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Published for the week of June 18-24, 2013

Released on June 17, 2013

Total no. of pages 64 + Covers

In this issue...

What they said to usGAURAV DWIVEDI, Manthan Adhyayan Kendra

"Water PPPs don't have a pro-poor orientation; it'sthey who need services at low cost on an urgent basis."

54 HIGH TEA Come to Town

1~::(C1IJ'£1:JO.-t 02 LETTERS 04 POLSCAPE56 BOOKS 60 FINE LIVING 62 GLITTERATI 64 DIARY

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OUTLOOK 24 June 2013 1

CURRENT AFFAIRS

08 Pool of LiesOutlook travels to Pakur district in Jharkhandto verify UPA government's Bharat Nirmanclaim and finds plenty wanting.

12 OPINION Anand Patwardhan20 COLUMN Kanwar Sandhu

BUSINESS

14 A Parched TaleWill privatising water be the answer to allour related woes? Outlook visits a fewprojects across the country to find that theonly ones who profit are the providers.

INTERNATIONAL

42 Snooping on SnoopersEdward Snowden's whistleblowing on the USgovernment's suspect monitoring activitiessends the world in a tizzy

46 TURKEY Taksim Squared

FEATURES

50 The Dhamma ManAravind Adiga goes in search of Vilas Sarang,Marathi-English writer, poet and literarycritic, but finds him missing

~ group

E-mail: yourhelpline@Outlookindia.com )

GOVERNANCEWATER SUPPLYr~' ----------------------------

ot .orth..theent?

,,;'

All the contracts are generous, butprivatised water hasn't really goto r cities overflowing with joy

~J /'•..... .

Many a Slip to the Sip

30Number of Indian cities whereprivate sector and MNCs havebeen roped in by civic bodies

to manage the water supply.

ONOproject has so far delivered onlofty commitments; most continueto face major opposition from the

consuming public and civil society.

lOOAverage percentage risein water tariff in citiesand urban areas with

privatisation projects. More to follow?

OObligation on water conservation orsewage treatment by PPPs, evenas public funds and manpower is

being provided to them.

35Duration, in years, of manage-ment contracts being signedby civic bodies, up from pilot

management projects for a few years.

Photographs: NARENDRA BISHT

ACROSS the road, on the other side of the gleaming newmalls of south Delhi, is the older but not quite glamoroussettlement of Hauz Rani. It's summer, holiday time. But

every evening, when they ought to be playing, dozens of youngchildren, jerrycans in hand, troop to the nearby colonies and toa public tap near the malls to lug water expectations. Costs are up, supply erraticback home-for drinking, cooking, was- and discretionary-they have not beenhing and cleaning. The life-sustaining above parching the less posh parts so asliquid, always in short supply, is evide- to cater to the tonyneighbourhoods.Andntly scarcer this summer. Not atypical, in the worst-case scenario, alternativeyou'd say,that's how things are in India. sources ofwater, like tubewells or publicNow, into this scenario, enters a troika taps, get blocked for good measure. As

of private companies, promising salva- India prepares to go down the privatisedtion. Suez, SPML Infra and Degremont, in water route, it's a good juncture to ask,a consortium, have got a 12-year contract after bijli and sadak, is paani too slippingfrom the Delhi Jal Board to supply 24x7 out of reach of the aam aadmi?water over a 14 sq km expanse that Three more Delhi areas (Vasant Kunj,includes Hauz Rani. So is salvation really Mehrauli, Nangloi) have been given overround the corner? Similar projects from to the public-private partnership (ppp)across the country have ominous stories model that Prime Minister Manmohanto tell. In Mysore, Nagpur and Khandwa, Singh tirelessly asserts is the answer toprivate efforts to ramp up public water the nation's ills. All told, the capital issupply are croaking under the weight of among 30-odd cities where civic bodies

by Lola Nayar have called in private entities, includingMNCS, to "manage" the water supply.Thenumber is set to go higher as more citiesapproach the Jawaharlal Nehru NationalUrban Mission (JNNURM) which-ironi-cally,considering the man after whom itis named-makes private participation aprecondition for financial support.Civicbodies have been pushed, despite

strong protests, into experimenting withthe PPP model. The government's justifi-cation has been that the private sectorwill bring in investments, technology andmanagement efficiency,none ofwhich acash-strapped public sector can offer.Yeta study of13 private water and sanitationprojects by the Planning Commissionhas praise for none. In four cases- Latur,Mysore, Dewas and Khandwa-the pro-ject viability has itself been questioned.

But the march towards privatisationcontinues. Current models of public-private water partnerships are diverse,from refurbishing the infrastructure toservice contracts for billing, collectionand metering. At present, most projectsare focusing on distribution improve-

DESPAIR ON TAP

Model: PPP contract for remodelling of watersupply distribution system of Mysore city

Firm & cost: JUSCO; n34.5 crore

Earlier tariff: f125 up to 25 KL @ 'f5/KL,'f8/KL from 25-50 KL and so on

Proposed tariff: Slab starting from 'f5/KL for domesticconnections

Status: Local protest against JUSCO and municipal officialson poor project planning and implementation; 'f7 crorepenalty imposed on JUSCO for various lapses in the project;committee constituted to resolve issues.

The average middle-class consumption of water is 20-30 KL per month

15

Model: Build, operate and maintain for12-15 years in three pilot projects

Current tariff: 'f600/month average

Proposed tariff: DJB to decide

Firms and cost: Suez, SPML Infra andDegremont (Malviya Nagar); SPML Infra, Tahal Consultingand Hagihon Jerusalem Water (Mehrauli and Vasant Kunj);Suez and SPML combine (Nangloi); 'f253.30 crore

Status: Survey work has started in proposed areas forimproving infrastructure. Activists are questioning the logicof DJB outsourcing O&M while providing all raw material.

OUTLOOK 24 June 2013

GOVERNANCEWATER SUPPLY

VIVEK PATERIA

Model: PPP Build Own Transfer (BOT)concession contract for 25 years

Firm and cost: Vishwa Infrastructure;'f115.32 crore

Earlier tariff: U50 per month/connection

Proposed tariff: U1.95/KL

Status: Construction phase ongoing, delayed by around twoyears. Investigations by JNNURM expert committee onirregularities. Local committee formed to look into people'sobjections to privatisation including removal of non-revenuewater, loss of municipal control, tariff hikes, etc.

ment. Even so, only a few places haveseen experiments with citywide distri-bution, with hardly encouraging resultsat that. Many more projects are comingup: Naya Raipur in Chhattisgarh hasdecided to give its water distributioncontract to Jindal Co on the ppp model.Kolhapur, Maharashtra, has the dis-tinction of being the first to go in forppp for sewage treatment."Six years ago, activists and residents'

welfare associations in Delhi, Bombayand Bangalore were able to stall aWorldBank-led move to have the private sectortake over water supply projects by mak-ing it a condition for granting loans;' saysS.A. Naqvi of the Citizens' Front forWater Democracy. "Ironically, theCentre is now taking exactly thesame route through JNNURM." It'snobody's case that India's mori-bund water supply system is notin dire need of help, as the HauzRani scenario illustrates. It's alsonot that its residents would becussedly averse to paying; anyonewho has sampled Delhi's 'machineka thanda paani' knows servicedoesn't come free. But as water

Madhya Pradesh.K/la.ndwa

SANGEETA MAHAJAN

Model: PPP contract for distribution, opera-tion and maintenance and uninterruptedwater supply (24x7) for 25 years

Firm and cost: Veolia Water and VishwarajEnvironment; 'f566 crore

Earlier tariff: U50-200 per month/connection

Proposed tariff: U.90/KL

Status: Several problems arising in project implementation,from steep water tariff hikes, dissatisfaction with meters,increased water consumption in demo zone after projectimplementation etc

ppps begin to come apart, the question isnot whether citizens should pay forunlimited use of a finite commodity likewater, but to whom and how much?When Hauz Rani's saviours, the neigh-bouring colonies, receive water for amere two and a half hours a day, theanswer isn't so easy.The Delhi ppp expe-rience is not unique:• In Mysore, JUSCO, a Tata enterprise,has faced severe time overruns, paidpenalties and faced pubic outrage• In Khandwa, Madhya Pradesh, allindications are of the project beingunsustainable in the long run• In Latur, Maharashtra, SPML hasbeen forced to hand back the water

When the statecedes control of asvital a public assetas water, it allowsbusiness to hold thepoor to ransomand fleece them.

supply management to a governmententity after local opposition."The results of PPP projects in urban

water supply in India-even globally-aren't encouraging. They don't seem tobe the solution that they were thoughtto be," says Gaurav Dwivedi ofMan thanAdhyayan Kendra, a study group."These are expensive projects and_municipal bodies are at risk of losingcontrol of water supply to privatecompanies due to long contract periodsfrom which there is no getting out."On paper, the case for privatisation of

water supply,like telephony and aviation,seemed sound. Meeting the growingwater demands of growing cities requi-

red high investment. Better qual-ity water called for sophisticatedinfrastructure. The private sectorheld the allure ofmoney, technol-ogy,and also its famed managerialskills in implementation, delivery,accountability. Win-win. In real-ity, however, the experience hasbeen quite the opposite as thestate willingly cedes control overa vital public asset such as waterunder the garb of a PPP and

16 24 June 2013 OUTLOOK

•

AFP

Model: PPPcontract for provision of24/7 continuous water supply includingrefurbishment of distribution networkFirm and cost: Veolia Water; ~235.10 croreEarlier tariff: ~90 per month per connectionProposedtariff: ~6/ KL for 0-8 KL, UO/KL for 8-15 KL,U5 for 15-25 KL and minimum charge of ~48 per monthStatus: Questions about the lack of transparency in theproject particularly with respect to the tariff structure;uncertainty about financial implications for local peoplewhen support is removed.

watches haplessly as the poor are fleeced.In many cities, private companies have

brought little to the table. Naqvi says allthe contracts awarded actually "havemechanisms to ensure the private partiesdon't have to put in any of their owninvestments. During the initial two and ahalf years of the pilot projects, when theconsortiums will be doing distribution,Delhi Jal Board will be paying very highmanagement fees, besides the power bill,delivering treated water at the colonyand providing its own employees to theprivate partner free of cost."

On top of that, private companies areseen to be tinkering with that invaluable(and often scarce) commodity calleddemocracy. Despite initial hic-cups, electricity distribution sawsome improvements after priva-tisation in cities like Delhi due tothe presence of multiple sourcesof power. But private water com-panies have to depend on a finitenumber of sources. Diminishingrainfall, depleting water tablesand raging wars between stateshave seen water become scarcer.So, supplying 24x7 water to one

AM IT HARALKAR

Model: Management contract for 10 yearsFirm & Cost: SPML; Fixed management fee(IRR of 19.6 per cent)Earlier tariff: UOO/monthProposedtariff: U50 (plus meter cost of~2AOO + connection cost U,700)Status: The first casewhere a private management contracthas been rolled back following three years of protests bypeople and most political parties barring Congress.Theproject has now beengiven to a public sector entity.

"~

Maharashtra

Latur-<li

City profiles by Outlook/Manthan

area in a city as promised by a privateoperator means depriving a number ofother areas of their rightful due. It alsomeans creating an artificial demandwith an eye on the bottomline.

Worse, says Prof U.N. Ravi Kumar, aMysore-based water consultant whohas been engaged in the revival of waterbodies. Private water suppliers are notmaking any effort to look at issues likewaste water management or conservingwater resources, he says. "All the pro-jects we hear about are presentations bythe companies and project promoters.Governments can easily get swayed bypromises of 24x7 supply." In otherwords, the private players have sold a

"The results of PPPprojects in India arenot encouraging,"says Gaurav Dwivedi."They don't seem tobe the solution theywere thought to be."

pipe dream and are getting access toexploit and monetise public waterresources without adding to it.

In many cities where private opera-tors have moved in, anecdotal evidenceshows that, while the rich and well-offcan be assured of better supplies at ahigher cost, those defaulting on evenone bill end up paying dearly withwater supplies being stopped. Whileprivate players have been relentless inenforcing the rules on individualdomestic connections, they seem tohave fallen prey to their political mas-ters while dealing with commercialconnections-which usually default ona much larger scale than domestic ones.

Ashok Govindpurkar, a veteranNationalist Congress Party coun-cillor from Latur, says they werewidely supported in their protestagainst private management ofwater supply in their city of fourlakh population as householdshaving or seeking to instal a hand-pump needed to get permission."The cost of a water connectionfor n,700 plus a meter cost ofU,400 was a huge burden on the

OUTLOOK 24 June 2013 17

••

GOVERNANCEWATER SUPPLY

JUMP CUT KSHITHIJ URSpoor;' he says. Adds Gaurav Dwivedi ofManthan Adhyayan Kendra, "Water pppsdo not have a pro-poor orientation eventhough this is the section of the commu-nity' especially in urban settings, whichneeds water supply and sanitation ser-vices at low costs on an urgent basis." Itdoes not call for any particular politicalbent to see that, in India, this would onlyworsen the country's overall indices.

THE private companiescomplain about beingdemonised. "In Latur,

water was supplied once aweek before we took over. Weimproved the situation and supplied it onalternate days;' says Rishabh Sethi, exe-cutive director, SPML. "The lack of sup-port and coordination between govern-ment entities with respect to theircontractual obligation has been the mainreason for the project being kept inabeyance. Plus plentiful local opposition,including from local political groups!'

In Mysore, JUSCO'S plea for renegotia-tion of the contract is meeting withwidespread opposition. Despite somebenefits having accrued to 'chronicproblem' localities in the city,many otherareas are seeing a drop in supplies. DittoNagpur, where the distribution projectwas extended to cover the whole cityeven before the assessment of the pilotwas done. "I don't think private partici-pation has worked anywhere in India fora sufficiently long period or provided acredible appraisal performance;' sayswater activist Himanshu Thakkar.

JUSCO is not the only company tryingto renegotiate the terms of its contract,but the Mysore city corporation is in afix. It is facing a financial squeeze andhas no answer to the public ire. Also,there's little option of throwing out theprivate company without inviting pro-tracted litigation. With the long-termcontracts loaded in favour of privatecompanies, civic bodies are caughtbetween a rock and a hard place. Andthe only way out, it seems, is to wait likeits counterparts in Europe and declarewater supply a public sector operationafter the contract runs out. c

Paying PartnershipKshithij Urs is founder-member of the Peoples' Campaign for Right to Water

WATER has always been a source of power-and of discrimination.Just as the study of an irrigated landscape is a route to the memoryof the power of kings and earlier forms of state, the government's

recent water policies, especially those on drinking water, are a product ofthe interplay between many spheres and interests. Recent water policiesare conspicuous for two important shifts: first, the removal of the statefrom its responsibility of operating and managing water services; second,the overwhelming role handed over to the private sector, with water ser-vices being handed in their entirety to bidding companies.

Karnataka became the first state to implement the pro-privatisationpolicy when Veolia, a French company, was provided a lucrative contractto manage water and sanitation in parts of four major cities in the northof the state. Soon, the whole of Mysore, home to a very progressivepublic water utility-with a major water reservoir, the KrishnarajaSagara (KRS), just 13 km away-was transferred to JUSCO, of the Tatas.

According to the contract, the state is responsible for bringing water tothe city from a distant source, treating it and filling up the overhead tanks.The state is also mandated to pay anddepute the entire water board staff towork under the private company. Abrand new water infrastructure wasalso to be laid by the state before theprivate operator could work to provereduced levels of leakage. Despite allthese benefits, services in all the priva-tised cities started collapsing. In thenorthern Karnataka cities, municipal-ity-operated wards, constituting three-fourth of the area of these cities, were deprived of water just to ensure thatwater flowed to the privatised wards. Water bills shot up five to six timesand those who couldn't pay were mercilessly disconnected from the ser-vice. Public taps and all other alternatives were also permanently pluggedto ensure complete dependence on privately managed water services.

In Mysore, JUSCO is being repeatedly penalised by the local authoritiesfor not being able to fulfil any of the agreed targets. Water services werestopped for 50 days in a row in many areas and large sections of thepopulation are now dependent on private water-tankers.

Notwithstanding the failure of these undemocratically decided policiesand privatisation projects, and repeated demands for their reversal, theCentre is prevailing over states to proceed with more such projects bylinking fund transfer to conditions that mandate dismantling of publicbodies and encouraging privatisation. From Mysore to Nagpur and Hublito Belgaum, it is clear that water privatisation is threatening our sovereignpolicymaking. Elected representatives have become subservient to seniorbureaucrats and business contracts are deemed more sacrosanct thanpublic opinion. For the sake of democracy and of water, we need to "punchthe shark" sooner than later and stop the privatisation menace in India. c

CONTRACTS ARE DRAWNUP IN A WAY PRIVATEPARTNERSHIPS ARE ATAN ADVANTAGE. YET,THEIR SERVICE IS POOR.

E-mail yourcolumnist:theragisprout@gmail.com

18 24 June 2013 OUTLOOK