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BW Businessworld

The Water Conundrum

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Any debate on the availability of water — espe- cially clean drinking water — can get fairly heated. The vast majority — which includes most consumers, NGOs, activists and politicians — believes that access to uncontaminated drinking water is a fundamental right. And that it is up to the government to ensure that all its citizens enjoy this access. A minority — mostly corporations in the business of water and a few consultants — holds the view that delivering clean water is an expensive proposition, and with demand rising all the time, consumers need to pay at least the amount that it takes to deliver water to them.

The fact is that the two views are not necessarily contradictory. The government needs to ensure that all the people have access to safe drinking water. Drinking water is a necessity, not a luxury. On the other hand, delivering water to every citizen in every part of the country involves a cost. Pipelines have to be built. With increasing pollution in our rivers and groundwater resources, the government also needs to build effluent treatment and water purification plants. This requires a fair amount of capital. Even after all these are built, there are maintenance costs, running costs and other operational costs. So who pays for all these?

If the government pays entirely, it needs to raise the money through taxes. This means that the tax-paying public ends up subsidising those who cannot — assuming the government is providing water to all. On the other hand, the government could charge for the water. And people could pay according to the quantity they use.

The latter is a better solution but the problem is that government bodies are not very efficient. So water inevitably gets wasted, and it also gets stolen and this increases the burden on those who actually pay.

One solution being proposed — especially by consultants and water entrepreneurs — is that the private sector should be given the mandate to supply water. There are multiple models that can be tried out. One envisages giving the private sector the right to pipeline maintenance, billing and delivery. Here, the municipal corporation might still own the assets but the private sector brings efficiency into the supply of the water to consumers and also bills them and collects the cash.

This works for places and consumers with access to water pipelines laid by government bodies. But what about areas where the pipes have not even been laid? Remote water purification and dispensation is one way out and here again the private sector can play a role.

Special correspondent Moyna Manku looks at the problem of water — and the businesses being built around it in our cover story package this issue.

(This story was published in BW | Businessworld Issue Dated 28-07-2014)