Tuesday, December 26, 2006

Implication of water Privatization in India


The United Nations has recognized access to water as a basic human right, stating that water is a social and cultural good, not merely an economic commodity. Today, due to increasing consumption patterns water is becoming scarce and this scarcity is an emerging threat to the global population. Global consumption of water is doubling every 20 years, more than twice the rate of human population growth. At present more than one billion people on earth lack access to fresh drinking water. By the year 2025 the demand for freshwater is expected to rise to 56%above what currently available water can deliver if current trends persist Barlow, 2003).
To solve the growing water crisis, the solution that is proposed and pushed by world bodies such as the World Trade Organization (WTO) and International Monetary Fund (IMF) through international agreements such as General Agreements on trade and services (GATS) is privatization of water, which in effect leads to treatment of water by private companies through structural adjustment policies. The control of water by private companies takes away the resource from the public and puts it in private control.
A number of water supply build operate–transfer (BOT) projects have been abandoned or are causing serious problems in Vietnam, China, Malaysia and elsewhere, due to unaffordable levels of prices being built into take-or-pay contracts. Similar problems have been observed elsewhere in the world. There should be a serious reappraisal of the economics of existing water supply Bots, and a moratorium on further developments, while the lessons of this experience are explored. Otherwise long term economic liabilities may be accumulated which damage the ability of water utilities to function.
The performance of public utilities in Asia compares well with that of the privatized operations in Jakarta and Manila. This confirms other evidence, for example a comparison of public and private water operations in Latin America, which found that private operations despite all the financial and other support they have received, were no
more likely to have extended services than cities without private operators. The ratings of the Asian cities call into question the continuing enthusiasm of the Asian development bank (ADB) and a number of governments for privatization in some form or other. Cities such as Osaka and Phnom Penh, run by effective public sector water operations can clearly provide lessons for other water undertakings in Asia.

Water privatizationWater privatization involves transferring of water control and/or water management services to private companies. The water management service may include collection, purification, distribution of water and waste water treatment in a community.
Traditionally this service has been provided by the local governmental infrastructure such as the municipality and local city council. The pro privatization lobby including water corporations, the World Bank and IMF has aggressively campaigned for water privatization on the grounds that, while water subsidies promote wasteful practices, commodification of water should allow market forces (supply and demand)to set the water tariff, which in turn will reduce water consumption and promote water conservation. Furthermore, it is argued that opening this sector to private providers will bring in badly needed capital for upgrading and development of infrastructure. There are several models of water privatization that are currently in vogue in different parts of the world (Citizens Network, 2003).Depending on the degree of privatization, these models can be broadly categorized into:
Service Contracts – In this model, public authority retains overall responsibility for the operation and maintenance of the system, and contracts out specific components.
service contracts last 1-3 years and include services such as meter reading, billing and maintenance. While public ownership is maintained and community accountability structures remain in place, the transparency of operation can be limited. Contracts are often not openly negotiated and regulation and oversight is usually lacking.
(Design), Build, Operate, Own and Transfer or (D)BOOT- this model of privatization is usually used for system infrastructure development such as water treatment plans that require significant finance. The private operator is required to finance, construct, operate and maintain the facility for a specific period of time (usually more than 20 years). At the end of the term the infrastructure may turned over to the municipality or the contract is renewed. This model is more prevalent in developing countries. Examples of (D)BOOT include Tiruppur Project in Tamil Nadu India and Cochabamba experience in Bolivia.
Divestiture- in this model, the government or public authority awards full ownership and responsibility of the water system including the water source to a private operator under a regulatory regime. This is also done in the form of 10-20 year renewable contracts on the entire system. The government moves operation to private hands thus improving efficiency. Competition is limited through the process of bids on the divestiture. The private sector firm is than expected to take the risks and recoup investment/profits. This model cedes tremendous power over an essential resource to corporations. Examples of divestiture include the Rasmada scheme, under which a 22-year lease over a stretch of the Shivnath River in Chattisgarh was accorded to Radius Water, Inc.
Water privatization has been recommended by the Indian Government’s national water policy (National Water, 2002) to address the issue of water scarcity. In its article 13 titled, “Private sector participation” the policy says that “private sector participation should be encouraged in planning, development and management of water resources projects for diverse uses, wherever feasible”. This has placed water privatization at the forefront of developmental policies implemented by several state governments (Ghotge, 2002).while the policy is silent on the kinds of privatization models that will be adopted as can be seen from the case studies below, most of the privatization that has been done in India follows the (D)BOOT model. The national water policy also encourages interlinking of rivers to improve water availability in water scarce areas (interlinking, 2005).the proposed river linking scheme has water privatization at its heart of funding, which will further isolate the water source and responsible water management from local communities. Many sate governments and, neighboring nations sharing river waters with India and experts have questioned the merits of such a scheme on numerous grounds including lack of feasibility and impact studies on the project, ecological disasters from river diversion schemes around the world, as well as adverse environmental impact due to
submergence soil salinity and water logging (Dasgupta , 2003) , (acharya, 2003),
(sharma, 2003)

Selected case studies of water privatization:Tiruppur, Tamil Nadu : The New Tiruppur Area Development Corporation Ltd.
(NTADCL) was set up by the state government in 1995 to execute an Rs 13 billion (EUR 281 million copy) water supply project , with financial support from USAID and the World Bank , NTADCL, issued a 30 year BOOT contract for the project to a consortium including Mahindra and Mahindra , United International, North West Water, Larsen and Tubro and Bechtel, which would transfer water over a 55 km long pipeline from the river Bhavani and supply 185 million liters of water per day to nearly 1,000 textile units and more than 1.6 million residents in Tiruppur and its surrounding area (Tiruppur water, 2005). According to the project document,United Utilities and NTADCL will run the joint venture at a “fixed operation and maintenance fee” that will be recovered entirely from Tiruppur municipality. However , in an effort to woo further corporate capital investment in a state , the Tamil Nadu government has guranteed profitability to the investors in the project by creating a hedge fund to pay the interest and operative expenses of the project in the event of water shortage in the Bhavani river, with no stipulation on amount of water withdrawal from the river for this project (Ninan, 2003)(Constraints to development, 1999).

Shivnath River, Chattisgarh : The Chattisgarh State Industries Development Corporation (CSIDC) , which is in the charge of industrial development in the state , commissioned the project to meet the demand on water in the Borai Industrial area
Situated on the Banks of the shivnath a non perennial river. As part of the project, a 23.6 km stretch of river was ceded to Radius Water through a 22 year renewable contract,
Under which the company had absolute monopoly over the stretch of river water.
In return, Radius Water would provide water to the CSIDC from the Shivnath during the lean 6 months>.The company built an integrated water supply system to control the water flow automatically depending on the level of the Shivnath and set the water tariff at substantially lower rates than that charged by the neighboring states of Madhya Pradesh
And Maharashtra (sharma, 2002). The project was initially hailed as a success by the government. However , the catch was that the the agreement assured Radius Water of payment for a minimum of four million liters of water per day by the state government, regardless of the amount of water used irrespective of whether the CSIDC recovers this amount from the industries.20 The CSIDC lost Rs 12.9 million between December 2000 and June 2002. 21 Furthermore , Radius Water’s monopolistic deal with CSIDC and the water resources department covered ground water as well in an 18 km radius covering the Borai industrial area. The company promptly prohibited fishing in the stretch of the river and also changed local farmers for access to water from tubewell. Ultimately , bowing to pressure from several NGO s and adverse media reports, the government had to scrap the deal (Dhar, 2003).

Degremont, New Delhi : Degremont a subsidiary of the French water giants suez has been awarded a Rs 2 billion contract under a 10 year BOT agreement with the Delhi Jal BOARD (DJB) for a drinking water treatment plant in Sonia Vihar near New delhi. The water treatment plant is expected to yield 635 million liters of drinking water a day.
While Degremont is getting the raw water for free through pipelines from the Upper Ganga canal of the Tehri dam project. (near Murad nagar, Uttar Pradesh)the amount it will get as a fee for treating the water will be much in excess of what the DJB will charge the consumers when selling the water . The DJB is also providing Degremont with land electricity and treatment cost.At the same time Degremont has been kept free from transmission losses and revenue collection and has also been assured the purchase of treated water and productivity incentives once the plant begins operations
(Kaur, 2003). The Sonia Vihar plant has been plagued by controversies since its inception. The leader of the opposition party and some ruling party members have leveled allegations of corruption and irregularities in the allotment of contract to Degremont (Mehdudia, 2000). A Delhi based NGO – Research Foundation for Science, Technology – has accused the Delhi Jal Board of wasteful practices(Shiva, 2002). The Delhi Jal Board, which does not rule out an increase in the water prices for the residents of New Delhi., (Degremont Water Plant, 2002) has not made public any of the project documents.

Arguments against Water Privatisation
1) Price hikes are unaffordable for poor: Water privatisation has invariably led to price hikes in almost all the regions in the world where water has been privatized. This is because there are considerable costs involved in upgrading water harnessing, purification and distribution systems. For such expensive projects, water companies borrow private money, which is subjected to high interest rates from financiers and state taxation. The companies recover their costs and expenses by charging the consumer. Not only is the capital cost divided among all the consumers but also the interest, taxes and overheads on the capital. Thus, the consumer is forced to bear the burden of higher payments on the company loans. In contrast, tax-free public financing results In the low costs for such projects in the community owned or state controlled water systems. It has been argued that privatization will lead to reduced consumption and promote conservation. However, while market forces will determine the water tariff and make it costlier in scarce areas, it is doubtful if this can actually reduce consumption. The price hikes following privatization have almost always made water unaffordable to the poor. However the rate increase does not make a dent on agriculture and industries where the price hikes are affordable.

In developing countries such as India, the water price hike is also an indirect consequences of the conditions imposed on the government by the World Bank and IMF in return for structural adjustment loans. The privatization of public services such as water and electricity is often a sine qua non for such loans. Furthermore, full cost recovery is demanded by the World Bank and IMF as a prerequisite to privatization. For instance, during the severe flooding in Orissa in 2001, the World Bank demanded an increase in the water tariffs as a cost recovery measure on the use of water (Press Release, 2001). Rates for water irrigation have since doubled or even tripled. Increased consumer fees for water can make safe water unaffordable for the impoverished and vulnerable populations. Families are often forced to make trade-offs between water, food, schooling and health care.

These cost recovery conditions mean that user fees paid by water consumers must cover all water system costs, which usually include the costs of operation, maintenance and capital expenditure, and sometimes the cost of servicing past utility company debt.
Magnesium in the Plachimada district in Kerala, which has lead to health problems among the villagers in the area (Jyaraman, 2002). In Walkerton, Canada, seven people died and several became ill as a result of E-coli contamination in the drinking water. The private company, A&L Laboratories, contracted to test the drinking water knew of the contamination but regulations intended to encourage privatization ensured that company was not required to alert the government (Top Reason, 2005). In India, the bottled water industries and Cola industry have been shown to have high pesticide levels in their products (CSE India’s, 2005).

The World Bank justifies cost recovery requirements by contending that, with higher payments from consumers,private companies will have an incentive,as well as the revenues,to extend pipes to those relying on water trucks or unclean sources. However,there is little evidence of the multinational water companies' commitment to expanding services, especially to poor communities where the ability to pay the increased fees is limited. This is because the poor communities offer little or no margins to the wate corporations. Instead, the multinationals, which have only recently started their major moves into developing countries, have quickly racked up very poor social and environmental records (Jayaraman, 2002)

2) Unsustainable water mining: Many potential risks emerge once a resource ass fundamentals to life as water is privatised.One of the foremost reason to oppose water privatisation is the threat of the unsustainable water mining by the water corporations in an effort to maximise profits. These corporations,which are answerable only to their shareholders, have a declared agenda to make profit. Once water becomes a marketable commodity and a corporation is given a sole rights to a body of water, then it is within corporations' rights to mine as much water as it deems fit. Furthermore in an effort to maximise profits, if the corporationmines an environmentally unsustainable amount of water and deplete the water body at a rate faster than it is replenished, then the government officialsand the affected population can do very little to legally prevent the coororations from doing so.
The fact that this is real and tangible threat is appreant from the increasing threat of the community complaints against indiscriminate mining of groundwater by Coca-Cola in the Khammam district of Andhra Pradesh, Athur village near Chennai and Plachimada in Kerala (Jayaraman, 2002). Residents from the villages in the Palghat district inKerala surrounding Cokes greenfield soft-drink bottling factory in Plachimada say that Cokes indiscriminate water mining has dried up many wells and contaminated the rest. Coca Cola's bottling plant was set up in 1999 in the middle of fertile agricultural land, with proximity to a number of number of reservoirs and irrigation canals. Cokes mining of more than 1 millions litres of ground water of ground water per day has parched the lands of some 2000 people within 1.2 miles of the factory. The company's usage of agricultural land for non agricultural purposes has also been questioned by local residents. Due to the indiscriminate mining, the grond water has become contaminated with the excessive calcium and magnesium from the dissolution of limestone that is associated with the groundwater deposit. Nearly 100 people have reported recurrig the stomaches aches, which they relate to the brackish and milky white water that they are being forced to drink. Public protest over the issue has only met with violent arrest by the police of local villagers (including women and children) involved in the peaceful picketing of the cokes factory.

3) Creation of water monopolies: Privatisation by definition eliminates the public control of the resources in question. Public control of water is essential not only because water is necessary for survival and human fulfillment, but also becaus eof the severe and ever worsening water crisis that the world is faced with (UN Warns, 2002)
Once the goverrnment agency hands over the water systems to a private enterprise, it becomes extremely difficult and prohibitively expensive to reverse the decision. What makes is so difficult is that global market for water is etimated to be over $500 billion globally and $2 billion in India (Jha,2002).. Fortune magazine has labelled water as the "oil of the 21st century ". With such a huge profits at stake, corporations around the world strive to ensure that water as a commodity live sin the private control. The water corporations are aided and abetted in their effort by financial institutions such as the world bank, WTO and IMF, which enforce many free trade agreements and structural adjustments programs on developing countries as a prerequisite for a " developmental" loan. A water corporation can use one of the many free trades treaties to take legal action against the government for withdrawing from the agreement to privatise water systems. Although this has not yet happened in India, yet many instances of watersuits filed by water corporations against local government that backed out of a contract in countries with a longer history of water privatisation (Top Reason,2005).

4) Water quality compromised :
Corporations in search f profits can compromise on water quality in order to reduce costs. this is especially true in country such as India,where the water quality regulatory boards do not have the teeth to enforce their standards. There have been numerous instances of outbreaks of epidemics due to poor quality of water. As discussed earlier, Coca-Cola's indiscriminate mining of ground water has contaminated ground water deposits with excessive amounts of Calcium and

5) Potential Export of Bulk Water: Fully aware of the $2 Billion water market in India, private companies are in a frenzy to access fresh water sources that they can sell at huge profits. For instance, the huge market for drinking water in the perpetually water starved city of Chennai has prompted several private companies to mine the surrounding villages for groundwater. The residents of Mathur village in North Chennai sued several bottled water companies in 1995 for illegally extracting groundwater (Hall, 1999). By the time the case was taken up in 1999, more than 60 private companies supplying water by tanker trucks had sunk additional illegal wells in Mathur. Privatisation opens the door to bulk water exports as control over this scarce resource is transferred from local communities to profit minded global operations. Bulk water exports will have disastrous ecological and environmental consequences.

6) Corruption and lack of transparency: Indian government agencies are notorious for teir lack of accountability and transparency in awarding of service contracts to the private corporations. The Enron scandal - in which the Maharashtra government awarded Enron a contract for generation and supply of 695MW of electric power – has epitomized the allegations of bribes and “kickbacks” that have plagued practically every major service contracts awarded by governments in India. In many cases the government guarantees ginst any loses incurred by the water corporation by setting up hedge funds for such purposes or assuring regular payments to the corporations for fixed amounts of water regardless of actual usage (Jain, 2003). Furthermore, the potential for huge profits and long term monopoly over supply of an essential resource such as water has doubly increased the incentives for private corporations active in this sector to offer bribes in order to secure contracts. Executives of many water corporations have

been convicted for bribing government official’s world wide (Hall, 1999), (Corruption, the companion, 2000).

Water is synonymous with life. Water corporation through world bodies such as the World Bank and IMF, are influencing national governments to push privatization nd commoditization of water as ‘the chosen’ alternative to manage the growth in water consumption and the severe water scarcity. However, the growth in water consumption is highest in the agricultural and industrial areas, where the resources to buy water are readily available with rich farmers and industries. This increase in consumption will be satisfied through the market dynamics often at the cost of the poor who cannot afford the increased water tariffs.

Furthermore, due to the nature of this sector, water privatization, instead of bringing in healthy consumption, results in to monopoly sanctioned by the government agencies. Numerous case studies around the world highlighted the other ills of water privatization such as poor quality of water, unsustainable water mining and lack of transparency and accountability. From the various studies outlined here, clearly shows privatization of water is a violation of basic rights of Citizen of India and should be opposed.

Better and socially responsible alternatives can be found by investigating in community based participatory approaches to water management that ensures equitable and sustainable use of this precious natural resources. All over the world, alternate models such as rain water harvesting, check dam and bund building, holistic watershed management, integrate river basin management and irrigation efficiency improvement have been demonstrated as low cost successful alternative to privatization.


(1) Acharya, K. (2003, July 14) “India’s River Linking Scheme Worries the Region’s Journlists,” Planets – Voice.org.

(2) Barlow, M. (2003), Blue Gold – The Fight to Stop the Corporate Theft of the World’s Water (p. 4). London:Earthscan.

(3) Citizens Network on Essential Services, (2003) “Democratising Local and National Governnce of Water, paper no. A2.

(4) “Corporation, the companion of privatization”, (2000, Mar 17-22) Public Services International Briefing – World Water Forum, The Hague.

(5) “Constraints to Developing Commercially Viable Urban Environmental Infrastructure Projects”, (1999, Nov) Indo-US FIRE (D) Project Notes, Note No. 21

(6) CSE India’s Report on Analysis of water quality, (2005)

(7) Dasgupta, M. (2003, Jan 31) “Experts raise doubts about river linking project,” The Hindu

(8) “Degremont water plant will leave Tehri farmers high and dry: NGO,” (2002, July 15) Business Line.

(9) Dhar, A. (2003, April 12) “Chhattisgarh to cancel water supply contract” The Hindu.
(10) Ghotge, S. (2002) “India’s Water Policy – A Perspective Paper,” National
Centre for Advocacy Studies, Pune.

(11) Hall, D. (1999, July) “Privatisation, Multinationals and Corruption”, Public
Services International Research Unit, Report No. 9909-U-U-Corrup.doc, July

(12) Jayaraman, N. (2002, May 28) “No Water? Drink Coke, CorpWatch India,

(13) Jain, S. (2003, Apr. 13) “A River gone private is drying up” The Sunday

(14) Jha, S. (2002, Dec. 5) “India’s Water Wars,” AlterNet.

(15) Kaur, N. (2003, Aug 30-Sep 12) “Privatising Water,” Frontline, vol. 20, issue 18.

(16)Mehdudia, S. (2000, Nov 29) “Sheila Dixit Plays Slander Campaign, The Hindu.

(17)Ninan, A. (2003, April 16) “Private Water, Public Misery,” CorpWatch India.

(18) “Press Release by The Social Justice Committee, (2001, Oct 9).

(19)Tirupur Water and Sewerage Project, India,” (2005) Water Technology Website,
Industry Project Reports.

(20)Sharma, A. (2002, July 14) “Water Colour of Money” The Sunday (Indian)

(21)Sharma, S. (2003, Oct) “Interlinking ? No, thanks,” India-together.org.

(22)Shiva, V. (2002, July 13) “Water Privatisating in India,” Articles in Public
Citizen Website.
“http://www.citizen.org/cmep/Water/cmep_Water/reports/india/articles.cfm?ID=8 109”

(23)“Top 10 Reasons to Oppose Water Privatisation”, (2005) Public Citizen Website
and references there in.

(24)“UN warns of looming water crisis” (2002, Mar 22) BBC World News.

Monday, December 25, 2006


1 Introduction
For the last decade the supporters of privatisation of water have been able to rely on active multinational companies seeking to expand by obtaining water concessions in developing countries. This was supposed to create a virtuous circle of capital investment by the companies, giving them greater incentives to efficiency, removing the risks from governments, and attracting further investment from others.
The last three years, however, has seen a remarkable change of policy by the multinationals, which undermines those assumptions. Led by Suez, previously the most aggressive, the companies are now withdrawing from investment. At the same time, the risks of actually losing capital are becoming apparent: either through guarantees being called in, or through companies actually extracting more money than they invest.
This report examines these trends and draws some conclusions.

2 Suez in retreat
In January 2003 the multinational group Suez took a series of decisions on restructuring its debt, its divisional structure, and its future strategy. The effect is that the company is retreating from water operations in developing countries, including a 1/3 reduction in its current investment (Some of data pertaining to exit and closure is shown in appendix A). These decisions take place against a background of financial and political reversals on Suez’ water business across the world, including in the USA. They also imply that Suez is prepared to withdraw from many of its existing concessions. The other major French water multinationals Vivendi and SAUR have already indicated their reservations about investing in water in developing countries.
Suez’ retreat poses a major problem for the financial strategies of the World Bank, the Camdessus panel on water financing, and the EU Water Initiative, all of which lay central emphasis on raising finance through extending private sector involvement.
2.1 The Suez decisions
On 9 January 2003, Suez announced a five point ‘action plan’ for 2003-2004. [1]
· Reduction of debt, mainly by selling existing assets
· Cost reduction
· New investments to be financed from cash flow, so new annual investments fall from €8bn to €4bn
· Reorganisation, including merging water and waste management into a public sector division and a private sector division
· Reducing its exposure in developing countries by one third.

All of these decisions mean that Suez will not only stop expanding in water concessions in developing countries, it will actually reduce its existing investment and activities.

2.1.1 Selling assets
Suez will continue to sell assets in ‘non-core’ sectors like construction, but also will sell some international business which is not generating sufficient profits now or is thought to be subject to risk. The remaining assets will be in ‘activities which offer a better risk/return ratio and enhanced cash generation’.
The risks involved in developing country projects have no doubt been re-appraised in view of events in Argentina and the Philippines. Developing country business will be seen as riskier. Since long-term water concessions are not short-term generators of cash, it is prudent to assume that Suez’ existing water operations in developing countries are among those most likely to be sold by Suez.
2.1.2 Cost reductions
According to Suez the company already had plans to cut costs by €500m in 2003 and a further €100m in 2004. The group now intends to cut deeper in both these years. One source of these cost reductions will be the merger of the headquarters’ operations of Suez, Tractebel and SGB into a single headquarters with one office in Paris and one in Brussels.
2.1.3 Investments restricted to cash-flow
The company is adopting more restrictive investment criteria. One change will be in risk assessment, where the company says it will favour “currency risk-exempt financing”. This is certainly in response to the crises in Argentina and in Manila (see below) where the company suffered from exposure to currency risk.

The target of being ‘exempt’ from currency risk implies that very few developing country projects will be selected for investment. The Aguas Argentinas concession enjoyed a theoretical protection from currency risk through the ‘dollarisation’ of prices, but that has proved to be unenforceable. It is hard to think of a form of guarantee that will satisfy the requirement of ‘exemption’ from currency risk. It should be noted that currency risk cannot be simply abolished – Suez is saying that someone else must carry that risk for them, otherwise, it will not make investments.
Another change in Suez’ corporate strategy is to adopt criteria which favour “the quickest free cash flow generating projects and contracts”. This will exclude long-term water concessions, which have a typical profile of rising profits in later years of the concession, and so this too means that Suez is less likely to enter such concessions.
Finally, projects will be expected to finance all their investments out of their own cash-flow. In future profits will not be redeployed across the group, and investments will not be made unless backed by profits from the project itself. This implies potential conflict with water concession contracts, many of which include absolute requirements for investment targets to be met, regardless of local profitability.
It also implies that Suez’ pricing policies will attempt full cost recovery, including the cost of investments – a policy which is widely recognized as unrealistic and unachievable in poor communities in developing countries. [2] And it implies that Suez will continue to ‘ring-fence’ concessions by raising money through project finance, which is secured on the revenue streams of the project alone – not corporate finance based on the company’s assets. This increases the cost of finance.
2.1.4 Focus on Europe and North America, not developing countries
The final part of the strategy is a simple statement that the group will ‘concentrate’ on the ‘soundest’ markets of Europe and North America. For developing countries the strategy is no new investment, and reducing existing investments by one third by 2005: “SUEZ exposure to emerging countries, as measured by capital employed, is expected to be reduced by close to one third”.

This is a major policy reversal by the company which has led the globalisation of private water operations, declaring that the mission to bring water to the poor is one that the company itself was committed to. It creates a difficulty for the World Bank and other IFIs whose strategies for the water sector depend on enticing the multinationals to increase their investment. and participation. Instead, they are now faced with a two-year period in which the leading company is abruptly reducing its investment.

2.2 The background
2.2.1 Argentina – the losses continue
The greatest single factor influencing Suez must be the collapse of the Argentine economy, and with it the economic viability of the numerous privatised water concessions held by Suez and its subsidiaries. In 2002 Suez wrote off $500m because of Argentina, and the crisis effectively cost Suez over 8% of its international water business. The company is engaged in intensive efforts to persuade the Argentine government to carry the burden of the losses. Contractual clauses had permitted Suez to link prices in Buenos Aires to the US dollar, but crisis legislation ended this dollarisation.[3]
2.2.2 Departure from Manila
Suez’ subsidiary Maynilad Water has formally announced that it is abandoning its concession in the western half of Manila, in the Philippines. Suez’ partner in Maynilad Water is Benpres, one of the local companies which dominate much of the Philippine economy. The concession was awarded in 1995, but was affected by the currency collapse in the Philippines two years later. Suez and its partner sought to impose heavy price increases, and then stopped paying the regulator the required fees as a way of restoring profits. In December 2002 Maynilad said it was abandoning the concession, claiming $303m compensation for all the investment it had made. [4]
This is the first time that Suez has openly abandoned a water concession. Previously, especially in the context of Argentina, it protested that it would remain even through the most difficult circumstances, in order to demonstrate its commitment to the local service. The exit from Manila may thus be taken as the first example of the new policy of ‘prepare for departure’.
2.2.3 Loss of contract in Atlanta
Suez must also be greatly concerned that it has lost one of its biggest contracts in one of their referred safe markets, the USA. The city of Atlanta, Georgia, USA, privatised its water in 1999 to United Water Resources (UWR), the US subsidiary of Suez, promising annual savings of $20m., which would enable the sewerage rate to be reduced. But a city audit has shown that “savings, while substantial at $10 million a year, came in at about half projections. And that money ended up subsidizing general government operations, not staving off sewer rate increase.” More surprisingly, audits also showed that UWR “failed to collect $33 million….And the firm also has asked repeatedly for a raise of about $4 million a year” [5]. The concession was terminated on January 2003 when “Atlanta officials and a unit of French utility giant Suez SA agreed to abandon one of the largest privatization efforts in U.S. history, a takeover of the city's water system that generated only half as much savings as expected and a mess for consumers”. The city council is now re-establishing a municipal water service. [6]
2.2.4 Protests in Jakarta
Suez’ contract in half of Jakarta, Indonesia (Thames have the other half) continues to attract opposition and protest, five years after it was given to Suez by then president Suharto. Suez had formed a water partnership with one of Suharto’s cronies in order to win this contract. [7]. The opposition to the Jakarta water privatisation has been revived in the context of a new bill in front of the current Indonesian government which critics charge will enable the privatisation of water nationwide. The World Bank claims that the bill will have no such implications and insists that will merely serve to decentralize what was an over-centralized Jakarta-based water management system. Under a decentralized system, regional governments may feel more pressure to sell off public water utilities. Environmental groups are organising strong protests against it, arguing that the damaging effects can be seen in Jakarta, where “Despite the entrance of two foreign companies, people in Jakarta still complain about the quality of the water they produce as well as disruption to water supply. The two companies have also failed to expand their networks, arguing that the city administration had increased water rates only a fraction of the amount they had requested [8].”
2.2.5 Image problems in Morocco
In Morocco, Suez is trying to bolster its image as new contracts for water and electricity in five cities will be tendered over the next few months. Suez’ problem is that it already has a contract to supply water and electricity to over half a million households in Casablanca, but it is not regarded as a showcase: “the company has received criticism from some quarters, accused of lack of transparency in its dealings with the municipal authorities. There have also been complaints about a rapid increase in charges, mainly affecting households.” [9]
2.2.6 Reliance on public sector development banks
Suez’ policy is concerned primarily with limiting, protecting and guaranteeing the profitability of its own investments. However, it continues to be ready to use debt finance provided by international and national development banks. In Brazil, for example, it has just received a US $ 19m loan from the state-owned national development bank BNDES for its water subsidiary Aguas do Amazonas, which has a 30-year concession for Amazonas state capital Manaus. The water multinationals have always relied heavily on the development banks to finance their operations, but Suez’ new policies may mean that their concessions are now almost totally reliant on debt finance from the development banks such as BNDES, plus whatever surplus Suez can extract from charging the users of water.
The present status of Suez business unit in Asia-pacific area is shown in appendix B.

3 Conclusions: no longer business as usual
Suez’ experience has taught the company that its previous profits model for water privatization in developing countries is not sustainable. The requirements set out by Suez for its future investments in developing countries are extremely demanding. The company is requiring unequivocal guarantees for its investments against all forms of risk, and requiring all of its operations – not just future contracts – to generate the cash for all investments.
This is a commercial impossibility for the poor, and so the companies are effectively demanding subsidies and guarantees from the development banks as a pre-condition for attempting to connect the poor. This is contrary to the rhetoric which Suez, especially, has employed in the past, that the companies can connect the poor. It also challenges the very reasons for involving the private sector in such an essential public service – the capacity to take on risk, to bring in their own capital and to provide the ‘benefits’ of competition. As it turns out, these multinationals are unable to do any of this.
The most basic lesson is for governments, development banks, donors and community organizations concerned with water to recognize these facts. It is not credible for the World Bank to continue making policy on the assumptions of the 1990s, when the flagship concessions of Buenos Aires and Manila are collapsing, and Suez says it will ‘prepare to depart’. It is no longer ‘business as usual’ with the water multinationals. The water multinationals are now clearly prepared to abandon concession contracts which do not meet the new demand for security for their investments. Communities, governments and public authorities, where there are existing concessions with the multinationals, especially Suez, should themselves initiate a review of the concessions and identify best options from the local perspective.


[1] SUEZ introduces its 2003-2004 action plan: refocus, reduce debt, increase profitability Paris, January 9, 2003 www.suez.com

2)For more details on this see the PSIRU report on ‘Water Multinationals 2002’ August 2002

3)See for example “Maynilad - A losing proposition from the start?” Business World Manila, Philippines Thursday, December 19, 2002.

4)The Atlanta Journal and Constitution January 22, 2003 Water funds audit shows goals unmet.

5)Wall Street Journal January 27, 2003 Suez Unit, Atlanta Agree To Abandon Water Deal.

6) A brief summary is provided in Privatization Of Water Supplies In Ten Asian Cities - A Study by A. C. McIntosh and C.E. Yniguez for the Asian Development Bank January, 2000

7) Jakarta Post 21 Janury 2003

8)Agence France Presse 22/01/2003 Indonesian students rally against Megawati.

9) Business News Americas January 7, 2003 Bndes Approves Us $ 19mn For Aguas Do Amazonas

Monday, December 18, 2006

Water Crisis: Are our concern justified

Water has become the most commercial products of the century. This may sound bizarre, but true. In fact, what water is to the 21st century, oil was to the 20th century. A major fresh water crisis is gradually unfolding in India. The crisis is the lack of access to safe water supply to millions of people as a result of inadequate water management and environmental degradation. The crisis also endangers the economic and social prosperity of the country. Water stress is becoming acute in both urban and rural situations. Not only the quantity but also the quality of water supplied or available is being questioned. At one extreme, water is being wasted in urban areas and by industries; at the other, the rural poor lack access to safe water. According to experts, the usable water resources in several river basins will eventually be exhausted, most surface water will be polluted, and environmental deprivation will be universal. Water scarcity has led to the emergence of the bottled water industry worth over Rs 1,000 crore.
The virtually dry and dead water resources have lead to acute water scarcity, affecting the socio-economic condition of the society. The drought conditions have pushed villagers to move to cities in search of jobs, whereas women and girls have to trudge further. This time lost in fetching water can very well translate into financial gains, leading to a better life for the family. If opportunity costs were taken into account, it would be clear that in most rural areas, households are paying far more for water supply than the often-normal rates charged in urban areas. Also, if this cost of fetching water which is almost equivalent. to 150 million women days each year, is covered into a loss for the national exchequer, it translates into a whopping 10 billion rupees per year [1].

The main aim of the study is to find out the present condition of rural India with respect to demand, supply and availability of water. For this we have tried to see this aspect from macro and micro point of view. The section three gives the macro view of the total available water and our requirement. Section four tires to give a micro level view of the existing water crisis taking example from different part of the country. It includes states from all geographical direction. Section fifth gives an overview of the steps taken by government starting from First five year plan to the present tenth plan. It tells about the important milestone like the Accelerated Rural Water Supply Programme and the Rajiv Gandhi National Drinking Water Mission. Section Six gives a projection of the future water requirement and the emerging issues which may have a drastic effect on the socio-economic condition of the country if the problem of water crisis further increases. Finally the section seventh comes up with the analysis of the present situation and the policies of the government and gives suggestion to improve the condition.

With an average annual rainfall of 1,170 mm, India is one of the wettest countries in the world. At one extreme are areas like Cherrapunji, in the north-east, which is drenched each year with 11,000 mm of rainfall, and at the other extreme are places like Jaisalmer, in the west, which receives barely 200 mm of rain. Though the average rainfall is adequate, nearly three-quarters of the rain pours down in less than 120 days, from June to September. The country gets about 420 million hectare-metres (mham) of precipitation annually, of which 20 mham is contributed by rivers flowing in from neighbouring countries. Net evapo-transpiration losses are nearly 200 mham. About 135 mham is available on the surface and the remaining recharges groundwater. Although India is endowed with sufficient water, there are significant variations in the spatial and temporal availability of this resource. Consequently, at any given time, there are areas of both water excess and water stress in the country. There are significant variations in water availability even within a river basin [2].
There is little consensus on the issue of exploitable precipitation. Estimates range from 85 to 105 mham. Even if the lower value of 85 mham is taken into account, domestic consumption is no more than 10 mham. The remaining goes to irrigation. But, with demand outpacing the exploitable potential, the maximum usable water supply of 105 mham will be inadequate to meet the growing demand by 2025 [3].
If per capita water availability is any indication, water stress is only just beginning to show. The annual per capita availability of renewable freshwater in the country has fallen from around 5,277 cubic metres in 1955 to 2,464 cubic metres in 1990. Given the projected increase in population by the year 2025, the per capita availability is likely to drop to below 1,000 cubic metres. If the availability falls below 1,000 cubic metres, the situation is labelled one of water scarcity [3].
Rural water schemes have remained the scourge of planners since Independence. Despite massive resource allocation during the last nine Five-Year Plans, there were as many as 61,747 problem villages in the country towards the end of 1997. If there is no source of potable water in 2.5 kilometres, then the village becomes no source water village or problem village. Interestingly, the country started out with a figure of 150,000 problem villages in 1972; this rose dramatically to 231,000 in 1980. According to the latest statistics, about 15,000 habitations in the country were reported to be without any source of potable water; some 200,000 villages were partially covered by drinking water schemes; and 217,000 villages reported problems with the quality of water [4].

Water is the biggest crisis facing India in terms of spread and severity, affecting one in every three persons. The government has accorded the highest priority to rural drinking water for ensuring universal access as a part of policy framework to achieve the goal of reaching the unreached. Despite the installation of more than 3.5 million hand pumps and over 116 thousand piped water supply schemes, in many parts of the country, the people face water scarcity almost every year, there by meaning that our water supply systems are failing to sustain despite huge investments.
In India, there are many villages either with scarce water supply or without any source of water. In many rural areas, women still have to walk a distance of about 2.5 kms to reach the source of water. She reaches home carrying heavy pots, not to rest but to do other household chores of cooking, washing~ cleaning, caring of children and looking after livestock. Again in the evening she has to fetch water. Thus a rural woman's life is sheer drudgery [5].
Harrowing midnight for a precious bucket of drinking water is a regular feature for many families of Vypuri, an Island off the mainland of Kochi. Women have to queue up in front of the public water taps, being at the lag end of the pipeline system, they get water only after the users ahead in the pipeline finish collecting water. There are nights when water pressure dips so low that some women get it after midnight. They split their day between household chores and collecting water. Apart from the water scarcity caused by Coca-cola in Plachimada, the other districts in the state are facing a water crisis. For instance, in Kottayam district at some places, the water scarcity is so acute that people hesist to offer a glass of water to the visitor, which hitherto was a common custom. In the upper Kuttanadu area of the district during summer people collect water from a distance of 3-4 kms. Water supply from public taps is erratic and very often even after standing for an hour in the queue; people are not able to get a bucket of water [6].
Most women and girls in Rajasthan find themselves searching water for much of the year with little time for other productive work. They trudge bare foot in the hot sun for hours over wastelands, across thorny fields, or rough terrain in search of water. On an average, a rural woman walks more than 14000 km a year just to fetch water. This impact on the education of the girl child, if the girl is herself not collecting water, she is looking after the home and her siblings when her mother is away. At some villages water from tubewells is too saline to drink. Even animals particularly cow gets indigestion after drinking this water, so the villagers add water from the dug well. The entire life of women in rural areas like Jaisalmer is spent on water collection and cooking [7].
Titlagarh, orissa is the hottest town of India. As the highest temperature, is recorded here 52 degrees centigrade which is also the highest temperature in India. In Titlagarh water problem is so acute that people are buying water throughout the year for drinking and cooking purpose. In the month of May and June the rate of water increase three times, from Rs 2 per Dabba to Rs.8 per Dabba (container). Due to the water problem some villagers are migrating to other places [8].
In Uttranchal women are suffering a lot in every village where water problem is severe. Natural sources are drying up which adds the kilometers for women everyday to quench the thirst of their family as well as animals. During the survey in Jaunsar area of district Tehri Garhwal, in villages such as Nagthat, Duena, Vishoi, Gadol, Jandoh, Chi tar, Chichrad and Gangoa, it was observed that water in the region is mostly acidic in nature. The water problem in Chi tar and Gangoa villages is very severe, where men and women carry water on mules from 8-10 Km to the village. Because of the poor water quality, most of the villagers in the regions are suffering from many diseases related to skin and teeth. Natural resources of water in the area are very few and they are also disappearing very fast [9].
In Bundelkhand, women have no work but to collect drinking water on their heads from long distance. The grim situation of water may be best illustrated by one Bundelkhandi saying which roughly translated as "let the husband die but the earthen pot of water should not be broken [10].
The Water crisis is same in West Bengal. In all the districts, the water commons have ceased to exist, and have become open-access resources, with hardly anyone responsible to take care of the resources. The absence of the community from the management of the water resources is indeed a tragedy, because now the resources are at the mercy of either the market or government officials.
Punjab; the name stands for abundance of water, but the present situation of water resources in the state is highly critical. The ground water availability is drastically hampered. The village ponds are drying day by day. Women In Talwandi Sabo, for some villages, the source for drinking water is about 8 km away. In Jajjal due to contaminated water, women are suffering from a number of diseases including cancer. There have been several deaths attributed to polluted water [11].
For Maharashtra, water is an abiding concern. In many villages women have to walk more than 3 kilometres everyday to fetch two huge vessels of water illegally from a government reservoir. They have to make at least three trips everyday. The state government do not send tankers to the villagers. At some places, women spend Rs 5 for two canes of water. Images of women carrying the pots of water, walking miles and miles for one single pot are common in the state of Maharashtra [12].
Karnataka is facing the worst kind of water crisis. In Bangalore, only 35% of the city gets water on daily basis, the rest on alternative days. In addition to the scarcity, erratic water supply is another problem. In Samadhanagar area, water generally comes in the morning at 11 A.M or in the middle of the night. In Doddanagar slums in the city, women and children who are also breadwinners of the family spend 3-4 hours filling water, losing their wages. In Hosapalya locality women get severe joint pain in their shoulders, hips and knees due to carrying water pits from water sources outside their colony. In Peenya industrial area, many street fights occur among the women over water. Social conflict and tension is high due to water crisis [13].

The evolution of the national Policy and Programme to take care of water supply and drainage for urban and rural areas after independent as part of the planning commission is as follows [14].
The first five year plan (1951-1956)
The National Water Supply and Sanitation Programme was included as a part of the health plan. 133 rural water supply and sanitation schemes for a total estimated cost of 13.5 crores were approved for inclusion under the plan for implementation by the state govt. Actual expenditure under the first plan was about Rs.5.6 crores on the rural schemes [National water supply and sanitation programme]. About 1,07,000 wells were constructed or renovated under this programme. The expenditure under local development work programme was Rs.7.25 crores and the number of wells contructed or renovated during the period was 29,650.
Second five year plan (1956-61)
The schemes included in the first plan did not make satisfactory progress on account many factors. The magnitude of the problem in regard to rural water supply and sanitation was estimated to be about Rs. 600 crores, the idea being that such a capital outlay would be necessary to cover the entire rural area of the country with a satisfactory measure of safe water supply and minimum sanitation facilities.
The third five year plan (1961-66)
The plan provided Rs.89 crores for urban water supply and sanitation schemes and Rs.67 crores for the rural water supply schemes, comprising Rs. 16 crores under the national water supply and sanitation programme, about Rs. 35 crores under the local development programme, Rs 12 to 13 crores under the community development programme and Rs, 3 to 4 crores under the welfare of backward classes programme.
The fourth five year plan (1969-74)
An approved outlay of Rs. 125crores for rural water supply and sanitation was made in this plan. To assist the state and Union Territories for extending the water supply to village or areas where the problem was most acute the govt. came up with Accelerated Rural Water Supply Programme (ARWSP) in 1972-73. Here preference was given to Tribals and Harijans and other backward classes.
The fifth five year plan (1974-79)
In addition to the general programs, the govt. initiated a special activity in 1975, the 20 point programme. Point no.8 of the 20 point programme is vital to the water supply and sanitation sector and this particular point has been assigned, the highest priority in the state and union territory sector programme.
Sixth five year plan(1980-85)
The ten year 1981-90 were designated as the international drinking water supply and sanitation decade. India being a signatory to the resolution came up with a “National Master Plan for India” highlighting the sector position and decade coverage programme policies. The provision for rural water supply in the sixth plan was 2135 crores.
Seventh five year plan (1985-90)
For the first time ARWSP for Desert Development Programme areas was introduced. 5%of the annual plan allocation was embarked for DDP without matching provision under MNP. Technology mission on drinking water later renamed as National Water Drinking Mission (NDWM) and again renamed as Rajiv Gandhi National Drinking Water Mission was initiated to provide scientific and cost effective content to the ARWSP.
Eighth five year plan (1992-1997)
Keeping in view the constraints of resources and other competing demands the plan provided for rural drinking water supply programme an outlay of Rs. 10054.52 crores of which Rs.4954.52 crores is under state/UT plans and Rs. 5100 crores under Central plan which includes ARWSP and RGNDWM.
Ninth five year plan (1997-2002)
In order to cover the backlog in rural drinking water supply, an amount equal to aproximately Rs.40000 crore was spent for operations and maintenance and funds to tackle quality problems. It aimed to achieve the norms for rural water supply of 40 litres of drinking water per capita per day (LPCD) and a public standpost or a handpump for 250 persons. Further, the sources of water supply should be within 1.6 km.horizontal distance in plains or 100 metres elevation distance in hills.
Tenth five year plan (1997-2002)
In line with the National Agenda for Governance, safe drinking water is to be provided
in accordance with the stipulated norms on a sustainable basis to all habitations by March 2004. This is also one of the monitorable targets in the Approach Paper for the Tenth Plan.
The Accelerated Rural Water Supply Programme (ARWSP) which was introduced in 1972-73 by the Government of India to assist the States and Union Territories (UTs) to accelerate the pace of coverage of drinking water supply was given a Mission approach with the launch of the Technology Mission on Drinking Water and Related Water Management in 1986. The NDWM was renamed as the Rajiv Gandhi National Drinking Water Mission (RGNDWM) in 1991. The following are the objectives of the Mission :
To cover the residual Not Covered (NC), Partially Covered (PC) and quality affected rural habitations.
Evolve appropriate technology mix.
Improve performance and cost effectiveness of ongoing programmes.
Create awareness on the use of safe drinking water.
Take conservation measures for sustained supply of drinking water.
In 1999 Department of Drinking Water Supply was formed to give more emphasis on Rural Water Supply programme.
The National Water Policy (NWP) has been adopted by the National Water Resources Council in its 5th meeting held on 1st April, 2002. The salient features of the NWP-2002 are water is a precious national resource and its planning, development and management should be governed by national perspectives. A well developed information system for water related data at national/state level should be established with a network of data banks and data bases integrating and strengthening the existing central and state level agencies. Planning for water resources to be on the basis of the hydrological unit such as a river basin or sub-basin. Appropriate River Basin Organisations (RBO) should be established for the planned development and management of the river basins. Water should be made available to water short areas by transfer from other areas including transfer from one river basin to another, after taking into account the requirements of the areas/basins. Planning of water resources development projects should, as far as possible, be for mutli-purpose projects with an integrated and mutli-disciplinary approach having regard to human and ecological aspects including those of disadvantaged sections of the society. Drinking water has been assigned the first priority in allocation of water. The exploitation of groundwater should be regulated with reference to recharge possibilities and consideration of social equity. The detrimental environmental consequences of overr-exploitation of ground water need to be effectively prevented. Careful planning is necessary to ensure that construction and rehabilitation activities proceed simultaneously. A skeletal national policy on resettlement and rehabilitation needs to be formulated so that project affected persons share the benefits through proper rehabilitation. Adequate emphasis needs to be given to the physical and financial sustainability of existing water resources facilities. There is need to ensure that the water charges for various uses should be fixed such as to cover at least the operation and maintenance charges initially and a part of the capital costs subsequently [15].
A new initiative " SwajalDhara "was launched on 25th December, 2002, to open up the reform initiatives in the rural drinking water supply sector throughout the country. The strategic elements of the Scheme are: (i) demand driven and community participation approach; (ii) panchayats/communities to plan, implement, operate, maintain and manage all drinking water schemes; (iii) partial capital cost sharing by the communities upfront in cash; (iv) full ownership of drinking water assets with Gram Panchayats; and (v) full operation and maintenance by the users/Panchayats. The unique feature of the scheme is that the rural people should feel as the owners of the Scheme.
In addition to the above Centrally Sponsored Schemes, several state governments are also implementing their own state-level schemes for soil and moisture conservation on a watershed basis; Maharashtra, Karnataka, Andhra Pradesh and Madhya Pradesh being the notable ones in this regard . A number of international donor agencies, including the World Bank, DANIDA, GTZ, DFID and EC, also support watershed development programmes in several parts of the country. Numerous non-governmental organizations (NGOs) such as AKRSP, MYRADA, Tarun Bhagat Sangh, etc. are also actively involved in various watershed development activities and programmes all over India, especially after the shift from the regulatory to the community-based approach that has taken place in the last decade.
In the international front the United Nations General Assembly in resolution 55/196 proclaimed the year 2003 as the International Year of Freshwater. It encourages Governments, the United Nations system and all other actors to take advantage of the Year to increase awareness of the importance of sustainable freshwater use, management and protection. The recent world bank released report “India’s Water Economy: Bracing for a Turbulent Future” warns of a severe water crisis unless the country changes the way it manages water – and changes it soon [16]. The report examines the challenges facing India’s water sector and suggests critical measure to address them.
Rural Water Supply Coverage Status as on 01/04/1999
A survey of drinking water supply in rural habitations was conducted in 1991, which was validated in 1994. A Comprehensive Action Plan, 1999 (CAP 99) was prepared by updating the habitation survey results validated in 1994. The coverage position as on 1.4.99 at the time of formulation of CAP 99 was as under :
Number of Habitations
Fully covered (FC)
Partially Covered (PC)
Not Covered (NC)
It was envisaged in the Tenth Plan that during the first two years of the Plan, i.e. 2002-03 and 2003-04, the emphasis would be to cover the remaining ‘NC’ and the ‘PC’ habitations of CAP 99. As a result of these efforts, 96.13% habitations have become fully covered, 3.55% are partially covered; and the NC habitations are 0.32%. In absolute terms, the coverage status is as under :
Number of Habitations
Fully covered
Partially Covered
Not Covered
Uninhabited / Urbanized etc.
A fresh Habitation Survey has been conducted in 2003 and the results of the same are being validated at present. The number of slipped back habitations will be known after the completion of the validation exercise. The Tenth Plan Working Group has estimated the number of slipped back habitations as 2.8 lakh. It is proposed to cover the slipped back habitations on the basis of list of habitations to be provided by the State Governments which would be a web-enabled computerized list.

In recent years there have been several studies of India’s water requirement in the future years. The below shown estimates are made by the Working Group on Perspectives of Water Requirements (WG) of the National Commission for Integrated Commission in its report to Government of India ( September 1999) [17].

1156.6 millions
1286.3 millions
1345.9 millions
Domestic Use (Rural)
55 liters capita per day(lpcd)
70 lcpd
150 lcpd
37 billion cubic meter (BCM)
67 BCM
81 BCM
19 BCM
33 BCM
70 BCM
Inland Navigation
10 BCM
15 BCM
Environment and Ecology
10 BCM
20 BCM
Evaporation Losses from Reservoirs
36 BCM
42 BCM
65 BCM
Total Water Requirement
710 BCM
850 BCM
1180 BCM

The report also highlights some emerging issues
The probability of a decline in per capita water availability and of the emergence of water-stress conditions;
Huge disparities in availability among the regions and states;
Increasing pollution (which may become massive) of both surface and groundwater;
The likelihood of serious conflicts between different uses of water, different areas, different states;
Inequities in water availability and in payments for waters with the poor often paying more than the rich; and

The stress on the multiple water resources is a result of a multitude of factors. On the one hand, the rapidly rising population and changing lifestyles have increased the need for fresh water. On the other hand, intense competitions among users in agriculture, industry and domestic sector is pushing the ground water table deeper From our study of the existing condition in different part of the country and looking into the policy’s and programmes of the government we found that:
The main causes of water scarcity are overuse of water sources under the ground (groundwater), and the absence of measures to recharge these groundwater supplies. Groundwater is used for both drinking water and irrigation, and there is little control over its use in many areas.
There has been a focus on short-term relief measures rather than long-term solutions.
Most schemes have not addressed water service issues. This is despite the fact that people find lack of water and a lack of sanitation as the most important issues.
Sanitation has not been a priority: defecation outside remains common even where watershed development projects have been running for several years.
To mitigate the water crisis; we suggests the following measures.
Restore the conventional methods of water conservation like Baolis, Jhods, Ponds, Tankas.
Introduce rainwater harvesting.
Change the cropping pattern of agriculture.
Instead of growing water intensive crop like paddy and sugarcane, introduce crops like millet, ragi, which consume less water.
In cities instead of Public Private Partnership (Privatisation of water) Public-Public partnership (Public and Government) is an alternative for water crisis.
Proper water conservation measures should be used. People should be made aware and trained on the techniques of water conservation.
Government schemes should be implemented properly.
Involve Public Raj Institutions (PRIs) and NGO in the management of rural water supply.
Women should be trained as water managers for the better utilization of water.
Future programmes/projects should be designed, keeping in view the women as water users.

(1) Mathur, et.al (2002), “Drought, Policy And Politics In India: The Need For A Long term Perspective”Sage Publications, New Delhi.
(2) Rao, K.L. (1975), India’s water wealth: Its Assessment, Uses and Projections, Orient Longman, New Delhi.
(3) Roy, Arundhati (1999), “The Greater Common Good” India Book Distributors.
(4) Evaluation of Rural Water Supply Schemes in India By NEERI, Nagpur sponsored by CPHEEO, MUD, Govt. of India – 2002.
(5) Shah, Mihir (2002), ‘Water Policy Blues’, The Hindu, 7 June 2002
(6) Krishnakumar, (2005), ‘Plachimada's loss’, Frontline, Volume 22 - Issue 09, Apr. 23 - May. 06, 2005. http://www.hinduonnet.com/fline/fl2209/stories/20050506001104000.htm
(7) Ragunathan, (2004), ‘The Great Divider’, The Hindu, 16 May 2004. http://www.hindu.com/mag/2004/05/16/stories/2004051600030100.htm
(8) Ruben Banerji, (2005), ‘Running out of luck and hope’, India Today. http://www.indiatoday.com/webexclusive/columns/reporters/20000503ruben.html
(9) Prashant, S (2005), ‘There is no water where Ganga sprouts’ Deccan Herald, 5 June 2005.
(10) Shiva, V., ‘Water Privatization in India’ http://www.citizen.org/print_article.cfm?ID=8109
(11) Singh, R., (2001), ‘Water crisis forces migration’, The Tribune, 29 Sep 2001.
(12) Sharma, K (2003), ‘Monsoon failure worsens crisis’ The Hindu, 26 Oct 2003.
(13) ‘Water crisis deepens in Bijapur, Bagalkot’ The Hindu, 3 May 2004.
(14) Planning Commission, Government of India
(15) National water policy, Ministry of Water Resources, Government of India, 2002
(16) Briscoe, J (2006), ‘India’s water economy: Bracing for a turbulent future’,
The World Bank http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,contentMDK:20742157~pagePK:141137~piPK:141127~theSitePK:295584,00.html
(17) Iyer, R.,(2003), ‘WATER Perspectives, Issues, Concerns’, Sage Publications,
New Delhi

Fresh Water Scarcity: Alternatives and Challenges

In 1995 the vice president of the World Bank ismail serageblin predicted that the wars of this century will be over water. The reality is that the world’s availability of fresh water supply is decreasing. Water pollution, deforestation, greenhouse gases, ozone depletion and climate change all interact and contribute to the depletion of fresh water supplies. From the perspective of Major Corporation, water scarcity has transformed water into the oil of the 21st century. Who had ever thought water our life blood would have such a high price tag.

Global consumption is surging at a rate higher than the population growth. The politics who gets clean water and who does not and at what price reflects the global inequality in the politics of water. Industry, mining, export agriculture, large land owners, real estate development and wealthy urban consumer drive the politics of water. Small farmer and ranchers, rural community, poor people in urban slum are usually the loser in the politics of water. In the United States, Canada and Europe most people take for granted that water will run when they turn on the tap. For many in the developing world piped water in the home is a distant dream.
According to United Nation (UN) statistics 1.1 billion people lack access to safe drinking water, 2.4 billion people lack the access to proper sanitation and more than 5 million die annually from water borne diseases. We should not accept the inequality of the global power politics of water. The United Nation projects that by the year 2005, 2/3rd of the world population will face water shortages or lack of clean water. Yet government and international institute do not seem willing to make investment to ensure access to clean and affordable water for all.

Most people in the developing world do not have access to portable water. It is estimated that water business is estimated to be about $7 trillion. The government in many countries are retreating from there responsibilities and are bending to the will of giant transnational companies. Private companies claim that they have the answer to the infrastructure and water availability challenges. The growing water industry is at the patronage of the water stressed people. With the odd stacked against them, the poor have little choice. The transnational companies have worked closely with World Bank, governments bodies around the world to make changes in there in legislation to force privatization of public work. At present privatization has been concentrated in poor countries where World Bank has used its power to force government to privatize water supplies in exchange of loans. Similarly is the case of International Monetary Fund, which in the year 2000, in its loan agreements with 12 countries included conditions imposing water privatization or “full cost recovery”. A review of World Bank water and sanitation loans approved in 2001 found that 80.9% of loans contained cost recovery measures and 51% contained privatization measures. The result was increase in water prices and lack of access for those who cannot pay this price which in turn resulted in increased marginalization of the world’s poor. In Ghana after IMF and World Bank policy required 95% rise in water fees in May 2001, purchasing three bucket of water a day cost ten to twenty percent of the average daily income. In India some poor household pay as much as twenty five percent of there income on water.

In contrast to privatization, there are several community based small-scale water management techniques which offer cost benefit and long term sustainability over the privatization. Rain water harvesting is one such method which involves the collection of water from surface on which rain falls, and subsequently storing them for later use. There are other number of traditional water harvesting systems in various ecological zones of India. These include johads, checkdams and other structures to harvest every drop of drain. The irrigation tanks (earthen bounded reservoirs constructed across slopes by taking advantage of local depression and mounds) of South India are symbols of an ancient and rich tradition of harnessing local rainfall and streamflow.

Better and socially responsible alternatives can be found by investing in community based participatory approaches to water management that ensures equitable and sustainable use of this precious natural resource. Thus the alternative to privatization lies in participation.

1) Rain water harvesting.org website: http://www.rainwaterharvesting.org/index.htm
2) The Hinduonline.com Website: http://www.hinduonnet.com/thehindu/mag/2002/08/11/stories/2002081100500100.htm;
3) Water: Charting a course for the future, Ramaswamy R Iyer, Centre for policy Research, 2000, pp 62
4) Tanks of South India, A Vaidyanathan, Centre for Science and Environment, New Delhi, 2001, pp 78
5) The world water council website: http://www.worldwatercouncil.org/
6) IndiaTogether website: http://www.indiatogether.org/2003/nov/env-wtrdebate.htm
7) Infochange India Website: http://www.infochangeindia.org/analysis67.jsp
8) Frontline Magazine Website: http://www.flonnet.com/