STRATEGIES FOR SUSTAINABLE WATER SUPPLY FOR ALL:
INDIAN EXPERIENCE

V Suresh

Chairman & Managing Director

I. Water Supply in India – Present Scenario

It is said that the future wars would be fought for water - the lifeline of humanity. Water plays a crucial role in any country's welfare/economic development. India has indeed achieved significant strides in the water supply sector. However, in 1991, only about 82% of the urban households covering 85% of the urban population had access to safe drinking water. Against the national average target of supply of 140 lpcd of water, the per-capita consumption is too low and ranges from 165 lpcd in few larger towns to about 50 lpcd in most smaller towns. In fact, the availability in the urban slums is around 27 lpcd. The situation is critical in many large cities. For instance, in Chennai, the fourth largest city of the country, only 2 million of the 3.7 million residential consumers within the service area of the Water Supply and the Sewerage Board are estimated to be connected to the system. On an average, they receive a supply of about 36 lpcd while the rest within the service area use the public taps which serve about 240 persons per tap. In respect of Calcutta too, some three million are estimated to be living in Bastis and refugee settlements and about 2.5 million in urban blights which lack potable water.

II. Financial Requirements for Water Supply

Water supply and sanitation is a state subject and funding of projects in this sector is essentially supported through the Plan provisions to the State governments. Though the plan provisions for this sector steadily increased from 0.65 per cent of the total outlay in the Second Five Year Plan (1956-61) to 1.81 per cent in the Seventh Five Year Plan (1985-90), this provision has been found to be highly inadequate. As a result, in urban areas against the target of achieving 100 per cent coverage (which was subsequently scaled down to 90 per cent) with safe drinking water and 75 per cent (which was subsequently scaled down to 50 per cent) with sanitation during the International Drinking Water and Sanitation Decade (1980-90), the coverage achieved in urban areas was only 85 per cent with safe drinking water and 45 per cent with sanitation.

The resources required to achieve 100 per cent coverage with safe drinking water and 75 per cent with sanitation are massive and call for recurring and non-recurring investments of very high magnitude. .The Planning Commission has estimated additional investment needs for water supply for the period 1996 to 2001, to be about US$ 3000 million. About one-third of the urban population live below the poverty line.

III. Factors Inhibiting development of sustainable Water Supply systems in India

There has been a substantial understanding on the need to improve the water supply position in the country. There are a number of factors that inhibit achieving this objective as discussed below:

Poor Financial Status of Local Bodies: Provision of water supply in cities and towns has remained the primary responsibility of the Urban Local Bodies (ULBs). The financial base of the ULBs over the last four decades has become increasingly fragile and the ULBs are finding it difficult to maintain even the existing lower level of water supply services or meet essential expenditure on staff out of the revenues that they are able to collect from tax sources. The failure on the part of the local bodies to collect adequate revenues from tax sources has made them increasingly dependent on the State governments Plan as well as non-Plan funds. The task of source development, maintenance of the distribution system and collection of water charges generally remained with the local bodies. However, while the Plan funds of urban development are spent through a variety of State level agencies such as State or city level parastatal institutions like Water Supply and Sewerage Boards, Public Health Engineering Deptts etc, the assets created are transferred to the local bodies for operation and maintenance without assuring them the consequent Plan assistance.

Unrelated links between Cost, Price and Consumption: In India, the pricing mechanism is rarely used to guide the decision of the consumer, as to how much to consume or to balance supply with demand. The existing water (connection) charges and water tariffs are highly subsidised. Revision of water charges and water tariff have remained indifferent to the inflation rate. Quite often, the State governments, being the guarantors of loans received from the financial institutions for implementation of water supply systems, come to the rescue of the state level agencies for repayment of loans and the water tariff structures intended to be revised remains untouched due to various socio-economic and political reasons. The ratio between the water tariff and water charges collected and expenditure incurred on O & M in some of the States has been found to range between 30 per cent and 46 per cent.

 

The continuance of poor Staff Strength for Maintenance Activities: In pursuance of the statutory provisions, the responsibilities of the local bodies include identification of sources, generating of potable water from those sources, distribution of water, fixation of tariffs and charges, collection of revenue and operation and maintenance. Studies reveal a substantial shortage in the staff strength of appropriate calibre to deal with the above complex issues. Poor cost recovery has been primarily attributed to irrational water charges, wastages and mismanagement. A `National Policy towards Full Cost Recovery' in respect of water supply and sanitation sector was adopted in March 1993. However, full or realistic cost recovery still remains to be put in place in India. A sense of public participation in terms of `customer' rather than `consumer' needs to prevail. The water supply Authorities also need to be clearly informed that the citizens are not to pay for the inefficient management. A quick response system to the customer needs and problems coupled with an efficient metering system and transparent billing and collection would substantially improve the `willingness to pay' of the public.

 

Absence of Regular Maintenance and Consequent Higher Operation and Maintenance Cost: The apathy of the ULBs towards the important issue of maintainance of water supply systems. For instance, to assist the local bodies, the Central Public Health Environmental Engineering Organisation (CPHEEO) of the Government of India has formulated a ‘Manual on Water Supply and Treatment’ which lays down guidelines as to how the systems should be maintained . The guidelines also lay emphasis on keeping a set of plans giving details of the layout and the production/distribution lines; establishing a systematic programme for daily operations including an operation schedule for machinery and equipment; keeping data and record on all equipment - their condition, when repaired and replaced; maintenance of records on the analysis on the waste collected at various points and listing safety measures that are necessary for proper maintenance of the system; etc. However, studies indicate that in most of the towns these are more often not-followed. Water supply projects are capital intensive and require longer repayment period more so due to initial capital costs and recurring operation and maintenance costs. Neglect of maintenance of assets created has led to decline in quality of services resulting in resistance from the users against any increase in tariff rates/user charges.

 

Substantial Losses and Leakages: A considerable portion of the treated water is lost through leakages in the transmission and distribution system. Reduction in loss due to leakages through leak detection equipment has been found to be one of the most vital measure to minimise service cost and maximise service, but this aspect is still largely ignored. While there is considerable awareness about the need to reduce the same, there are no reliable estimates of the actual quantities lost. This problem has a direct linkage to the revenue generation and sustainability of the entire water supply system. Further, the awareness about use of conservation methods/equipments to ensure efficient use of water is generally lacking. Use of Flow Control Taps is still absent except in general services such as Railways etc. Detailed investigations carried out by National Environmental Engineering Research Institute (NEERI) have revealed that about 17 to 44 per cent of the total flow in the distribution system is lost as unaccounted through leakages in main, communication and service pipes and leaking valves. The major portion of leakage (about 82 per cent) occurs in the house service connection, through service pipes and taps. The remaining 18 per cent is due to leakages in pipe lines. Water supply is unmetered in major parts of urban areas and also a significant proportion is supplied, particularly in low-income areas through stand posts resulting in unaccountable losses.

 

High Administrative and Supervision Charges burden on ULBs: The State level Water Supply and Sewerage Boards/PHEDs are generally responsible for investigation, planning, designing and implementation of water supply projects on behalf of the ULBs. Operation and maintenance is however the responsibility of the ULBs. The Administrative & Supervision charges of the Water Supply & Sewerage Boards is quite high and varies between 18 to 22 per cent. As the Administration and Supervision charges calculated are levied as a percentage of the total project cost, the officials of the implementing agencies do not have much consideration towards project cost/time over-runs.

 

Lack of Recycling Initiatives: In India, water is essentially used as a one time commodity. Often treated and un-treated water is used indiscriminately. There is substantial scope for segregated use of the water for appropriate uses and recycling of the waste water for further use for gardening, industries, street cleaning, fire fighting, agriculture etc. This also brings in another important consideration that the same quality of water use for drinking purposes need not be (mis)used for large number of other activities like flushing, washing besides other uses, and from that point of view, the possibilities of alternate water supply systems could also be kept in view for potable and un-potable water.

 

 

IV. Initiatives in India towards Achieving Sustainable Water Supply for all

The Habitat II Conference at Istanbul has given a clear vision on the essential requirements that needs to be adhered to, to achieve the goal of water for all. Recognising the need for an integrated approach to the provision of those environmental services and policies that are essential for human life, the `Global Plan for Action : Strategies for implementation', urges the governments at the appropriate levels, in partnership with other interested parties, to ensure that clean water is available and accessible to all human settlements as soon as possible through, inter alia the adoption of improvement of technology, and ensure that environmental protection and conservation plans are designed and implemented to restore polluted water systems and rebuild damaged watersheds. It recognises that water resources management in human settlements presents an outstanding challenge for sustainable development which combines the challenge of securing for all the basic human need for a reliable supply of safe drinking water and meeting the competing demands of industry and agriculture, which are crucial to economic development and food security, without compromising the ability of future generations to meet their water needs.

Emphasising the need for a strong political commitment the Habitat Agenda stresses the need to pursue policies for water resources management that are guided by the broader consideration of economic, social and environmental sustainability of human settlements at large, rather than by sectoral considerations alone and establishment of strategies and criteria (biological, physical and chemical water quality) to preserve and restore aquatic ecosystems in a holistic manner, giving consideration to entire drainage basins and the living resources contained therein. It advocates for management of supply and demand for water in an effective manner that provides for the basic requirements of human settlements development, while paying due regard to the carrying capacity of natural ecosystems. More importantly, it suggests promotion of partnerships between the public and private sectors and between institutions at the national and local levels so as to improve the allocative efficiency of investments in water and sanitation and to increase operational efficiency. In regard to the institutional mechanisms, it impresses to implement the institutional and legal reforms necessary to remove unnecessary overlaps and redundancies in the functions and jurisdictions of multiple sectoral institutions and to ensure effective coordination among those institutions in the delivery and management of services. It advocates for the introduction of economic instruments and regulatory measures to reduce wastage of water and encourage recycling and reuse of waste water and to develop strategies to reduce the demand for limited water resources by increasing efficiencies in the agricultural and industrial sectors. It also emphasises the need to involve women in decision making process in regard to management of infrastructure systems at large.

In recognition of such concerns in advance, a number of new initiatives have been taken in the last seven years for achieving sustainable water supply systems in India. The details are given below:

Registration charges on Water Connections and Collection of Advance Payments: In order to elicit the cooperation of the public in advance, it would be appropriate for the Development Authorities/Local Bodies to announce a registration scheme as being done in housing and telecommunications sector inviting applications from the public to register their names for new connections as and when the city authorities plan to implement water supply scheme. A non-refundable one time deposit can be collected from the house owner who are willing to get the house service connection from the proposed water supply scheme. This will enable the local authorities to gain part of the resources required against the capital cost or generate revolving funds even before the service is made available. The Tirupur Municipality (Tamil Nadu) has tried this proposal successfully at Tirupur. An amount of Rs 25 million from 10,000 house owners at the rate of Rs. 2000 per house and Rs 4,000 from commercial institutions has been collected. Part of this amount has been deposited with the Tamil Nadu Water Supply and Drainage Board - the state level implementing agency, for executing the work of laying additional distribution system of 110 Kms in the town. Thus, about 37 per cent of the total project cost of Rs 135 million is to be met in this process from the users themselves. In fact in about 261 water supply schemes funded by the Housing and Urban Development Corporation Ltd. (HUDCO), the need for advance registration charges have been put on as an important condition for extending loan assistance.

Metering of Water Connection: The procedure of application of flat rates for un-metered connections defy the principles of allocative efficiency. Although, metering of water supplied to industrial and commercial premises have largely been accepted without much controversy, metering domestic water supply has been a subject of debate for a long time. Findings of a study carried out in Uttar Pradesh revealed that the consumption of domestic water supply came down to less than 50 per cent when metering was resorted to. In view of the fact that substantial percentage of the area does not have the facility of metering, flat rates are levied which are based on the location as well as the area of houses. In certain cases, even the size of the ferrule, which connects to the main water supply line, is taken as the parameter to decide the charges payable on flat rate monthly.

Realistic Pricing Policies : The pricing policies should be on the principle of full cost recovery. Water supply and Sanitation agencies including local bodies need to be given full autonomy for determination of tariff with the provision for automatic annual increase to cover the average incremental operation and maintenance costs, depreciation charges, debt services, etc. Associations and involvement of local bodies and the resident population at large from the conceptional stage to implementation stage of the project and also in fixation of tariff will ensure sustainable operation of the service system. The local bodies in general, adopt the rates that are prescribed for by the State as a whole as a minimum and they rarely exercise the power conferred on them to enhance such rates depending on the local conditions and requirements. A survey regarding the extent of cost recovery possible in water supply sector during 1990-95 revealed that many of the local bodies would not have been in a position to bear the additional burden of debt servicing and O&M costs unless the water charges were nearly doubled and collection performance improved they would have not been able to meet the O&M costs. In India normally, local bodies revise water tariff once in five years. As the quantum jump is considerable, consumers generally resist such revisions. The Govt of Andhra Pradesh has recently revised the water tariffs for house service connection from Rs 20 to a minimum of Rs 40/- per month. A 10 per cent increase in the water tariff every year should be resorted to which might have been well received by the consumers. This aspect has been well recognised in recent years. For instance, in the State of Kerala, the scheme of automatic annual water tariff revision to an extent of 15 per cent has been successfully implemented. Similar approaches are being implemented in a number of other states too.

In addition, the financial institutions in India are increasingly becoming assertive in emphasising the need to appropriately fix/revise the tariff/charges as a pre-condition to gain access to institutional credit. For instance, in respect of the water supply scheme in Jaypore, Orissa the Housing and Urban Development Corporation (HUDCO) had emphasised the need for immediate hike in tariff rates both in respect of domestic, commercial and industrial rates followed by an annual automatic increase of 10 per cent. In addition a one time connection charge of Rs. 4000 per connection was also insisted. Similarly, in respect of Kolhapur in Maharashtra, in addition to immediate hike of the tariffs ranging from 75 to 100 per cent depending on the type of use, an automatic increase of 10 per cent in the tariff every four years was insisted. This was in addition to levy of a minimum advance registration charge of Rs. 2000 per new domestic connection. The above approaches have led to implementation of water supply systems becoming sustainable and profit making over a time horizon. Nearly 261 water supply schemes with a project cost of Rs. 32.7 billion (US $ 886 million) and with loan component of Rs. 16.75 billion (US $453 million) funded by HUDCO have incorporated these requirements.

Conservation through Rain Water Harvesting: Ground water is a valuable economic commodity and to avoid its depletion measures to recharge the acquifers should be extensively practiced. In places where there is an acute scarcity of drinking water, there is an increasing need to adopt rain water harvesting methods to adequately recharge the acquifers. In the water starved city of Chennai, people resorted to rain harvesting in a big way during the North-East monsoon in 1993 following acute scarcity preceding the monsoon. The rainwater was collected in ground level sumps, which was subsequently used after filtering and boiling. A number of voluntary organisations took the case for wider adoption and today incorporation of provisions for rain water harvesting and aquifer charging in the building plans in Chennai is mandatory for approval as the Chennai Municipal Development Authority has incorporated a regulation for conservation of rain water in its building guidelines in the area of Chennai in view of the acute scarcity of water.

Private Sector participation in Water Supply It is believed in general that owing to the capital intensive nature and with long gestation period, private sector would not be interested in urban infrastructure provision and that it may not be desirable to allow full private sector monopolies in these crucial sector. Apprehension about the successful association of private sector in water supply sector may be misconceived as the supply of water would be a monopolistic proposition with demand being perpetual, a well managed private enterprise with appropriate tariff structure and effective collection mechanism could outmarket or marginalise the low income households unless internalised transparent subsidies are put in place. Varied forms of public private partnership in water supply provision are being practiced in many developing countries with ranging options from large scale trucking , formation of water corporation, water vending kiosks and door to door service, coin operated meters.

Recently many progressive cities are coming up with privatisation of water supply on a BOT, BOOT basis like Pune, Belgaum, Dewas, Bangalore, Tirupur etc. However the learning process is taking longer time due to initial steps needed to ensure prudency in selection, interests of people, accountability etc.

Unbundling of Water Supply Systems: There exists a substantial scope for involvement of private sector in water supply provision through appropriately unbundling of the operations. The private sector could be involved effectively in the source development from where bulk transfer of treated water could be effectuated through a bulk water purchase agreement by the ULBs. While the distribution has to remain under the control of the public sector, the collection of tariffs/user charges could be effectively delegated to the private sector. The private sector could be allocated a commensurate profit, which would encourage them to maintain appropriate metering and reach of water to the individual households.

Participation of Community Groups : It is being increasingly realised that the user participation, either as provider or for performance assessment can be critical to the effectiveness and at times efficiency of the smaller community level infrastructure services. In many of these, the provisions and operations at the local level can be better handled by the user or community groups. Some of the important initiatives taken in this context are given below:

Specific arrangements for involving user and community groups may be achieved by unbundling of the services in an effective manner. For example, depending on the technical considerations of scale economies, local distribution networks for water may be provided by the community groups and they may be supplied with bulk water by a water utility company. In such cases the entire provision and operation can be transferred to the SPVs formed of the user and community groups.

The City and Industrial Development Corporation (CIDCO), a public sector institution at New Bombay has had a very successful experience with privatisation efforts. The privatisation experience includes maintenance of sewerage pumps, and water pumps, meter reading and billing, maintenance of parks and gardens, collection of CIDCO’s service charges and so on. CIDCO has given the responsibility of collection of its service charges to the Senior Citizens Club (an association of retired persons) to whom it pays 1 per cent as commission. If CIDCO was to collect the charges on its own it would have cost it three times more.

Another important initiative is to make available the cooperative societies, the bulk water supply by the local agencies and in turn the members of the Group Housing take care of the distribution of available water and collection of water charges.

 

 

An unique example of community participation in the field of water supply has been the experience of the Baroda Citizens Council (BCC), constituted in 1966 by the partnership of University of Baroda, Baroda Municipal Corporation, the American Friends Service Society and the Gujarat Federation of Mills and industries. Initially the BCC was involved in construction of family toilets, hand pumps, sanitation facilities and training of health and hygiene workers and training of women volunteers in hand pump maintenance. In this scheme the beneficiaries contributed upto 70 per cent of the capital costs. The remaining came from contributions from bilateral and other donors, routed through the BCC. Usually the contribution per family were in the range of Rs. 500 per family for the Mark III hand pump and Rs. 250 per family for a community drainage scheme. These handpumps and community drains are fully maintained by the community and money is collected from the users for procuring spare parts or for engaging mechanics. The BCC has moved on to find sustainable systems for financing the maintenance and upgradation of this infrastructure in the slums with the help of the Municipal Corporation and the UNICEF.

 

In addition a significant initiative has been taken through a centrally sponsored scheme namely ' Urban Basic services for the Poor (UBSP)'. The programme primarily aims integration of community efforts through a convergence approach involving the basic infrastructure services including health services with additional focus on livelihood for the people. The scheme is primarily operated in the slum areas and so far as addressed about 7 million slum dwellers as against total target group of 50 million slum dwellers. The scheme encourages formulation of neighbourhood groups (of 20 houses) represented by Women Resident Community Volunteer which combine to form a community development society under a community organiser.

 

Another National Level Initiative for Sustainable Rural Water Supply taken by the Government is the establishment of the Rajiv Gandhi National Drinking Water Mission which was launched in August 1986 to accelerate the progress of drinking water supply in rural areas and to provide cost effective science and technology inputs to improve the programme implementation in active collaboration and cooperation with the states, local people and institutions.The Missions' objective is to provide safe drinking water free from chemical and biological contamination as also ensure provision of 40 litres of safe drinking water per person per day (LPCD) in all areas for all human being and additional 30 LPCD in Desert Development Programme areas for drinking water requirement of cattle. Habitations, which are not getting full supply of 40 LPCD, are treated as partially covered requiring augmentation facilities to bring them to the level of 40 LPCD.

 

The Mission's major activities include the improvements in the quality of drinking water through the sub Missions on Eradication of Guineaworm, Control of Fluorosis, Removal of excess Iron and Brackishness, Removal of Arsenic, Water Conservation and Recharge of Aquifers. In addition, other programmes on water quality surveillance, training of villagers and officers/staff involved in the programme, research and development, and information, education and communication for health awareness are being implemented in cooperation with the State/UT Governments, Panchayats and non-Governmental Organisations with special provisions for SCs and STs.

 

Another innovative initiative in Gujarat has been the organisation of 'Paani Panchayats' (Water Courts). An NGO called 'Shelter for health awareness' was asked to help in developing local users water committees to increase the per capita availability of water. The forum also decides the distribution of available water and helps resolve disputes between the villagers on issues pertaining to water supply.

 

Role of Financing Agencies in Institutionalizing Change : The financing institutions have been substantially successful in sensitizing the ULBs on the need to evolve and implement infrastructure systems which are sustainable. In order to make the water supply schemes sustainable, while agreeing to extend financial assistance HUDCO emphasises on the provisioning of i)Principle of full cost recovery to be adopted, ii) Adequate subsidy to be provided in a transparent manner to meet the basic minimum requirement of the poor, iii)Efforts must be made for cost reduction by effective savings on manpower, energy consumption, reduction in leakages, improvement in billing and collection, etc., iv)Concerned agencies including the local bodies, be given full autonomy for determination of tariffs with the provision for automatic annual increase to cover costs, v)Tariff fixation should be based on average incremental cost including O&M cost depreciation charges, debt dues etc., vi)State level institutions should associate the local bodies and the community at large to instill better sense of participation, vii)As the chances of success of privatisation are greater in O&M, privatisation could be introduced for new installations initially, viii)Compulsory 100 per cent metering, ix)Elimination of Stand Post as far as possible and x)Operation of Escrow Account.

Substantial capacity building programmes are needed for all the stakeholders, for them to play an important role in the sector. Such initiatives can result in the ULBs adopting the financial viability and user pay approaches in other sectors too.

V. Future Ahead

Urban water and sanitation infrastructure services do not pay for themselves and the government doesn’t have the financial capacity to continue subsidising them. Falling levels of government funding will result in deficiency in volumes as well as quality of services. Many users who currently receive free or highly subsidised services could infact afford to pay. A National Committee (1997) suggests extensive private-public partnerships in the field of water supply particularly in areas relating to source development, treatment and bulk supply with private agency, retail distribution and pricing with public sector.; differential treatment of water for different uses, micro level treatment to recycle water at the household level and metering of water supply to reduce leakage. It also suggests proper packaging of projects to reduce project cost and improve viability. The need for integrated water management through conservation and use of waste water recycling, acquifer recharging and rain water harvesting is also being increasingly emphasised.

India is indeed poised for substantial involvement of private sector in the field of water supply. In the emerging scenario of liberalisation there has already been a welcome trend in this direction in the fields of power and telecommunications. The realisation and recognition of the possibilities for unbundling of water supply operations has opened up a whole new world of opportunities for the private sector to involve itself profitably. The emerging concepts of bulk purchase agreements in water supply, even though relatively new in India, is gaining substantial attention in recent years. A consensus is slowly emerging on the need for establishment Urban Utilities Regulatory Board on the lines of Telecom Regulatory Authorities, either at the city level or at the state level, which may look into the larger issues of equity aspects of pricing/supply/distribution, production cost and leakage reduction ensuring quality of service as well as involvement of private sector with special reference to urban utilities. It is hoped that very shortly many city water supply schemes would be managed collaboratively through Public- Private partnerships for mutual advantage.

Another significant area is to put people at centre stage and involve the community in regard to development of safe drinking water systems and create the proper environment for developing a attitude of 'willingness to pay' through the resident welfare Associations, Ward Committees, Councilors, city authorities etc. so that a deep sense of participation is ensured. Further, in the unbundling process in the water supply provision and management sector the community can be allocated certain physical roles to play in this important sector.