Isher Judge Ahluwalia Posted online: Wednesday, Jan 27, 2010 at 0305 hrs
The water scenario in three cities of Karnataka, i.e., Hubli-Dharwad, Belgaum and Gulbarga was not very different from that in most other cities of India until recently. Water was available for 1 to 2 hours every 5 days or so, covering only 50 per cent of the population. Since all households did not have individual meters, a fixed rate of Rs. 90 per month was charged to all residents. The richer households met their additional water needs by buying water from tankers at a price of Rs.150 per tanker. Others would invest in storage tanks and electric pumps to make the most when water would flow. The poorer households would line up for hours on the day water would come through the pipes and would therefore miss reporting for work and forego their wages for the day. Today 25,000 individual households or almost 2 lakh residents enjoy the benefits of 24x7 water supply with a world class water distribution system.
This is the result of a pilot project with public-private partnership covering the three cities and costing Rs 237 crore over a period of 5 years. The pilot covers approximately 10 per cent of the population of these cities, which now has access to 24 x 7 water at a cost which is lower than what they paid for earlier, especially when account is taken of the payments for private supplies and loss of wages incurred while queueing up to get public supply of water. All property connections are metered and computerised records are maintained. Average monthly water bills range from Rs. 80 to Rs. 150 depending on consumption. Customer service centres operate 24x7 to address customer complaints and queries. With this pilot, the Karnataka Urban Water Sector Improvement Project (KUWASIP) has successfully demonstrated the technical feasibility of providing water round the clock to all the residents of the pilot project area. Fittingly, the project received the National Urban Water Award for public private partnership from the President of India on August 13, 2009.
Arvind Shrivastava, managing director of the Karnataka Urban Infrastructure Development and Finance Corporation, pointed out to us that in Gulbarga for the first six months, customers received their bills, based on actual consumption, but had only to pay the old fixed charge. After seeing that the new charges were mostly lower than earlier, the customers willingly switched to the new system of consumption-based payments.
The project focused on (i) physical investments in the system, and (ii) strengthening of institutions for service delivery. The latter, which in many ways is crucial, meant improving information systems, benchmarking services, pricing services to recover the cost of operations and management, and putting in place other measures designed to improve the performance of the public sector. The reforms covered the municipal corporations, the Karnataka Urban Water Supply and Drainage Board (KUWSDB), and the Karnataka Urban Infrastruture Development and Finance Corporation (KUIDFC).
The role of the private operator, a French water company, Veolia Water, was to develop an investment programme to refurbish and transform the existing system and to implement the programme. The private sector involvement revolved around single accountability, with a review of the existing systems, data validation, system design, network revamp, and operations & maintenance — all handled by a single party. This was tied into a performance-based contract with stringent performance requirements and payments linked to achievement of the targets. The management fee of Rs. 22 crore to the private operator had a fixed component of 60 per cent, while the remaining 40 per cent was linked to performance. The contract also included a maximum bonus of Rs. 5.6 crore and a penalty of up to 10 per cent in case of failure to meet the performance targets. In the event, “all performance targets were met”, said a beaming Mr K.A. Joseph, regional director of the private company.
The operator was responsible for providing 100 per cent customer connections as well as billing. Actual collections remained with the corporations. Providing adequate bulk water to the private operator was the responsibility of the KUWSDB. The project has comprehensively proved wrong the perception that 24x7 requires more bulk water. Against the 135 lpcd assumed for the project, average water consumption is actually 100 lpcd. The funding for the project came from the World Bank (77 per cent) and the Government of Karnataka (23 per cent).
The project protects the interests of the poor through a cross-subsidy in the tariff structure such that a minimum lifeline supply of 8,000 litres per household is provided at a subsidised rate for the poor, and connection charges are also waived. Not having to store water in large containers means that household space is freed up. Improved water quality has also meant less spending on medicines for water-borne diseases. For example, cases of diarrhea and dysentery at the Belgaum Corporation Maternity Hospital dropped from 402 during the fiscal year 2005-06 to 177 during the fiscal year 2008-09.
A touching revelation during our interaction with the women in the slum area of Madhavpur in Hubli-Dharwad was the enthusiasm of the women for the project. When a politically motivated man tried to intervene by saying that 24x7 water is good but it should be made available cheaper and that women did not realise the value of money since they do not earn, the women protested by saying, first, that they were also earning wages and then, “what would men know about the inconvenience of bringing water from distant locations?” Their empowerment was writ large on their faces.
The political will at the level of the urban local body was evident in our discussion with the corporators. So was the effort at social intermediation. Mr P.S. Vastrad,
municipal commissioner, Hubli-Dharwad, highlighted the importance of involving the local NGOs who took the message of the benefits of the programme to the communities.
Much to the delight of the residents in other areas of the cities which were not covered in the pilot project, the Government of Karnataka has approved the up-scaling of the project to the entire population of the three corporations within the framework of public-private partnership. If three cities in Karnataka have shown that 24x7 water is
indeed deliverable, should other cities and other states of India be far behind?
Isher Judge Ahluwalia is the chairperson of ICRIER and chair of the High Powered Expert Committee on Urban Infrastructure. Ranesh Nair is a consultant to the committee. Views are personal
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