The Hindu : New Delhi News : Privatisation a bonanza for water companies

Online edition of India's National Newspaper
Wednesday, Jul 13, 2005

New Delhi

New Delhi

Privatisation a bonanza for water companies

Sujay Mehdudia

Reports submitted by various private consultants project different water targets and figures

NEW DELHI: The alleged backdoor moves for privatisation of the Delhi Jal Board at the behest of the World Bank and private consultants are being undertaken in such a manner as to ensure a financial bonanza for the multinational water management companies. Apart from fudging of water loss figures, the unbundling is likely to put a heavy financial burden on the lakhs of consumers whose water bills are likely to go up by almost 400 to 800 per cent.

The reports submitted by the private consultants Price Waterhouse, GKW and CURE project different Non-Revenue Water (NRW) targets. These are in contrast to each other and those projected by the Delhi Jal Board for the 10th Five Year Plan are vastly different. According to the Delhi Jal Board, the NRW stands at around 36 per cent. But according to Price Waterhouse it is 48 per cent. Similarly, according to GKW, it is 59 per cent.

No rational explanation

There is no rational explanation on such wide divergence in the present NRW estimates. "Everything is in black and white. Their own documents explain the actual situation. These targets hardly have any significance. If the Delhi Jal Board's estimates of present levels of NRW are correct, then the targets for the first three years appear to be bogus,'' remarked Arvind Kejriwal of Parivartan, a non-government organisation that has done extensive research on the submissions made by the private consultants.

The Delhi Jal Board has committed itself to making huge investments to the tune of Rs. 3,500 crores during the 10th Five Year Plan. It is admitted by the consultants that the ongoing projects of DJB would reduce NRW to 22 percent by 2008. If that is the case, it appears that significant portion of NRW reduction targets are paper targets and the balance would happen automatically due to DJB's ongoing projects.

"The burden is going to come on the consumers. The reports are alarming and the water privatisation is going the power privatisation way. While the people are being made to pay ten times higher for power, the quality of services offered is poor,'' stated Sheenu Khurana of the Defence Colony Resident Welfare Association (RWA). Ms. Khurana feels that everything cannot be privatised and the need of the hour was better governance. The Delhi Government was just trying to wash its hands off such essential utilities instead of learning from the experience of other countries where such systems have failed.

International experience has proved that water prices have skyrocketed wherever water utilities were handed over to the private water companies.

In Manila, water prices went up by 700 per cent within three years of privatisation, while the companies had promised no increase in tariffs for the first ten years. In Bolivia, water prices increased by 200 per cent within a few weeks after water utility was handed over to the private water companies. Many of the residents of El Alto in Bolivia live on the equivalent of half-dollar per day, but cost of new water and sewer connection rose to 450 dollars, which for the poorest was the same as more than two years of food expenses. Water rates nearly tripled in Nelspurit in South Africa. Water prices increased multi-fold in every country wherever water was handed over to the private companies.

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