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April 21, 2017

Should we privatise water? – The Hindu


There is no case for water privatisation. In pushing for it, we are ignoring the key issue, which is better governance, writes Himanshu Thakkar

Privatisation of water is unwarranted, unjustified and unnecessary. In pushing for it, we are not really addressing the key issue plaguing the water sector, which is a need for better governance. We need a democratic, transparent, accountable and participatory governance in a bottom-up approach, on each aspect of the urban water sector where water privatisation is advocated.

Widespread gaps

There are lacunae in the urban water sector which are being used as a justification for pushing water privatisation. Lacunae include losses, inefficiency, unreliability, corruption, issues of quality, and mismanagement. All of these are symptoms; the root cause is lack of democratic governance.

If we look at the experiences anywhere in the world with privatisation of water, nowhere has it sustained over a long period of time in a comprehensive manner, encompassing most of, or even large parts of, the urban water sector. What has been attempted is privatisation of some small sub-sector, say, water distribution, keeping the rest of the issues still in the public sector.

Water is not merely a commodity, and the urban water sector is not just about supplying fresh potable water to people in urban dwellings. The urban water sector also involves multiple layers, including sourcing of water, deciding which is the best among available options, getting potable water through purification plants for equitable distribution through huge infrastructure, and managing the sewage generated through another set of huge infrastructure.

It involves not only creating infrastructure at so many different levels and managing such created infrastructure along with natural sources, but also aims to achieve a sustainable and optimum system.

For example, how do we use rainwater in an optimum way, in connection with lakes, ponds, tanks, wetlands, forests like the ridge in Delhi, groundwater aquifers, river and streams, and storm water drains? How do we manage all this? How and where do we treat sewage? What happens to treated sewage? How do we manage the system? Considering all aspects of the urban water sector comprehensively is necessary to achieve better water management and good governance. This becomes even more important when the urban water footprint is growing fast and when changing climate is also affecting the way we deal with various aspects of the water sector.

Not only a commodity

In many places where most of the water sector remains in the public domain even where some piecemeal water privatisation has been implemented, re-municipalisation is the trend. The private sector works on one bottom line: profit maximisation. But the management of water supply is an issue of rights and a basic need, as acknowledged by the judiciary. Moreover, water is embedded in the ecosystem. Any attempt to see water only as a commodity is bound to have multiple disruptive consequences.

When privatisation is mooted as a solution, it comes with a promise that it will create competition and that the consumer will benefit. A look at the power sector shows that this promise has not been delivered. The power sector is not only a monopoly but refuses to submit itself to public audit. This is not to suggest that people should not pay for the water they consume. Those who can must be made to pay. The current government in Delhi has not only provided free water to the lowest consumers, but has also managed to expand the distribution network and bring down losses. It is possible and necessary to improve public water governance. That is the only way forward.

Himanshu Thakkar is coordinator, South Asia Network on Dams, Rivers and People, and has been associated with water and the environment sectors for more than two decades

Should we wait for the government to deliver on its promise on drinking water or try public-private models, asks Arun Lakhani

Water is an asset of society and cannot be owned by the government, let alone the private sector. The government is the custodian of water on behalf of the people it represents. Having said that, let us ask the question, has the government been able to perform its role of trustee efficiently and responsibly? The answer is a resounding ‘No’.

Thus we have over 50% non-revenue water (water put into the distribution network after being treated is untraceable). We have irregular water supply hours ranging from a few hours daily to once a week or perhaps once in two weeks. We have 60% pipe coverage and hardly 4% metering, leading to large wastage of water with no accountability. In sewage, 38,000 million litres per day (mld) of untreated sewage is discharged in lakes and rivers. The Ganga receives 12,000 mld of sewage per day. The result is that 21% of diseases are water-borne; we lose over 10 crore person-days every year due to water-borne diseases.

Harness private efficiency

The above situation is despite the fact that even today we pump adequate amounts of water (135 litres per day per person) in 84 of the new 100 nominated smart cities. What’s missing is management of this precious resource. Thus, as a society, should we just wait and watch for the government to improve and redeem its promise to deliver drinking water or try out models like public-private partnerships (PPP) where private sector efficiency can be harnessed with structures ensuring accountability, leading to sustainable development?

The PPP model too needs to add another P — to stand for people who have to come on board as the largest stakeholder in the water sector. The involvement of the private operator, who will bring in the investment, would ensure long-term commitment to the cause.

Let me illustrate this with an example. In Nagpur, we are engaged with the city’s municipal body, and the right to connect and disconnect water supply rests with the Nagpur Municipal Corporation, which decides on the tariff. The Corporation follows a telescopic tariff structure. The private partner, that is us, gets paid a fee for every unit (metre cube) of water supplied, billed and collected. So tariff and fees are separated. The PPP model ensures that every bungalow, flat, and slum gets tapped water that is metered and for 24 hours. The largest beneficiaries are the people in the slums who no longer have to wait in queues for six to eight hours to collect their bucket of water.

Lessons from Nagpur

Nagpur has both a 24×7 water distribution project as well as a 100% privately funded 200 mld sewage treatment plant for reuse. The sewage treatment project with private funding has multiple benefits for society. If we are able to re-use treated water from thermal power stations in Nagpur (thanks to Central and State government policies and this is in an advanced stage), the city will be free of both capital and operational expenditure for 30 years. The contamination of nearby rivers/lakes will stop. The 200 mld of fresh water being currently used by thermal power stations will be available for the city to use, sufficient for almost 18 lakh people, which means that their interests are taken care of for the next 20-25 years despite population growth.

In my view, of utmost importance is to deliver service to the people. Generations have gone by without getting benefits of clean, potable, tapped water.

It has been five years since we started work in Nagpur and my experience tells me that the well-being of the people is central to the water narrative.

Arun Lakhani is chairman and managing director of Vishvaraj Infrastructure. The firm, in partnership with the Nagpur Municipal Corporation, supplies potable and reused water to the city

The SC’s Public Trust Doctrine, rather than privatisation or nationalisation, is the answer to India’s water problems, writes Mihir Shah

When we ask the question “should water be privatised?”, the underlying presumption is that currently water is not. But is that really true? India’s most important water resource is groundwater. It provides 80% of our rural and urban drinking water, as also industrial water and more than two-thirds of water for agriculture, which takes up most of our water resources. Groundwater in India is governed by 19th century British Common Law, which states that whoever owns the land has the right to draw unlimited quantities of water from below that land. Thus, private property in land extends to private control over water. In many respects, our water crisis today is the result of this privatisation of groundwater, which we inherited from the British.

Water table problem

It is not adequately recognised that nearly two-thirds of India’s land mass is underlain by hard rock formations. The natural rate of recharge of these rock formations is very low. Thus, once you extract water from these rocks, rainwater takes a long time to percolate below the ground and restore the water table to its original level. From the 1970s onwards, we started using tube wells to extract groundwater. Private extraction of groundwater happened in a competitive race to get water from greater and greater depths. When one user went to 300 ft, his competitors drilled to 400 ft and once that happened, other competitors reached 500 ft and so on in a vicious infinite regress that ended up successively lowering the water table, so much so that today we speak of “mining” of groundwater, with both water tables and water quality falling precipitously. In Punjab, people are drinking water that has uranium in it; in Bengal there is arsenic. This is because groundwater has been treated as a private resource, which has been subject to destructive competitive extraction. A classic example is that of a soft drinks giant depriving the people of gram panchayat Plachimada in Kerala access to drinking water.

The way forward?

So what is the way forward to overcome the obvious problems created by privatisation of water? Is nationalisation or a licence-quota permit raj the way forward? Certainly not. At last count, India had 30 million wells and tube wells. It is impossible to police 30 million groundwater users or to issue them licences and monitor them. This will be an administrative nightmare and only give rise to massive corruption. What we need to do instead is to recognise the common pool resource character of water.

One million farmers in the hard rock districts of Andhra Pradesh have already shown us the way. Once they understood the nature of their underlying aquifers, they came together to sustainably and equitably manage their shared groundwater. They adjusted their cropping patterns to bring them in line with the water available to ensure that the water would last them in good stead over a long period of time, while maintaining its quality.

Water is in public trust

As the recently drafted National Water Framework Law (NWFL) states, “water is the common heritage of the people of India; an inseparable part of a people’s landscape, society, history and culture; and in many cultures, a sacred substance, being venerated in some as a divinity”. Such a resource must never be privatised.

Indeed, as the NWFL goes on to say: “The State at all levels holds water in public trust for the people and is obliged to protect water as a trustee for the benefit of all”. And that no one’s use of water should lead to depriving anyone of his or her basic right to water for life. So much so that even a “delegation of water service provision to a private agency will, in no event, constitute the privatisation of water”.

Thus, the Public Trust Doctrine enunciated by the Supreme Court, rather than privatisation or nationalisation, is the answer to India’s water problems.

Mihir Shah is secretary, Samaj Pragati Sahayog, an organisation dedicated to sustainable management of water resources

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