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Privatisation and Commercialisation of Water in India

During the past decade and half India has been witnessing measures to reform the water sector based on the financial sustainability model put forward by the international institutions based on principles like full cost recovery, rationalisation of water tariffs, privatisation and public private partnerships across urban, rural as well as agricultural sub-sectors. The move is towards privatisation, commercialisation and commodification of water sector. These efforts to privatise water services have been undertaken through various international institutions like World Bank, Asian Development Bank (ADB) and International Finance Corporation (IFC) funded projects, 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 initiative and the AMRUT 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 have witnessed privatisation measures being implemented despite people's opposition and negative opinion against these. We have also seen earlier that in some places these projects were halted due to immense public pressure like in Delhi, Mumbai, Bangalore, Latur, Mysore among others. However, despite these setbacks the steps to privatise continue and during this period we have witnessed water services being 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 an 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 process in the water sector manifest as specific clauses under the concession contracts that range from risky to ridiculous like – control of private companies on domestic water supplies, mandatory household level metering, 24x7 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 Chhatissgarh; 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 serious social, economic, financial and environmental problems that these projects are facing. There are various other places where 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 Chhatissgarh and an Independent Committee of the State Government in Khandwa. The 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) and Latur (Maharashtra) 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 Aurangabad the private projects continue to face serious problems.     

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 marketisation in water sector. Provisions like 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 political 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 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 and better, quality, coverage and access to the local people especially poor and marginalised.     

In the past several years community groups, social and non-government organisations have been discussing and organising activities critiquing reform measures and privatisation of public water services 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. The meeting proposed in Bhopal endorses the efforts of this larger collective to reach out to the people in varied places on issues related to water and privatisation. This meeting we look forward to build strategies to campaign against privatisation and commercialisation of water services, supplies and water resources. 

This note was prepared by Gaurav Dwiwedi as a background note for a national meeting held in Bhopal, Madhya Pradesh on August 10, 2016. The author can be reached via email:

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