Privatisation of Water Services

Privatising Water Services in India

( by Gaurav Dwivedi )

As part of Manthan we have been “studying, monitoring and analysing” water and energy sectors for more than a decade now. As one of the team members I was more involved into looking in the specific aspects and trends related to privatisation, public private partnerships (PPPs) and reforms in the water sector in India as well as internationally. Over this period we have observed the impacts of privatisation and reforms programs in water sector in other countries and similar transformative programs being put in motion in India.

The water privatisation and reforms programs in the country have shifted from being influenced by the international financial institutions (IFIs) to be part of the domestic policies at the national as well as the state level. These include the principles of financial sustainability, full cost recovery, tariff rationalisation, private sector participation, etc. Interestingly, this also includes the lesser publicized idea of commercialisation of water, creation of water entitlements, market for trading water entitlements, etc. In several cities and towns across various states the process of commercialisation and privatisation of public water services is ongoing broadly in the name of reforms.

On the other hand we are also observing another trend spread across several countries where public water utilities have been privatised. Several cases have been documented where national governments, municipal authorities and citizens have been demanding that the water services be returned back to the public authorities and be delivered as public service rather than a private service.

In India too, there have been a few cases where people’s representatives, local municipal authorities and citizens have strongly advocated against private domestic water supply projects. There have been voices coming from places like Mysore, Aurangabad, Latur, Khandwa, Delhi, Nagpur, Tiruppur, Hubli-Dharwad and others consistently about the poor planning and execution as well as operations of private water supply projects. Some of these cases have been well documented which shows that on financial, technical, social and environmental aspects these projects have not been able to perform up to the levels that were promised.

The results are now there for all to see that haphazard and poorly discussed projects are facing problems on multiple levels in several cities and towns including the ones mentioned above. Local people have been raising serious concerns about financial, service delivery, water quality, operational, social and environmental aspects. The private projects which were meant to replace the inefficient public water services are failing to deliver on the promises. This has lead to an interesting turn of events, will discuss about those in the next posting.

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Book on the PPP in water sector written by author may be downloaded form here.

Gaurav Dwivedi may be reached at gauravd1977atgmail.com

About Manthan

In last several decades, resource use and developmental activities have given rise to large number of fierce debates and intense struggles raising issues of social justice, equity, environmental sustainability, human rights, rights of the oppressed sections like tribals and dalits, gender issues, cost- benefit, and efficiency. Serious concerns have arisen regarding the social and environmental sustainability of existing developmental paradigm, even as its efficacy in delivering benefits has been put in doubt. In the recent years, the enormous ongoing transformations in the global and national economic, financial, governance and power structures due to the relentless push towards globalisation, liberalisation and privatisation, have made these concerns even more relevant and accentuated.

It is necessary for any organization or individual anxious about these concerns to fully understand the nature and substance of these ongoing transformations, along with the traditional concerns of equity, human rights, environment and so on. This has become especially important for those working in the public interest and public policy arena. Yet, most information, information sources and analytical capacity remain with governments or private corporate sector.

In the last two decades or so, the issues that the intense struggles have thrown up, along with the efforts of many working on ground level experiments, have also started adding to macro level picture of alternate paradigms. There is a need to bring together these strands, analyse them, and help build the larger picture.

Thus, there is a critical need for independent groups committed to addressing public interest concerns that can carry out high quality research and analysis with sufficient rigor, as also collect, collate and provide access to information. Manthan has been set up as an attempt to address this need.