PPP goes from watts to water

After years of deliberation, the Delhi government has approved a proposal to rope in private players in public-private partnership (PPP) for managing water supply in three south Delhi areas — Malviya Nagar, Mehrauli and Vasant Vihar.

The decision was taken at a high-level meeting chaired by chief minister Sheila Dikshit, for whom water reforms had become an obsession for the last few years. A small beginning has been made on Monday, and the plan is to gradually extend the experiment to the entire city.

According to a recent report by Mckinsey Global Institute, Mumbai and Delhi, already reeling under a water crisis, will need the maximum supply of municipal tap water in the world by 2025. Mumbai tops the list of 20 global cities in terms of municipal water demand in the next 13 years, followed by Delhi.

The current water demand in Delhi is estimated at 850 MGD (million gallons daily). Taking into account losses during treatment and distribution of about 30 to 40 per cent, the Delhi Jal Board (DJB) supplies only 600 MGD of treated water to consumers. As a result, people get erratic and inadequate supply of water, that too of poor quality.

Why huge losses in supply

“DJB’s policy is to rope in contractors to handle all repair and maintenance work related to the supply system. There is no transparency on contract terms, and no accountability in how these contractors perform. So nothing changes and losses continue,” says a former DJB official.

It has been estimated that at around 25-30 per cent of Delhi’s population gets no piped water supply and are forced to depend on ‘informal systems of water supply’, meaning private contractors supplying water drawn from borewells at high rates.  This leads to severe public resentment, often spilling out into the streets.

It is against this background that the government felt the situation could be set right through managerial measures, embarking on the path to privatisation. According to Dikshit, the PPP model in water distribution has become a necessity as people will get 24-hour water supply once the model is implemented.

“The assets will remain with the DJB, while distribution and maintenance will be looked after by private entities. The partnership will ensure uninterrupted and pressurised water supply, prompt grievance redressal and improvement of services at no extra cost,” Dikshit has been often heard saying, pointing out the advantages of the new model. “It will also increase revenue generation and reduce energy consumption.”

However, the opposition BJP sees no advantages in the system and calls it a conspiracy by Dikshit in collusion with private players. Leader of opposition in Delhi Assembly V K Malhotra says that after burdening the people with a tariff hike every two months with the privatisation of electricity, she now wants to repeat it with water. This will only burden the common man more, and make private firms richer.

“Dikshit has been the chief minister of Delhi for the past 14 years and has failed to provide pure drinking water to people. Hence, in order to hide her failure, the chief minister has decided to hand over the reservoirs of the Delhi Jal Board to private companies. These private companies do not run business for charity and they will end up fleecing people by raising water prices,” says Malhotra.

While this may be an extreme opinion, it cannot be dismissed entirely. Look at privatisation of power supply as an example. Delhi has seen over 75 per cent hike in power tariff in the last two years alone, while there is no relief from power cuts.

The logic given by the city power department is that enough electricity is not produced in the Capital and it has to be bought from power generation companies. So the hike becomes necessary when these companies raise their prices. And outages happen when these companies don't supply enough power.

Critics say privatisation did not help consumers. But it did relieve the government from the mundane task of supplying power. The same story might get repeated in water distribution as well.

Delhi depends on rivers in Haryana and Punjab for its water needs, and Dikshit had to negotiate hard with Haryana chief minister B S Hooda this summer after water supply to Delhi was reduced to meet Haryana’s own needs.

“Delhi is like a big spoilt child who gets everything. Privatisation will only help private companies maximise profits. According to the Delhi Jal Board, 68 per cent of water provided by it comes under the non-revenue category, which is lost in leakages and theft. And with the PPP model in place, leakages and theft may be reduced to 15 per cent in 36 months,” says Himanshu Thakkar, coordinator of South Asia Network on Dams, Rivers and People.

“Till a month ago, among the three areas for the pilot project, Nangloi was a major focus area but now it is Mehrauli. The profit motive is already being witnessed here,” says Thakkar.

However, India Water Review managing editor Girish Chadha thinks differently. According to him, it is important that something as scarce as water is not used unscrupulously by people who take it for granted. “Supply is limited, so we have to control demand. And how do we do it? One way demand can be managed is through pricing. You make price slabs, tell people to pay so much for so much use. Just like electricity. This will put an end to its wastage” says Chadha.

He says people are likely to crib initially as nobody wants to pay more for anything, but they will get used to it after some time. He believes in the efficiency of private companies.
According to DJB, a large portion of its water supply is non-revenue generating and private players will ensure that this water is not wasted.

“The government is not bothered about what is lost and what is coming,” says Chadha. “However, once you and I are held responsible for that water, we will make sure that every drop is accounted for. This wastage of water through leakages and theft will also come to an end.”

Both sides of the argument seem convincing. But time will tell.