Close to past two decades India has been observing measures to reform the water sector based on the financial sustainability model put forward by the International Financial Institutions (IFIs) based on principles like increasing efficiency, full cost recovery, increase in water tariffs, privatisation and public-private partnerships across urban, rural, industrial as well as agricultural sub-sectors. The move is towards privatisation, commercialisation and commodification of water sector. These efforts to privatise and commercialise water supply services have been undertaken through several IFI supported water sector reform projects like the World Bank, Asian Development Bank (ADB) and International Finance Corporation (IFC).

The major reform measures promoted by IFIs are also being part of the national programs like Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Urban Infrastructure Development Scheme in Small and Medium Towns (UIDSSMT) and now under the SMART city mission and the AMRUT (Atal Mission for Rejuvenation and Urban Transformation) plan for urban development. Where private participation of urban services is envisaged and user costs will be required for covering the expenses of such services including domestic water supplies. In Madhya Pradesh, specific state schemes like Chief Minister’s Urban Water Supply Scheme (CMUWSS) and Madhya Pradesh Jal Nigam in Madhya Pradesh look to continue the principles of the reforms model.

Under these schemes, several towns and cities across the country are witnessing privatisation measures being implemented despite people’s resistance and negative opinion against these. In the past, in some places, these projects were stalled due to immense public pressure like in Delhi, Mumbai, Bangalore, Latur, Mysore, Nagpur among others. However, despite these setbacks the steps to privatise continue and during this period water services have been handed over/ proposed to private control in places like Nagpur, Hubli-Dharwad, Khandwa, Tiruppur, Shivpuri, Patna, Guwahati, Naya Raipur, Mangalore, Kolkata, Ludhiana and Dewas. The National Water Policy (NWP), 2012 has included private sector participation as a viable option to deliver water services.

Local people in these towns and cities are severely impacted due to the conditionalities that the privatisation of water services brings along with it, especially the poor and the marginalised sections of the community. The conditionalities are being implemented as part of the larger reforms processes in the water sector manifest as specific clauses under the local water supply contracts with private companies that range from risky to ridiculous like – control of private companies on domestic water supplies, mandatory household level metering, 24×7 water supply, increasing water tariffs, automatic revision of water tariffs every one to three years (10% hike), ignoring access and coverage of poor and marginalised sections, prohibiting use of local water resources and sharing domestic water within the community, neglecting local water resources, increasing dependence on distant water sources, among others.

However, it also needs to be added that these reform measures and privatisation of water services are not without any problems. For instance, privatisation of Shivnath river for water supply to Borai Industrial Area, Durg in Chhattisgarh; privatisation of domestic water supply in Khandwa and Shivpuri in Madhya Pradesh; Latur, Nagpur and Aurangabad in Maharashtra; Mysore, Hubli-Dharwad and Bangalore in Karnataka and privatisation in Delhi has seen social, economic and environmental problems that these projects are facing. There are various other places where the privatisation of water services/ resources is in “troubled waters”. Several of the above-mentioned cities have been witnessing people’s campaigns against the privatisation projects.

The campaigns in case of Shivnath and Khandwa have been successful to the extent that the state governments were forced to form committees to investigate the objections against these projects – Public Accounts Committee of the State Legislative Assembly in Chhattisgarh and an Independent Committee of the State Government of Madhya Pradesh in Khandwa. These committees in their final reports submitted to the respective state governments were scathing in their assessment of the privatisation processes as well as the concession contracts given to the private companies against people’s wishes. However, it also needs to be noted that these contracts continue to be operational till date despite negative remarks by government appointed committees. However, there have also been significant reverses as well in Mysore (Karnataka), Aurangabad and Latur (Maharashtra) where privatisation of water services has been rolled back due to the serious problems that the private projects faced and negative public opinion of the operation of water services by private companies. In other places like Tiruppur, Nagpur, Delhi and Khandwa the private projects continue to face serious problems.

Various consultancies are part of the support group which helps the planning of the water sector. These consultancy companies such as Ernst & Young, McKinsey, and Price Waterhouse Coopers prepare business plans for the multinational companies which are their clients, TNCs like Veolia, Saur, Suez and Indian companies such as Doshion, Vishwaraj Infrastructures, Vishwa Infrastructure, SPML, JUSCO, etc so that their profits margins are maintained from year-to-year and there is considerable economic growth in the sector by using public funds in the name of private sector participation (PSP) or public-private partnership (PPP) forms of contracting wherein profits are made by the private sector. This means separate payments twice over. This is far from efficient, an extremely expensive proposition.

On the other hand, apart from the above city-specific projects, several state wide water sector restructuring projects are also being implemented across the country. In states like Maharashtra, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Gujarat, Rajasthan and Delhi such projects are being implemented supported by the loans from IFIs like the World Bank or ADB. These projects look to transform the whole sector by commercialising and commodifying water from a public good to a market commodity. The various institutional, legal, administrative, financial and operational components prescribed under these loan projects look to provide the underpinnings for privatisation, commercialisation and commodification in the water sector. Provisions like the formation of water regulatory authorities by state governments – which are essentially put down as conditionalities under loan agreements – look to uncouple the decision making mechanisms in water sector from the public processes to a parastatal and quasi-judicial institutional structure in the form of water regulatory commissions. These regulatory commissions formed under the law passed by state assemblies will have the power to assess and allocate water resources to users as well as setting of water tariffs to be charged from different users – irrigation, domestic, industrial, etc. States like Maharashtra, Madhya Pradesh, Uttar Pradesh, Arunachal Pradesh, Gujarat and Karanataka have passed laws/ notifications in this regard. Similarly, restructuring projects also include measures like increasing water tariffs, privatisation and PPPs.
Interestingly, all the above projects focus on financial aspects like tariff increases, user charges, full cost recovery, but none of the above discusses in details about the services improvement aspects, better quality, coverage and access to the local people especially poor and the marginalised.

In the past several year’s community groups, social and non-government organisations have been discussing and organising activities critiquing reform measures and privatisation of public water services promoted by IFIs in several places across the country. In the past, there has been a determined effort that has gained momentum to bring the various groups of campaigners, activists, researchers, academics, community groups, labour collectives, people’s representatives and non-government organisations together for national campaigns and meetings discussing further actions against privatisation and the alternatives to privatisation. Campaigns such as Reclaiming Public Water and Remunicipalisation of private water services are making an effort across several cities and countries to help support community groups, trade unions, municipalities to gain control of water services in their cities. As of now, there are more than 200 separate cases of remunicipalisation, grown from just 2 in the year 2000, that have been documented across the world. These include cities like Paris, Berlin, Buenos Aires, Cochabamba, Bogota, Jakarta, Kuala Lumpur, Johannesburg, Dar es Salaam, among many others. The efforts to remunicipalise services are ongoing in several other places. Remunicipalisation offers opportunities to for building socially desirable, environmentally sustainable, quality public water services benefiting present and future generations. Remunicipalisation emerges from the direct experience with the false promises of privatization of water services – from poor service quality, poor performance, under investments, increasing tariffs, retrenchment of workers, lack of tangible efficiency improvements, problems of transparency, accountability and participation.

Campaigns around remunicipalisation and reclaiming public water supply has given way to the increasing discussions on the concepts of right to water and its implementation at the community level and how municipal bodies, trade unions, citizen groups in several cities and towns across the world are resisting privatisation and making an effort to adopt a pro-people and not for profit approach for delivering water services.

Help us in
* Demystifying finance to common people
* Making financial institutions transparent and accountable
* Spreading financial literacy programmes

Your email address will not be published. Required fields are marked *

*