Nagpur, the second capital of Maharashtra, is one of the fastest growing cities in India with the highest per capita income. It is one of the mission cities under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

According to Nagpur Municipal Corporation (NMC), the population of the city is 23,50,000 (2004) with a density of 10,802 persons/sq km. NMC manages the basic municipal water supply with an annual budget of Rs. 95 crore (approx.) against the actual receipt of Rs. 50 crore. NMC supplies 120 to 150 litres/capita/day with a treatment capacity of 470 mld.

NMC was confronting a number of issues such as high water losses in transmission of raw water from the source to Water Treatment Plants (WTPs) as well as in distribution system, high Unaccounted For Water (UFW) and Non-Revenue Water (as per billing records, the billed water volume was only 241 mld out of produced 470 mld for the period of 2004-05), low network coverage, old and inefficient assets, inequitable water distribution, low water tariff, poor billing and collection mechanism, low service level to the urban poor, etc.

In order to meet these challenges, NMC has initiated a comprehensive programme to improve the efficiency of the water supply system. Among the other initiatives, a Water And Energy Audit has been considered to be the first step of reform process.
To achieve the desired objectives, NMC has appointed a consultant for a Water Audit as per International Water Association (IWA) guidelines. The scope of the work includes updating network maps, hydraulic model for entire distribution system, comprehensive city-wide leak detection survey and water balance, and preparation of Detailed Project Report (DPR) and its implementation under JNNURM.

Along with the Water Audit, NMC has initiated an Energy Audit for improving the pumping system efficiency, effective control and remote monitoring system, system improvement and upgradation etc. The scope of work includes study of the existing system and past records along with system energy efficiency from water source to the consumer's end; and setting benchmarks for energy consumption; preparation of action plan for short, medium and long runs with no investment; and with minor and major investment plans; and preparation of DPR and implementation.
To reduce the transmission losses, NMC has decided to lay an MS pipeline for transmission, and the estimated savings from project was around Rs. 6.08 crore per year for 137 mm3 (current requirement) and 8.44 crore per year for 190 mm3 (ultimate requirement) due to the difference of water tariff between canal and dam.

To reduce losses due to leakages and during Filter Backwash process in WTP, NMC has awarded a performance-based contract to a private contractor for the upgradation and improvements in the processes of WTP, and was able to save approximately 22 mld of water.

Bulk meters have been installed at raw water off-take points and pure water transmission mains, to attain benefits and enhance the accountability of water input into the distribution system as well as each zone, as the quantum of water receipts and quantum of water billed and calculating UFW could achieve annual savings of Rs. 2.5 crore, which was more than the estimated annual saving.

A Slum Policy has been recommended to improve the services to the urban poor with the aim of increasing the number of individual connections, reducing the number of stand posts, legalising the illegal connections, etc.

To implement the recommendations of the Water Audit Report, NMC has contracted out the implementation of a 24X7 water supply in a demonstrative zone of 10,000 connections. The contractor was responsible for the O&M of the system for 5 years with the provision of incentives and penalties on performance parameters like water quantity, quality, customer services, etc.

The Energy Audit Report estimates an annual saving of Rs. 475.12 lakhs (1,79,26,833 Kwh), and it requires an investment of Rs. 2,503 lakhs for which the payback period is 5.27 years.
Aurangabad, Mumbai, Thane and other urban local bodies of Maharashtra have adopted the Nagpur model. The Government of Madhya Pradesh intends to replicate the same model in four cities.