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October 1, 2014

Recycling water: A crucial need for industrial usage across India – Projects Vendor

India is the second most populated country in the world with over 1.3 +billion population. Although, the total water available( 1122 BCM) is sufficient to meet todays estimated demand (Agriculture – 690 BCM, Industry – 73 BCM & Domestic- 49 BCM) at present, consumption of water across various sectors is on rise due to urbanisation, increase in population and rapid industrialization which will put India into a water stressed zone by 2025. The uneven distribution of water resources, have also created scarcity situations in many states like Rajasthan.

Considering the ecological cost and direct investments required for any augmentation of surface water reservoirs, it is necessary for us to look for innovative solutions to the water stress.

Agricultural sector necds to be made more efficient by drip irrigation and other methods; however agriculture being an un- organized sector with small land holdings makes it very difficult to implement the efficiency measures in this field effectively.

Urban – Domestic Consumption of water is an area where large scale in-efficiencies exist. The Non Revenue Water (NRW) in urban towns is more than 50% and going as high as 70-75%. This wastage of treated water, not only takes us into a negative cycle of lower collections, lower O&M and in-turn, the higher NRW, thus needs major attention.

The Urban domestic water consumption also brings out sewage of 40,000 million liters per day (MLD), which is 80% of the total water consumed.The current wastewater treatment capacity can handle only 30 percent of the total generation, out of

which only 55% is operational. This translates to an investment gap of over USD 7 Billion for class I and class II cities by 2016-17 which are the first few to go dry.

It is the responsibility of the Urban Local body (ULB) – Municipality to treat it but with the budget constraints of ULB, it automatically goes down the priority list as against light, water, cleaning etc. and the sewage is released un-treated to eco-system. This is leading to major health issues and contamination of water bodies surface as well as ground water(lakes, wells, rivers) depleting the usable resources of water further.

The Industrial consumption is on an increase as we economically grow. The fresh water reservation for Industry is clashing and creating tension with other sectors, particularly agriculture. Farmers feel that the growth of industry in their area, although provides few jobs, but is taking away their precious resource – water and effectively reducing irrigation capacity for that area.

To address both the issues of reducing water extraction from natural resources and avoiding conflict, reuse is most appropriate solution. In Singapore, Korea, USA the sewage treated water after tertiary treatment is used for drinking purposes as well, however considering our cultural acceptability; we should use the tertiary treated water for industry.

This in one stroke reduces our fresh water consumption by at-least 20,000 MLD, considering that half of the water treated is near enough for industries to use economically. This translates into producing 20,000 MLD of fresh water for domestic/ agricultural purpose. The PPP models in this sector converts the cost-centre for ULB into a profit centre, as it gets revenue share of treated water sale. The prime example of this will be in the Nirmal Ganga program, where reuse of water for industry and agriculture is essential to ensure the zero discharge to Ganga.

The first few experiments of private participation by PPP in the water sector are showing mixed results. An ambitious project called ‘The 24X7 water supply project’, at Nagpur has shown good results on PPP basis. A consortium by Vishvaraj Infrastructure Ltd and a, French company Veolia water is operating the city of 2.5 million for the last 2 years. The investment is 70% JNNURM grant and 30% by the private operator. The asset ownership and the tariff control remains with the ULB. The aim of the project is to provide continuous pressurised water supply to 25 lac people in the city 24 x 7 basis.This 25 years PPP project involves rehabilitation and maintenance of the assets and operator remuneration is linked to the volume of water billed and collected. Many other cities like Delhi, Ahmedabad, clusters of towns in Karnataka are following similar models. The total market size for class I & II cities is more than 60 billion USD.

The other PPP project in Nagpur is of Sewage Water Reuse, wherein 100% investment comes from private partner. The ULB provides a deferred payment escrow mechanism. The upside for both Private operator and ULB comes in when the water sale begins to the nearby thermal power plant. This sale of water will ultimately bring so much revenue that the plant, its operations and maintenance for 30 years will be free of cost for the ULB. These type of PPP proposals are needed to be adopted across India, and will lead to value generation from waste.

The uncontrolled disposal to the environment of municipal and industrial waste constitutes one of the most serious threats to the sustainability of human civilization contamination of water. Almost 21% of all diseases and 7.5% of the total deaths in India are water related. One third of all deaths of all children under five years of age in India are due to diarrhoea and other water-borne diseases. Manpower loss due to water-borne diseases, are 9.2 crore days a year resulting in economic losses each year equivalent to 6.4 percent of India’s GDP As per UNICEF, a rupee invested in water saves 8 rupees in health budget.

The PPP in water sector is very different than other sectors like roads or power. Water touches every human life every day. It is much more sensitive and essential than any other facility. Thus involving the Fourth ‘P’ -The people in the PPP model is very essential for long term sustenance of these structures.

Today a trust deficit exists between People the largest stake holders on one side and Private operator and Government on the other side. To bridge this very strong and effective communication is required. This communication can be most credible if it is initiated by representatives of People. In my opinion the responsibilities need to be shared by all the 4Ps.

• P-Public – as Govt for Policy, structure and support grant
• P-Private – for investment and efficiency improvement, and service level delivery
• P-People – Communication and monitoring
• On-boarding of 4thP the people is essential for long term contracts to sustain.

Thus bringing People to participate will lead to a healthy PPP system which will bring enormous value to all the stakeholders, health, environment, and reduction of tariffs by removal of in-efficiencies.

(The author is Chairman & Managing Director – Vishvaraj Infrastructure Ltd.)

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