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Campaign against so-called 'privatisation' of water
Written By murali772 - 26 February, 2011
Bangalore Corruption Water Citizen Reports efficiency outsourcing water supply privatisation governance environment
In a meeting organised with the Karnataka Urban Development Minister Mr. Suresh Kumar on 23 February 2011 at the behest of Mr Kodihalli Chandrashekar of the Karnataka Rajya Raitha Sangha, representatives of various movements, networks and voluntary organisations opposed to water privatisation were present. A major reason for this meeting was the call made last week by the Peoples Campaign for Right to Water opposing the impending visit of 16 American corporations to Bangalore next week as part of the US Water Trade Mission – organised by the US Consul General in collaboration US Department of Commerce. Present in the meeting were Shri. P. B. Ramamurthy, Chairman, BWSSB and Mr. Arvind Srivatsava, Managing Director, KUIDFC and other officials.
Some excerpts (in italics) from the 'Press Release/ Report' (for the full report, see the attachment) released by the group after the meet, and my responses to them:
Welcoming the gathering Mr. Suresh Kumar explained that his position was absolutely opposed to privatisation of water. This had been his position all through his political career and he explained how he had organised successful protests against proposed privatisation of water services promoted by Biwater and Vivendi in 2001 when he was in the Opposition of the Karnataka Legislature.
Those days the scope of the contracts may have been for total privatisation. But, today, it's largely for outsourcing of water supply.
On the invitation of the Minister, Mr. Rajendra Prabhakar of the Peoples Campaign for Right to Water explained that while the US Trade Mission was absolutely based on exploiting what was claimed by the US Government as US$ 50 billion water market in India, the core concern has been that the Karnataka Urban Drinking Water and Sanitation Policy, 2003 was fully supportive of such commodification and privatisation of water. As long as this policy remained, mercenary traders would continue to exploit this lacunae.
The talk about the US$ 50 billion opportunity, etc is typical of the of hype generally created by trade delegations to attract participation by the members of industry organisations. Our own trade bodies like the CII, FKCCI, etc do it too, when they take out such delegations abroad. And, yes, the floundering US industry is desperately looking for opportunities in huge markets like in India. And, given the incapacity of the municipalities/ parastatals in meeting the ever-growing demand as well as in curbing the mounting 'unaccounted for losses' (BWSSB's itself being over 40%), the pressure on the governments to find solutions, and the propensity of some neta/ babu combo's to milk the opportunity to enter into sweet-heart deals, there's a possibilty of things going wrong, as has happened in other countries, and in our own maha-Bharat, on mega scales, but in sectors other than water, so far. So, there could be a threat. But, status quo is not the answer. It will only help perpetuate the hold of the well-entrenched lobby formed of the water-tanker and bore-well industry (all in the private sector, of course), in collusion with the BWSSB mafia, which besides is largely responsible for the 'unaccounted for losses', apart from the mucking up of our water bodies - check this
The right solution can be said to have evolved in the form of the Mysore City Corporation - JUSCO outsourcing contract, perhaps with some bit of tweaking added on, based on the learnings from the present phase of execution in its third year. Going by the report cited here, Bangalore is also now set to follow the Mysore example, though it seems to be going about it very tentatively.
The Fundamental Right to Life, that contains the Right of Access to a Life Supporting Resource such as water, was therefore under constant threat.
You can have all the water you want if you go to the source – a river, lake, or wherever; but, for it to be made available at the turn of the tap in your home, there are huge costs involved, and these have to be met. For supplies to lower middle class areas, there can possibly be a subsidy, and in public taps, the supply can even be free. But the flows have to be measured, and the government has to bear the subsidy burden. For more on that, click here.
Mr Kshitij Urs of Action Aid warned that such programmes tend to destroy control over basic resources by democratic organisations; which once in the control of the private sector would have devastating consequences on society, as had been repeatedly proven across the world.
It is perhaps true that most water-supply upgradation schemes tried out in the past (not in India) had ended up in total privatisation, and, driven by the short-term profit maximising objective of the service providers taking advantage of the 'natural monopoly' nature of the service, led to unfair cost escalations. But, the reasons for the municipalities not wanting to continue providing the service by themselves, in the first place, hadn't disappeared at all. Not quite appreciating this, some municipalities had apparently reverted to undertaking it themselves, and are now inevitably set to re-invent the wheel, after putting the citizens to a lot of hardships, in the process.
Not just water supply, as per the provisions of the 74th amendment, municipalities in India are now required to be responsible for power supply, public bus transport services, traffic policing, etc, in additions to the myriad functions they have already been (mis)-handling so far. And, no municipality anywhere in the world can claim to have the capacity to manage all of them by itself. For more on that, click here
He reminded that a part of the reason for the popular protests in Egypt was that people were frustrated by the high cost of living, that included buying water from mercenary private players.
Whatever the position in Egypt or elsewhere, in our maha-Bharat, it is the incapacity and inefficiency of the the government service providers in key infrastructure areas that is responsible for the rapidly rising cost of living. In sectors, where there is private participation, the prices have in fact been dropping.
Ms Nandini of the Campaign stated that no discussion whatsoever had taken place in the public domain about the intent and scope of this Trade Mission to Bangalore.
There's quite some truth in it. The government has generally been very cagey in its ways - check this
On the inclusion in the Mission's agenda of 'imparting knowledge to Indians on rain water harvesting', Nandini observed that it was indicative of the 'indignant attitude on the part of the Trade Mission is reminiscent of colonial and imperial approaches'.
Well, Indian companies have learnt the trick of actualising blooms in deserts from Israeli's. Likewise, if the US companies have some thing better to offer than what we have been used to, what's the harm in looking at it? Nobody is going to buy it unless it's cost effective.
The Minister, Mr Suresh Kumar, read out the email to all gathered and it revealed that the US Commerce Department had decided to organise this Trade Mission without any consultation whatsoever with its Indian counterparts. The Trade delegation had unilaterally decided the dates, locations and the agencies and locations they wished to visit. The BWSSB was merely informed to be ready to receive the delegation and assist in such visits.
Apparently, this has been the practice so far. It's time they realised, as also they are told, that the times have changed.
Mr. Arvind Srivatsava of KUIDFC spoke next and explained in defence of ongoing privatisation efforts. He said that they had all been secured based on consensus from local Councils. He claimed that he had personally participated in many of the meetings, and made presentations providing all choices to the Councils. In Mangalore, for instance, he offered three options to the Council: a) manage water provisioning on their own, b) manage it through a parastatal Board and c) to privatise the water distribution. The Mangalore Council preferred the privatisation route, he said, claiming this as evidence of acceptance of water privatisation as a democratic choice. He also defended the privatisation of water services in Mysore as being a part of the democratic process based on consultations. He also suggested that the public sector workers of Vanivilas Water Works in Mysore were accommodated by JUSCO (the water privatisation arm of TATAs managing the distribution network) based on a condition imposed by the Government. In effect justifying his point that the Government was not abandoning its obligation of providing water for all, especially the poor.
In a debate that followed, Mr. Saldanha highlighted that were the workers not to protest against their transfer or retrenchment at the Vanivilas Water works, the Government's intent appeared to be to disband this loyal expertise in favour of the private sector.
For all the 'loyal expertise', it has not been able to prevent the mounting 'unaccounted for losses'.
Thus the claim that the Government intended to protect public sector workers was specious; clearly the workers remained because they fought for their rights.
The government has an obligation to protect the interests of all sections of workers, and not just those of the public sector labour aristocracy. For more on that, click here
Mr Kodihalli Chandrashekar stated that the Raitha Sangha was clearly opposed to privatising water anywhere. He explained to Mr. Srivatsava that when senior and articulate officers like him went to Councils in backward areas, with laptops and power point presentations, etc., the naïve councillors were so weakly informed and equipped to formulate such complex decisions or wise choices, that they would routinely surrender to the urbane communication and perceptions of officers.
Essentially, he seems to be saying that Mangalore councillors are dumb. And, what about Mysore Grahakara Parishad (MGP) members, with whom Mr Manivannan interacted closely? - check this
Where are the deliberate efforts of the Government to communicate to the wide public and elected representatives all the implications of such privatisation efforts in threadbare detail, he enquired?
As already stated, Mr Manivannan had interacted closely with the MGP, arguably the foremost think-tank in Mysore, before finalising the contract with JUSCO. Further, when Mr K Chandrasekhar is so contemptuous of the capacity of the elected representatives from Mangalore, how come this sudden reverence for representatives from elsewhere? Well, either way, there's no denying the the importance of keeping the elected representatives in the loop in a democracy.
He demanded that the entire State Water Policy must be reviewed in detail and publicly, involving elected representatives and experts, and that pending this exercise there was no need whatsoever to rush into any deals.
Fair enough - we have an acknowledged water expert like Mr Viswanath, and a most genuine Socialist like Ms Kathyayini Chamaraj, in our midst, apart from representatives of various other stake-holders. Do include them in the process too.
Mr Suresh Kumar speaking for the Government reassured the delegation that the Government was completely opposed to commodification and privatisation of water. He said that in principle he was one with the Protests against any such move, and that no one needs to doubt his integrity on this commitment. He confirmed that once the Budget Session of the Karnataka Legislature was complete, he would organise public debates on the State Water Policy with the intent of withdrawing the pro-privatisation of water contained presently. He reasserted that this Government will never privatise water.
The minister's personal integrity is not at all in question (but, so is Dr Manmohan Singh's). But, how effective they have been in checking their colleagues, is what is in question. And, one hopes the minister realises that words like 'commodification' and 'privatisation' are red herrings deployed to side-track the debate from the actual issues involved.
When urged that he should not allow the Government to support the Trade Mission, given its unconstitutional and covert objectives, he said he would consult his officials as he had not been at all informed or approached by the US Consul General.
I can't see any harm in carrying on a dialogue and understanding what they have to offer. In fact, there may be scope for Indian companies like JUSCO to replicate the Mysore model in US cities, quite like Indian companies in other sectors having taken over the operations there.
Muralidhar Rao
COMMENTS
murali772 - 16 April, 2015 - 12:23
success stories emerging finally?
murali772 - 5 July, 2015 - 17:23
Water privatisation may be a politically contentious issue, but that has not deterred Vishvaraj Infrastructure, a company implementing road projects worth ₹16,120 crore in Maharashtra, from foraying into water distribution on a public-private-partnership (PPP) basis.
Having started a water distribution project in Nagpur, the company is now implementing projects in five cities of Karnataka – Magadi, Bidar, Basavakalyan, Shahabad and Yadgir – to create 3.81 lakh water connections and lay 992 km of pipelines. After these projects are completed, over 81,000 people will be able to drink water straight from their taps in these five cities, as one does in developed countries, says Arun Lakhani, Chairman and Managing Director of Nagpur-based Vishvaraj Infrastructure, which plans to overhaul the water distribution network in these cities.
- - - “Communicating with people and getting them on board is crucial while taking up such a project. There is a World Bank report that quotes not-so-successful projects and the main reason is mishandling of the social side,” he added.
For the full text of the report in The Hindu BusinessLine, click here.
Mr Lakhani has put it quite correctly. And, that's exactly what Mr Manivannan, as the then Dy Commissioner of Mysore, did by engaging with Mysore Grahakara Parishad, arguably the foremost NGO in the city, while roping in the services of JUSCO to help improve the broken water supply system. But, unfortunately, after Manivannan moved out, the mafia that ruled earlier, clawed its way back, and systematically sabotaged the entire scheme, leaving the entire city and citizens in the lurch - check here.
In the face of all of that, Vishvaraj Infrastructure succeeding in Nagpur (apart from Pune), and the many small towns in Karnataka, comes as a breath of fresh air. It'll be interesting to see how it progresses.
vatsan007 - 6 July, 2015 - 08:14
Unfortunately, I've seen JUSCO do this in Mysore in my own house.
The earlier promised 24x7 water-supply with JUSCO left a lot to be desired. I'm not asking for a water distribution system for 24x7 as people don't realise its value, but, even when water is supplied every day for a few hours, their shoddy work left a lot to be desired. It took months to lay the pipe, then, to fix the meters. Roads were dug up, leakages were seen everywhere after they did their job (half job)...
It is not that private agencies work well by default, but constant monitoring/regulation is required for them as well, especially in public space.
murali772 - 6 July, 2015 - 12:28
@ Srivatsan - Based as your comments are on first-hand experience, there's no disputing them. My comments have largely been based on my interactions with a few members of the MGP, as noted here (as also elsewhere in the same thread/ blog).
My overall understanding is that, right from the very beginning, the VVW lot had been upto every trick in the trade (and even outside it) to undermine the contract, backed of course by powerful politicos with vested interests - that's what I would term as the "mafia confederation". And, apparently, JUSCO too has been found wanting in the required kind of professionalism in managing the whole show. As I have commented earlier too, more was expected of a TATA company.
Perhaps Arun Lakhani's Vishvaraj Infrastructure is better equipped to play this game. Let's wait and see. Whatever, the government set-ups like VVW, and even BWSSB, are way past their sell-by dates.
Incidentally, TATA's, it must be recorded to their credit, have pulled off a largely successful job of taking over the power supply in about one third of Delhi, from the government-owned DESU/ DVB - check here. And, that job, I am sure, was as challenging too. So, it's not as if they can't do it. May be Mysoreans too need to make up their minds as to whether they want to continue with a decrepit VVW, or they want change.
murali772 - 24 June, 2014 - 11:11
Few businesses are more basic than the supply of water. But Thames now doesn't look anything like a water company; it more closely resembles a Russian doll. Holding company sits within holding company sits within holding company: in all, there are five intermediate firms between the business that supplies the water and sorts the sewage and the eventual shareholders. That's before you reach the two subsidiary firms that go out to the markets to raise cash, one of which is naturally based in the tax haven of the Cayman Islands.
Who gains from such a corporate Byzantium? Not regulators and politicians, nor journalists and analysts, because such a layout is the opposite of transparent. But the beneficiaries are identified by John Allen and Michael Pryke at the Open University, who pored over Thames's accounts from 2007 (the first full year after the Macquarie consortium took over) up to 2012. In three of those five years, investors took more dividends out of the business than it raised in profits after tax. Bung in interim payments, and there was only one year in which the consortium of shareholders took less out of the company than it had in post-tax profits. What replaced the profits? In a word: debt, which more than doubled to £7.8bn in that period.
For the full text of the article by Aditya Chakrabortty in The Guardian, click here.
Going by the contents of the article, the whole privatisation model here appears deeply flawed. You can't be allowing for such private profiteering, through utility companies, particularly so when they are monopolies. In the very first place, like I have already stated, water being a scarce resource (particularly in India, our sources being largely monsoon dependent), privatisation is perhaps not the right approach in the case of water supply. It should instead be outsourcing of the distribution, in order to bring about greater accountability, as compared to when it is handled by government agencies, due to political interference.
I wonder if there is another side to the story.
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