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Cost Of Water Surges, As A Business Booms

As municipal supplies deteriorate in quality bottled water sales soar to 4.4 billion litres, worth Rs 7,040 crore

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For Janaki, resident of Delhi’s largest slum, Sangam Vihar, safe water was a luxury. Water supply was restricted to an hour a day and was not fit for drinking. A severe water crisis in summer and the deteriorating health of her children forced her to opt for bottled water, which cost her Rs 1,000 a month, or ten per cent of her monthly income.

“Last year I spent about Rs 15,000 on medical expenses for my children. So finally, I opted for bottled water. It is expensive but I am assured that my children will not fall ill,” says Janaki, who works as a domestic help for a livelihood.

According to a recent study by the Associated Chambers of Commerce and Industry of India (Assocham), on an average Delhi gets four hours’ of water supply a day. Delhi Jal Board supplies more than 3,000 million litres per day, but much of it is lost in leakage and because of deficient infrastructure. So, only about 1,700 million litres of water actually reaches consumers.

As municipal bodies fail to provide safe drinking water, bottled water suppliers do brisk business in India. According to Market Research Euromonitor, the bottled water market in India is estimated to be 4.4 billion litres in volume in 2016, worth Rs 7,040 crore. Bottled water sales are expected to touch Rs 11,000 crore, growing by 25 per cent CAGR to touch Rs 21,500 crore by 2021.

Beverage majors like PepsiCo, The Coca-Cola Company, Bisleri International and Parle Agro are more focussed now on their bottled water divisions. India’s home-grown company, Patanjali has also announced plans for foraying into this market, expected to grow three times faster than that of beverages.

A reason for the boom in the bottled water business is water supplies that are too little, too polluted or too mismanaged. India is already reeling under an acute shortage of drinking water. A WaterAid report in 2016 ranked India among the worst countries in the world for the number of people without safe water. An estimated 76 million people in India have no access to safe water.

Data from the Union Ministry of Drinking Water and Sanitation (MODWS) suggests that 77 per cent of India’s rural population had access to at least 40 Litres Per Capita Day (LPCD) of safe drinking water. Even so, India compares poorly with other countries in terms of the rural population able to access safe drinking water. The crisis is fuelled by over-exploitation of ground water. A ministry official informs that ground water was the source of 85 per cent of the drinking water in rural India, the rest coming from surface water like rivers and streams.

India is the largest exploiter of ground water in the world. It pulls out 251 cubic km of water every year, which is higher than that of the United States and China put together. Ground water levels in India are sinking faster than in most major countries. “The situation is already critical in 40 per cent of our water reserves. Going forward it will be tougher to meet water demands. If we are not doing anything to reduce our exploitation of ground water, there will be water wars,” says Kapil Narula, CEO &Executive Director, CII-Triveni Water Centre. Even where water is available, pollution is a major concern.

Too little, Too Soiled

“Arsenic is a major problem, affecting over 900 million people in India. Steps must be taken to ensure that people do not end up using arsenic laden water,” says K.B. Biswas, Chairman, Central Ground Water Board. Arsenic contamination is grave in West Bengal, Jharkhand, Bihar, Uttar Pradesh, Assam, Manipur and Chhattisgarh, with contamination levels above the permissible limit of 10 micrograms per litre.

The presence of fluoride in water is another major concern, especially in the Brahmaputra basin. Fluoride has now even seeped into agricultural produce like tea and rice. “To address the problems of arsenic and fluoride in groundwater, the Ministry of Drinking Water and Sanitation is implementing the National Water Quality Sub-Mission,” says a senior official at the ministry.  

“The Ministry of Drinking Water and Sanitation has the Integrated Management Information System (IMIS) for maintaining and disseminating water quality information to the public. In addition, there are 2,265 water quality labs in the country for testing and dissemination of water quality information,” he says.

Even as the Union government strives to fix the problem, water scarcity and pollution creates a huge business opportunity for private players in bottled water, water purifiers, water management and recycling plants. “Water is a large industry now. Estimates are that this industry is pegged at Rs 80,000 crore and will only continue to grow. Going forward we are expecting an investment of $10 billion in the next five years,” says Arun Lakhani, CMD, Vishvaraj Infrastructure. The company is responsible for managing water supply 24X7 in Nagpur and Pune.

India’s $1 billion programme to improve management of its groundwater is attracting many foreign players, who sense a big opportunity. According to the water management consultancy Earth Water Group, the water treatment market alone is pegged at Rs 17,907 crore.

More than 12 international companies have already set up design and engineering centres in Mumbai and Pune and more than 1,200 companies are in the business of waste-water treatment alone. With the Smart Cities Mission and AMRUT, many more companies are expected.

French water and waste major, Suez Environment, has bagged a contract worth Rs 500 crore in Mumbai, Pune and Bangalore and is eyeing many more projects pan India. “Managing water in the agriculture sector is another area, which will attract lots of investment, given the fact that currently agriculture accounts for 87 per cent of our total water consumption and 35 per cent of the water is wasted,” says Lakhani.

In coastal areas like Chennai, seawater desalination plants are doing a brisk business. Mumbai, Gujarat, and Orissa are all mulling on setting up a large-scale desalination plant to create a captive water source for humans, as well as industry. According to Rajiv Mittal, managing director and CEO, VA Tech Wabag, which runs the largest desalination plant in India, “Twenty per cent of Chennai’s population drinks treated sea water and going forward, this number may go up to 60 per cent”.


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Magazine 14 October 2017
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