Peixian Water Supply Project in Jiangsu

Pei County is located in Xuzhou City, Jiangsu Province, close to Weishan Lake in the east, Feng County in the west, Tongshan District in the south, and Yutai County in Shandong Province in the north, and is at the southeastern edge of the North China Plain and the northwestern bit of the Huaihai Economic Zone. Jiangsu Peixian Water Supply Project was initiated in October 2015, and the project composition includes two parts: stock and new construction, of which, the stock part includes 100,000m3/d surface water plant (Phase I project), 13 formed town sewage treatment plant and pipe network (total 83,000m3/d scale); the new construction part includes 100,000m3/d surface water plant (Phase II project), regional water supply pipeline network project, regional water supply and rural Drinking Water Branch Network Docking Project, and Rural Drinking Water Safety Project. The total investment of the project is about 1.5 billion RMB.

The project is implemented under a concession mode, whereby the project company is responsible for investment, construction and operation, providing water supply and wastewater treatment services that meet the standards, and obtaining the corresponding income and realizing the corresponding investment returns during the concession period. The project introduced the social capital party through bidding in August 2016, and the project company was established in September of the same year.

For the surface water plant project, the project company will invest in the completion of the renovation and expansion project, and the residents or enterprises and other users will pay according to the price of water supply set by the government, and the government will make up for the "feasibility gap subsidy" that can not be covered by the price on the basis of the performance appraisal. For sewage treatment plants, the project company is responsible for the operation, according to the design concept of "capacity water price + water quantity water price", the government pays the project company the fixed costs of sewage treatment services (wages and benefits, management fees, repair costs, etc.) and variable costs (unit electricity costs, unit pharmaceutical costs, unit water costs, unit sludge transportation costs, etc.), of which variable costs are settled based on the actual sewage treatment volume. For the municipal pipeline network and rural safe drinking water project, the social capital will invest and finance to complete the new construction part, and the government will entrust both the stock and the new pipeline network to the social capital to be responsible for the operation, and the government will pay for it.

As the consultant of the government side of this project, Jinzun Consulting provided the whole process of consulting services, such as due diligence research, program mechanism design, financial calculation, program preparation, contract text preparation and negotiation, etc., to assist in the smooth implementation of the project.

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