Many A Slip To The Sip
- 30 Number of Indian cities where private sector and MNCs have been roped in by civic bodies to manage the water supply.
- 0 No project has so far delivered on lofty commitments; most continue to face major opposition from the consuming public and civil society.
- 100 Average percentage rise in water tariff in cities and urban areas with privatisation projects. More to follow?
- 0 Obligation on water conservation or sewage treatment by PPPs, even as public funds and manpower is being provided to them.
- 35 Duration, in years, of management contracts being signed by civic bodies, up from pilot management projects for a few years.
Across the road, on the other side of the gleaming new malls of south Delhi, is the older but not quite glamorous settlement of Hauz Rani. It’s summer, holiday time. But every evening, when they ought to be playing, dozens of young children, jerrycans in hand, troop to the nearby colonies and to a public tap near the malls to lug water back home—for drinking, cooking, washing and cleaning. The life-sustaining liquid, always in short supply, is evidently scarcer this summer. Not atypical, you’d say, that’s how things are in India.
Now, into this scenario, enters a troika of private companies, promising salvation. Suez, SPML Infra and Degremont, in a consortium, have got a 12-year contract from the Delhi Jal Board to supply 24x7 water over a 14 sq km expanse that includes Hauz Rani. So is salvation really round the corner? Similar projects from across the country have ominous stories to tell. In Mysore, Nagpur and Khandwa, private efforts to ramp up public water supply are croaking under the weight of expectations. Costs are up, supply erratic and discretionary—they have not been above parching the less posh parts so as to cater to the tony neighbourhoods. And in the worst-case scenario, alternative sources of water, like tubewells or public taps, get blocked for good measure. As India prepares to go down the privatised water route, it’s a good juncture to ask, after bijli and sadak, is paani too slipping out of reach of the aam aadmi?
Three more Delhi areas (Vasant Kunj, Mehrauli, Nangloi) have been given over to the public-private partnership (PPP) model that Prime Minister Manmohan Singh tirelessly asserts is the answer to the nation’s ills. All told, the capital is among 30-odd cities where civic bodies have called in private entities, including mncs, to “manage” the water supply. The number is set to go higher as more cities approach the Jawaharlal Nehru National Urban Mission (JNNURM) which—ironically, considering the man after whom it is named—makes private participation a precondition for financial support.
Civic bodies have been pushed, despite strong protests, into experimenting with the PPP model. The government’s justification has been that the private sector will bring in investments, technology and management efficiency, none of which a cash-strapped public sector can offer. Yet a study of 13 private water and sanitation projects by the Planning Commission has praise for none. In four cases—Latur, Mysore, Dewas and Khandwa—the project viability has itself been questioned.
When the state cedes control of as vital a public asset as water, it allows business to hold the poor to ransom and fleece them.
But the march towards privatisation continues. Current models of public-private water partnerships are diverse, from refurbishing the infrastructure to service contracts for billing, collection and metering. At present, most projects are focusing on distribution improvement. Even so, only a few places have seen experiments with citywide distribution, with hardly encouraging results at that. Many more projects are coming up: Naya Raipur in Chhattisgarh has decided to give its water distribution contract to Jindal Co on the PPP model. Kolhapur, Maharashtra, has the distinction of being the first to go in for PPP for sewage treatment.
“Six years ago, activists and residents’ welfare associations in Delhi, Bombay and Bangalore were able to stall a World Bank-led move to have the private sector take over water supply projects by making it a condition for granting loans,” says S.A. Naqvi of the Citizens’ Front for Water Democracy. “Ironically, the Centre is now taking exactly the same route through JNNURM.” It’s nobody’s case that India’s moribund water supply system is not in dire need of help, as the Hauz Rani scenario illustrates. It’s also not that its residents would be cussedly averse to paying; anyone who has sampled Delhi’s ‘machine ka thanda paani’ knows service doesn’t come free. But as water PPPs begin to come apart, the question is not whether citizens should pay for unlimited use of a finite commodity like water, but to whom and how much? When Hauz Rani’s saviours, the neighbouring colonies, receive water for a mere two and a half hours a day, the answer isn’t so easy. The Delhi PPP experience is not unique:
- In Mysore, JUSCO, a Tata enterprise, has faced severe time overruns, paid penalties and faced pubic outrage
- In Khandwa, Madhya Pradesh, all indications are of the project being unsustainable in the long run
- In Latur, Maharashtra, SPML has been forced to hand back the water supply management to a government entity after local opposition.
“The results of PPP projects in urban water supply in India—even globally—aren’t encouraging. They don’t seem to be the solution that they were thought to be,” says Gaurav Dwivedi of Manthan Adhyayan Kendra, a study group. “These are expensive projects and municipal bodies are at risk of losing control of water supply to private companies due to long contract periods from which there is no getting out.”
On paper, the case for privatisation of water supply, like telephony and aviation, seemed sound. Meeting the growing water demands of growing cities required high investment. Better quality water called for sophisticated infrastructure. The private sector held the allure of money, technology, and also its famed managerial skills in implementation, delivery, accountability. Win-win. In reality, however, the experience has been quite the opposite as the state willingly cedes control over a vital public asset such as water under the garb of a PPP and watches haplessly as the poor are fleeced.
In many cities, private companies have brought little to the table. Naqvi says all the contracts awarded actually “have mechanisms to ensure the private parties don’t have to put in any of their own investments. During the initial two and a half years of the pilot projects, when the consortiums will be doing distribution, Delhi Jal Board will be paying very high management fees, besides the power bill, delivering treated water at the colony and providing its own employees to the private partner free of cost.”
“The results of PPP projects in India are not encouraging,” says Gaurav Dwivedi. “They don’t seem to be the solution they were thought to be.”
On top of that, private companies are seen to be tinkering with that invaluable (and often scarce) commodity called democracy. Despite initial hiccups, electricity distribution saw some improvements after privatisation in cities like Delhi due to the presence of multiple sources of power. But private water companies have to depend on a finite number of sources. Diminishing rainfall, depleting water tables and raging wars between states have seen water become scarcer. So, supplying 24x7 water to one area in a city as promised by a private operator means depriving a number of other areas of their rightful due. It also means creating an artificial demand with an eye on the bottomline.
Worse, says Prof U.N. Ravi Kumar, a Mysore-based water consultant who has been engaged in the revival of water bodies. Private water suppliers are not making any effort to look at issues like waste water management or conserving water resources, he says. “All the projects we hear about are presentations by the companies and project promoters. Governments can easily get swayed by promises of 24x7 supply.” In other words, the private players have sold a pipe dream and are getting access to exploit and monetise public water resources without adding to it.
In many cities where private operators have moved in, anecdotal evidence shows that, while the rich and well-off can be assured of better supplies at a higher cost, those defaulting on even one bill end up paying dearly with water supplies being stopped. While private players have been relentless in enforcing the rules on individual domestic connections, they seem to have fallen prey to their political masters while dealing with commercial connections—which usually default on a much larger scale than domestic ones.
Ashok Govindpurkar, a veteran Nationalist Congress Party councillor from Latur, says they were widely supported in their protest against private management of water supply in their city of four lakh population as households having or seeking to instal a handpump needed to get permission. “The cost of a water connection for Rs 1,700 plus a meter cost of Rs 2,400 was a huge burden on the poor,” he says. Adds Gaurav Dwivedi of Manthan Adhyayan Kendra, “Water PPPs do not have a pro-poor orientation even though this is the section of the community, especially in urban settings, which needs water supply and sanitation services at low costs on an urgent basis.” It does not call for any particular political bent to see that, in India, this would only worsen the country’s overall indices.
The private companies complain about being demonised. “In Latur, water was supplied once a week before we took over. We improved the situation and supplied it on alternate days,” says Rishabh Sethi, executive director, SPML. “The lack of support and coordination between government entities with respect to their contractual obligation has been the main reason for the project being kept in abeyance. Plus plentiful local opposition, including from local political groups.”
In Mysore, JUSCO’s plea for renegotiation of the contract is meeting with widespread opposition. Despite some benefits having accrued to ‘chronic problem’ localities in the city, many other areas are seeing a drop in supplies. Ditto Nagpur, where the distribution project was extended to cover the whole city even before the assessment of the pilot was done. “I don’t think private participation has worked anywhere in India for a sufficiently long period or provided a credible appraisal performance,” says water activist Himanshu Thakkar.
JUSCO is not the only company trying to renegotiate the terms of its contract, but the Mysore city corporation is in a fix. It is facing a financial squeeze and has no answer to the public ire. Also, there’s little option of throwing out the private company without inviting protracted litigation. With the long-term contracts loaded in favour of private companies, civic bodies are caught between a rock and a hard place. And the only way out, it seems, is to wait like its counterparts in Europe and declare water supply a public sector operation after the contract runs out.