw
Titled "CPCB to rank industrial units on pollution levels", None vs several representatives of State pollution control boards (Respondent(s)), Order
Original Application No. 1038/2018. Paragraph 14 states “We reiterate that economic development is not to be at the cost of health of the public
and in violation of law of the land. Unless the polluting industries tackle the problem they have created, their operations have to be
stopped/suspended.”
49
Keynote address delivered by Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India at the Annual Infrastructure Finance Conclave
organised by SBI Capital markets Limited at Agra on August 9, 2013. The speaker commented on what he termed as ‘asset liability mismatch’. He
stated, “ . . . .if, as going concerns, banks can rely on retail deposit to fund projects for 8-10 years, they might as well do so for 13-15 years.”

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successful in India in some instances. We have identified several industrial parks that are either fully privately
owned by an outside agency or owned by the users of the park (an SPV model) where the services provided to
industry are highly successful and environmentally sustainable. A common feature of these models is that they
are not models designed for the CETP only but rather models for the industrial park as a whole.

5.1.4.3.1 Case study - Gujarat Eco Textile Park50

The Gujarat Eco Textile Park is an example of a privately owned and operated industrial park promoted under
the SITP Scheme of the Ministry of Textiles, Government of India. It was established as an SPV, Gujarat Eco
Textile Park Ltd (GETPL), owned by 27 members that comprise the industries that use the park. The members
themselves financed the initial investment which comprised the development of all services including: roads,
street lighting, drainage, water supply, wastewater (including a CETP), solid waste management, power supply
(including a self-contained power generation plant) and more. In addition to the utility services the park also
provides ancillary services including: training centre, laboratory services, worker’s canteen, bank, hospital,
workers’ hostel, and emergency services etc. The SPV calls upon its members to contribute towards future
investment requirements including expansion and upgrading of facilities such as the CETP51.
The SPV members are effectively shareholders in the SPV and as such they effectively own the infrastructure
and the plots of land they occupy. Their shareholding is a tradable asset which can be sold. It is not clear if the
shareholding is a suitable asset for collateral purposes.
The SPV has a management structure that manages the operations of the Industrial park. The management
arm determines the charges for the services which comprise a mix of unit charges for water, wastewater,
power etc. plus fixed charges for other services (roads, lighting etc.). The management has established
detailed charging structures for services provided to the occupants.
The performance of the park, including the wastewater services, is regarded as highly successful and is
considered a model for future industrial park development in India.

5.1.4.3.2 Case study – Brandix India Apparel City52

Brandix India Apparel City (BIAC), located in the port city of Visakhapatnam (in the state of Andhra Pradesh,
India), is a fully private sector developed industrial park. Its business model is to attract investors to a site that
brings together a vertically integrated value chain to collaborate optimum efficiency for branded apparel
clothing in textiles.
The site is 1000 acres (400 ha) and includes a wide range of ready to connect services for investors (roads,
drainage, water supply, wastewater (including a CETP), solid waste management, power (with a dedicated
substation connected to the main grid) and telecommunications. It also provides professional services to
support investors develop their industrial infrastructure as well as communal and social facilities such as
offices, training centres, banks, guest houses, recreation and sports facilities, health centres. The company has
also supported the communities off-site through health and education projects in the surrounding area.
The site describes itself as a “….one-stop, industry-specific hub, creating a ‘plug-n-play’ production
environment that is second to none. All apparel-manufacturing related requirements – sourcing,
transportation, speedier documentation processing, and authorization from a single point – are therefore
provided.”
Brandix developed and owns the industrial park. They sell or lease the land parcels to industries. Brandix
charges the site occupants for the services provided. Effectively, Brandix operates as a mini municipality.
An incentive provided by the government for Brandix and its occupants is the duty free tax status. It is outside
the scope of this project to analyse the details and the impact of this incentive but any reduction in end user
50
https://getp.in/
51
The CETP has a provision of expanding the capacity from 60 MLD to 100 MLD
52
https://brandix.com/inspired-solutions/what-we-do/brandix-india-apparel-city

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costs resulting from setting up within the park will encourage industry to move there which, in turn, adds to
longer term viability and sustainability.

5.1.4.3.3 CHEMPARK53 , Germany

The Weber Sites Consulting Report provides an in depth examination of the CHEMPARK operation in Germany.
We summarise below some of the key findings.
CHEMPARK is a large industrial park comprising three major sites in Germany hosting a large proportion of
Germany’s chemical industry. In total it covers 11 km 2, 1300 km of utility pipelines (of which 640 km is sewage
pipes), over 100 km of roads, over 100 km of rail, the electricity and gas networks, and more. It also provides
ancillary services to the park’s tenants such as safety services (firefighting) and services specific to the
chemical industry such as laboratory analytical services. The responsibility for the operation of the services
provided by CHEMPARK is assigned to CURRENTA GmbH. From CURRENTA’s website
(https://www.currenta.com/home-en.html ) they provide:
“Services required to support the infrastructure at CHEMPARK further include power grids, pipeline networks
and pipe bridges, as well as roadways, railways, sewers, docks and water supply and treatment systems. As
many as 600 employees in the CHEMPARK & Safety department work to ensure safety at CHEMPARK, both
inside and out. Their responsibilities include conventional safety services, such as site security, fire protection
and emergency rescue, as well as forging relations with neighbours, the political community and government
authorities.
“In the area of supply and disposal services, CURRENTA supplies the manufacturing plants with all the required
forms of utilities, from electricity and steam, to compressed air, refrigeration and various technical gases. As a
specialist in safe disposal solutions, CURRENTA manages all processes involved in disposing of and recycling
waste in its own hazardous waste and waste air incineration plants, landfills and recycling collection centres.”
- History of development

In the first half of the 20th century the state supported large chemical companies, such as Bayer in the case of
CHEMPARK, in the development of industrial parks. Following the Second World War the government divested
itself of these assets to the private sector. Once privatised they became successful models to attract many
other industries to the parks by providing efficient services benefiting from economies of scale and that these
services were tailored to meet specific industry needs.
- Business model

The CHEMPARK organisation comprises three principal elements:

 Bayer Real Estate (BRE): owner of the land and general buildings in CHEMPARK. BRE leases the assets to
CURRENTA together with an operational contract to operate the industrial park. BRE also has multiple
lease contracts with the resident companies.
 CURRENTA as operator of CHEMPARK has multiple service contracts with the resident companies
 The resident companies lease their sites from BRE and have service agreements with CURRENTA.
Figure below illustrates this arrangement.

53
http://investors.chempark.com/startpage.html

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Figure 5.11 CHEMPARK organisational and contracting structure (Source: Weber Sites Consulting, 2017)

- CURRENTA – the park operator

CURRENTA is a private company who is the ‘operator’ of CHEMPARK. This company was spun off from Bayer
AG in the course of the company's restructuring in 2002 54. (until 2007 company name was Bayer Industry
Services GmbH & Co. OHG - BIS). In 2020 it was sold to Macquarie Infrastructure and Real Assets, 100% of
shares.
As for most industrial parks in Germany, CURRENTA’s role is to operate the full services provided in the park
and to charge the users for the service through robust contract provisions. Competition between parks to
attract industry generally ensures high quality services and competitive charging arrangements. Over time
CURRENTA has evolved from a basic utility services provider in the park to a more comprehensive customer
focussed overall service provider and facilitator supported by an open governance framework that helps to
steer and develop the industrial park. This open governance framework comprises committees, including
representations of the industries in the park, to determine development, operating rules and many other
activities.
- Environmental regulation and compliance

Although German legislation (Federal Water Act) requires industry to have an approval to discharge
wastewater through an “Indirect discharger permit” this requirement can be waived if the user has an
equivalent contractual arrangement with the operator of the private wastewater facility, in this case the
service agreement between CURRENTA and the resident industry. It is CURRENTA, as a whole, that has the
discharge permit.
This arrangement imposes significant responsibilities onto CURRENTA and the resident industries including:

 As the holder of the water discharge permits CURRENTA manages the complete disposal of all wastewater
requiring treatment and is the managing body on behalf of the resident companies for any legally
prescribed sewage charges and taxes.
 Estimation of future wastewater charges and taxes to resident companies based on contracted loads and
volumes.
 Analysis of resident companies’ wastewater and to advise companies on wastewater issues.
 Management of wastewater connections.

54
Prior to 2007 the operating company was Bayer Industry Services GmbH & Co. OHG – BIS, but subsequently changed its name to CURRENTA.

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 Where necessary, providing advice with respect to any pre-treatment requirements. In practice this is
rarely necessary as the CURRENTA wastewater treatment plants are designed to meet the loads and
volumes from the resident companies.
 Monitoring of wastewater flows from industries and necessary actions in the event of exceeding limit
values.
 Storage of hazardous wastewater for specific treatment where necessary.
 Other wastewater management activities such as blending of wastewater to protect the performance of
the treatment plant and to minimise charges and taxes.
 Round the clock support.
German legislation empowers operators, including CURRENTA, to enforce compliance with environmental
standards through financial penalties and, in extreme cases, through enforcement notices to resident
companies to cease operations. These provisions are set out in the service contracts but have the weight of
legislation to back it up. These contracts also set out the internal regulations, codes of practice and
enforcement powers.
These arrangements have been successful, not solely by the strengths of the contracted agreements but also
by the responsible attitudes of the resident companies, and their employees, who place a high value on good
environmental and social behaviour. The net result is a high level of compliance and virtually no recourse to
the legal process to settle disputes.
These contracts also allow for any penalties imposed on CURRENTA for non-compliance with environmental
regulations to be passed on to one or more resident companies should they be proved to be the root cause of
the non-compliance.
The framework is used not only for ChemPark but also other similar industrial parks in Germany but some
differences in level of enforcement exist, e.g. the contracts used by the BASF Industrial Park in Ludwigshafen
take a more robust line on enforcement than does CURRENTA in CHEMPARK.

5.1.4.3.4 Philippines
The Philippines has nearly 250 industrial parks, some publicly and some privately operated. Some of these
industrial estates have installed centralised wastewater treatment facilities as incentives to locator companies
and to comply with legislation that requires wastewater management systems (CWTF- centralised water
treatment facilities) to be established in economic zones.
As both domestic and process wastewaters are discharged in CWTF, the industrial estates require industries to
pre-treat their process wastewater to standards set by operator of the CWTF (comparable to sewage
characteristics) prior to discharging into the CWTF. The treatment plants are generally based on biological
treatment systems such as activated sludge and the sequencing batch reactors/digesters. Industries are
required to perform pre-treatment of wastewater, obtaining wastewater discharge permit, and carry out self-
regulation, monitoring and reporting. However, there is a wide variation in policies and standards from one
economic zone to another even among privately owned or publicly owned industrial estates. Some of the main
issues in industrial estates include:

 lack of an environmental operating standard accepted by all industrial estates

 lack of environmental monitoring systems
 lack of efficient and sustainable management organisations
 lack of financial resources for establishing and maintaining environmental protection facilities. Some
industrial estates are not equipped with CWTF and solid waste management systems.

5.1.4.3.5 China
25% of wastewater in China comes from industrial sectors with manufacturing, textiles, coal, and industrial
agriculture accounting for half of this production. Chinese law requires that wastewater be collected and

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treated before being released into the waterways but few factories comply because of the high cost involved
and low monitoring and enforcement levels.
Despite having an annual installed treatment capacity of around 90 billion tons, the actual amount of
wastewater treated in China shows a utilisation rate of approximately 50%. Industrial in-factory or on-site
wastewater treatment facilities are typically built using private funding but public funding on common effluent
treatment plants for industrial parks is increasing due to the more stringent environmental regulations and
enforcement. Polluting companies have been shut down and the central government has directed provincial
governments to merge smaller sized factories into industrial parks with centralised pollution control facilities.
However, a lack of coordination between central and local governments and a lack of oversight by local
governments on industrial parks means that often factories dump wastewater into rivers, canals, sewers,
seepage pits to avoid treatment costs. Local governments seem unable to address these problems with the
result that many brand new wastewater treatment plants end up unused while toxic sludge is illegally
discharged into the rivers. Central initiatives to build wastewater treatment plants should be strictly
coordinated with local governments that provide monitoring and enforcement. For example, municipal
governments who issue discharge permits to treatment plants do not communicate that information to local
environmental regulators, who are tasked with monitoring contaminant levels. Frequently, wastewater
treatment plants are fined for above-regulation output after unknowingly accepting wastewater far too toxic
for their treatment capacity.
It is necessary to clarify responsibilities between local environmental regulators, the industries, the industrial
parks, and wastewater treatment plants and define operable standards for the treatment plants.
Additional issues are the lack of specific standards for wastewater treatment plants, currently mostly relying
on urban wastewater regulations, which don’t include harsh industrial contaminants, and the lack of
infrastructure.

5.1.4.3.6 Bangladesh
The textiles and leather industries in Bangladesh are significant contributors to the national economy.  These
industries, however, are highly polluting and the effects have resulted in demands to improve their
environmental performance. New industries are obliged to include details of effluent treatment facilities in
their planning applications and prior to commencement of their industrial activities they must secure an
environmental clearance certificate. Although they are obliged to meet the statutory environmental standards
many do not, and many of the older and smaller industries have no treatment facilities at all. Regulatory
enforcement is largely ineffective with individual industries more willing to pay the small fines that incur the
cost of remedies.
The government has recognised that the CETP approach may provide benefits of economies of scale and
although supported in principle by the industries there is an unwillingness for the industries to contribute to
the necessary investment costs. In some cases, the government to has responded by making commitments to
construct CETPs but these have not always come to fruition and the onus is still on individual industries to
make their own arrangements for wastewater treatment.
The more successful CETPs in Bangladesh are within the number of Export Processing Zones (EPZs) established
by the Bangladesh Export Processing Zones Authority (BEPZA). These CETPs collect and treat effluent from all
connected companies within the EPZ. The connection to the CETP is provided by BEPZA. Further, the CETP
establishment has also been promoted as a business unit within the EPZ, which is expected to make profits on
the treatment of the effluents.
Industries in the EPZ are charges a tariff for the amount of effluent they discharge into the system. This tariff is
determined by BEPZA. Industries are at liberty to construct their own pre-treatment facilities to reduce their
charges.

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The BEPZA (in addition to the industrial units) is an executing agency within the EPZs (BEPZA constructs the
connections between industrial plots and the CETPs as part of the infrastructure built on-site), and DoE is the
monitoring agency. Outside the EPZs, the industries are expected to execute treatment initiatives, and DoE
remains the monitoring agency. In sum, while the industrial units within BEPZA have economic incentives
(thanks to BEPZA's efforts) in addition to the regulatory disincentives (from the DoE) to treat their effluents,
the units outside are subject to the normal system of regulatory disincentives enforced by the DoE alone.
This model is similar to the successful models identified in Germany, India and elsewhere where the CETP is an
integral component of the industrial estate and that internal regulatory boundaries are largely removed.

5.1.5 Summary findings of existing business model arrangements

The evidence to date, supported by this analysis, suggests that although PPP arrangements for the CETPs
through BOT and BOOT appear to be better solutions than the alternatives of publicly owned facilities or
facilities owned by industry through SPVs they are still less than perfect and there is room for these models to
be improved upon.
A principle barrier to improving these models is the current restraint on the scope of responsibility assigned to
the PPP operator, i.e. confined to the CETP only. Our analysis suggests that there is significant scope to
improve the models by expanding the scope to include, as a minimum, the conveyance network, but, possibly
better, the complete industrial park and all services therein.
The observations from India lead us to believe that attempts to design a business model specifically for the
CETPs in isolation of the business model for the overall industrial park are unlikely to succeed in the longer
term. The more successful models in India and Germany have a common feature in that the business model is
for the complete industrial park and all facilities provided by the park owner / operator rather than a specific
model for the CETP. Furthermore, these examples show that the private sector has demonstrated itself to be a
viable vehicle for the initial development and subsequent operation bringing into question the role of the
SIDCs in this area. The role of government should be confined to that of a facilitator for development rather
than an implementation agency.
A further change that needs consideration is the removal of regulatory boundaries that are internal to the
park’s overall activities; the necessity and practicalities of the regulation of effluent by the SPCBs at several
points in the effluent flow, but before the effluent enters the environment, is questionable.
The CHEMPARK model, Germany, provides for the control of effluent quality upstream of the CETP to be set by
contract obligations between the park owner and the tenants provided it is supported by robust enforcement
provisions. External environmental regulation by the statutory regulatory authorities is determined by the
boundary at which point the effluent (treated or untreated) enters the environment.

5.1.6 Formulation and evaluation of alternative business model options

5.1.6.1 Identified problems

Our analysis of the existing business models used for CETPs in India has identified several problems that create
adverse environmental and economic outcomes. They include:

 Fragmented institutional arrangements within the industrial park (CETP, SIDC etc.).
 Multiple regulatory boundaries several of which are internal to the business park.
 The separation of ownership and responsibilities between wastewater conveyance system and the CETP.
 Tensions between CETP owners and users, especially with respect to pricing of services, that can result in
charges less than necessary for the proper functioning of the CETP, in turn leading to falling levels of
service and non-compliance with regulatory obligations. This is exacerbated when the CETP is owned by
the industries it serves.

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 Regulatory enforcement is not as robust as it could be, due in part to the multiple regulatory boundaries
described above but also to competition pressures at state level to protect the economic interests of the
industrial users.
 The industrial users’ commercial interests can often over-ride their ethical responsibilities to protect the
environment.
 ‘Gaming’ of the system by users to avoid liabilities for non-compliance with environmental obligations
even though their actions result in environmental harm.
 Improper behaviour by users and ineffective enforcement measures, especially if the improper behaviour
is an activity that is not necessarily an environmental regulation issue but rather a contract relationship
issue, e.g. meter tampering.
 Weak pricing structures that are insufficient to meet longer term capital maintenance requirements and
do not encourage economically efficient behaviour responses.
 The actions to address the CETP issues in isolation of the wider business park activities fail to capture
optimum overall solutions, i.e. a sticking plaster rather than the cure.
 Funding mismatches between asset economic lives and financial requirements.
Although the PPP arrangements in India when applied to the CETPs only seem to be the best approach so far
many of the above issues persist to varying degrees.

5.1.6.2 Formulation and evaluation of improved business model options

From the analysis so far related to the existing business models the involvement of the private sector is the
direction of travel to improve the performance of the industrial parks. Out analysis of alternative options
considers how the private sector strengths can be leveraged to deliver a fully functioning working model that
can deliver the best overall outcome for all stakeholders. To do this we have considered the issues, remedies
and the options for business models that can best deliver the remedies.

Area Issue Remedy Business model requirement

Macro - Burden on Central and Private sector investment Business models such as BOT and BOOT for CETPs
economic state treasuries for short- to develop industrial can relieve the burden on the governments’ financial
term investment and parks (not just the CETPs) resources this could be improved upon by mobilising
longer-term support. and all associated private capital for the development of the industrial
infrastructure. park as a whole
State level competition to Regulatory enforcement Largely a political responsibility outside the direct
attract industry that to be truly independent control of any business model. However, the
could lead to a relaxation of any undue influence by business model should be designed such that it (and
of regulation at the cost the state government or its users) can be effectively regulated.
to the environment. any other party.
Improved accountability
of regulatory agencies.
Regulatory agencies to be
adequately resourced.
Industry’s commercial Industry to actively Well-designed business models that treat industry as
interests under threat support protection of the a partner can encourage environmental protection
from bad publicity related environment. but at the same time need to be robust enough to
to poor environmental ensure compliance with regulations. Risk and liability
compliance. properly allocated.
Environmental Multiple regulatory Removal of internal Business models to include conveyance systems and
protection boundaries and their regulatory boundaries. possibly extended to all infrastructure services
adverse impact on Consolidation of related within the industrial park.
effective regulation. infrastructure into a Internal regulatory boundaries to be replaced with
single responsibility, i.e. binding and robust contract and enforcement
conveyance and provisions.
treatment to be
combined as a single
responsibility

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Area Issue Remedy Business model requirement

Ineffective or inconsistent Removal of internal As above.
regulatory enforcement regulatory boundaries.
by SPCBs. More effective regulation
over SIDCs where
financial penalties have
little or no impact.
Removal of regulated
activities from SIDCs, e.g.
conveyance system.
Limited control over Effective enforcement of With the recommended removal of the regulatory
quality of industrial limit values. barrier between industry and the conveyance system
effluents. to be replaced with enforceable contract obligations
setting limit values. These limit values can also
include contracted capacities (volume and quality
parameters) for charging purposes. Other limit
values (non-charging) should be binding.
The contract should be supported by legal
instruments to allow emergency recourse to legal
means to ensure compliance, e.g. injunctions
requiring actions to be taken. Legal counsel to be
consulted with respect to the practicalities of such
arrangements.
Micro- Charges for services Charges to be set to a A private sector owner should have the freedom to
economic below cost recovery level sufficient to finance set prices to meet its costs but still offer protection
levels. the proper carrying out of against monopoly behaviour. Competition to provide
the services including efficient services to industry should in itself deliver
return on capital where efficient pricing but if necessary the business model
applicable. could include provision for periodic re-assessments
of charges by an independent body (a quasi-
economic regulator) supported by an appeals
system.
The charging arrangements should provide for
periodic (annual) determination of required
revenues together with a process to true-up
surpluses / deficits from one year to the next.
Charges for services not Charges set to send A private sector owner should have the freedom to
effective in delivering economically efficient set charges on a cost reflective basis. This could be
effective economically price signals to industry, set on the basis of a pre-determined formula in the
efficient behaviour e.g. charging on the basis contract arrangements or based on principles.
responses. of the Mogden formula or Principles based charging is more effective as it can
similar. respond to changing circumstances but this would
Agreements on limit need to be supported by a well-designed open
values for charging governance framework whereby the charging model
purposes and how they can be scrutinised and modified when necessary.
are applied. The contracts between owners and users need to be
specific about limit values of parameters for charging
purposes. The contracts should allow for increases or
decreases in capacity to be applied for and charges
reset accordingly.
Poor revenue collection Charges to be Enforcement provisions to be included in the
from industrial users enforceable contract arrangements to ensure prompt payment.
resulting in inadequate Industry could be required to lodge deposits or
financial resources guarantees as part of their lease agreements.
If the private operator was responsible for the
complete business park the payment obligations for
the wastewater could be included as part of the
overall lease agreement thereby potentially giving
greater leverage and authority over enforcement
measures.

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Area Issue Remedy Business model requirement

Asset-liability mismatch Mechanisms to match In theory a system to buy-back assets at the end of
revenues with economic the concession should result in economic charging.
costs rather than In practice this buy-back could be perceived as a risk
compressed into a and is unlikely to be priced into concession bids.
contract period. An open ended arrangement with no time limit, e.g.
Opportunities to leverage full divestiture of an existing industrial park or a BOO
funding on longer terms. arrangement for a new industrial park would
facilitate better economic charging.
If the arrangement included the whole park and not
just the wastewater infrastructure, and that the
owner had full title to the land, the capacity to raise
finance on longer terms would be much improved
due to the high value collateral that could be
offered.

The above analysis suggests that there are several opportunities to improve the business models with a view
to ensuring the longer term financial and environmental sustainability of the industrial parks and the CETPs in
particular. They include:

 Widening the scope of the services provided to include the conveyance system as a minimum. This should
be accompanied by a removal of the regulatory boundary between the industry and the entrance to the
conveyance system and to replace it with robust and enforceable contract provisions between the service
provider and the industry.
 A more radical approach is to develop a framework where the service provider is responsible for the
overall industrial park and all services therein through a BOT or BOOT type contract.
 This approach could be taken further through the privatisation through a mechanism that is as close to full
divestiture as is legally possible in India that provides for perpetual rights to operate the industrial parks
by the private sector. . This approach is similar to successful models elsewhere in the world. These include,
in India, Brandix India Apparel City and Gujarat Eco Textile Park, and in Germany, CHEMPARK and others.
 To make these options work effectively the contract arrangements between the service provider and the
tenants need to cover a wide range of services and to ensure an efficient allocation of responsibilities and
risks.

5.1.6.3 Recommendations for alternative business models

The analysis of the existing arrangements suggests that rather than focusing purely on the CETP the business
model should consider the business model for the industrial park as a whole. With a few exceptions, this is a
significant departure from the general arrangements for industrial parks in India. Evidence from Germany and
elsewhere suggest that industrial parks are best managed as a complete package of services for which
wastewater treatment is only one of many. The examples of successful models in India and Germany that
provide a wide spectrum of services ranging from basic utility services of water supply and power through to
more industry specific services such as site safety and analytics, and even social amenities, clearly demonstrate
the benefits to industry and the wider economy of such an arrangement.
In developing such a framework for India there will be many areas that would need to be addressed through
legal provisions, contracts and other mechanisms.

5.1.6.3.1 Ownership of assets

A pre-requisite to raise capital for site development or refurbishment is high quality security or collateral. In
the case of industrial parks, the best form of collateral is ownership of the assets including land. This is a
complex legal area outside the scope of this study. The land ownership model can include title of individual
plots retained by the park owner with tenants’ rights secured by long term leases subject to annual rents.
Alternatively, the park developer could sell the development plots to investors as fully serviced plots whereby

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the developer can recover the investment outlay through the sale of the plots. With both options legally
binding conditions will be imposed on the plot owner / tenant regarding activities that can and cannot be
undertaken. The value of the collateral offered is largely dependent on the revenue stream the park can
generate. An industrial park that can generate revenues from a wide range of services (not just wastewater) is
likely to have greater collateral value and lower risk than revenues from a single service such as wastewater.

5.1.6.3.2 Charging for services

The integrated business park model will include arrangements for industries to be charged for the services.
This will include fixed charges for static services, e.g. road maintenance, drainage, security, etc. plus charges
based on consumption for things such as water supply, wastewater, energy, telecommunications, analytical
services and more.
For optimum performance charges for all services should be as cost-reflective as reasonably possible. For
wastewater services in particular cost-reflective charging means charging not only on the basis of the volume
of wastewater collected and treated but also the quality of wastewater, normally based on a few key
parameters such as BOD, TSS and, on occasion, pH.
In February 2020 GOPA Infra investigated options for charging for wastewater in industrial parks in India based
on the application of the Mogden formula 55. This report provides a detailed description of how the Mogden
formula could be applied to CETPs in India and the necessary conditions precedent for its implementation. For
an integrated industrial park structure covering all infrastructure services it is anticipated that overall charges
will be based on an itemised schedule of charges for each service, one of which would be wastewater and
could be set on a similar cost reflective basis.
To protect against monopoly behaviour in the pricing strategy safeguards may be introduced, such as an
independent arbiter to scrutinise charges, either on a regular basis or in the event of an appeal by one or more
of the served industries.

5.1.6.3.3 Contract administration and dispute settlement

The relationship between the park owner / service provider and the industries using the site will be bound by
detailed contracts between the parties. These contracts should seek to cover all potential eventualities but
occasions will arise when issues are in dispute in which case the contract should set out a dispute resolution
process including arbitration in extreme cases.
The contract arrangements shall set out the responsibilities and obligations of service provider and service
receiver. These will include standards and limits to abide by, and in the case of wastewater this will include
limits on the volume and content of the industrial effluents. These conditions are central to the effective
provision of services to all users. To ensure full compliance there must be a rigorous zero tolerance
enforcement protocol as part of the contract including:

 Effective monitoring of behaviour and practices.

 Effective monitoring of effluents.
 Charging arrangements (including penalty charges) to deter exceeding contracted capacities and
limitations.
 Rapid response mechanisms for transgressions including enforcement notices to cease activities.
 Further enforcement measures including legal injunctions.
 In the extreme, options for the suspension of the agreement and the removal of services resulting in the
closure of the business.

55
GOPA Infra, Feb 2020, Development of a financial tool for CETP sustainability and a guiding document for CETP contract

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Similarly, the industry would need assurances that the services provided will be reliable and continuous. The
agreement could provide for a guaranteed standard of service which the users may be entitled to an agreed
level of compensation56, in the event that the service fails to meet the agreed standard of service.

5.1.6.3.4 Relationship with regulators

The industries using the park will be bound by regulatory requirements as for any other business. This will
include environmental regulation with respect to pollution control. However, as mentioned in the earlier
analysis, the internal regulatory boundaries should be removed and replaced with contracted requirements.

5.1.6.4 Recommendation for the development of new industrial parks

The analysis herein concludes that the business model that can deliver best the longer-term financial and
environmental stability needed for optimum economic benefit is one that considers the industrial park as a
whole and not the CETP as a separate entity. The private sector has clearly demonstrated its ability to deliver
such models including the initial investment for development. Furthermore, the industrial parks’ longer-term
sustainability can be strengthened if the role of the private sector was assured in perpetuity. Our
understanding of the legal barriers in India is such that, aside from special economic zones, full private
ownership by the private sector is not normally possible as the land for such parks is normally obtained under
‘public purpose’ (equivalent to eminent domain in other legal jurisdictions) and that land acquired in such a
manner cannot subsequently be sold unless it is surplus to needs or through insolvency 57.
To overcome this constraint there are options the can provide the longer-term benefits that divestiture could
offer but without divesting title in land. Two principal options are to create an ‘Infrastructure Investment Trust
(InvIT)58 or a joint venture (JV) with the SIDC. These models have been applied successfully in India in other
sectors, e.g. highways, and there is no reason why these models cannot be extended to industrial parks.
The InvIT model would retain tile of the land with the SIDC but the ownership of the infrastructure assets and
the perpetual rights to operate and charge tenants would belong to the InvIT, in turn owned by investors
through shareholdings.
The JV model, used in India for highways, is probably more appropriate for industrial parks. This would
comprise an agreement between the SIDC as the land-owner (or land lease holder), and the private investor as
the operator of the infrastructure. In many respects this is similar to the Chempark model in Germany where
Bayer Real Estate (BRE)is the owner of the land and general buildings but leases the assets to CURRENTA
together with an operational contract to operate the industrial park.
For a JV the SIDC will form a JV as a company incorporated under the Companies Act, 2013. The risk allocation
is such that the SIDC is assured of share of profits (dividends) but is not liable for losses. If the land is owned by
the State Government, the lease will transfer to the joint venture company from the SIDC. This is similar to full
divestiture except that the land is never physically removed from the Government’s asset books. Since most of
the members of the Board of Directors of the JV are from the private party, undue government influence is
minimised. Typically, the SIDC will not be permitted by the Government to sell its equity in the JV, but nothing
stops them from acquiring the private partner’s shares (except financial wherewithal, maybe). The private
partner can also sell its shares allowing the SIDC “first right of refusal”.

56
Compensation for failure to provide a full service would not normally cover consequential loss (loss of business) but rather limited to loss of
production etc. This is a complex area for which specialist legal counsel is required to set out the degree to which compensation could be
provided.
57
There are examples of ‘private’ industrial parks but in the absence of any governing law, most promoters (developers) simply assemble land
(private transactions), develop some basic and rudimentary services (if at all), sell the plots and remove themselves from the longer-term
responsibilities, leaving matters to an association of industrial unit owners who may or may not have the wherewithal to manage affairs in the
common territory.
58
InvITs are established in accordance with the Indian Trusts Act, 1882 with the objective of undertaking investment activities as an InvIT in
accordance with the Securities and Exchange Board of India (Infrastructure Investments Trust) Regulations, 2014.

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For other sectors the apportionment of the shareholding for the JV partners is about 25-30% for the SID and
70-75% to the investor. The actual apportionment will depend upon the value of each party’s contribution and
other factors, e.g. risk allocation59.
Furthermore, the private party may splinter into multiple ‘group companies’ to firewall liabilities of a particular
service line from others. For example, SIDC of some State forms a JV with M/s ABC called M/s SIIDC-ABC. This
becomes the primary ‘holding company’, which is also the lessee of the land and can sub-lease land to unit
owners. However, for utilities, M/s ABC forms a separate JV with M/s PQR for water & wastewater including
effluents, another one with M/s MNP for roads & drainage, and yet a third one with M/s JKL for electricity. If,
for example, in the case of a dispute in wastewater treatment, only the JV between M/s ABC and M/s PQR is
subject to litigation, the SIIDC is safe.
The above models rely on robust governance arrangements with many safeguards built in to ensure that the
operator is compliant with its obligations and that the SIDC does not inhibit the ability of the operating partner
to secure the finance to properly meet its obligations (through user charges and other sources of revenue).
Since this joint venture company is largely a private entity, it can be held legally liable for underperformance
both by the association of unit owners, State Government (for violating terms of the concession by way of
deficient service standards) as well as by statutory authorities. However, the problem is that it also exposes
the SIDC to these regulatory risks. These could be mitigated through contract arrangements that effectively
indemnify the SIDC from such liabilities but their robustness against legal challenge is unknown.
Competition would be expected to ensure economically efficient charges to tenants, i.e. if charges were too
high business could choose to move elsewhere. The JV, as a body corporate, would be subject to regulatory
oversight and failure to meet statutory obligations, e.g. compliance with environmental obligations, would
result in regulatory enforcement measures that would have a direct impact on shareholder returns. However,
some safeguards may be necessary to protect against potential abuse, e.g. excessive profiteering. This could
be in the form of an oversight board including representation of the industrial tenants as well as the JV
partners. The arrangements should also provide for dispute resolution.
As full divestiture of industrial parks is not possible outside of the special economic zones the next best option
is to create a JV model as described above where the JV is responsible for the operation of the complete park.
Although the SIDC will still be a JV partner its role will change from that of an implementation agency to one of
facilitator and JV investor. The facilitator role would comprise identifying land for development and the
subsequent invitations to bid from potential private sector JV partners.

5.1.6.5 Recommendation for changing the way the existing industrial parks are owned and operated
The existing industrial parks that have been identified as failing, either on the basis of environmental
compliance or for other reasons, should be considered for restructuring along the lines of the JV model
described above. Establishing JV models for existing parks present additional challenges.

 Many such operations include legacy contract commitments such as service contacts. The JV
arrangements should provide for a mechanism to unwind such contracts through negotiation with the
contracted parties and at the same time ensure continuous running of the facilities.
 Establishing a JV could prove to be more complex for those parks / clusters that comprise a mix of public
ownership and private investment, e.g. where the CETP is constructed and operated through a BOT or
BOOT agreement. These legacy agreements involving long term investment could prove much harder to
unwind and, for the purposes of maintaining the country’s standing in the eyes of investors, such
agreements should only be unwound in very exceptional circumstances. For these operations we
recommend that the JV initiative could be delayed until after the existing agreements have run their

59
The shareholding of the SIDC in a JV company will be the fair value of land as derived through an appropriate mechanism defined in the Ind-VS
(the Indian adaptation of International Valuation Standards Council (IVSC) standards) whereas the private partner will make investments in
rehabilitation, replacement renewal & operations in the estate. The joint venture company may receive some viability gap funding from the
State/ Government of India or they can ask for the Viability Gap Fund scheme run by Ministry of Finance, Department of Economic Affairs.

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course or unwound by mutual agreement (including compensation where appropriate) and without any
adverse impacts on the country’s reputation as an investor friendly environment. Alternatively, they could
be adopted as a legacy agreement within the JV.
 The incorporation of an existing enterprise into a JV initiative will involve many complex financial and legal
issues to be defined in the agreement. This includes ownership of any accounts receivable and
responsibilities for accounts payable at the transfer date, transfer of existing agreements with industry,
licence transfers where applicable, and more besides.
 Where the existing facilities are not currently meeting the required environmental standards it may be
necessary for the SPCBs to issue the new operator with time limited derogations that temporarily exempt
the operator from satisfying full environmental compliance. The derogation could set interim standards,
e.g. not to exceed current effluent quality characteristics, for the period of the derogation. This is
necessary to allow the new operator reasonable time to develop the necessary infrastructure to meet the
required standards. Once the necessary works are complete the derogation should be removed, even if it
is before the expiry data of the original derogation.
In all cases, existing and new industrial parks, we recommend that the regulatory boundaries between the
network and industry are replaced with contract boundaries.

5.1.6.6 Derogations – a necessary tool to ensure investor confidence.

5.1.6.6.1 International experiences with derogations

Derogations are a widely used tool for providing operators of facilities (industry and utilities etc.) sufficient
time to make changes necessary to their activities and infrastructure to comply with existing and new
environmental obligations without having to immediately shut down or curtail their activities with adverse
overall economic consequences. The system also provides owners and operators the confidence to invest in
the upgrading of existing operations that are currently non-compliant with statutory regulations without the
risk of being held immediately liable (criminal or financial) in the interim. The concept of the derogation is to
allow a deviation from the required standards (temporarily) rather than the alternative of shutting down or
curtailing the operation subject provided it can be supported by an overall positive economic case. For
example, a power generation facility may apply for a derogation to give it time to comply with the emissions
standards without the adverse economic impact of shutting down the facility.
A primary example of the use of derogations is the European Union’s Industrial Emissions Directive Article
15/460 which states:
‘4. By way of derogation from paragraph  3, and without prejudice to Article  18, the competent authority may, in specific cases,
set less strict emission limit values. Such a derogation may apply only where an assessment shows that the achievement of
emission levels associated with the best available techniques as described in BAT conclusions would lead to disproportionately
higher costs compared to the environmental benefits due to:
‘(a) the geographical location or the local environmental conditions of the installation concerned; or
‘(b) the technical characteristics of the installation concerned. The competent authority shall document in an annex to the permit
conditions the reasons for the application of the first subparagraph including the result of the assessment and the justification for
the conditions imposed.
‘The emission limit values set in accordance with the first subparagraph shall, however, not exceed the emission limit values set
out in the Annexes to this Directive, where applicable.
‘The competent authority shall in any case ensure that no significant pollution is caused and that a high level of protection of the
environment as a whole is achieved.
‘On the basis of information provided by Member States in accordance with Article  72(1), in particular concerning the application
of this paragraph, the Commission may, where necessary, assess and further clarify, through guidance, the criteria to be taken
into account for the application of this paragraph. The competent authority shall re-assess the application of the first
subparagraph as part of each reconsideration of the permit conditions pursuant to Article  21.’
This provision has been, and continues to be, widely used throughout the EU as measure to protect investors
from liability when they initially adopt failing infrastructure, including wastewater treatment plants.

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A recent document reviewing the use of derogations under this provision 61 describes how EU member states
have applied this provision. The document abstracts reads:
‘Article 15(4) of the Industrial Emissions Directive allows competent authorities to set, under certain specific circumstances, less
strict emission limit values in the permit than the emission levels associated with the best available techniques. Derogations are
considered a pivotal component of the IED as the application of Article 15(4) directly affects the effectiveness and relevance of the
IED, as well as wider competition in the Single Market. The objective of this study was to provide an overview of the use of Article
15(4) and of the approaches followed by Member States in their decision-making processes. The study compiled information on
Member State derogation procedures and on a selection of derogation case studies, illustrating their application.
‘A total of 105 derogation requests, i.e. applications at the installation level, have been reported by Member States of which the
majority have been granted (75). The study also identified 27 derogation principles that can be considered as high-level
recommendations on the application of Article 15(4) and could assist Member States in the assessment of future derogation
requests. The derogation principles are illustrated with exemplar practices from Member State derogation procedures.’
Member states have prepared their guidance documents for applying derogations including principles to be
followed, the information to be supplied with the application and the processes to be followed. An example
from the Scottish Environmental Protection Agency (SEPA) 62 provides a detailed but simple to follow guidance
on how derogations are applied for and how they are evaluated by SEPA. The principal points in this guidance
are:
 Derogation assessment is not a quick process and requires sufficient time to gather information and for
SEPA (the environmental regulator) to evaluate the request.
 The success of a derogation request cannot be guaranteed. Many eligibility checks must be satisfied
before SEPA can consider granting a derogation.
 It is for the operator of an installation to make the case for a derogation request and for the competent
authority to assess and decide whether derogation is appropriate.
 Article 15(4) allows the setting of a less strict emission limit value (ELV) and that it is not to be considered
an indefinite derogation but rather a temporary relaxation in the ELV.
 The operator must justify the request with detailed plans to bring operations to within the best available
technology associated emission levels (BAT-AEL) range and cease the requirement for derogation within
an appropriate timescale.
 SEPA has a policy position that derogation from the BAT-AEL range is not appropriate for new installations,
unless there are exceptional circumstances.
 Derogation cannot last for an indefinite period. SEPA has a policy position that ordinarily derogation
should be granted for a specified period only. This should be whatever is appropriate to allow the operator
to make the necessary upgrades to their installation and bring emissions to within the BAT-AEL range.
Where the proposals for derogation are justified on the basis of closure in the future, there must be a
clear commitment, plan and timescale for closure.
 The derogation process comprises: 1) site specific BAT assessment, 2) is the installation compliant with
legal requirements, 3) are the derogation criteria justified, 4) assessment of costs and benefits, and 5)
derogation decision.

5.1.6.6.2 The need for derogations in India to support investment in CETPs

The current legal framework in India does not provide for the SPCBs to award derogations. In theory this
should result in wholesale enforcement measures (including closure) by the SPCBs against many CETPs that
are reported to be non-compliant with the statutory limit values. In practice this has not happened due to a)
the concept of a state body imposing a fine on another state body (the SIDC) is irrational, and b) political and
economic considerations such as the impact of the closure of the CETP and the consequential costs to industry
can take precedence over environmental compliance.
The net effect is the SPCBs effectively turning a blind eye to non-compliance in many cases. This is, in effect an
informal and unauthorised derogation but without conditions stipulating the need for compliance with
statutory limit values within an agreed time frame. If, however, the CETP (and other infrastructure in the
industrial park) was to be adopted by a private sector operator as we have suggested in this chapter, the new
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Amec Foster Wheeler, Application of IED Article 15(4) derogations, March 2018.
https://circabc.europa.eu/sd/a/a9515429-6176-468c-840a-d251a62af8fb/AMEC%20Article%2015-4%20derogations%20AMENDED.pdf
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SEPA, IED-TG-44 Pollution Prevention and Control (Scotland) Regulations 2012, Regulation 25(12) – Derogation from BAT-AEL

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operator could suddenly find itself immediately liable (financial and criminal) for not meeting statutory
obligations. This would be a major disincentive for private sector investment in the sector even if the investor
has every intention to invest to restore the performance of the infrastructure to meet the statutory
environmental standards.
We recommend that the central and state legislatures consider amending the necessary legal instruments to
empower the appropriate authorities (the SPCBs in the main) with the power to grant derogations in the same
manner as applied in the EU, i.e. time limited, subject to a detailed commitment to meet standards and
supported by an economic justification. This will give investors time and confidence to invest in the
infrastructure without being exposed to the risk of enforcement measures between adopting the assets and
completion of the investment activities.

5.2 Procurement Models

The procurement processes are guided by the Procurement Rules specified by the Department of Finance in
the respective state, whereas there are certain overall guidelines specified by the Department of Expenditure,
Ministry of Finance, Government of India; with the agencies like the Competition Council of India, Central
Vigilance Commission, O/o Comptroller & Auditor General et al keeping a close watch in case of governmental
agencies or government grants are involved. Financing institutions may also stipulate the procurement
processes to be followed if they have stake in the venture. Procurement Models adopted maybe broadly
classified in the case of CETPs as Procurement of Works, Procurement of Services or a combination of both.
Procurement of Works maybe essentially through Engineering, Procurement & Construction (EPC) mode of
engagement in case client is taking care of the finances. Alternate models of procurement could be through
the multiple variants of Public Private Partnership models wherein specialist agencies are engaged to partner
and develop appropriate business models. Procurement of Services would be a pure case where companies/
agencies are engaged to operate the CETP established for a given financial consideration for a preset time
span.

5.3 Tendering procedures

CETPs are established through Open Tendering Process wherein the requirements are specified. This may also
include a Term tender for the Operations & Maintenance component. E-Tendering has been adopted by the
Government and e-procurement is the preferred mode with India moving towards Digitalization.
Various advance tendering processes like Swiss Challenge and Reverse Auction modes are also being explored
for which the Government procurement guidelines are being upgraded by various state agencies.

5.4 Contractual arrangements

The Contractual Arrangements can be direct as in the case of EPC Contracts or Term Contracts for the Services
procured. However, the Concessionaire Agreements are pretty long drawn legal documentation between the
developer and the public authority/ private entity like say Industry Association to enable the developer to
invest, develop and recover the cost and profit from the service rendered over the agreed concession period.
These agreements are carefully drafted to ensure the rights of the parties involved are duly protected.
In a typical CETP, a member agreement is made by each member industry with the CETP to convey trade
effluents meeting certain environmental parameters and quantity for an agreed tariff which will be escalated
on certain basis and that the member is bound to be penalized for violations and termination of services.

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6 MAJOR AVENUES OF INTERVENTIONS BASED ON NATIONAL AND

INTERNATIONAL BEST PRACTICES TO IMPROVE PERFORMANCE/
COMPLIANCE STATUS OF CETPS

6.1 Roles of CETP operators, member industries and SPCBs/PCCs

The effective functioning of the CETP requires close co-operation by the concerned stakeholders. The CETP
essentially being a common infrastructure built to take care of a common problem and is seen a systematic
way of outsourcing the responsibility of treatment of trade effluents, in a given geographic location by a
specialized agency while giving the advantages of the economies of scale. However, this also to a monopolistic
scenario wherein the member industries have no alternate service provider and pose business continuity risks
to the industries as the operations may directly depend upon the operational status of the CETP.
CETP Operator: The CETP Operator’s role and significance is defined by the business model on which the CETP
is structured – i.e. whether it is established as a co-operative NOT for Profit initiative by the industry
association, a utility infrastructure established by the State Industrial Authority/ Private Industrial Estate
developer as part of the mandatory/ basic facility to be established or a private investor who develops and
operates the utility on a pure business enterprise. Each business model or ownership type exhibits specific
character in its service outlook and business orientation. The CETP Operators successful operations is
dependent on the robustness of the legal and managerial systems in place with the given assumption that the
CETP is technically adequate and efficient to treat the quantity and quality of effluents it receives. The
Operator essentially is bound to transform his role from a mere Service Provider to Product seller wherein the
associated legal liabilities will get naturally attracted the moment the CETP gets upgraded towards reutilization
of its treated wastewater for process application or irrigation and all the more over a commercial engagement.

Hence, it is proposed to develop certain ‘Key Performance Indicators’ for the CETPs against which the CETPs
maybe benchmarked on an annual basis and published by the Ministry of Environment, Forests and Climate
Change, Govt. Of India. GIZ may consider piloting such initiative to establish a National Performance
Benchmarking System for the CETPs which could spur them to learn and excel from each other strengths.

Member Industries: The key stakeholder remains the member industries – the raison d’etre of the CETP; and
hence the CETP Operator is duty bound to provide the services to the member industries -i.e. Collection,
Conveyance, Treatment and Disposal of the effluents generated by the member industries in an
environmentally benign manner and in compliance with the regulatory requirements of the land; for a
mutually agreed consideration. The member Industry is duty bound to ensure that in compliance to the
agreement entered they pre-treat the effluents and send them to CETP and also make timely payments against
the bills raised as per mutually agreed tariff. The Member Industry may clearly note that their non-co-
operation or belligerence can not only harm the CETP (cause disruption of CETP operations due to techno-
commercial reasons) but also themselves and the fellow industry members of the CETP as it is in common
interest to ensure that the CETP operations happen smoothly and effectively.
The Member Industries through its Association need to be proactively involved with the Maintenance as well
as other Operations Committees’ of the CETP to ensure that the CETPs are also held accountable for the

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services they are being hired. Active and positive engagement of the Members can also help in developing
innovative ideas in developing alternate revenue streams and commercialization of by-products that could in
turn minimize the net payable to the CETP.
Regulators: (SPCBs/ PCCs): The CETPs were essentially conceptualized as a common/ co-operative
establishment to effectively treat the trade effluent generated predominantly by the Micro, Small and Medium
Enterprises (MSMEs) that do not have the wherewithal to establish and maintain systems; and dispose /
manage them in an environmentally benign manner and in compliance to the rule of the land. As the very
premise of the establishment of the CETP is to achieve compliance, and that it has also drastically reduced to
monitoring workload of the regulators; it becomes all the more pertinent on the law enforcers to maintain
close watch of the CETP operations over a combination of both Real Time Effluent Quality Monitoring Systems
as well as Manual sampling. A laxed enforcement system can encourage an unethical CETP Operator to also
get laxed on compliance levels. Further, the regulator needs to play an active role in the board of the CETP and
initiate action against erring member industries in the event of them comprising common interest on CETP.
The active role of the regulator also goes a great way in creating enable mechanisms or business environment
when the CETPs are to move towards Zero Liquid Discharge or reutilization in Processes. THE SPCBs also have a
proactive role to play to Create Awareness among the member industries in the event of a major regulatory
change to support them in transitioning to the new requirements. The regulator also needs to empathise with
the conditions of the member units/ CETP to ensure overall smooth functioning of the CETP.
Agencies like Ground Water Authorities need to create adaptive and enabling business environment to
encourage Treated Wastewater reuse/ recycling.

6.2 Automated mechanism to monitor quantity and quality of effluent

Monitoring & Surveillance Mechanisms at the Member Units, Conveyance Systems and at the CETP (Inlet and
Outlet) are to established to ensure transparent governance systems, billing systems and also for effective
contract management systems.
Currently CETPs are mandated to have Real Time Monitoring Systems at the Inlet and Outlet and the data has
to be directly transmitted to the servers of CPCB and concerned SPCB. Monitoring of Raw Water quantity
abstracted from the groundwater aquifers as well as the water table levels are also to be monitored and
reported.
Centralized Control Rooms maybe established in the CETPs to monitor each individual unit, conveyance
networks. Tamper resistant boxes maybe utilized to vandalization or tampering with the unit level monitoring
Systems. Automated Non return valves may also be utilized to ensure that effluent not meeting compliance
requirements are permitted to the CETP.
Integrated Plant SCADA can also provide for Remote Monitoring, Process Management as well as for
correlation of the Plant Performance.
Online Automated Auto Samplers can be installed in select conveyance network / nodes or in critical industrial
units for further validation tests. These samplers can be trigged on detection of any compliance breaches and
the legally acceptable representative samples can be collected and the same maybe utilized by the
enforcement agencies or CETP Operator to enforce/ inform the violator accordingly. MIDC has mandated
installation of Auto Samplers and Non Return Valves apart from the set of RTEQMS, by all industries that are
members of the Taloja CETP.

6.3 Skills and training requirements

Skill sets of the Plant Operator goes a long way in ensuring effective operation of the CETP. The Skill Council of
Green Jobs (SCGJ), Ministry of Skills Development & Entrepreneurship has floated standardized certification

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program for training, testing and certification of the Wastewater Treatment Plant Operators, Helpers and
Supervisors. Many programs were initiated to encourage CETP personnel participation.
It is proposed that it must be a mandatory provision in the CETP tenders that the O&M personnel deployed
must essentially be SCGJ certified Wastewater Treatment personnel only or maybe given a window of time by
when the personnel get the certification.

6.4 Strengthening of regulatory regime

The Enforcement of the Regulations and the framing of appropriate policies go a great way in ensuring
effective engagement of the stakeholders as well as creating the right business environment that could
encourage or mandate quicker adoption of policies like Treated Water Reuse/ Recycling.
Any laxity in enforcement of actions on environmental Non-Compliance would only lead to systemic failure of
the system. The SPCB mandated to enforce compliance at local level must be part of the Regulatory
Committee and Maintenance Advisory Boards of the CETP and also guide and support the CETP management.

6.5 Health, safety and security considerations

Health, Safety and Security considerations are key to the CETP Operations as well as during Constructions
Phase. The Safety protocols, PPEs, SOPs and mock drills are to be followed at the CETPs on a regular basis and
the personnel trained on the same.
The security systems are also to be engaged to ensure Any Unauthorized access to the utility campus is
immediately detected and actioned upon.

6.6 Enhanced revenue streams

For the CETPs to be sustainable, it needs to not only optimize its operational costs, but also proactively lookout
for opportunities to gain revenue from other waste / by product streams. As per the specific CETP conditions,
new revenue stream opportunities/ opportunities for process optimizations/ energy savings maybe explored.
This can, not only increase the profitability and sustainability of the CETP Operations but may also help in cross
subsidizing the tariff payable by the Member industries.
Of late, spin offs from the typical CETPs are customized facilities for Centralized Evaporation Facility, which
takes care of the highly concentrated effluent streams from streams like RO rejects, Spent Acid streams,
Solvent Recovery or Chemical Recovery plants are established as allied units which can not only bring in
additional revenue streams, but reduce the operating costs of the CETP. Alternatively, the CETP may utilize the
services of these facilities to manage problem waste streams.

6.7 Water positive industrial estates

New business models and concepts are evolving which would revolutionize the current concept of CETP to that
of transforming the facility into an Integrated Water Resource Management Utility of the specific Industrial
Estate wherein it is the sole agency that Supplies Raw Water to the industries and Treats the Trade and
Domestic effluents from the member units. This would necessarily require a see change in the vision, service
and business outlook of the entity, as well play a great role in graduating the Industrial estate into a Water
Positive with initiatives towards Rainwater harvesting too; along with the initiatives for treated wastewater
reuse and recycling.

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6.8 What is a business model?

A business model is an outline of how a company plans to make money with its product and customer base in
a specific market. At its core, a business model explains four things:

 What product or service a company will sell?

 How it intends to market that product or service.
 What kind of expenses it will face?
 How it expects to turn a profit.
Because there are so many types of businesses out there, business models are constantly changing — and
although we'll discuss some of the most common types below — there is no one-size-fits-all model that can be
applied to every business.
Essential elements of a business model include a unique value proposition, a viable target market and a
competitive advantage. Without those elements, you don’t have a way of generating revenue.
Business models aren't just about income — you also need to consider production costs and other factors in
order to see the full picture. What goes into creating a business model? Here are the 10 components you'll
want to keep in mind:

 Value proposition: A feature that makes your product attractive to customers.

 Target market: A specific group of consumers who would be interested in the product.
 Competitive advantage: A unique feature of your product or service that can’t easily be copied by
competitors.
 Cost structure: A list of the fixed and variable expenses your business requires to function, and how these
affect pricing.
 Key metrics: The ways your company measures success.
 Resources: The physical, financial, and intellectual assets of your company.
 Problem and solution: Your target customers’ pain points, and how your company intends to meet them.
 Revenue model: A framework that identifies viable income sources to pursue.
 Revenue streams: The multiple ways your company can generate income.
 Profit margin: The amount your revenue exceeds business costs.
These are the essentials that make up a business model, and they are likely to change as your business
matures. From the outset, you may not have a clear idea of what each of these components will look like for
your business.

6.9 Most common types of business models

Now that we've thoroughly answered what a business model is, let's break down the different types of
business models. As we've mentioned, there are a variety of types of business models — and they all can be
customized or changed based on the specific company or industry — doing so is often referred to as creating a
disruptive business model.
Although we're going to review 12 of the most common types of business models, you will find additional
types beyond those listed here.

6.9.1 Subscription model

A subscription business model can be applied to both traditional brick-and-mortar businesses and online
businesses alike. Essentially, as we explained in reference to Netflix, the customer pays a recurring payment on
a monthly basis (or another specified timeframe) for access to a service or product. A company may directly
ship its product in the mail, or you may pay a fee to use an app.

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Examples: In addition to Netflix, other businesses using the subscription model include HelloFresh, Beer Cartel,
StitchFix, as well as other streaming services like Hulu, HBO Go, and Disney+.

6.9.2 Bundling model

Exactly like it sounds, the bundling business model involves companies selling two or more products together
as a single unit, often for a lower price than they would charge selling the products separately.
This type of business model allows companies to generate a greater volume of sales and perhaps market
products or services that are more difficult to sell. However, profit margins often shrink since businesses sell
the products for less.
Examples: Businesses that use the bundling model include AT&T, Adobe Creative Suite and Burger King, as
well as other fast-food companies that offer value meals or deals.

6.9.3 Freemium model

The freemium business model has gained popularity with the prevalence of online and Software-as-a-Service
(SaaS) businesses.
The basic framework goes like this: a software company hosts and provides a proprietary tool for their users to
freely access, such as an app or tool suite. However, the company withholds or limits the use of certain key
features that, over time, their users will likely want to use more regularly. To gain access to those key features,
users must pay for a subscription.
You can see how Spotify follows this model — it gives users free and open access to its entire database of
music while sprinkling in ads between songs. At some point, many users opt to pay a recurring monthly fee for
the premium service so they can stream music without interruption.
Examples: Spotify, LinkedIn, Skype and MailChimp are all businesses that use the freemium model.

6.9.4 Razor blades model 

To understand the razor blades model, you can simply look to your local drugstore. You’ll notice that
replacement razor blades cost more than razors themselves.
Companies offer a cheaper razor with the understanding that you’ll continue to purchase more expensive
accessories — in this case, razor blades — in the future. For this reason, this model is referred to as the "razor
blades model."
In addition to the traditional razor blades model, you'll also see companies use the reverse razor blades model
— in which they offer customers a high-margin product and then promote the sales of lower-margin products
that accompany that initial product.
A classic example of this model is Apple iPhones and Macs — you purchase the high-margin item, the phone or
computer, and then Apple pushes additional products, tools, and services that accompany that item.
Examples: On top of razor companies, examples of the general razor blades model include Keruig, Brita, Xbox,
and printer and ink companies.

6.9.5 Product to service model

Imagine that you are the owner of a company that makes scooters. Let’s say you need two pieces of metal
welded together. You might ask another company to weld the pieces of metal together instead of purchasing a
welding machine yourself. In essence, this example shows how the product to service business model works.
Companies that follow this type of business model allow customers to purchase a result rather than the
equipment that delivers that result.

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Examples: Companies that use the product to service model include Zipcar, Uber, Lyft and LIME.

6.9.6 Leasing model 

Under a leasing business model, a company buys a product from a seller. That company then allows another
company to use the product they purchased for a periodic fee. Leasing agreements work best with big-ticket
items like manufacturing and medical equipment.
Examples: U-Haul, Enterprise and Rent-a-Center are all examples of companies that use the leasing model.

6.9.7 Crowdsourcing model 

Crowdsourcing involves receiving opinions, information, or work from many different people using the
internet or social media. These types of business models allow companies to tap into a vast network of talent
without having to hire in-house employees.
Some traffic apps, for example, encourage drivers to report accidents in real-time for the benefit of other app
users.
Examples: Wikipedia, YouTube, IMDB and Indiegogo are all examples of businesses using the crowdsourcing
model.

6.9.8 One-for-one model 

As the name suggests, the one-for-one business model means that a company donates one item to a
charitable cause for every item that is purchased. This model appeals to the charitable nature and social
consciousness of customers to encourage them to purchase a product or service, while also allowing both the
business and the customer to actually engage in philanthropic efforts.
Blake Mycoskie, the founder of TOMS, pioneered this form of social entrepreneurship.
Examples: In addition to TOMS, SoapBox, Smile Squared and Warby Parker are all companies that use this type
of business model.

6.9.9 Franchise model 

Of all the different types of business models, the franchise model is perhaps the one that people are most
familiar with — after all, we each see and likely visit franchise businesses often in our daily lives.
In short, a franchise works like this: A franchise is an established business blueprint that is simply purchased
and reproduced by the buyer, the franchisee. The franchiser, or original owner, works with the franchisee to
help them with financing, marketing, and other business operations to ensure the business functions as it
should. In return, the franchisee pays the franchiser a percentage of the profits.
Examples: Starbucks, Domino's, Subway, McDonald's and the UPS Store are all common examples of the
franchise model.

6.9.10 Distribution model 

A company operating as a distributor is responsible for taking manufactured goods to the market.
Hershey’s, for example, manufactures and packages its chocolate, but distributors are the agents that transfer
and sell the goods from the factory to a retailer. To make a profit, distributors buy the product in bulk and sell
it to retailers at a higher price.
Examples: Other examples of companies that use the distribution business model are HD Supply, Avent,
Cheney Brothers, and ABC Supply Co.

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6.9.11 Manufacturer model 

One of the most traditional business models, the manufacturer model refers to when a manufacturer converts
raw materials into a product.
Companies like Dell Computers or Hewlett-Packard, both of which assemble computers with parts
manufactured by other companies, would still be considered manufacturers.
Examples: Additional examples of this type of business model include Intel, Magic Bullet, Black + Decker and
LG Electronics.

6.9.12 Retailer model 

The last business model on our list is the retailer model.
A retailer is the last link in the supply chain. These businesses purchase goods from distributors and then sell
them to customers for a price that will both cover expenses and turn a profit. Retailers may specialize in a
particular niche, such as kitchenware, or carry a range of products.
Examples: This is a popular type of business model — used by big-name companies like Nordstrom, Home
Depot, Target and Best Buy.

6.9.13 How to choose the right business model ?

With all of these different types of business models, how do you choose the right one for your small business?
At the end of the day, there's no absolute answer to this question. Instead, the business model that's best
suited for you will depend entirely on the scope of your operations and the costs you may incur along the way.
To narrow down your options, you'll want to start with your small-business idea and then ask yourself the
following questions:

 How will my product or service benefit the customer?

 How will I generate revenue?
 Who’s my target customer?
 What start-up costs am I looking at?
 Which expenses will be fixed and variable costs?
 Do I need support from investors?
With the answers to these questions, you'll be able to gain a better understanding of how to structure your
business model.
In addition, it may be helpful to research other businesses that are similar to yours (especially competitors)
and see how they've structured their operations. This information will be able to inform your business model
generation, as well as suggest avenues you can take to differentiate your business from others out there.

6.9.14 The bottom line

Ultimately, mapping out your business model may feel overwhelming, especially considering doing so is just
one piece of planning and launching your business.
It's important to remember, however, that you can think of a business model simply as a plan that shows how
you'll make money. Plus, by putting the time and effort into outlining your business model now, you're taking
the necessary steps to set your business up for growth and success in the future.
Source: https://www.nerdwallet.com/article/small-business/what-is-a-business-model
Recommendations:

 Develop KPI for CETPs

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 Benchmark Matrix
For this reason, a framework of performance management called “Ten Attributes of Effectively Managed
Water Utilities” has been created, developed by the U.S. Environmental Protection Agency (EPA) to measure
the stability of the infrastructure network along with water resource adequacy and customer satisfaction.
The framework operates via an analysis of the current performance assessment conditions and looks to find
the priority areas of improvement, analysing new attributes to choose from and rank in order of importance
and degree of implementation. A crucial step of the Ten Attributes framework is the ability to choose from
the attributes, the practice areas (e.g. product quality, operational optimization) that are relevant to the
organization, and provide tools for performance improvement.

6.9.14.1 The KPI Institute Benchmarking study

Back in 2017, The KPI Institute conducted secondary benchmarking research and compiled it into a report
called “Key Performance Indicators for Water Utilities. Utilities Performance Benchmarking Report Series
2017”, which includes 35 companies located throughout five continents. All the 178 Key performance
indicators (KPIs) studied were clustered in five main domains:

 Customers (e.g. # Water quality complaints per 100 customers, # Overall communication index, # Billing
accuracy, % Customer calls responded within 30 seconds, # Population served – sewerage) – with 25 KPIs
documented;
 Operations (e.g. # Net energy consumption from water, # Treated water reservoirs, % Restoration of
unplanned water supply within 5 hours, # Treatment plants, # Average time to restore a sewer) – with 68
KPIs documented;
 Environment (e. g. # Greenhouse gas emissions, # Waste to landfill, % Solid waste recycled and used,
# Paper Use, # Total Net CO2 Emissions) – with 22 KPIs documented;
 Human Capital (e. g. # Senior Managers, % Female Employees in management positions, % Lost Time
injury rate, # Male employees, % Senior Managers) – with 61 KPIs documented;
 Corporate Governance (# Meetings to attend, # Employees eligible to attend meetings) – with 2 KPIs
documented.
This report was dedicated to the analysis of purely non-financial KPI applied to the water industry, under the
five main above-mentioned areas of expertise, reporting results for the 2011-2015 period. The Operations
side was the most documented cluster, including 68 KPIs out of the 178 analysed. Likewise, the indicators
were categorized into 6 main areas:

 Transmission network (e.g. # Treated water towers, % Earthquake resistant pipeline joints);
 Interruptions (e.g. # Interruption time (minutes), % Interruptions restored within 5 hours);
 Restorations (e.g. % Restoration of unplanned water supply, % Sewer spills attended within 1 hour);
 Operations quality (e.g. # Overall operation and maintenance index, % Yearly water losses);
 Key Processes (e.g. # Infrastructure planning and delivery, # Core financial processes).
 Water Consumption (e.g. % Non-revenue water, # Groundwater (megaliters).

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7 TEN ATTRIBUTES OF EFFECTIVELY MANAGED WATER SECTOR

UTILITIES

The Ten Attributes of Effectively Managed Water Sector Utilities describe desired outcomes that are applicable
to all water and wastewater utilities. The Attributes provide indication of where effectively-managed utilities
focus and what they strive to achieve.

7.1 Product quality

Produces potable water, treated effluent, and process residuals in full compliance with regulatory and
reliability requirements and consistent with customer, public health, and ecological needs.

7.2 Employee and leadership development

Recruits and retains a workforce that is competent, motivated, adaptive, and safe-working. Establishes a
participatory, collaborative organization dedicated to continual learning and improvement. Ensures employee
institutional knowledge is retained and improved upon over time. Provides a focus on and emphasizes
opportunities for professional and leadership development and strives to create an integrated and well-
coordinated senior leadership team.

7.3 Financial viability

Understands the full life-cycle cost of the utility and establishes and maintains an effective balance between
long-term debt, asset values, operations and maintenance expenditures, and operating revenues. Establishes
predictable rates—consistent with community expectations and acceptability—adequate to recover costs,
provide for reserves, maintain support from bond rating agencies, and plan and invest for future needs.

7.4 Operational resiliency

Ensures utility leadership and staff work together to anticipate and avoid problems. Proactively identifies,
assesses, establishes tolerance levels for, and effectively manages a full range of business risks (including legal,
regulatory, financial, environmental, safety, security, and natural disaster-related) in a proactive way
consistent with industry trends and system reliability goals.

7.5 Water resource adequacy

Ensures water availability consistent with current and future customer needs through long-term resource
supply and demand analysis, conservation, and public education. Explicitly considers its role in water
availability and manages operations to provide for long-term aquifer and surface water sustainability and
replenishment.

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7.6 Customer satisfaction

Provides reliable, responsive, and affordable services in line with explicit, customer-accepted service levels.
Receives timely customer feedback to maintain responsiveness to customer needs and emergencies.

7.7 Operational optimization

Ensures ongoing, timely, cost-effective, reliable, and sustainable performance improvements in all facets of its
operations. Minimizes resource use, loss, and impacts from day-to-day operations. Maintains awareness of
information and operational technology developments to anticipate and support timely adoption of
improvements.

7.8 Infrastructure stability

Understands the condition of and costs associated with critical infrastructure assets. Maintains and enhances
the condition of all assets over the long-term at the lowest possible life-cycle cost and acceptable risk
consistent with customer, community, and regulator-supported service levels, and consistent with anticipated
growth and system reliability goals. Assures asset repair, rehabilitation, and replacement efforts are
coordinated within the community to minimize disruptions and other negative consequences.

7.9 Community sustainability

Is explicitly cognizant of and attentive to the impacts its decisions have on current and long-term future
community and watershed health and welfare. Manages operations, infrastructure, and investments to
protect, restore, and enhance the natural environment; efficiently uses water and energy resources; promotes
economic vitality; and engenders overall community improvement. Explicitly considers a variety of pollution
prevention, watershed, and source water protection approaches as part of an overall strategy to maintain and
enhance ecological and community sustainability.

7.10 Stakeholder understanding and support

Engenders understanding and support from oversight bodies, community and watershed interests, and
regulatory bodies for service levels, rate structures, operating budgets, capital improvement programs, and
risk management decisions. Actively involves stakeholders in the decisions that will affect them.

7.11 Outcome oriented

The Attributes cover a range of desired utility outcomes in the areas of operations, infrastructure, customer
satisfaction, community welfare, natural resource stewardship, and financial performance.

7.12 Identify improvement opportunities

The Attributes provide useful and concise reference points for utility managers seeking to improve
organization-wide performance. They can best be viewed as a continuum of, or a set of building blocks for,
management improvement opportunities.

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7.13 Fit the unique needs of individual organizations

Water and wastewater utilities can use the Attributes to select priorities for improvement based on each
organization’s strategic objectives and the needs of the community it serves. Individual utilities will need to
tailor the timing, sequence, and degree to which they address each Attribute to their management and
community needs and circumstances.
Even as all utilities will need to approach improved management one step at a time, utility mangers involved in
the development of the Attributes believe increasingly excellent, overall utility management will emerge when
utilities address more, and eventually all, of the Attributes.
The Attributes are not presented in a particular order; utility managers can decide their relevance and relative
importance depending on individual utility circumstances.

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ANNEX 1 EVALUATION OF CURRENT BUSINESS MODELS RELATIVE TO STAKEHOLDER

OBJECTIVES
We set out below our assessment of the currently employed business models for CETPs in India based upon how they meet the objectives of the stakeholders. In this
assessment we rate as: weak, fair or good. We have not applied a weighting to the relative scores as this very much a subjective decision.
For this analysis we have considered three basic business models: fully public owned, the fully privately owned but in the form of a special purpose vehicle owned by
members of the industrial park tenants, and public private partnerships in the form of BOOT and BOT type contracts.

Option 1 – Fully public owned model

For the fully public owned model we have considered the framework where the state industrial development corporation / board is responsible for the provision of
services. This model can allow for outsourced activities such as operation and maintenance of the CETP but the private sector has no direct ownership responsibilities.

Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
Central Maximisation of economic development through The creation of industrial parks promotes Weak Government policy to consider wider economic implications
government promotion of industrial output and exports, development but with the removal of subsidies as for the development of industrial parks recognising the need
employment. per current government policy intentions the costs to align protection of the environment with commercial
will be passed on to industry and ultimately to interests. This could be extended to encouraging industry to
consumers. It can be argued that this will be adopt technologies that protect the environment. The
balanced by a reduced tax burden. industrial parks should be developed with this aspect in
The publicly funded model does not ensure longer mind, e.g. to provide facilities that can readily accept green
term maintenance of the assets that eventually technology such as solar energy.
impair the performance of the industries served by Overall rating: Weak
them.
Greater consumer awareness of pollution can
influence consumer choice and therefore CETP
failure could influence competitiveness (nationally
and internationally).

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Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
Protection of the environment and optimisation The fully public owned CETP framework has a poor Weak
of natural resources. track record of compliance with environmental
obligations with consequential damage to the
environment.
State government Maximisation of economic development through As for Central government above. Weak Competition to attract investment is to be encouraged but
promotion of industrial output and exports, state governments should avoid the moral hazard of placing
employment. economic development ahead of maintaining high standards
To attract industry to the state, either from State government influence over regulation can be Fair and the protection of the environment, leading to a race to
other states or from abroad. used as lever to secure industry to invest in the the bottom.
state (or encourage them to remain in the state) The state government to support the SPCBs in exercising
but this could come at the price of environmental regulatory authority over the SIDCs. In particular alternatives
and longer-term economic harm. to financial penalties are required as the state imposing a
It could also escalate as unhealthy competition fine on itself is somewhat futile.
between states to lower standards to attract Overall rating: Weak
industry.
Protection of the environment and optimisation As for Central government above. Weak
of natural resources.
Central Pollution Protection of the environment and natural It may be easier for the CPCB to exert influence Weak The CPCB should exert influence over the SPCBs to be more
Control Board resources. over publicly owned bodies to comply with effective in regulatory oversight of public owned industrial
(CPCB) environmental obligations but this is limited by parks.
availability of resources (financial in particular) Overall rating: Weak
made available to the SIDCs.
Evidence on actual performance suggests this
model fails to protect the environment.
State Pollution Protection of the environment and natural As for CPCB above. Weak The SPCBs should be more determined to enforce
Control Board resources. The willingness and ability of the SPCBs to environmental compliance and be more effective in
(SPCB) effectively enforce environmental compliance by regulatory oversight of public owned industrial parks.
another state owned entity is questionable. Overall rating: Weak
It is easier to regulate a single entity public owned
model (provide it is the same entity that is
responsible for the conveyance system) as it
partially removes multiple regulatory barriers, but
unless the barrier between the industry and the
conveyance system is addressed the regulatory
burden remains.

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Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
State Industrial parks developed and fully functioning. A single agency responsible for developing and Good The longer-term financial requirements for capital
development running the CETP should result in optimum design. maintenance need to be incorporated in rents and other
agencies / boards The SIDC should be able to access finance for charges to industry. These could be determined by an
effective capital maintenance and government independent assessment by a third party to ensure
lines of credit. transparency.
Revenue from the parks to recover costs (capital In reality once developed the SIDCs do not raise Weak Overall rating: Fair
and recurrent) sufficient funds for capital maintenance and assets
fall into disrepair.
SIDCs appear subject to undue influence from
industry to depress charges below cost recovery
levels. Assets fall into disrepair.
Investors Parks constructed to a high quality and The investors are primarily government (Central Weak Subsidies for capital investment are no longer available. The
maintained at that level to ensure that the and state). In this instance there is limited direct budgetary arrangements for publicly funded investment in
investment’s value is protected. investor interest in the protection of asset value. industrial parks need to accommodate options for borrowing
A revenue stream sufficient to meet debt service Charges are often below cost recovery levels. Even Weak from the banking sector or through bonds, supported by
to specified levels, e.g. debt service coverage if debt service is maintained it comes at the price state guarantees, where necessary.
ratios. of a lack of investment in capital maintenance. Loan covenants should include provisions to maintain the
A revenue stream sufficient meet shareholder Equity returns are not normally expected with Fair value of the assets.
return on equity expectations state investments. The stat generates returns Investment is required in existing industrial publicly owned
through improved economic activity and tax industrial parks to raise the standard to a level where their
receipts from industry. value can be realised through partial or full privatisation.
Security against default. State entities are insulated from default. Fair Overall rating: Weak
Liquidity, i.e. the investment is tradable. Provided the CETP is in good condition and the Fair
charges are such that the enterprise is (or could
be) profitable then privatisation is a potential
option.
Efficient / best value investment. Government investment in CETPs may lack the Weak
same degree of innovation that may be available in
other models.
Industrial park Detailed scope of work including design criteria The experience of SIDCs in developing industrial Good Overall rating: Good
developers / to be applied. parks should ensure that they well understand the
contractors scope or work and are able to produce effective
designs to meet the needs of prospective tenants.
Site selection appropriate for needs. The SIDCs can, through state government powers Good
of eminent domain, ensure optimum site
selection.

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Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
Best value for construction. Rigid state procurement regulations may adversely Fair
influence project management and construction.
Potential opportunity for rent seeking by
construction firms.
Handover of assets to respective parties, e.g. It should be easier to hand over assets from one Good
power infrastructure to be adopted by power state body to another than if it was a private
utilities etc. developer.
Industrial park / A revenue stream sufficient to meet costs SIDCs appear subject to undue influence from Weak SIDCs should resist pressure from industry to reduce charges.
CETP owners including debt service, operating costs (to pay industry to depress charges below cost recovery Suggest an independent body (such as a professional
operators where applicable) and any other levels. Assets fall into disrepair. accounting practice) who could be appointed to determine
necessary costs, including returns on capital. Users sometimes resist payment of due charges charges set to ensure effective operation and maintenance
and the park owners ability to enforce payment (including longer term capital maintenance).
obligations is sometimes ineffective. Overall rating: Fair
Long-term assurance of revenues. Revenues at risk if the facilities fall into disrepair Fair
and industry elects to move elsewhere.
Industry may take comfort from a state-owned
park that is unlikely to go insolvent and therefore
may enter into long-term lease agreements.
Protection against liability for damages as a Public owned entity largely insulated from liability Good
result of non-compliance with statutory in the event of non-compliance.
regulations and / or failure to meet service Industrial users could seek remedies from the
obligations with users. owner if they considered that the CETP was not
functioning as expected and resulted in damages.
Such liability would ultimately be absorbed by the
state government.
Longer term-protection of asset value through The SIDC track record of maintaining asset value is Weak
proper maintenance of assets. weak through neglect of essential capital
maintenance.

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Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
Industrial park A revenue stream sufficient to meet operating Charges are generally sufficient to meet operating Fair As above.
management / costs (including lease / concession fees where costs (labour, energy, chemicals, laboratory Greater enforcement of improper activities by industrial
operators applicable) services and other costs) but insufficient to finance users, including imposition of sanctions such as suspension
(including sub- capital maintenance. In the case of outsourced (or closure in the extreme).
contractors) operators through contract agreements the
Outsourced operators to be provided with comprehensive
operator is assured revenue through contract
details with respect to scope of work and resources
provisions. However, pressure can be brought to
expected. Competition should be applied to seek the best
bear on contracted operators to reduce the scope
outsourcing value (price and quality-based assessment) and
of work and resources to keep charges down
to avoid driving down prices once contracts are agreed.
resulting in reduced levels of service.
Consideration to be given to more economically effective
Proper behaviour by users to ensure proper Users sometimes abuse systems, e.g. meter Weak
charging arrangements to send price signals which in turn
functioning of the infrastructure. bypass, exceeding agreed limit values, etc. State
promote efficient behaviour response from industry. This
entities lack the incentives to protect the value of
however, requires a level of technology and sophistication
their infrastructure and/or protect their revenues
not normally associated with publicly owned entities.
stream to adequately enforce proper behaviour.
Overall rating: Weak
State employees may be potential targets for
undue influence in enforcement activities and
decision making.
Efficient behaviour response by industrial users Experience suggests that publicly owned and Weak
based on price signals and other incentives. operated facilities rarely employ sophisticated
charging arrangements to maximise optimal
behaviour responses. The technology required and
the level of expertise to apply such arrangements
is not normally available within the SIDC
structures.
Protection against liability for damages as a Public owned entity largely insulated from liability Fair
result of non-compliance with statutory in the event of non-compliance although an
regulations and / or failure to meet service outsourced operator and could be exposed to
obligations with users. liability through contract provisions.
Capital maintenance and expansion investment The SIDC track record of capital maintenance is Weak
procured properly and on time to ensure poor. This will result in an inability of operators to
continued long-term performance of the properly manage the systems. Furthermore,
infrastructure. without investment in expansion the systems
could become overloaded with increased industrial
loading also impairing the ability to properly
manage the systems.
Proper functioning infrastructure. As above Weak

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Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
Industrial tenants Well-functioning, reliable and affordable Even if the public owned entity has a contract Weak Industry to regard protection of the environment as a high
facilities (roads and parking, drainage, agreement with the industrial users that sets out priority in its activities. This could be reinforced by a
electricity, telecommunications, water supply, performance obligations experience suggests that requirement on tenants to provide an environmental
wastewater and other services). enforcement of such a contract may not be so easy protection policy as part of the occupancy agreement and
and the public owned entity can simply choose to that if the industry fails to adhere to the policy it will be
ignore its obligations with limited or no considered in breach of the agreement.
consequences. Similarly, the agreement should place responsibilities on the
Long-term assurance of the quality of services. Although under a public owned framework Weak industrial park owner to meets its environmental obligations,
longevity of the park is assured this does not mean possibly providing for compensation for damages incurred by
the quality of the services will remain high. a failure on behalf of the park owner, e.g. damage to a
Experience suggests that that the quality business’s reputation by association if the park was publicly
deteriorates significantly over time. identified as failing in its environmental obligations.
Efficient management of the site include rapid Public owned entities can be slow to respond to Weak Overall rating: Weak
responses to issues related to services provided. complaints about the quality of services and the
need for repairs as required.
Simple ‘one-stop-shop’ relationship with park The single public owned entity responsible for the Good
owner or /operator rather than dealing with whole industrial park provides a single point of
multiple parties for different services. contact with the owner / operator rather than
having to deal with multiple parties.
Rents and charges to be fair and cost-reflective Rents and charges may be set as fairly as Fair
as reasonable possible. practicable but may fall short of a level of cost
reflectivity sufficient to influence behaviour
responses.
In many cases charges are set at minimal levels to
cover operating costs only which may suit tenants
in the short term but will pay the price in the
longer term with failing levels of service.
Protection from adverse commercial impacts of Public owned entities may not consider reputation Weak
bad publicity related to park activities, e.g. damage to be as important as it is to the industrial
serious pollution from the park could result in users and therefore be less responsive to any
loss of commercial opportunities from concerns raised.
international clients that place a high value on In the extreme, industries may relocate to another
environmental protection. park (even in another state) to protect their
reputation in the eyes of their customers.
Indemnity from prosecution or liability for The multiple regulatory boundaries create Weak
failings by park management, e.g. pollution uncertainty with respect to liability.
incidents.

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Fully public owned model

Stakeholder Objective / outcome Assessment Rating Recommendations
General public Improved economic development and knock-on The interests of the population are aligned with Weak The media should scrutinise and inform the general public of
benefits of the park’s activities. the interests of industry. In a competitive the overall impacts of the industrial parks.
environment Industry will reside in those areas Environmental protection should feature as an election
where the greatest overall benefits lie. The public issue.
owned model is less competitive with respect to
The public should be made aware of any threats to public
quality of services.
safety resulting from the industrial parks.
Employment opportunities. The opportunities for employment by the Fair
Overall rating: Weak
industries are dependent upon the attractiveness
of the park to attract business. The public owned
model has limited attractions for industry relative
to other models.
For the industrial park itself a public owned
framework is more probable to draw upon human
resources in the local area whereas alternative
models may use labour from elsewhere, even from
another state.
Protection of the environment. The evidence suggests that the public owned Weak
model is ineffective at protecting the environment,
partially attributable to regulatory capture.
Public safety. The evidence suggests that undue political Weak
influence over the public-owned model is more
readily accepting of offering low charges to attract
business but at the cost of providing a low level of
service. This may attract those businesses who
may not take their public duty of care
responsibilities as seriously as they should. This
could potentially lead to incidents where
employee and public safety could be at risk.

Option 2 – Fully privately owned model

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For the fully privately owned model we have considered the commonly used framework of a special purpose vehicle (SPV), either as a company or a trust, The SPVs for
CETPs in India are normally owned by the industries served by the facilities in the industrial park. The fully privately owned model analysis does not consider the option of
the CETP owned by a private entity that has no relationship to the industrial park tenants. Such an option is more related to the public private partnership arrangements
discussed as option 3.

Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Central Maximisation of economic development through The privately owned model is aligned to the Good Government policy to consider wider economic implications
government promotion of industrial output and exports, current government policy of no longer subsidising for the development of industrial parks recognising the need
employment. the development of industrial parks and the CETPs. to align protection of the environment with commercial
The privately owned model has a higher interests. The focus should shift from the CETPs in particular
probability of maintaining value and protecting the to the role of the industrial parks generally as a means to
nation’s assets. promote economic development and in particular policies to
encourage the participation of the private sector.
It will effectively remove implicit subsidies (from
under-pricing of publicly funded services) which Overall rating: Fair
will add to the operating costs of industry but this
will be balanced by the added value of a higher
level of service.
Protection of the environment and optimisation With effective regulation and the removal of Fair
of natural resources. potential conflicts of interests there is a higher
probability of full compliance with environmental
regulations.
The incentive for profits, however, could create
opportunities for operators to take short cuts that
could have adverse impacts on the environment.
State government Maximisation of economic development through As for Central government above but extra Fair State government should use the power at their disposal to
promotion of industrial output and exports, protections in the form of quasi economic develop industrial parks with private sector finance. These
employment. regulation is needed to substitute the oversight powers include eminent domain to secure land for
that the state government has over the SIDCs. development and access to resources where necessary, e.g.
To attract industry to the state, either from Under a fully privately owned framework the state Fair water supply.
other states or from abroad. government may not have as much influence in Any agreements should be clear and specific regarding risk
areas that could be used to induce potential allocation and liabilities, especially with respect to
industries. This will be substituted by private environmental considerations.
sector inducements to attract industry which may Overall rating: Fair
be more efficient overall.
Inducement should not come at the price of
existing tenants effectively subsidising new tenants
and some financial protections may be desirable to
ensure equality.

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Protection of the environment and optimisation As for Central government above. Fair
of natural resources.
Central Pollution Protection of the environment and natural Provided there are no external pressures there is a Weak Any private sector agreement should ensure that it fully
Control Board resources. reasonable probability of environmental complies with any specific CBCB requirements (that are not
(CPCB) compliance. covered at state level).
A fully privately owned model will be obliged to Overall rating: Weak
adhere to obligations although private owners may
be more willing to resist CPBC directives, even
through the legal means.
Evidence on actual performance suggests this
model fails to protect the environment.
State Pollution Protection of the environment and natural As for CPCB above. Weak Consideration should be given to the remit of the private
Control Board resources. Regulation of a privately owned entity is more owner to include the conveyance system.
(SPCB) effective as financial penalties will have a direct Although there are procedures for consents to construct and
impact on the entity’s returns. However, this operate CETPs they may not be adequate for a fully privately
needs to be balanced by more rigid monitoring owned model. Consideration should be given to a
and enforcement measures that are resilient to comprehensive licensing system where the licence sets out
legal challenge. all the obligations of the licence holder including not just
Separation of the CETP and the conveyance system obligations with respect to compliance with environmental
creates multiple regulatory boundaries with regulations but also principles to be adopted in other areas,
multiple regulated entities including the SIDC e.g. fairness in charging arrangements.
adding to the regulatory burden. Overall rating: Weak
The regulatory boundary between the industrial
user and the conveyance system still needs to be
addressed in this model.

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
State Industrial parks developed and fully functioning. If the private owner is responsible for developing Weak Consideration should be given to the remit of the private
development the site, then care is needed to ensure the CETP is owner to include the conveyance system and to leave the
agencies / boards aligned with other infrastructure needs. SIDC responsibilities confined to the other services in the
The private developer may have to absorb a high industrial park.
degree of risk with respect to the ramp-up period Although a private owner may better determine the needs
to full site occupancy whereas the SIDC could for financing operating costs and capital maintenance,
absorb the risk through state government safeguards need to be in place to prevent or limit monopoly
support / loans. This could be alleviated by effects and to encourage efficiency (without adversely
advance tenancy agreements and phased impacting on the quality of service. Consideration should be
construction. given to some form of economic regulation through an
There is a risk of a mismatch between well independent assessment of charges on a regular basis.
maintained privately owned and operated CETPs Overall rating: Weak (if confined to the CETP only)
and deteriorating conveyance systems. This could
lead to conflict and assignment of liabilities.
Revenue from the parks to recover costs (capital The private owner / operator should have a Weak
and recurrent). separate agreement with the tenants that set out
obligations and charging arrangements and where
charges should be sufficient to meet cost recovery
expectations including a margin / return for
shareholders.
The agreement should contain robust
enforcement measures in the event of non-
payment.
The SIDC, however, will still need a sufficient
revenue stream to operate and maintain the
conveyance system resulting in potentially two
charges for a single service.
Investors Parks constructed to a high quality and Investors for a privately owned model will demand Good Loan covenants should include provisions to maintain the
maintained at that level to ensure that the high quality assets and that the assets’ values are value of the assets.
investment’s value is protected. protected through loan covenants from banks and
shareholder pressure.

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
A revenue stream sufficient to meet debt service A private owner would only enter the market if Fair The banking sector should consider options for longer-term
to specified levels, e.g. debt service coverage revenues were reasonably well assured through a lending for private investment in business parks.
ratios. contract agreement with current and prospective If legally possible the use of partial risk guarantees may give
tenants through firm contracts in advance of comfort to investors.
investment decision making.
Consideration should be given to the option of an ‘owner of
Lenders may regard this activity as medium to high last resort’, i.e. a body to take over the assets and liabilities
risk resulting in high interest charges and short in the event of bankruptcy to ensure services to tenants are
loan periods (no more than 10 years). uninterrupted.
A revenue stream sufficient to meet shareholder Lending over periods shorter than the life of the Fair Overall rating: Fair
return on equity expectations. assets will create cash flow stresses for equity
investors who may only expect to see real returns
only after near full debt repayment. Higher
charges in the short term to fund borrowing costs
may not be acceptable to tenants.
A degree of commercial risk is to be expected and
will form part of the risk premium for this type of
investment.

Security against default. The principal collateral that can be offered as Weak
security against default is the assets themselves as
a going concern. The assets are immovable and as
such banks may not consider the collateral to be
sufficient. If the SPV is owned by the industries
additional security could be provided through
them.
Liquidity, i.e. the investment is tradable. Provided the CETP is in maintained in good Fair
condition and the charges are such that the
enterprise is (or could be) profitable then the asset
will have value and could be sold to another
investor if necessary. This may be problematic if
the SPV shareholders are the industrial concerns
served by the CETP.
Efficient / best value investment. Private sector investment will, by definition, seek Good
best value .

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Industrial park Detailed scope of work including design criteria An SPV comprising industrial users are well placed Fair Consideration should be given to the design and construction
developers / to be applied. to advise their designers as to their specific of the CETP as part of the overall construction of a business
contractors requirements but they may not be conversant with park rather than treating it as a separate activity.
wastewater system design technology and the Overall rating: Fair
options available and will be significantly
dependent on the advice of the design engineers.
If designed as part of the overall industrial park the
design team will most probably comprise specialist
designs specific to wastewater treatment.
Site selection appropriate for needs. A privately owned body may not have as much Fair
choice in site selection as afforded to a publicly
owned body such as an SIDC.
A privately owned body will still be dependent
upon state government powers such as eminent
domain to secure the site.
Best value for construction. Private sector investment decision making is Good
normally efficient and can offer innovation that
possibly may not be available within the public
sector.
Handover of assets to respective parties, e.g. Provided the assets were constructed to the Good
power infrastructure to be adopted by power required standards expected by the parties there is
utilities etc. no reason why handover of assets should be
problematic.
Industrial park / A revenue stream sufficient to meet costs The model of an SPV owned by the industrial users Weak Preparation of the SPV agreements (or similar) needs to
CETP owners including debt service, operating costs (to pay themselves presents significant conflicts of consider a wide range of options to properly allocate risks
operators where applicable) and any other interest. The needs of the CETP to secure revenues and liabilities. This should also include provisions to ensure
necessary costs, including returns on capital. to finance all costs are at odds with the desire of against industrial commercial interests over-riding the
the users to keep charges low. Cost recovery interests of protecting the environment. A well designed
charges for CETPs and associated infrastructure overseeing board of directors that placed good governance
finally based on long run assessments whereas above all else is essential. This governance should include
industry may take a shorter-term view. enforcement provisions in the case of transgressions by
Multiple owners of an SPV should have consensus individual members, or the group as a whole e.g. non-
with respect to charges and other obligations. payment, exceeding volumes and limit levels, abuse of
There is an opportunity for agency theory whereby facilities etc.
individual users’ decision-making may be Consideration should be given to a suitably qualified
determined by self interest rather than group independent body to scrutinise charges and other aspects
interests. may help to avoid the opportunity of short-term interests by

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Long-term assurance of revenues. Even though industry may be willing to finance full Fair industry having an adverse impacts on the ability of the CETP
costs they may prefer to finance costs as they arise to be able to finance its activities.
rather than be charged along run stable tariff in Overall rating: Fair
accordance with normal utility practice.
Provided industry can appreciate the need to
maintain the assets in good working order the
necessary revenue streams should be assured.
For an SPV owned by the industries it assumes that
the industries will be there in perpetuity. Problems
may arise when individual industries decide to
leave or close down in which case the decision-
making with respect to the CETP may not
necessarily be the best interests for the longer
term.
Protection against liability for damages as a The industry owned SPV model potentially Fair
result of non-compliance with statutory removes conflict between CETP and the users. The
regulations and / or failure to meet service failure on the part of the CETP is in effect a failure
obligations with users. on the part of the industry itself. Consequently,
liability for damages is shared by industry although
individual liability to a specific industry will still
need to be determined within the SPV itself.
The problem arises however when there may be
failures in the conveyance system and
determination of liabilities for damages and
subsequent remedies may be unclear.
Longer-term protection of asset value through The long-term value of assets is largely dependent Fair
proper maintenance of assets. on the value the owners place on them, generally
measured by the avoided costs and penalties for
non-compliance with environmental regulations
plus the avoided costs resulting from damage to
reputation. This is subject to the efficacy of
regulatory activities and the importance placed on
reputation.

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Industrial park A revenue stream sufficient to meet operating Experience from existing SPV models suggests that Fair As above, notably governance arrangements.
management / costs (including lease / concession fees where charges are generally sufficient to meet operating Contract provisions to include extensive and detailed risk
operators applicable). costs (labour, energy, chemicals, laboratory and liability allocation provisions.
(including sub- services and other costs) but will still face pressure
Outsourced operators to be provided with comprehensive
contractors) from industry to keep charges as low as possible.
details with respect to the scope of work and resources
Where the operations are outsourced to private expected. Competition should be applied to seek the best
operators the contract agreements can provide outsourcing value (price and quality based assessment) and
assurance to revenue but, pressure can be brought to avoid driving down prices once contracts are agreed.
to bear on contracted operators to reduce the
Consideration to be given to more economically effective
scope of work and resources to keep charges
charging arrangements to send price signals which in turn
down resulting in reduced levels of service.
promote efficient behaviour response from industry.
Proper behaviour by users to ensure proper Users sometimes abuse systems, e.g. meter Weak
Overall rating: Weak
functioning of the infrastructure. bypass, exceeding agreed limit values, etc. An SPV
model owned by industry will be conflicted in
addressing such behaviour as individual incentives
to avoid charges may be stronger than the group
incentive to maintain financial viability. The SPCB
may not be able to intervene as some avoidance
measures such as meter bypass are operational
management issues and not subject to regulatory
enforcement.
Sanctions such as financial penalties may prove
difficult to enforce over a member of the SPV
ownership.
If privately owned by an external investor (not an
SPV owned by the member industries) the
potential conflicts are removed but effective
contract and enforcement provisions need to be
provided for.

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Efficient behaviour response by industrial users Cost reflective price signals results in winners who Fair
based on price signals and other incentives. will support the approach and losers who will
resist it. An SPV model comprised of winners and
losers may struggle to reach consensus on cost
reflective charging arrangements, even if it can be
demonstrated to provide an overall group benefit.
The technology required and the level of expertise
to apply such arrangements will come with an
additional cost (even though it may provide net
benefits) which may be resisted by the SPV
members.
Protection against liability for damages as a The allocation of risk and liabilities between the Fair
result of non-compliance with statutory SPV and the management will need to set out by
regulations and / or failure to meet service detailed contract provisions. This will include
obligations with users. aspects such as joint and several liabilities in the
establishment of the SPV members.
The contract between the SPV and an outsourced
CETP operator will need set out detailed provisions
for the allocation of risks and liabilities.
A grey area is the allocation of risks resulting from
any issues related to the conveyance systems.
All the above are complex legal areas that need to
be addressed by legal specialists but provided the
contracts are prepared correctly risk and liability
allocation can be established.
Capital maintenance and expansion investment Operator performance will depend on the Fair
procured properly and on time to ensure willingness of the SPV members to properly
continued long-term performance of the finance capital maintenance.
infrastructure.
Proper functioning infrastructure. As above Fair

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
Industrial tenants Well-functioning, reliable and affordable The functioning of the infrastructure will depend Fair Industry to regard protection of the environment as a high
facilities (roads and parking, drainage, on the willingness of the SPV members to ensure priority in its activities. This could be reinforced by the
electricity, telecommunications, water supply, that it is properly financed, especially for capital articles of agreement for the SVP setting out an over-riding
wastewater and other services). maintenance. The SPV and its members may have environmental protection policy as an obligation for all
control over the functioning of the CETP but they members to abide by.
will have little influence over other services, Such articles could be included as a precondition to the
including the wastewater conveyance system. tenancy agreements and that if the industry fails to adhere
Relies upon the membership acting as one with to the policy it will be considered in breach of the tenancy
common interests and to resist depressing agreement.
revenues in exchange for short-term commercial Similarly, the agreement should place responsibilities on the
gain. industrial park owner to meets its environmental obligations,
Long-term assurance of the quality of services. As above. Fair possibly providing for compensation for damages incurred by
Efficient management of the site including rapid An SPV would be expected to be more responsive Fair a failure on behalf of the park owner, e.g. damage to a
responses to issues related to services provided. to issues arising but this will be confined to the business’s reputation by association if the park was publicly
CETP only. An issue with the conveyance system or identified as failing in its environmental obligations.
other services may take longer to resolve. Effective communications between park management, the
SVP and tenants is needed. In particular consideration should
Simple ‘one-stop-shop’ relationship with park Services separated between two or more agencies. Weak
be given to the park management to take on responsibility to
owner or /operator rather than dealing with This can create added administrative burdens and
be the interface between the SPV and individual tenants.
multiple parties for different services. potential for unclear responsibilities.
This could even be extended to the park management’s
Rents and charges to be fair and cost-reflective With cooperation within the SPV charges could Fair powers in the tenancy agreements to be applied to ensure
as reasonable possible. become more cost reflective reaching agreement against transgressions related to SPV.
among a wide membership but may be subject to
Consideration should be given to the option of the park
prolonged debate and negotiation.
management being a vehicle for billing and collection of
Protection from adverse commercial impacts of The interests of industry should be reflected in the Fair charges for CETP services, i.e. the CETP management
bad publicity related to park activities, e.g. degree to which they attach importance to their determines the bills for individual tenants and they are
serious pollution from the park could result in public image. If the industry is largely unconcerned passed on to the park management (SIDC) who passes on the
loss of commercial opportunities from about its image then they will pay less attention to charges as a line item in the overall park charges. This has
international clients that place a high value on supporting the CETP to maintain standards. the advantage of tying the charges to the lease agreement
environmental protection. Individual industries may suffer as a result of with greater potential for effective enforcement.
decision taken by the majority may choose to The park’s management should include provision to be a
relocate. point of contact for raising issues with the industry.
Indemnity from prosecution or liability for The multiple regulatory boundaries create Weak Overall rating: Fair
failings by park management, e.g. pollution uncertainty with respect to liability. A failing in the
incidents. CETP resulting in financial penalties will effectively
be a cost to the SPV members, i.e. exposure to
liability is increased.

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Fully privately owned model – SPV (company or trustee company)

Stakeholder Objective / outcome Assessment Rating Recommendations
General public Improved economic development and knock-on The interests of the population are aligned with Fair The media should scrutinise and inform the general public of
benefits of the park’s activities. the interests of industry. In a competitive the overall impacts of the industrial parks.
environment Industry will reside in those areas Environmental protection should feature as an election
where the greatest overall benefits lie. issue.
Employment opportunities. The opportunities for employment by the Fair The public should be made aware of any threats to public
industries are dependent upon the attractiveness safety resulting from the industrial parks.
of the park to attract businesses. A more efficient
Overall rating: Fair
privately run service is potentially more attractive
to industry than a public service.
For the industrial park itself a private operator is
more likely to recruit on merit rather than
availability of labour. This may result in drawing
human resources from outside the local area, even
from another state.
Protection of the environment. Evidence from existing SPV models suggest that Weak
they are only marginally better at protecting the
environment due to commercial interests of the
membership taking precedence over
environmental considerations.
Public safety. Regulation (environmental and safety) over Good
services provided by a private operator is more
likely to be effectively enforced. This is not
confined to environmental considerations but
protection of the public with respect to safe
working practices. Those businesses that are
willing to support an SPV model are more likely to
give serious consideration to their public duty of
care responsibilities.

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Option 3 – Public private partnership (PPP)

There are a range of public private partnerships including: Management Contract; Divestiture, Concession; Build, Own, Operate, and Transfer Scheme (BOOT); Build,
Own, and Operate (BOO); Build, Operate, and Transfer (BOT); Build, Lease, and Transfer (BLT); Build, Transfer, and Operate (BTO); Rehabilitate, Operate, and Transfer
(ROT); and Rehabilitate, Own, and Operate (ROO). For the purposes of this analysis we have focussed on those that relate to the procurement of new facilities and their
subsequent operation. These include: BOOT, BOO, BLT, and BTO. Although there are differences in the way these assets are procured, financed and owned we consider
them to be largely similar with respect o an assessment of their operational and financial performance and we therefore consider them as a group.
The remaining (management contract, divestiture, concession, ROT and ROO) relate to options for existing facilities to be reformed into a new structure. We understand
that effective privatisation of existing facilities is not on the current policy agenda but should be the subject of another policy study for the future.

Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Central Maximisation of economic development through The PPP model is aligned to the current Good Government policy to consider wider economic implications
government promotion of industrial output and exports, government policy of no longer subsidising the for the development of industrial parks recognising the need
employment. development of industrial parks and the CETPs. to align protection of the environment with commercial
It will effectively remove implicit subsidies (from interests. The focus should shift from the CETPs in particular
under-pricing of publicly funded services) which to the role of the industrial parks generally as a means to
will add to the operating costs of industry but this promote economic development and in particular policies to
will be balanced by the added value of a higher encourage the participation of the private sector.
level of service. Government policy should consider wider PPP options for
The PPP model has a higher probability of industrial parks generally (not confined to CETPs) that could
maintaining value and protecting the nation’s be coupled with other environmentally friendly measures,
assets. e.g. providing opportunities for investors to develop
renewable energy systems as part of the overall industrial
It may prove attractive for investors from outside
park services.
India bringing with it innovation and improved
efficiencies. Overall rating: Good
Protection of the environment and optimisation With effective regulation and the removal of Good
of natural resources. potential conflicts of interests there is a high
probability of full compliance with environmental
regulations.
The long-term agreements together with the need
to protect professional reputation should provide
assurance of compliance with environmental
obligations.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
State government Maximisation of economic development through As for Central government above. Good State government should use the power at their disposal to
promotion of industrial output and exports, PPP may employ some specialist labour from out develop industrial parks with private sector finance. These
employment. of state but this should be regarded as a net gain powers include eminent domain to secure land for
for the state. development and access to resources where necessary, e.g.
water supply.
To attract industry to the state, either from Under a PPP framework the state government may Good
other states or from abroad. not have as much influence in areas that could be Awards of PPP options to be subject to transparent
used to induce potential industries. This will be competitive tendering.
substituted by private sector inducements to Any agreements should be clear and specific regarding risk
attract industry which may be more efficient allocation and liabilities, especially with respect to
overall. environmental considerations.
Inducement should not come at the price of Overall rating: Good
existing tenants effectively subsidising new tenants
and some financial protections may be desirable to
ensure equality.
PPP options will attract external investment to the
state.
Protection of the environment and optimisation As for Central government above. Good
of natural resources.
Central Pollution Protection of the environment and natural Provided there are no external pressures there is a Good PPP agreement should ensure that it fully complies with any
Control Board resources. reasonable probability of environmental specific CBCB requirements (that are not covered at state
(CPCB) compliance. level).
A PPP model will be obliged to adhere to Overall rating: Fair
obligations although private owners may be more
willing to resist CPBC directives, even through the
legal means. This could be mitigated to a degree
by the provision of robust provisions in the PPP
agreements to abide by environmental obligations,
failing which they could be in breach of contract.
Evidence on actual performance suggests this
model has some limited benefit in protecting the
environment.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
State Pollution Protection of the environment and natural As for CPCB above. Fair Consideration should be given to the remit of the PPP
Control Board resources. Regulation of PPP agreements is relatively contract to include the conveyance system. This could be
(SPCB) effective as financial penalties will have a direct extended to the PPP contract to include the whole business
impact on the entity’s returns. However, this park and all services.
needs to be balanced by more rigid monitoring Although there are procedures for consents to construct and
and enforcement measures that are resilient to operate CETPs they are not complete enough or adequate
legal challenge. for a PPP model. For a PPP model the contract agreement
Separation of the CETP and the conveyance system can incorporate all the provisions expected in a licence.
creates multiple regulatory boundaries with These should not be confined to statutory compliance but
multiple regulated entities including the SIDC also many other areas such as charging systems etc.
adding to the regulatory burden. The PPP arrangements must provide for changes to
The regulatory boundary between the industrial legislation, e.g. new environmental standards, which may
user and the conveyance system still needs to be result in decisions with respect to risk and cost allocation.
addressed in this model. Overall rating: Fair
State Industrial parks developed and fully functioning. The PPP contract needs to be aligned with the Fair Consideration should be given to the remit of the PPP
development development of the park as a whole. contract to include the conveyance system and to leave the
agencies / boards The PPP contractor will need to absorb a high SIDC responsibilities confined to the other services in the
degree of risk during the ramp-up period to full industrial park.
site occupancy. This could be alleviated by advance Alternatively, the PPP contract could relate to the park as a
tenancy agreements and phased construction. Risk whole in which case the SIDC’s role largely falls away.
could also be transferred through and risk transfer Although a PPP contractor may better determine the needs
through ‘take or pay’ type agreements. for financing operating costs and capital maintenance
There is a risk of a mismatch between well safeguards need to be in place to prevent or limit monopoly
maintained PPP managed CETPs and deteriorating effects and to encourage efficiency (without adversely
conveyance systems. This could lead to conflict impacting on the quality of service). Consideration should be
and assignment of liabilities.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Revenue from the parks to recover costs (capital The PPP should have separate agreement with the Weak given to some form of economic regulation through an
and recurrent). tenants that set out obligations and charging independent assessment of charges on a regular basis.
arrangements and that charges should be Overall rating: Fair (if confined to the CETP only)
sufficient to meet cost recovery expectations
including a margin / return for shareholders.
The agreement should contain robust
enforcement measures in the event of non-
payment.
The SIDC, however, will still need a sufficient
revenue stream to operate and maintain the
conveyance system resulting in potentially two
charges for a single service.
Investors Parks constructed to a high quality and Investors for a PPP will demand high quality assets Good Loan covenants should include provisions to maintain the
maintained at that level to ensure that the and that the assets’ values are protected through value of the assets.
investment’s value is protected. loan covenants from banks and shareholder The banking sector should consider options longer-term
pressure. lending for private investment in business parks.
A revenue stream sufficient to meet debt service A PPP investor would only enter the market if Fair If legally possible the use of partial risk guarantees may give
to specified levels, e.g. debt service coverage revenues were reasonably well assured through comfort to investors.
ratios. contract agreement with current and prospective
Consideration should be given to the option of an ‘owner of
tenants through firm contracts in advance of
last resort’, i.e. a body to take over the assets and liabilities
investment decision making.
in the event of bankruptcy to ensure services to tenants are
Lenders may regard this activity as medium to high uninterrupted.
risk resulting in high interest charges and short
Overall rating: Fair
loan periods (no more than 10 years).
There are several risk transfer options that can be
considered, e.g. the PPP contract to be based on a
portion of an annual revenue to be guaranteed as
an allowed annual revenue model (determined at
contract phase subject to periodic review) and
tariffs set each year to recovery the allowed
revenues.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
A revenue stream sufficient to meet shareholder Lending over periods shorter than the life of the Fair
return on equity expectations. assets will create cash flow stresses for equity
investors who may only expect to see real returns
only after near full debt repayment. Higher
charges in the short term to fund borrowing costs
may not be acceptable to tenants.
A degree of commercial risk is to be expected and
will form part of the risk premium for this type of
investment.
An issue with PPP contracts is that the asset useful
lives are often longer than the life of the PPP
contract term. This results in a return of capital
(depreciation) will not be based on the asset life
but the remaining life of the contract term, e.g. an
asset with a 30-year life constructed in year 20 of a
25 year PPP term will be depreciated over five
years instead of 30 years. This will result in charges
higher than they would otherwise be if the
projected term was in perpetuity. The alternative
is to provide in the contract a sale of assets on
transfer at their written down values at the end of
the term.
Security against default. There will be a mismatch between debt service (up Weak
to 10 years) and the life of the concession (25
years or more). Either charges have to be front-
loaded in the early years or the PPP will operate at
low or negative cash flow rates in the early years.
This may result in contract default with limited
options for remedies.
The principal collateral that can be offered as
security against default is the assets themselves as
a going concern. The assets are immovable and as
such banks may not consider the collateral to be
sufficient.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Liquidity, i.e. the investment is tradable. Provided the CETP is in maintained in good Fair
condition and the charges are such that the
enterprise is (or could be) profitable then the asset
will have value and could be sold to another
investor if necessary.
Efficient / best value investment. Private sector investment will, by definition, seek Good
best value.
Industrial park Detailed scope of work including design criteria The PPP contractor needs to be well experienced Good The design team for the CETP should work closely with the
developers / to be applied. in the development of industrial park SPCB and other agencies to determine the best overall
contractors infrastructure. outcome. In some cases, derogations to the SPCB limit values
The design team appointed would be expected to in certain cases may be preferred and that the SPCB should
undertake extensive analysis of needs and all consider such derogation requests.
associated technical criteria. Consideration should be given to the design and construction
The regulatory framework may inhibit the of the CETP as part of the overall construction of a business
adoption of innovation that could deliver park rather than treating it as a separate activity.
improved value, e.g. changing limit values at the Overall rating: Good
point of entry to the conveyance system if it is
more efficient to treat a higher concentration at
the CETP than to insist on on-site pre-treatment.
If designed as part of the overall industrial park the
design team will most probably comprise specialist
designs specific to wastewater treatment.
Site selection appropriate for needs. Where possible the PPP design team should be Fair
provided with options for site selection but choices
may be limited.
A PPP contractor body will be dependent upon
state government powers such as eminent domain
to secure the site.
Best value for construction. PPP investment decision making is normally Good
efficient and can offer innovation that possibly
may not be available within the public sector.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Handover of assets to respective parties, e.g. Provided the assets were constructed to the with Good
power infrastructure to be adopted by power the required standards expected by the parties
utilities etc. there is no reason why handover of assets to third
parties should be problematic.
PPP contracts expect handover of assets at the end
of the agreement. Robust contract provisions are
needed to ensure that the assets are handed over
in good order and not run down in the last few
years of the agreement.
Industrial park / A revenue stream sufficient to meet costs The PPP model removes potential conflicts of Good The PPP agreements need to consider a wide range of
CETP owners including debt service, operating costs (to pay interest between industrial users and the CETP options to properly allocate risks and liabilities.
operators where applicable) and any other owners. The PPP agreement should include provisions for either
necessary costs, including returns on capital. An agreed contract setting out charges (or the agreements between the PPP contractor and the tenants
method of determining charges) that is included in setting out their respective rights and obligations. This could
agreements with tenants supported by adequate take the form of individual contracts between the PPP and
enforcement provisions should assure revenues. tenants or be included in the tenancy agreements
Long-term assurance of revenues. As above. Good themselves.
Setting charges in a long term agreement is a Consideration should be given to a suitably qualified
complex activity and subject to a high degree of independent body to provide input into the resetting of
uncertainty. A common practice is to rest charges charges on a periodic basis, e.g. a quasi-economic regulator.
periodically, e.g. every 3 to 5 years, to reflect Overall rating: Good
changes in circumstances, passing on benefits of
efficiency gains, and other factors.
Protection against liability for damages as a The PPP contractor would be expected to take all Fair
result of non-compliance with statutory reasonable measures to protect itself from liability
regulations and / or failure to meet service for damages. Where possible this could be an
obligations with users. insurable risk, especially with respect to public
liability.
Issues with respect to the separation between
conveyance and the CETP remain.
Longer-term protection of asset value through The PPP contract should ensure that there are Good
proper maintenance of assets. sufficient incentives for the PPP contractor to
properly maintain assets throughout the term of
the contract.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Industrial park A revenue stream sufficient to meet operating The terms of the PPP agreement should be Good As above.
management / costs (including lease / concession fees where sufficient to assure revenues to the operating Although the PPP agreement should set out the charging
operators applicable). entity. arrangements we caution against this being to rigidly set.
(including sub- In some cases the PPP agreement will need to The charging arrangements should be principles based, e.g.
contractors) provide for revenues to or from the SIDC (or other setting out how the total charges are determined and
agency), e.g. lease fees. providing principles as to how the total is allocated among
Proper behaviour by users to ensure proper The PPP contract should provide for adequate Good the user, e.g. cost reflective based on quantity and quality.
functioning of the infrastructure. inspection rights accompanied with robust Changes to the allocation method can be subject to a
enforcement measures (including financial governance process set out in the agreement.
penalties) to ensure proper use of infrastructure. Overall rating: Good
This could be incorporated into the tenancy
agreements.
In the case of financial penalties, the PPP contract
should set out how they are to be administered
and their legal basis. It should not be seen as a
source of profit for the PPP operator but at the
same time they must be effective as a deterrent.
Mechanisms such as an annual true-up of charges
to reflect income received from penalties and
other unexpected income could be passed back to
all consumers through price adjustments.
The PPP contractor should be obliged to report
non-compliance to the SPCB, and not to do so
should itself be an issue of non-compliance.
Efficient behaviour response by industrial users It is in the PPP contract’s interest to have charges Good
based on price signals and other incentives. set on the basis of cost reflectivity, e.g. the
Mogden formula. This will promote efficient
behaviour from the tenants and at the same time
provide for optimum use of the facilities,
important when considering longer run expansion
of services.
The degree of sophistication for such charging
models should within the capabilities of the PPP
operator.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Protection against liability for damages as a The contract between the PPP owner and an Fair
result of non-compliance with statutory outsourced CETP operator will need set out
regulations and / or failure to meet service detailed provisions for the allocation of risks and
obligations with users. liabilities and possibly include mandatory
insurance cover.
Capital maintenance and expansion investment Expansion and investment obligations should be Good
procured properly and on time to ensure set out in the PPP agreement.
continued long-term performance of the
infrastructure.
Proper functioning infrastructure. As above. Good
Industrial tenants Well-functioning, reliable and affordable The PPP agreement will set out the performance Good Effective communications between the PPP contract owner
facilities (roads and parking, drainage, obligations that determine the design and and the tenants are needed.
electricity, telecommunications, water supply, technology used. The problem with the PPP is that Consideration should be given to the option of the park
wastewater and other services). it is not always flexible to accommodate a change management being vehicle for billing and collection of
in requirements, e.g. to meet change in limit levels charges for CETP services, on behalf of the PPP contractor
as set by the regulatory agencies or a change in i.e. the PPP management determines the bills for individual
the effluent characteristics due to a change in tenants and they are passed on to the park management
industry practices. This can be accommodated (SIDC) who pass on the charges as a line item in the overall
subject to sufficient leeway in the contract to allow park charges. This has the advantage of tying the charges to
for variations as required. the lease agreement with greater potential for effective
The presence of the well qualified PPP contractor enforcement.
can offer additional benefits to individual Consideration should be given to the appointment of an
industries by offering advice and assistance to independent body to periodically oversee a resetting of
their practices, e.g. advice with respect to improve charges (or revenues) to ensure that the tenants share in
any on-site wastewater management. These future efficiency gains by the PPP operator.
activities will be commercial and any payments for
The park’s management should include provision to be a
services shall be a matter between the PPP
point of contact for raising issues with the industry.
operator and the industry although transparency
in such dealings may be necessary to protect the Overall rating: Good
integrity of the PPP contract.
Long-term assurance of the quality of services. As above. Good
Efficient management of the site including rapid A PPP arrangement is more probable to be Good
responses to issues related to services provided. responsive to issues raised than for an SPV or
publicly owned model.
Simple ‘one-stop-shop’ relationship with park By maintaining the services of the PPP to be Weak
owner or /operator rather than dealing with confined the CETP there is still the problem of
multiple parties for different services. industry dealing with multiple agencies.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Rents and charges to be fair and cost-reflective The PPP arrangement can, in the early years, prove Fair
as reasonable possible. to be relatively efficient with charges based on
competition (for the market). However, to lock
charged in for a long-term arrangement often
results in excess profiteering by the PPP operator
by retaining the gains of future efficiency
improvements. This can be mitigated by periodic
resetting of charges through an economic
regulatory mechanism.
Protection from adverse commercial impacts of The interests of the PPP contractor and the Good
bad publicity related to park activities, e.g. industry are aligned in this respect. The PPP
serious pollution from the park could result in contractor will have vested interests in avoiding
loss of commercial opportunities from any potential bad publicity as a result of failings by
international clients that place a high value on industry or the PPP contractor as this could have
environmental protection. an adverse impact on future similar business
ventures.
Indemnity from prosecution or liability for The multiple regulatory boundaries create Weak
failings by park management, e.g. pollution uncertainty with respect to liability.
incidents.
General public Improved economic development and knock-on The interests of the population are aligned with Fair The media should scrutinise and inform the general public of
benefits of the park’s activities. the interests of industry. In a competitive the overall impacts of the industrial parks.
environment Industry will reside in those areas Environmental protection should feature as a nelection
where the greatest overall benefits lie. issue.
As a PPP contract may be more expensive to The public should be made aware of any threats to public
industry than other models the higher quality of safety resulting from the industrial parks.
service may attract industry with higher ethical
Overall rating: Good
standards which will be in the wider public
interest.
The concept of a private operator profiting from
wastewater treatment may not be regarded as
appropriate by some elements of society who may
believe that this should be provided as a non-profit
public service.

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Public private partnership (BOOT, BOO, BLT and BTO)

Stakeholder Objective / outcome Assessment Rating Recommendations
Employment opportunities. The opportunities for employment by the
industries are dependent upon the attractiveness Good
of the park to attract business. A more efficient
privately run service is potentially more attractive
to industry than a public service.
For the industrial park itself a private operator is
more likely to recruit on merit rather than
availability of labour. This may result in drawing
human resources from outside the local area, even
from another state.
Protection of the environment. Evidence from existing SPV models suggest that Good
they are only marginally better at protecting the
environment due to commercial interests of the
membership taking precedence over
environmental considerations.
Public safety. Regulation (environmental and safety) over Good
services provided by a private operator is more
likely to be effectively enforced. This is not
confined to environmental considerations but
protection of the public with respect to safe
working practices. Those businesses that are
willing to support an SPV model are more likely to
giver serious consideration to their public duty of
care responsibilities.

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final1.pdf)
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Common Effluent Treatment Plants by Central Pollution Control Board (Ministry of Environment & Forests,
Govt. of India).
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3. Common Effluent Treatment Plants: Overview, Technologies and Case Examples, GIZ – Indo German
Environment Partnership (IGEP), May 2015.
(http://seip.urban-industrial.in/content/e62771/live/hrdpmp/hrdpmaster/igep/content/e54413/e54441/
e61172/e63630/20150522_CETP_RefDocument_i.pdf)
4. India-EU Water Partnership - Scoping Study; Opportunities for EU Businesses in the Indian Water Sector by
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July 2018.

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103 Development of a Financial Tool for CETP under GIZ - Support to Ganga Rejuvenation Project (SGR) by GOPA
Infra GmbH

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104 Guidelines for Waste Water Conveyance Systems, Strom Water Management and CETPs in Industrial Parks,
GOPA Infra GmbH for GIZ
105 Water Resources and Environment Technical Note D.2, The World Bank Washington, D.C.
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106 Implementation of Effluent Treatment Plants for Waste Water Treatment, Scientific Research
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107 Study of the development and performance of centralized wastewater treatment plants in Chinese
industrial parks, ScienceDirect
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108 Industrial Wastewater Treatment, Wikipedia
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109 CETP Standards, Ministry of Environment, Forest and Climate Change, Notification, 01 Jan, 2016
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CONTRIBUTORS
GOPA Infra GmbH

Laura Sustersic
Team Leader (International Expert)

Trushit Desai
National Senior Expert, Wastewater

Keith Burwell
International Expert, Finance

Ruchi Yadav
National Junior Expert

Alexander Pinciu
Project Director

Johannes Martin
Technical Backstopping

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STAKEHOLDER CONSULTATION

159