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