PhD_THESIS_SJMalecek_U.Dundee_May2013

A LEGAL FRAMEWORK FOR LOCAL PRIVATE SECTOR
PARTICIPATION IN URBAN WATER SERVICES:
AN APPROACH TO ASSESSMENT AND REFORM
By
Steven J. Malecek
May, 2013
PhD Water Law and Policy
IHP-HELP Centre for Water Law, Policy and Science
University of Dundee
Dundee DD1 4HN
Scotland, UK

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Table of Contents
List of Figures .............................................................................................................. v
List of Tables................................................................................................................ v
Acknowledgements.....................................................................................................vi
Summary...................................................................................................................... x
Table of Abbreviations...............................................................................................xii
1.0 INTRODUCTION ................................................................................................. 1
1.1 OVERVIEW.................................................................................................... 1
1.2 RESEARCH QUESTION ............................................................................... 4
1.3 RESEARCH JUSTIFICATION ...................................................................... 5
1.4 METHODOLOGY AND ANALYTICAL FRAMEWORK........................... 9
1.5 SCOPE OF ANALYSIS................................................................................ 12
2.0 THE LOCAL PRIVATE SECTOR: DEFINING ITS ROLE.............................. 17
2.1 INTRODUCTION......................................................................................... 17
2.2 LOCAL PRIVATE SECTOR: COMPOSITION AND CAPABILITIES..... 18
2.3 WATER SERVICES NEEDS AND THE LOCAL PRIVATE SECTOR.... 26
2.4 APPLICATION EXAMPLES....................................................................... 39
2.5 CONCLUSIONS ........................................................................................... 44
3.0 WATER LAW AND POLICY: IMPLICATIONS FOR LOCAL PSP ............... 48
3.1 INTRODUCTION......................................................................................... 48
3.2 WATER POLICY ......................................................................................... 51
3.2.1 Foundational principles and objectives................................................ 51
3.2.2 National water policy in India ............................................................. 57
3.2.3 State water policies in India................................................................. 62
3.3 WATER LAW FOR WATER SERVICES................................................... 70
3.3.1 Bulk water needs and legal implications ............................................. 70
3.3.2 Water law principles ............................................................................ 74
3.3.3 Applicable water law in India.............................................................. 76
3.3.3.1 Water ownership and water rights........................................... 76
3.3.3.2 Allocation of water rights: Regulation and permits ................ 89
3.3.4 Water conservation and quality protection .......................................... 97
3.3.4.1 Water conservation and restoration......................................... 98
3.3.4.2 Water quality and environmental protection......................... 105

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3.4 INSTITUTIONS.......................................................................................... 117
3.4.1 Foundational principles and concepts................................................ 117
3.4.2 Institutional support for water law and policy in India...................... 125
3.4.3 Central government agencies............................................................. 127
3.4.4 State level water agencies.................................................................. 131
3.4.5 Municipal level institutions ............................................................... 134
3.5 CONCLUSIONS ......................................................................................... 137
4.0 LEGAL FRAMEWORK FOR PRIVATE SECTOR PARTICIPATION ......... 143
4.1 INTRODUCTION....................................................................................... 143
4.2 LEGAL BASIS FOR PSP IN WATER....................................................... 146
4.2.1 Legal principles for public delegation to private sector..................... 146
4.2.2 Legal provisions for PSP in India water sector.................................. 153
4.2.3 Electricity reforms: A potential model for water reforms ................. 160
4.2.4 Electricity reforms: Implications for PSP in water............................ 174
4.3 CONTRACTUAL FRAMEWORK FOR PRIVATE PARTICIPATION .. 178
4.3.1 Private sector participation models and interface with public utility 178
4.3.2 Policy and legal framework for PPPs in India................................... 188
4.3.2.1 Status and strategy for public-private partnerships in India.. 188
4.3.2.2 Central government policies and legal provisions for PPPs.. 192
4.3.2.3 State and municipal level capacities for PPP contracts......... 198
4.3.3 PPP contract options for PSP in Delhi’s water services .................... 206
4.3.3.1 Performance based management contract ............................. 211
4.3.3.2 BOT/ROT type contract focused on water distribution ........ 215
4.3.3.3 Concession contract for water supply system ....................... 219
4.4 CONCLUSION ........................................................................................... 227
5.0 REGULATORY FRAMEWORK...................................................................... 236
5.1 INTRODUCTION....................................................................................... 236
5.2 ECONOMIC REGULATION OF WATER SERVICES............................ 238
5.2.1 Objectives, scope, and forms of regulation........................................ 238
5.2.2 Utility and water services regulation in India and New Delhi........... 245
5.2.3 Regulatory capacity assessment......................................................... 255
5.2.4 Reform approach................................................................................ 257
5.3. REGULATORY INSTITUTIONS AND LEGAL STRUCTURE............. 263
5.3.1 Regulatory independence................................................................... 264

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5.3.2 Regulatory structure and organization............................................... 268
5.3.3 Regulatory structure for utility regulation in India............................ 273
5.3.4 Implications for regulatory structure in Indian water sector.............. 284
5.4 CONCLUSIONS ......................................................................................... 288
6.0 RESEARCH CONCLUSIONS.......................................................................... 293
6.1 SUMMARY ................................................................................................ 293
6.2 OPPORTUNITIES AND LIMITATIONS FOR LOCAL PSP IN WATER
........................................................................................................................... 296
6.3 LEGAL AND REGULATORY ASSESSMENT FOR PSP IN NEW
DELHI’S WATER SERVICES ........................................................................ 298
6.3.1 Water law and policy......................................................................... 298
6.3.2 Legal structure for private sector participation.................................. 301
6.3.3 Regulatory Framework ...................................................................... 307
6.4 RESEACH AGENDA AND WAY FORWARD........................................ 313
BIBLIOGAPHY....................................................................................................... 316
APPENDIX I – Application template: Ground water abstraction permit in India .. 359

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List of Figures
Figure 2.1 – Generalized value chain model for water. 29
Figure 2.2 - Potential for diversification of water infrastructure services for improved
access to poor communities. 35
Figure 2.3 - Existing distribution system in New Delhi. 39
Figure 3.4.1- Institutional structure for water. 118
Figure 4.3.1.1- Forms of private sector participation in water services. 187
Figure 4.3.1.2– Private sector participation options. 187
List of Tables
Table 2.1- Qualifications, capabilities, market interests, and other attributes of
various private sector players in urban water services. 20

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Acknowledgements
This research benefited from the support, guidance, and critical insights of numerous
individuals, but foremost would be my thesis supervisors Dr. Sarah Hendry and Dr.
Patricia Wouters at the IHP Centre for Water Law, Policy and Science at the
University of Dundee. I am particularly grateful not only for their enthusiastic
support and encouragement, but also the broader vision and sense of purpose
concerning water law and global water needs that they and the leadership at the
Centre have conveyed in motivating my research.
I am also grateful to several of the faculty and fellow students, both within the IHP
Centre for Water Law Policy and Science and at the Centre for Energy Mineral Law
and Policy (CEPMLP), University of Dundee, for their informative and helpful
perspectives and critical feedback on my work during seminars and discussions.
Particular acknowledgement is given to Dr. Michael Hankte-Domas for his guidance
on regulatory issues in water services and to Dr. Subhes Bhattacharyya for his
insights on the electricity and water sectors in India. I also appreciated the
understanding and support from Dr. Melaku Desta, Director of the PhD programme,
over the course of my research.
During research visits in New Delhi, Paris, Jakarta, and elsewhere I had the
opportunity to meet with researchers, industry experts, and public officials who
provided valuable insights, guidance, and suggestions for my research. These
individuals with their affiliations at the time of my visits are listed below. No doubt I
have overlooked the contributions of others that I had the opportunity to interact with
and I regret any oversight.
The unwavering support and understanding from my wife Roxane and our daughters
Julie and Rachel over the course of a seemingly unending pursuit are truly
appreciated. Their patience, encouragement, and prayers along with those of family
and friends during this journey made all the difference.

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Dr. Ramesh Bhatia formerly Global Water Partnership, New Delhi, India
Mr. Christophe Bosch The World Bank, New Delhi, India
Mr. Phillipe Folliasson PT. Pam Lyonnaise Jaya (Suez), Jakarta, Indonesia
Ms. Anjali Garg The Energy and Resources Institute, New Delhi, India
Professor Alex Gardner Faculty of Law, University of Western Australia, Perth,
Western Australia
Mr. Jan Janssens Managing Partner, JJC Advisory Services, Geneva,
Switzerland
Dr. David Johnstone School of Geography and the Environment, University of
Oxford, UK
Mr. Thierry Krieg PT. Pam Lyonnaise Jaya (Suez), Jakarta, Indonesia
Mr. Ashish Kundra Delhi Jal Board, New Delhi, India
Mr. Achmad Lanti Chairman, Regulatory Body of Jakarta Water Supply
Provision, Jakarta,
Mr. Badal Malick Water and Sanitation Programme, World Bank, New
Delhi, India
Dr. Augustin Maria CERNA Centre of Industrial Economics – Paris, France
Mr. Jack Moss Suez Environnement, Paris, France
Prof. Usha P. Raghupathi National Institute of Urban Affairs, New Delhi, India
Mr. Falko Selner International water project manager and Honorary
Associate of the UNESCO IHP-HELP Centre, University
of Dundee
Dr. Dipanker Sengupta Centre de Sciences Humaines, New Delhi, India
Dr. Lena Srivastava The Energy and Resources Institute, New Delhi, India
Ms. Priti Suri Priti Suri & Associates Legal Counsellors, New Delhi,
India
Dr. Marie Helene Zerah Institut de recherché pour le developmment, Paris, France

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Signed Declaration for Submission of Postgraduate Thesis
I, the candidate, hereby declare that this thesis is my own work and has not been
submitted for any other higher degree. All references cited have been consulted
unless otherwise stated and a list of references is provided.

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Signed Statement by Supervisor
I, the supervisor, hereby acknowledge that the conditions of the relevant Ordinance
and Regulations have been fulfilled.
Signed: ______________________________ Date: _____________________

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Summary
This thesis analysed the legal requirements to enable local private sector participation
in urban water services and applied an assessment and reform approach to New
Delhi, India as a case evaluation. The research question focused on identifying the
reforms needed to facilitate a local private sector role to improve and expand water
services in New Delhi. The significance of reforms to introduce private sector
participation is readily realized in view of the lack of adequate and safe supplies of
water in much of New Delhi and other Indian cities and in similar urban settings in
other developing countries. Although the public sector will likely continue to play a
lead role in urban water services and international private water companies will
target selected markets, considerable untapped potential is seen to exist with local
private companies that can bring to bear local expertise and business skills. Legal
and regulatory reform can serve to harness this potential. This case analysis was
therefore also a demonstration of an analytical approach for broader application.
The analytical approach consisted of three components; these being: water law and
policy and the implications for bulk water availability to local service providers; the
legal basis and contract options for public-private partnerships involving local
operators; and, the regulatory provisions and institutions needed for water services.
The analysis of water law and policy focused primarily on urban water resource
needs and particularly in the case of New Delhi, the increasing exploitation of
groundwater resources. Addressing the legal basis and regulatory framework for
private sector participation drew upon policy level support and proposed water
legislation; however, the lack of applicable law in water services moved the analysis
to also examine reforms that have taken place with electricity services in India where
local private companies now have a presence.
Results of the analysis for New Delhi indicated a currently inadequate legal
framework for local private sector participation in water services. Suggested reform
measures include enactment the draft groundwater bill for New Delhi, enactment a
water framework law called for in the National Water Policy, 2012 with legal
provisions for private sector participation as was articulated in electricity reforms,
and the creation of regulator independent of the Delhi Jal Board to objectively set

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tariffs, establish water quality standards, and regulate decentralized local private
providers operating under possible concession type contractual arrangements.

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Table of Abbreviations
ADB Asia Development Bank
BIS Bureau of Indian Standards
BOO Build-Own-Operate
BOT Build-Operate-Transfer
BOOT Build-Own-Operate-Transfer
BST Bulk Supply Tariff
CERC Central Electricity Regulatory Commission
CGWA Central Groundwater Authority
CGWB Central Ground Water Board
CPHEEO Central Public Health and Environmental Engineering
Organization
CWC Central Water Commission
CII Confederation of Indian Industry
CPCB Central Pollution Control Board
CSH Centre de Sciences Humaines
DDA Delhi Development Authority
DEA Department of Economic Affairs
DERC Delhi Electricity Regulatory Commission
DJB Delhi Jal Board
DMA District Meter Areas
DWSS Department of Water Supply and Sanitation
GIS Graphic Information System
GOI Government of India
GSDA Groundwater and Survey Development Agency
HUDCO Housing and Urban Development Corporation
IWRM Integrated Water Resource Management
JNNURM Jawaharlal Nehru National Urban Renewal Mission
JUSCO Jamshedpur Utilities and Services Company Limited
MCD Municipal Corporation of Delhi
MDB Millennium Development Goals
mha Millions of hectares
MGD Millions of Gallons per Day
MIS Management Information Systems
MJP Maharashtra Jeevan Pradhikaran
MLD Millions of Litres per Day
MoEF Ministry of Environment and Forests
MWRRA Maharashtra Water Resources Regulatory Authority
MWSS Metropolitan Waterworks and Sewerage System (Manila)
NCT National Capital Territory
NDMC New Delhi Municipal Council
NEERI National Environmental Engineering Research Institute
NGO Non-governmental Organization
NRW Non-revenue water
O&M Operations and Maintenance
OECD Organization for Economic Cooperation and Development

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OERC Orissa Electricity Regulatory Commission
OHPC Orissa Hydro Power Corporation
PAH Polyaromatic Hydrocarbons
PCB Polychlorinated biphenyl
PPP Public-Private Partnership
PPIAF Public-Private Partnership Advisory Facility
PPPIRC PPP in Infrastructure Resource Centre
RFP Request for Proposal
RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana
RO reverse osmosis
ROO Refurbish-own-and-operate
RoR Rate of Return
ROT Refurbish-own-transfer
Rs Indian Rupees
RSPMU Reform Support and Project Management Unit
SME Small-Medium Enterprises
SPS Sanitary and Phytosanitary
SSWP Small-Scale Water Providers
TDS Total Dissolved Solids
TERI The Energy Research Institute
TPSB Tubig Para Sa Barangay (Manila)
TTZ Taj Trapezium Zone
ULB Urban Local Body
UNCED United Nations Conference on Environment and Development
UV Ultra-Violet
VGF Viability Gap Fund
WB World Bank
WHO World Health Organization
WQAA Water Quality Assessment Authority
WRA Water Regulatory Authority
WSP Water and Sanitation Program
WTO World Trade Organization

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1.0 INTRODUCTION
1.1 OVERVIEW
This thesis seeks to determine what legal and regulatory reforms will enable the local
private sector in developing countries realize its potential and allow it to play a
meaningful role in expanding and improving urban water services, especially in
poorer communities.. The investigation therefore examines how the local private
sector can have a tangible impact on improving urban water services, if among other
conditions such as access to financing, political support, and socio-economic
stability, a conducive legal and regulatory framework is in place.
In order to identify the essential reform elements and evaluate their relevance to
enhancing a local private sector role, New Delhi, India was selected as a case study
for research analysis. The product of this analysis was to be twofold: first it was to be
an assessment of existing legal and regulatory provisions with regard to their
adequacy for promoting and supporting local private sector participation in urban
water services, and second, it was to provide recommendations on how existing legal
and regulatory capacity could be enhanced to develop this participation. Results of
the analysis were further intended to provide an exemplary approach to evaluating
existing legal and regulatory conditions for urban water services in other developing
countries and identifying areas of needed reform with the objective of encouraging
the local private sector and facilitating its role in improving water services.
This thesis is divided into three major parts. The first part consisting of Chapters 1
and 2 sets the stage in describing the research focus and clarifying the local private
sector role that is being emphasized. Chapter 1 identifies the research question, its
justification, and the analytical framework and its method of application in making
an assessment of legal and regulatory conditions and recommending areas of reform.
An introductory context is further established by defining the scope of the analysis
and identifying legal and non-legal issues that although potentially relevant and
important to furthering the local private sector role in water, remained outside the
scope of investigation.

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Chapter 2 evaluates the premise that the local private sector represents untapped
potential by examining some of the differentiating characteristics of the local private
sector in terms of their unique business capabilities and interests, particularly in
contrast to those of international water companies. Consideration is also given to
ways which these attributes might be leveraged relative to the overall value chain in
water to improve urban water services. In evaluating the local private sector role,
though without delving into the public versus private sector debate, there is
recognition of a continued role for the public sector in service provision; however,
forms of public-private partnerships involving local rather than only international
companies are a viable and promising option.
The second part of the thesis constituting the main body of analysis is contained in
Chapters 3, 4, and 5 where three legal issues are examined from the standpoint of
enabling the participation of the local private sector in water services. The specific
context for analysis is New Delhi although other States in India and the Central
Government in India provide relevant and if not directly applicable guidelines for
legal and regulatory framework design in New Delhi.
Chapter 3 focuses on how water policy and the legal framework for water resources
management define access to bulk water for the private sector and spells out the
rights and responsibilities governing that access. The analytical framework applied
to water law and policy first identifies the key principles and concepts related to
water rights and allocations and the management of these resources for ecosystem
sustainability. Then with reference to the foundational principles and guidelines in
these areas, the existing water law and policy for New Delhi and across India are
evaluated for their relevance and adequacy in accommodating a local private sector
role in urban water services. Various forms of private participation are anticipated to
be impacted by water law and policy; however, it is primarily in the context of
private operators requiring direct access to bulk supplies of surface or groundwater,
rather than indirectly through service or management contracts with the public utility
supplying bulk water that laws and policies are examined.
Chapter 4 addresses a key legal issue concerning the establishment of a legal basis
for private sector participation in water services. Since water supply is typically the

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responsibility of the public sector, some explicit delegation of responsibility or
authorization for the private sector to participate with the public utility is required.
The analytical framework therefore first examines the legal principles in delegating
responsibility to the private sector and granting it a legitimate role, then identifies the
existing legal provisions in New Delhi and India for doing so, including examining
reforms in other utility sectors such as electricity where PSP has already taken place.
Initiatives taken by the government to promote PPPs in infrastructure development
are also examined. Following an assessment of the legal basis for private
participation in water services and assuming such a basis is established with needed
reforms, contract options under various forms of public-private partnerships for New
Delhi are evaluated.
Chapter 5 focuses on the regulatory requirements for local private sector
participation in water services. The control of market access and the conduct of
service providers in a market with respect to tariffs, service standards, environmental
safeguards, and other conditions fall in the realm of economic regulation that is
essential to providing water services. The analysis therefore identifies the concepts,
principles, and rationale for economic regulation, then evaluates the potential for
independent regulation of water services in New Delhi in light of regulatory
legislation that exists for water services in other Indian states and in other utility
sectors in India including electricity and telecommunications. Key areas of reform
are identified and particular attention is given to the qualities of independent
regulation and the organizational structure of a regulatory body in order to
effectively administer and enforce regulations.
Chapter 6 represents the third and final portion of the thesis as it draws together the
results from the three areas legal analysis, namely, water law and policy, a legal basis
for private participation, and the regulatory framework for water services to assess
the potential for expanding a local private sector presence and improving water
services in New Delhi.
Areas of reform are proposed for each of these framework elements by referring to
policies, laws, and programs related to water resource management and water
services at Central and State government levels in India and by drawing upon laws,

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regulations, and contract structures in other utility services where the private sector
now plays a role. An assessment of the potential of the local private sector is also
reached by considering the opportunities and limitations for local operators in light
of factors such as the market conditions, technology, and public attitudes toward PSP
in water. Chapter 6 concludes with suggestions on possible approaches to evaluating
the analytical approach and better determining the reforms needed to encourage local
PSP in water services.
1.2 RESEARCH QUESTION
With the aim of improving and expanding urban water services—and a case focus on
New Delhi, India, this research seeks to determine what legal and regulatory
conditions are needed to encourage and enable the local private sector to play a more
significant role in providing these services. Posed as a research question the objective
is therefore to determine: “what legal and regulatory reforms are needed in New
Delhi to enable the local private sector to improve urban water services?”
The research question in turn implies two related lines of inquiry, the first being an
understanding and assessment of existing legal and regulatory conditions pertinent to
water service provision by the private sector, and the second being a determination of
the reforms that are needed to fill existing gaps and improve these conditions.
Particular attention is given to the local private sector; however, the context for
inquiry also includes the role of private sector more generally as it relates to legal
and regulatory requirements for private sector participation in otherwise publicly
provided utility services.

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1.3 RESEARCH JUSTIFICATION
This research focused on determining the legal and regulatory framework needed to
encourage and facilitate local private sector participation in urban water services and
can be justified on the basis of at least three developments related water services and
the private sector role. The primary motivations for this research included global
water needs and existing service levels, recent trends in private sector participation,
and with the expanded role being argued for the local private sector, the need for
legal and regulatory provisions for local private operators to assume that role.
At the broadest level improved service provision accomplished by mobilizing local
private sector involvement can be seen to contribute to meeting the Millennium
Development Goals in water. These globally defined goals include halving by 2015
those without sustainable access to adequate water supply and sanitation.1
Although
this goal was reported to have been met in 2010, current estimates are that 783
million people or 11% of the global population remains without access to improved
sources of water and that by 2015 over 600 million people will still be using
unimproved sources of water.2
Since these numbers do not take into account water
quality and reliability, it is likely those having access improved sources is an
overestimate of those actually having access to safe supplies of water. 3
The lack of safe supplies of water also characterizes service levels in New Delhi and
much of India. Service levels by public utilities in cities such as New Delhi fall far
short in meeting demand and international benchmarks for performance.4
In Delhi, as
in many Indian cities, water is available only three to four hours per day and then not
1
United Nations, Goal 7: Ensure environmental sustainability, Millennium Development Goals
Report 2012 52 (2012) <http://www.un.org/millenniumgoals/pdf/MDG%20Report%202012.pdf>.
2
Id., at 52.
3
Id.
4
A benchmarking system in water supply and sanitation established for India uses performance
criteria developed in the US and European cities. Four performance indicators are assessed: 1) Inputs
– treatment plants, manpower, electricity, financial; 2) Outputs – clear water produced, service
coverage, service level; 3) Efficiency – capacity utilization, maintenance, metering and accuracy; 4)
Outcomes- Water availability, quality, customer satisfaction.
Benchmarking Performance: A manual on performance measurement in urban local bodies, 14 (2004).
Comparisons with other developing areas of the world show that with access to safe drinking water at
75%, India ranks lower than Latin America (90%), the Asia-Pacific (83%) and West Asia (87%).
Africa is appreciably lower than India at 67%.
K. Deb, Reforms in drinking water and sanitation 2 (2004).

6
even on a daily basis. This limitation occurs irrespective of bulk water availability as
the problem is mainly with distribution.5
Average physical losses with water
distribution in Indian cities range from 25% to over 50%, with total unaccounted
water, which includes non-physical “administrative” losses, sometimes being two to
three times physical losses.6
In addition, largely because of intermittent service,
water quality is generally poor.7
A second justification for addressing legal and regulatory to facilitate a local private
sector role in improving access to clean water is the changing nature of private sector
participation in water services. Since 2001, and notably since 2004, there has been a
shift away from large concession contracts by multinationals in developing countries,
owing mainly to excessive political, regulatory, and currency risks.8
Overall water
related international private investment flows decreased by 30% in 2005.9
The retreat of international operators in developing countries, most perceptively
since 2005, was marked by cancellation or early termination of contracts—typically
large concession contracts, in response to the risks and vulnerabilities of unstable
5
A.C. McIntosh, Regulatory bodies, public awareness and Transparency, in Proceedings of the Asia
Development Bank Regional Forum: Regulatory Systems and Networking of Water Utilities and
Regulatory Bodies 15 (Mar. 26-28, 2001) <http://www.safirasia.org/SafirPDF/rsrc401.pdf>.
6
See Deb, supra note 4, at 2.
Water losses are often expressed in financial terms with the two components being “Revenue Water”
and “Non-revenue Water”. The terms Non-revenue water (NRW) and Unaccounted for Water (UAW)
are sometimes used synonymously. NRW or UAW includes 1) unbilled authorized consumption, 2)
apparent losses, and 3) real losses, with a further breakdown of 1) and 2) on criteria of metering and
billing and of 3) Real Loses on criteria of leakage and overflows.
Losses from water supply systems: Standard terminology and recommended performance measures,
The IWA Blue Pages 5 (Oct. 2000)
<http://www.iwahq.org/contentsuite/upload/iwa/Document/Losses_from_Water_Supply_Systems_20
00.pdf>.
7
Intermittent service and low pressures result in back siphoning which contaminates the water in the
distribution network.
Water and sanitation, India Assessment 2002 34 (Oct. 23, 2002)
<http://planningcommission.nic.in/reports/genrep/wtrsani.pdf>.
Such contamination is commonly caused by the fact that water supply lines and sewer pipes are often
in close proximity to one another. With both sets of lines prone to leakage, a decrease in water line
pressure caused by service interruption results in sewerage influx and cross-contamination of the
water flow once it resumes.
D. W. M. Johnstone, Introduction – Basic principles of the water ‘utility sector’, Course discussion:
Governance of Public and Private Water Services Provision (May 2-6, 2005).
8
International water companies: The flood dries up, 372 The Economist 57 (Aug. 28, 2004).
Third-world water and the private sector: How not to help those in need, 372 The Economist 11 (Aug.
28, 2004).
9
Private activity in water sector shows mixed results in 2005, Private Participation in Infrastructure
Database (May 2006) <http://ppi.worldbank.org/documents/2005_Data_summary_water.pdf>.

7
economic conditions and the difficulties in adjusting contracts to these changing
conditions.10
In some cases the contract design was not financially viable,
particularly with regard to tariffs or the bidding process was flawed.11
Examples of
early terminated contracts with international operators include those in Dar es
Salaam (Tanzania), Cochabamba (Bolivia), and Buenos Aires (Argentina); while
contracts in cities such as Manila (Philippines) and Jakarta (Indonesia) have led to
mixed or disappointing outcomes.12
Accompanying this shift away from large concession contracts with international
water companies has been the emergence of new private operators in developing
countries such that by 2007 local private operators were serving over 40 per cent of
the market.13
The types of contracts too have changed with management and lease
contracts and smaller concession contracts more common than large long term
concessions as new players including national and regional private firms in countries
like Argentina, Brazil, China, Colombia and Malaysia have become active since
2005.14
Declining investment by international companies has also accelerated the
emergence of the local private sector in water and created opportunities for local
partnerships through innovative financing schemes.15
A less tangible yet significant
factor which could compensate for reduced international private sector interest is a
distinctive level of entrepreneurial energy and resourcefulness evident among many
small to medium sized business in Indian cities like New Delhi and Mumbai and in
10
Marin, P., Public-private partnerships for urban water utilities: A review of experiences in
developing countries 8 (2009).
11
Id., at 28.
12
Id., at 119.
Tanzania has been cited as an unusual example where the private operator did worse on technical and
financial measures than did the public provider. Usually it is the financially mismanaged and
technically inadequate government run utility that yields to private sector involvement for improved
performance.
J. Nellis, Privatization in Developing Countries: A summary assessment, The Egyptian Centre for
Economic Studies 33 (Dec. 2005) <http://www.eces.org.eg/Uploaded_Files/%7B3DD908DA-591A-
41C9-9848-81FA83170817%7D_ECESDLS24e.pdf >.
13
See Marin, supra note 10, at 8.
14
The average concession contract investment in 2005 was US$54 million compared with more than
US$270 million in 1995–2000.
P. Marin and A. K. Izaguirre, Private participation in water: Toward a new generation of projects?,
PPIAF Gridlines 4 (Sept. 2006) < http://www.bvsde.paho.org/bvsacd/cd66/14ppiwater.pdf>.
15
A. Gurria, Enhancing access to finance for local governments; Financing water for agriculture,
Report 1 Task Force on financing water for all 3 (Mar. 2006)
<http://www.financingwaterforall.org/fileadmin/Financing_water_for_all/Reports/Financing_FinalTe
xt_Cover.pdf> (last accessed 14 Oct. 2012).

8
other large cities in developing countries such as in Jakarta, Indonesia.16
If properly
incentivized and harnessed, such entrepreneurial acumen could be channelled toward
developing local businesses with a role in improving water services.
A third justification for this research and the primary focus of this study is the need
for a legal and regulatory framework that allows participation by local private sector
operators in partnership with the public water utility and provides for independent
regulation of private and public sector activities. It remains recognized that the public
sector will continue to play a significant role in urban water service provision, and
indeed in Indian cities, including New Delhi, the public utility is the sole legally
recognized water service provider and will likely remain the dominant provider even
with allowance for new entrants from the local private sector.
Formal legal recognition of the private sector is therefore a key requirement for
participation. This is generally implemented through a contractual arrangement with
binding obligations between public and private sectors.17
This contractual
relationship is thus a distinction within a broader categorization that is inclusive of
any form of private sector participation (PSP) in the delivery of water services. The
involvement of informal small-scale water providers (SSWPs) as found in many
developing countries, for example, would therefore qualify as a form of PSP.
Although lacking formal legal recognition and likely to be unregulated, such SSWPs
could be considered among the private sector actors serving an unfilled need in water
services.
A further distinction among contractual arrangements is that of public-private
partnerships (PPPs) in which there is some degree of risk sharing and investment by
the private sector. Therefore, mere outsourcing contracts such as technical assistance
agreements, service contracts, and most forms of management contracts, even though
involving a contractual arrangement, would not be considered PPPs. The term
privatization is sometimes used interchangeably with PSP and PPPs, and though
privatization can be regarded as a form of PSP, the divestiture of public assets
16
This assessment is based on largely on personal observations and conversations with residents and
business leaders in these Indian and Indonesian cities.
17
See Section 4.3, infra note 835.

9
involved with privatization places it outside the realm of PPP arrangements as the
partnership aspect is essentially removed. Unless referred to otherwise as found in
the literature or in legal sources, privatization is not used synonymously with PSP or
PPP in the consideration being given here to a potential local private sector role in
water services.
Enabling the local private sector in settings such as New Delhi calls for an analysis
of legal and regulatory provisions for public-private partnerships, and to the extent
that bulk water resources need to be procured by private operators, there is also the
need to identify and evaluate applicable water law and policy. While private sector
participation in urban water services is not new as is obvious from the many PPP
contracts that have been signed by international water companies in various countries
over the past 15-20 years, there is justification for specific consideration of the legal
and regulatory requirements and contractual adaptations for local private sector
involvement in urban water services.
Differentiating characteristics of local private operators having legal and regulatory
implications include the likelihood of a larger number and greater diversity in
operator and contract types than has been the case with multinationals where one two
large concessionaires may be contracted to provide water services for a large
metropolitan area like New Delhi and has occurred in cities like Manila and Jakarta.
Regulatory functions are therefore likely to require greater coordination and
flexibility especially for extending service to poorer areas. Individual PPP contracts
suited to the capabilities of local operators are also likely to be smaller and may
require modification from those applied to international water companies. If local
company activities also involve the abstraction of surface or groundwater to operate
decentralized water treatment and distribution systems, water law and policy and
associated regulations may feature more significantly for small local operators than
they do for multinationals who receive bulk water from the public utility.
1.4 METHODOLOGY AND ANALYTICAL FRAMEWORK
The methodology applied in this research consisted of three main phases; the first of
these established a context for the case study and was accomplish through meetings

10
and on-site visits, supplemented by correspondence, phone calls and literature
searches to develop insights on the key issues in water services and those specific to
the case study setting of New Delhi. The selection of New Delhi as a case study was
a subcomponent of this phase of the methodology, with the choice being motivated
by an opportunity for research visits to India and access to contacts in academia,
industry, government organizations, law firms, and research institutes located in
India, and contacts elsewhere having knowledge and expertise relevant to the water
sector and urban water services in India.
The selection of New Delhi specifically was driven in part because of its being the
national capital of India and therefore the location of government and research
organizations that were accessed and venues for conferences and seminars that were
attended. Organizations visited included the Delhi based National Institute of Urban
Affairs, The Energy Research Institute (TERI), and international organizations with
representation in New Delhi including the Centre de Sciences Humaines (CSH)
French Research Institute in India, and the World Bank Water and Sanitation
Program (WSP) located in New Delhi. Research contacts in New Delhi also
facilitated interaction with India-based private sector operators, particularly the Tata
Corporation with its successful public-private partnership for water services operated
by Jamshedpur Utilities and Services Company Limited (JUSCO) in the state of
Jharkhand, India.
New Delhi also provided a case example of urban water service conditions
characteristic of other Indian cities and large urban centres elsewhere in developing
countries with problems that include intermittent low quality supply, leakage, high
non-revenue water, politicized tariffs, and unconnected poor and peri-urban areas
that rely on unregulated informal providers rather than supply from the public utility.
The public utility for the National Capital Territory of New Delhi, the Delhi Jal
Board (DJB), typifies these problems in its loss-making operations; however, as the
exclusive water service provider for New Delhi, the DJB would factor into any
arrangements for local private sector involvement. Part of the research agenda
therefore included a visit to the DJB offices in New Delhi to obtain insights on the
challenges the utility faces and the efforts that have been made toward reform.

11
Given a context for water services in New Delhi and potential scope for local private
sector participation, specifically through public-private partnerships with the Delhi
Jal Board, a second phase of the research methodology was a legal research on laws,
policies, and regulations relevant to water resource management and the private
provision of water services in New Delhi. Electricity and telecom sectors were used
as analogues for establishing a legal basis and regulatory framework in water
services, and therefore laws and regulations related to delegating these services to the
private sector, forming partnerships with a public entity, and establishing regulatory
institutions were also researched from the standpoint of looking to reforms that have
taken place in electricity distribution and telecom services in India.
The third component of the research methodology involved the application of an
analytical framework to each of three subject areas represented by Chapters 3, 4, and
5. Although applied in the context of New Delhi, the analytical framework was
considered generic to analysing the potential for local private sector participation in
other developing countries. Chapter topics subjected to the analytical framework
therefore included: water law and policy with implications for bulk water availability
to local service providers (Chapter 3); the legal basis and contractual options for
introducing public-private partnerships in water services (Chapter 4); and the
regulatory framework and institutions needed to regulate the activities of private
service providers and public sector partners (Chapter 5).
The analytical framework itself consisted of three components, these being first the
identification of the key legal principles and concepts related applicable to each of
the three subject areas. These included, for example, water resource management
principles that should be part of water law and policy (Chapter 3); the principles
related to delegating power and responsibility from a public authority to a private
entity that form the legal basis for establishing public-private contracts (Chapter 4);
and the concepts and theories which justify and serve to guide the design of
economic regulation in water services and the establishment of regulatory institutions
(Chapter 5).
On the basis of these principles and guiding concepts, the second stage of the
analysis applied to each of these three chapter topics was identifying within existing

12
policies, laws, and regulations applicable provisions for water resources and water
services in New Delhi and in other Indian states, and also examining existing
legislation in electricity and telecom distribution services for relevancy to the
analogous network aspects of water distribution. The primary objective of this
second aspect of the analysis was therefore to determine to what extent the guiding
concepts and principles for utility services and private sector participation were
reflected in the existing policies, laws and regulations at national and state levels in
India.
The final stage of analysis served to identify the gaps and areas where reform is
needed to facilitate local private sector participation in urban water services. This
evaluation considered not only conceptual ideals, but also some of the realities in
developing countries like India in implementing change and needed reforms. This
stage of the analysis further provided recommendations on what reform measures
should be taken to address the identified legal and regulatory gaps that currently limit
a more prominent local private sector role in improving water services in New Delhi.
1.5 SCOPE OF ANALYSIS
While the focus was on legal and regulatory provisions to facilitate the introduction
of local private sector businesses in providing water services in partnership with the
public utility and assuring access to and the protection of bulk water supplies for
private providers, a wide range of issues and factors across legal, socio-economic,
and technical topics were also relevant to discussion and analysis. However, as
dictated by the need to limit the scope of the analysis and to make certain
assumptions, several topics were only briefly addressed or excluded entirely.
Among the legal issues a significant assumption was that the local private sector
entities regarded as potential service providers in some form of public-private
partnership are existing legally recognized businesses. This assumption therefore
excludes informal small scale water providers from the analysis, despite their
recognized presence and significance in providing water services in poor and peri-
urban areas. There is a need for an in-depth analysis of such providers in how to

13
register and regulate them;18
however, doing so would entail further legal
considerations including the application of company law and the investigation of
business registration procedures.
Even by limiting consideration of the types of potential service providers to existing
legally recognized businesses such as local construction companies, engineering
firms, or property developers, a host of other legal requirements and regulatory
controls would likely apply in conducting business operations. Among the legal
issues would be those related to labour laws, tax laws, contract law and procurement
regulations, and possibly intellectual property and patent law for proprietary
technology or business know-how such as in water treatment and control systems.
Although the franchising concept is recognized as a possible approach to developing
local businesses in water services, laws related to franchising and licensing
agreements in structuring and operating commercial franchises were likewise not
given formal attention. In order to develop infrastructure and establish businesses,
real estate law and property rights will also invariably be important concerns and
likely expose intricate issues especially in developing countries where title to real
property is often in question and private sector investments are at stake. Property
related legal issues were therefore also excluded from consideration.
A further area of importance is dispute resolution, whether between private operators
or involving contractors and suppliers to these operators, or because of disputes
arising between private companies and the public utility. Because of constraints on
scope, dispute resolution options were likewise not given detailed attention. Dispute
resolution issues were considered in the context of regulatory disputes such as those
involving tariffs, licensing, and service standards to the extent that the regulatory
framework needs to bestow on the regulatory authority the power to resolve such
disputes.
Although the central focus was local private sector participation, this focus does not
preclude the possibility of partnerships or joint ventures between international water
18
A. C. McIntosh, Asia water supplies: Reaching the Urban poor 133 (2003).

14
companies and local companies or transnational agreements with the public utility.
However, the legal aspects of such transnational arrangements, including dispute
resolution provisions were also considered outside the scope of this study. The basic
model being considered from a legal standpoint was therefore that of an established
legally recognized local private company, likely a small-medium sized enterprise
(SME) entering into a partnership with or having official recognition and
authorization from a public utility such as the Delhi Jal Board in providing urban
water services. Particular emphasis was therefore on how such SMEs could apply
their business specialties to helping expand services to areas not served by the public
utility.
The operations of local service providers may include the abstraction of surface or
groundwater as a source of raw water for treatment in a decentralized treatment plant
and then distribution to local consumers. Such abstraction has potential impacts on
the quantity of and quality of available water resources and therefore relevance to the
water law and policy issues that are addressed in Chapter 3. In order to focus on the
aspect of local operators providing water supply services in New Delhi two related
limitations on the scope of water law and policy implications were applied.
First, with respect to New Delhi, while both surface and groundwater are potential
sources of raw water as they are for the public utility, the Delhi Jal Board, it is likely
that local private operators that abstract water directly (rather than obtaining bulk
supplies from the utility) will rely primarily on groundwater rather than surface
water. Surface water from the Yamuna and Ganga rivers represents over 70% of the
sources of raw water for the Delhi Jal Board; however, for smaller providers, unless
they are close to these rivers and can build transmission lines to treatment plants, and
furthermore can treat heavily polluted water from these rivers, it will be more
expedient and less costly for them to rely on groundwater. However, as discussed in
Chapter 3, the over exploitation of groundwater has become a serious problem in
New Delhi and though reforms to regulate groundwater abstraction have received
increased attention over the past ten years, there is yet to be enacted groundwater
legislation for New Delhi. It was therefore an emphasis on groundwater use and the
lack of a regulatory framework for this water resource in New Delhi that served to
focus the discussion of water law and policy.

15
A second limitation in considering water law and policy implications related to local
private sector operators follows from an emphasis that was given to water
distribution services rather than water treatment processes. Therefore, although the
possibility of privately operated water treatment plants is recognized, the potential
water quality and environmental effects related to effluent from such plants,
including possibly desalination plants or private captive wastewater treatment plants
that further treat wastewater from municipal plants (as being considered as a bulk
water source by property developers in the Delhi area), were not given specific
attention in a legal analysis. In general, legal issues surrounding wastewater,
including the major challenge of wastewater generated by domestic and industrial
users of water in a city like New Delhi, were out of necessity to limit the scope of the
analysis, not examined. In the context of the value chain in water (described in
Chapter 2), water law and policy considerations focussed on the forward path of
water supply rather than the reverse path of wastewater treatment.
A wide range of possible socio-economic issues pose challenges and potential
obstacles to introducing and implementing a local private sector role in water
services. These too were only briefly addressed, if at all. Among such issues is the
debate over the justification for private versus public provision of water services and
the closely related argument for the human right to water and the concern that private
sector involvement may infringe on that right. In the area of water economics and the
financing of water services, technical considerations include market structure and
tariff setting for cost recovery and profit margins for private operators, yet with
sensitivity to the ability of the poor to pay and the possible need for tariff subsidies.
Also a concern is the ability of private operators to demonstrate credit worthiness and
secure financing whether from government grants or from private sources to the
extent that local credit and capital markets exist or assistance is available from
multilateral financing institutions. Economic issues related to tariff and water quality
standards are addressed in evaluating regulatory reform measures, though primarily
from the standpoint of guiding principles rather than quantitative determinations of
tariffs or contaminant concentrations in drinking water.

16
Overshadowing many of these socio-economic issues may be influences arising from
the political system and the integrity of the government according to measures such
receptiveness to private sector involvement and the pervasiveness of corruption in
the government. These and other inter-related socio-economic and political factors,
as well as cultural and religious views toward water and water services are
potentially significant to the feasibility and outcome of private sector initiatives in
water services and therefore deserving of attention. However, it was necessary in
further limiting the scope of the analysis and maintaining a focus on legal and
regulatory requirements to forgo an in-depth analysis of any of these broader issues
or their implications. Certain aspects of these topics were included in the discussion
to the extent that they helped establish a context for the New Delhi case study and
India generally.
The technical design and operation of water treatment and water distribution systems
along with the local hydrology of surface and groundwater also play a potential role
in determining the feasibility and approach to private sector involvement in water
services. However, these topics were likewise beyond the scope of any detailed
evaluation. A discussion of water treatment and distribution systems and the
availability of water resources was limited to how certain technical innovations
might lend themselves to decentralized infrastructure that is scalable to small-
medium sized local private operators and how their access to bulk water resources
for operation of these systems will be defined by water law and policy and provisions
for integrated water resource management.

17
2.0 THE LOCAL PRIVATE SECTOR: DEFINING ITS ROLE
2.1 INTRODUCTION
A central premise in arguing for participation by the local private sector in improving
urban water services, and therefore the need for a legal and regulatory framework to
enable such participation, is that the local private sector represents unrealized
potential in providing services unmet by the public utility. These needs are less likely
to be met by large international water companies in light of their reduced investment
flows in developing countries since around 2005,19
with the implication that only
selected markets in developing countries would attract these reduced investments.
Accompanying this reduced presence by multinationals has been an increased
awareness of the positive role that local companies and entrepreneurs can play in
compensating for the shortcomings of public services in water services and also the
impact they have had in adopting alternatives to concession contracts and in
structuring financing arrangements.20
There has also been the recognized benefit of
national small and medium enterprises in minimizing the effect of “foreignization”
that large international PPPs can create, and in serving secondary cities that are not
attractive to complex international PPPs.21
The potential role of local private sector operators is addressed from the standpoint
of their particular qualifications and capabilities relative to key needs within the
value chain for water. There is however, recognition that local operators will need to
function in a partnership mode in cooperation with public service providers. The
requirements and structure for such a partnership in terms of a conducive legal and
regulatory framework follow in Chapters 3, 4, and 5.
This assessment of the local private sector examines the differentiating
characteristics of local companies and the critical gaps in service delivery that they
19
See Marin, supra note 10, at 31.
20
Cross-cutting perspective 1: Innovative models for financing local activities, Baseline document
discussion draft for Beacon Meeting at Fourth World Water Forum Mexico City 2 (Feb. 2005)
<www.worldwaterforum4.org.mx/uploads/TBLDOCTOSB_11_44.pdf>.
21
K. Sansom, R. Franceys, J. Morales-Reyes, and C. Njiru , eds., Contracting out water and sanitation
services-- Volume 2 : Case studies and analysis of service and management contracts in developing
countries, 33 (2003).

18
might fulfil. The following discussion is therefore structured around first identifying
the defining capabilities and characteristics of companies regarded to comprise the
local private sector. Attention is then given to identifying possible roles the local
private operators might have in improving water services, with a specific context
being New Delhi and the water service challenges confronted by the Delhi Jal Board
in serving the National Capital Territory of Delhi.
Although the broad and often polarizing debate on public versus private provision of
water services is not taken up in the discussion, there is a perspective to arguing for a
local private sector role from data such as efficiency and service quality gains that
have been achieved through private sector participation in water services. This
information is therefore also drawn upon in assessing the potential role for local
private operators.
2.2 LOCAL PRIVATE SECTOR: COMPOSITION AND CAPABILITIES
A relatively broad definition of “local” is applied to characterize the local private
sector being focused upon in establishing a conducive legal and regulatory
framework to expand and improve the delivery of urban water services. Sometimes
also referred to as the “domestic” private sector, a working definition is therefore that
the local private sector excludes foreign based multinational companies, but instead
represents a spectrum of in-country business entities ranging from private national
companies and corporations, to small and medium sized enterprises (SMEs), to
individual entrepreneurs, including potentially small scale water providers. There is
therefore no pre-defined threshold on business size in terms of capitalization or
number of employees being applied here in qualifying potential local private sector
operators; however, an important precondition is that such operators have an
established legal identity, thus excluding from consideration informal small scale
water providers.
A comparative summary of the composition and characteristics of the local private
sector players relative to those of international companies is presented in Table 2.1.
Among the distinguishing characteristics of international companies is their focus
typically on large projects such as Build-Operate-Transfer (BOT) construction

19
projects and concession contracts that tend to be limited to attractive markets in
major cities. In some cases BOT contracts with international companies have become
a source of disillusionment with governments, not only because of onerous “take or
pay” clauses, but also because these projects have focused more on new production
facilities rather than the real problems in water distribution.22
A particularly sensitive issue where international companies are involved, and often
a key argument against “privatization” in water, is the repatriation of profits that
these companies extract from charging for water, including from among the poor
who are considered least able to afford it. Rather than being reinvested or seen to
benefit the local economy, this outflow of profits is perceived as self-serving
exploitation by international companies. As a result, the technical, financial, and
managerial strengths that international companies might bring can be overlooked by
these and other negative perceptions of them.23
22
See McIntosh, supra note 18, at 89.
23
Id.

20
International
Companies
National
Companies
Small-
Medium
Enterprises
Small-scale
Providers
Distinctive
Competencies
Technical, financial,
and management
National knowledge
and local legitimacy
Local
knowledge and
innovation
Local knowledge;
entrepreneurship
Benefits Inflow of finance,
skills, innovation, and
technology
Build national
capacity, networks,
and government links
Local socio-
economic
development
Serves needs not
met by public or
formal sector
Market
Interests
Large scale projects;
market entry; limited
risk
Medium scale
projects and
secondary cities
Fills gaps in
service supply;
flexibility
High risk, small
size; poor and
peri-urban areas
Water Sector
Focus
Water supply Water supply in
consortia
Tertiary water
supply and
sanitation
Water supply
(resellers, tankers,
cart carriers, etc.)
Political
Issues
Generally outside web
of local politics
Often dependent on
local politics and
individuals
Limited if any
political
recognition
Outside political
system; not
recognized
Other Contract driven; profits
expatriated; exhibits
international culture
and national values
Strong national pride,
profits stay in
country; local
cultural identity
Driven by need
for personal
income; profits
stay local
More likely to
meet needs of the
very poor
Table 2.1- Qualifications, capabilities, market interests, and other attributes of various private
sector players in urban water services. Shaded area refers to entities considered to comprise the
local private sector. These include national companies, small-medium enterprises (SMEs), and small-
scale providers that overall, contrast with international companies not only by being typically smaller
business undertakings, but also by being able to leverage their depth of local knowledge and identity
with local socio-economic and political conditions.24
Increased involvement of the local private sector is not a panacea for improving
urban water services in developing countries—or elsewhere; however, as indicated in
Table 2.1, several characteristics of local operators stand in contrast to those of
international companies and lend themselves to an expanded local presence as
service providers. These defining characteristics derive primarily from the in-depth
knowledge and understanding of the local culture, language, customs, socio-
economic conditions, and the physical environment that an indigenous local presence
affords. From a business perspective, local companies are generally less capable of
taking on large projects and major investments than are international companies;
however, with their knowledge of the local context, their network of local contacts
and relationships, including within government, and their awareness of viable
24
Table is a modified from Plummer (2002) under Box 6.4 entitled “Disaggregating the Private
Sector” and with the addition of the column and entries for small-medium enterprises (SMEs).
J. Plummer, Focusing Partnerships: A Sourcebook for Municipal Capacity Building in Public-Private
Partnerships 74 (2002).
Local Private Sector

21
technical solutions, local companies are generally willing to take on more risk and
are less insistent on the guarantees that multinationals typically require.25
Domestic
companies with revenues and costs in local currency are also less likely to be
exposed to currency exchange risks as international companies might be.
Since the financial performance of local companies is closely tied to local economic
and business conditions they will also have a strong commitment to the success of
projects.26
Unless it is a large domestic company with diversified international
interests, profits generated by a local company are likely to be locally retained, thus
enhancing long term community investment, employment, and business
development—and improving the attitude of consumers and the public toward
private sector participation that may otherwise be less favourable. Particularly
significant in developing countries too is the increased willingness on the part of
domestic companies to work with and invest in secondary cities and lower income
markets that multinational companies tend to avoid.
Case studies in developing countries have further shown that local private companies
are less deterred by the absence of a well-established legal and regulatory
framework, notably in the area of tariff regulation, than are foreign companies owing
to the familiarity and comfort level of local private operators with the local context.27
While an ambiguous or inadequate legal and regulatory regime may reduce barriers
to entry for local service providers, the implications are not necessarily beneficial to
private operators or their customers. The drawbacks can be seen for those operating
in the informal sector and by customers being served by the informal sector.
25
See Plummer, supra note 24, at 81.
Increased risk tolerance by local companies reflects reduced exposure to risks such as currency
exchange since revenues and investments will be locally denominated and political risk since there
may be a more accepting attitude by the public and politicians toward local companies than toward
multinationals who are perceived to be exploitative and detached from local concerns.
26
Id.
27
T. Triche, S. Requena, and M. Kariuki, Engaging local private operators in water supply and
sanitation services: Initial lessons from emerging experience in Cambodia, Colombia, Paraguay, The
Philippines, and Uganda, World Bank Water Supply and Sanitation Working Note 12, Volume I 48
(Dec. 2006).
<http://siteresources.worldbank.org/EXTWSS/Resources/ENGAGING_LOCAL_PRIVATE_OPERA
TORS.pdf?resourceurlname=ENGAGING_LOCAL_PRIVATE_OPERATORS.pdf>

22
The profile of small-scale providers presented in Table 2.1 identifies some of the
distinguishing characteristics and the market focus of informal small scale water
providers who usually lack formal recognition by local authorities or are even
suppressed by them and are unregulated.28
An informal status constrains their access
to credit and increases their financial risks while for their customers there is a lack of
control on water quality, and tariffs may be on the order of 10-20 times per unit of
water charged to those connected to a public supply.29
Although small scale water providers hold a significant market share, serving up to
70% of the local market in some countries30
and provide an important service
especially among the urban poor in developing countries, integrating them into the
formal sector is complicated by a number of factors. One factor on the part of such
providers is that they may elect to remain informal even though they could be legally
recognized,31
while on the part of governments there is a reluctance to recognize
them lest this be seen as a failure of the public utility to adequately provide water
services or it implies an admission of responsibility by governments for the actions
of informal providers.32
28
G. McGranahan, C. Njiru, M. Albu, M. Smith, and D. Mitlin, How small water enterprises can
contribute to the millennium development goals: Evidence from Dar es Salaam, Nairobi, Khartoum
and Accra, 2 Water, Engineering and Development Centre, Loughborough University (2006)
<http://www.dfid.gov.uk/r4d/PDF/Outputs/Water/R8060How_SWEs_can_contribute_to_the_MDGs_
-_Complete.pdf>.
29
Faruqui, N., Balancing between the eternal yesterday and the eternal tomorrow: Economic
globalization, water and equity, in Rethinking Water Management: Innovative approaches to
contemporary issues 48 (C. M. Figueres, C. Tortajada, and J. Rockstrom, eds., 2003).
30
New designs for water and sanitation transactions: Making private sector participation work for the
poor, Report of World Bank PPIAF Water and Sanitation Program 3 (2002)
<https://www.ppiaf.org/sites/ppiaf.org/files/publication/WSP%20-
%20New%20Designs%20Water%20Sanitation%20Transaction%202002.pdf>.
In Africa, among 26 countries and selected cities evaluated—around half being country capitals,
coverage by small scale providers in all but two cases was over 20%, and in half the cases, coverage
by these providers was over 50%.
Meeting development goals in small urban centres—Water and sanitation in world’s cities 2006 UN-
HABITAT 148 (2006).
31
See New designs for water and sanitation transactions, supra note 30, at 3.
<http://www.wsp.org/pdfs/global_newdesigns.pdf>.
Circumstances which encourage an informal economy include costly and onerous regulations,
especially with business registration procedures, an overbearing bureaucracy exacerbated by
corruption, limited access to credit, and weak banking system.
Promoting small and medium enterprises for sustainable development, Issue Brief of SNV- World
Business Council for Sustainable Development 4 (Jul. 2007)
<http://www.wbcsd.org/DocRoot/NDsgZ5p6ANKsxmVSXbfl/sme.pdf>.
It may therefore be the wrong type or overly burdensome regulation rather than a weak or absent
regulatory framework which contributes to informal business activity.
32
See McGranahan, Njiru, Albu, Smith, and Mitlin, supra note 28, at 31.

23
Because of these extenuating factors in establishing a legal status and regulating their
diverse business practices and service levels,33
small scale informal providers are
excluded from this evaluation as a segment of the local private sector to be
considered. Both national domestic companies and legally established local firms
that can be classified as small to medium-sized enterprises (SMEs) are therefore the
main types of business entities being regarded here as comprising the local private
sector in water services.
Large domestic conglomerates such as the Tata Group of Companies or Reliance
Industries Limited, both headquartered in Mumbai, India represent considerable
resources in financial, technological, and managerial capabilities and have in fact
brought these to bear in certain utility sectors in India. In the power sector Reliance
Infrastructure Limited and Tata Power hold electricity distribution concessions in
New Delhi and Mumbai.34
In the water sector, the Tata Group, through its subsidiary
Tata Steel and formation of the Jamshedpur Utilities and Services Company
(JUSCO), is providing water and waste water services in Jamshedpur and other cities
in central and eastern India.35
With a required scale of projects considered attractive for investment and a local
presence likely limited to selected markets, participation by large national companies
may exclude many smaller cities or market segments outside of major population
centres and markets. Local small-medium enterprises on the other hand, are more
likely to be present across a range of markets and have existing in-depth local
knowledge with an established local identity. Those having water sector related
qualifications are therefore potentially well positioned to venture into water services
if given suitable financial incentives and legal and regulatory assurances.
33
Examples include water resellers, carters and water carriers, truckers and water tanker operators,
and pioneers in piped networks.
See McIntosh, supra note18, at 47.
34
Reliance Infrastructure Limited, Productive power distribution, About RInfra 1 (2012)
<http://www.rinfra.com/kar_energy_distribution.html>.
Tata Power, Distribution business, About Us 1 (2012)
<http://www.tatapower.com/services/transmission.aspx>.
35
JUSCO, Water and waste water services, About Us 1 (2012) <http://www.juscoltd.com/water-and-
waste-water.asp>.

24
From a broad development standpoint promoting SMEs is significant as research
data and country studies consistently confirm the important role that SMEs play in
economic development as measured by indicators such as job creation, innovation,
and generation of competition.36
In developing countries over 90% of all firms
(outside the agricultural sector) are SMEs and microenterprises, contributing in many
cases to well over a third of production and investment and upwards of over 50% of
employment.37
In India, micro-enterprises and SMEs account for around 39% of
manufacturing output and 33% of exports, and in so doing provide employment for
around 31 million persons across 12.8 million enterprises to represent a labour
intensity in the micro and SME sector almost four times higher than among large
enterprises.38
Formal definitions have been established in terms of headcount and financial
turnover for the thresholds that constitute micro, small, and medium sized
enterprises.39
The Indian government has established definitions in terms of capital
investments (plants, machinery, and equipment) and made distinctions between
investment levels in the manufacturing and service sectors.40
Based on these
definitions and the types of existing local businesses in construction, civil
engineering, and property development potentially adaptive to providing water
36
W. Bartlett, SME development policies in different stages of transition, 11 MOCT-MOST 197 (Dec.
2001) <http://link.springer.com/article/10.1023/A%3A1013180808869>.
37
See Promoting small and medium enterprises, supra note 31, at 2.
<http://www.wbcsd.org/DocRoot/NDsgZ5p6ANKsxmVSXbfl/sme.pdf>.
38
Government of India, Ministry of Micro, Small and Medium Enterprises, Home Page 1 (2009)
<http://msme.gov.in/msme_aboutus.htm>.
39
The European Union has established definitions of Micro, Small and Medium sized enterprises that
are contained in Annex II of The Official Journal of the European Union adopted by the Commission
on 6 May 2003 and entered into force on 1 January 2005. Medium-sized enterprises are defined as
those which employ fewer than 250 persons and which have annual turnover not exceeding 50 million
euro, and/or an annual balance sheet total not exceeding 43 million euro. For “Small Enterprises”
these thresholds are a 50 person headcount, and annual turnover or annual balance sheet total of less
than 10 million euro, while for “Micro Enterprises”, comparable numbers are less than 10 person
headcount and annual turnover or a balance sheet total of less than 2 million euro.
European Commission, The new SME definition: User guide and model declaration, European
Commission SME User Guide 14 (2005)
<http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/sme_user_guide.pdf>.
40
In the Manufacturing Sector investment levels are: less than 25 lakh rupees (US$ 45,000) for Micro-
Enterprises; 5 lakh to 5 crore rupees (US$ 45,000 to 910,000) for Small Enterprises; and 5 crore to 10
crore rupees (US$ 910,000 to 1.82 million) for Medium Enterprises.
In the Service Sector investment levels are: less than 10 lakh rupees (US$ 18,200) for Micro-
Enterprises; 10 lakh to 5 crore rupees (US$ 18,000 to 364,000) for Small Enterprises; and 2 crore to 5
crore rupees (US$ 364,000 to 910,000) for Medium Enterprises.
Government of India, Definitions of micro, small & medium enterprises, Development Commissioner
Home Page 1 (2012) <|http://www.dcmsme.gov.in/ssiindia/defination_msme.htm>.

25
services, it is envisioned that many of them would rank as SMEs in having
investment levels on the order of US$250,000-500,000 and staffing numbers in the
range of 50-100 or less. Possible examples of local private sector service providers
include owners of housing estates in providing their own water supply independent
of the public supply, and building and civil engineering companies who are
contracted to lay pipes.41
Such contractors in developing the necessary technical
skills and business knowledge may then be willing to expand and invest in operating
independent water supply systems.
In Indian cities such as New Delhi and Mumbai, property developers in particular
have a strong incentive to have an assured water supply for their tenants and
residents. They would be a type of business motivated to invest in facilities for the
abstraction, transmission, and treatment of raw water and the distribution treated
water within their privately operated piped networks, and also perhaps to install
equipment for the treatment and recycling of wastewater.42
The critical importance
of an available water supply before opening new housing developments has been
experienced in Delhi where in one instance 2,709 flats in two blocks were completed
and available for occupancy, but the Delhi Jal Board was not able to supply them
with water.43
Rainwater harvesting, water from tube wells and wastewater recycling
have provide alternative supplies in the interim.44
A similar problem was
encountered in the Dwarka development of Delhi which opened before having an
adequate municipal water supply.45
41
J. Green, Private sector involvement in water services, Tearfund Advocacy Guide 6 (2003)
<http://tilz.tearfund.org/webdocs/Website/Campaigning/Policy%20and%20research/Advocacy%20gui
de%20to%20private%20sector%20involvement%20in%20water%20services.pdf>.
42
Concepts and application ideas based on interviews and discussions with researchers and residents
of New Delhi and Mumbai, including R. Bhatia (2005), D. Sengupta (2005), A. Maria (2005), M. H.
Zerah (2005), S. Srinivasan (2007), S. Jayanti (2010) ; A. Despande (2011).
43
N. Lalchandani, New Vasant Kunj flats await water supply, The Times of India 1 (Oct. 1, 2012)
<http://articles.timesofindia.indiatimes.com/2012-10-01/delhi/34196988_1_dda-claims-djb-officials-
flats>.
44
Id.
Although this is example is a project of the Delhi Development Authority, it illustrates the dilemma a
private developer would also face if constructing a new property development without a supply from
the public utility. If accessible to groundwater or surface water, perhaps supplemented by rainwater
harvesting and waste water recycling a private developer may seek to establish an independent water
supply system to become self-sufficient or reduce dependency on the utility.
45
N. Lalchandani and R. Verma, Power, water still a tall order in high-rise Dwarka, The Times of
India 1 (Sept. 26, 2012) <http://articles.timesofindia.indiatimes.com/2012-09-
26/delhi/34100919_1_dwarka-water-treatment-plant-sufficient-water>.

26
2.3 WATER SERVICES NEEDS AND THE LOCAL PRIVATE SECTOR
In assessing the potential role of the local private sector in meeting water service
needs in New Delhi two basic forms of participation can be identified. The first of
these relates primarily to improving services within the existing service area and
water distribution network of the Delhi Jal Board. A second form of local private
participation would be in extending access of treated tap water to areas of the city –
mainly among the urban poor and in slum areas not served by the Delhi Jal Board
aside from the limited and currently regarded unreliable service from DJB operated
tankers.46
With little or no organized water supply residents of unauthorized colonies
and slum areas must resort to informal vendors such as unregulated tankers,
boreholes, or other sources of untreated water.
Of these two aspects to the water supply problems facing New Delhi—which also
characterize the situation in most other Indian cities and therefore present similar
opportunities for local private sector participation, the second form of involvement in
extending piped water service and providing treated water to presently unconnected
households will likely be the more challenging. For technical, operational, financial,
and social reasons, as well as in satisfying the foundational requirement of
establishing an appropriate legal and regulatory framework, significantly more
preparation will be required.
There is not a sharp geographic demarcation within the National Capital Territory of
Delhi by which to distinguish between these two types of water service needs –
between those areas which can be considered having marginally adequate service
provided by the Delhi Jal Board and those within which no connections to treated
piped water are available. All administrative units within the NCT have areas where
46
The Delhi Jal Board has recognized the problems with delays in service, errant tanker drivers asking
for money, and unaccounted for water losses. As a solution, the DJB has awarded contracts the
construction of new tankers equipped with global positioning system (GPS) units to better monitor the
reliability of their tanker services.
The Hindu, Jal Board to outsource tankers for water supply, Cities – Delhi Article 1 (July 11, 2012)
<http://www.thehindu.com/news/cities/Delhi/article3626816.ece?css=print>.

27
no connections are available as evidenced by recent Census of India 2011 data for
the National Capital Territory of Delhi.47
A compilation of data for the nine administrative units comprising the NCT indicated
that overall drinking water availability within premises existed in only 78.4% of
households in 2011, which was up marginally from 74.9% in 2001.48
Across the
NCT, the availability of drinking water within premises in 2011 ranged 91.7% in
Central Delhi to 70.8% in Northwest Delhi.49
Overall, tap water was available to
81.3% of households, against 75.3% in 2001.50
Of these households, only 75.2% had
treated tap water in 2011 while 6.1% used untreated tap water, with alternative
sources of drinking water being from tube wells, hand pumps, and other sources.51
The implication of these statistics is that whether in terms of share of total number of
households (3,340,538) or of total population (16,753,235)52
a significant portion of
the population of the NCT of Delhi remains without access to treated tap water.
Within the water supply system operated by the Delhi Jal Board major deficiencies
and limitations lie with the distribution network, which in the context of the value
chain for water (Figure 2.1) is the interface between bulk water transmission from a
water treatment facility and retail delivery to customers and includes metering and
billing. Among the technical and operational problems with the DJB operated water
distribution system are high leakage rates and high non-revenue water,53
inferior
47
V. Joshi, Houses, household amenities, and assets: Drinking water, Census of India 2011, NCT of
Delhi 8 (2011) <http://censusindia.gov.in/2011census/hlo/Data_sheet/delhi/5Drinking_water.pdf>.
The Indian Express, A decade later, drinking water access, sanitation lacking: Census, Express News
Service 1 (May 8, 2012) <http://www.indianexpress.com/news/a-decade-later-drinking-water-access-
sanitation-still-lacking-in-city-census/946636/0>.
48
See Joshi, supra note 47, at 6.
49
Id., at 7.
50
Id., at 5.
51
Id.
52
Government of India, Delhi urban population 2011, Census of India 2011 1 (2011)
<http://www.census2011.co.in/census/state/delhi.html>.
53
Field studies in Delhi indicate that around 40% of water produced goes to leakage from the system
(transmission and distribution). When unbilled, unmetered or unauthorized consumption is added, the
total non-revenue water is around 50%. Within in the distribution network, around 24% of water
produced is lost due to defective pipes and service connections.
PriceWaterHouseCoopers, Delhi Water Supply and Sewerage Project - Project Preparation Study:
Final Report: Part B Report – Executive Summary 2-6 (July, 2005)
<http://delhijalboard.nic.in/djbdocs/whats_new/news/pdf/DFR3-Water%20Supply-Vol%20I-
17%20Nov%202004.pdf>.

28
piping materials and construction,54
poor maintenance, faulty connections,55
and
illegal connections.56
Water service averages about five hours per day57
and because
of this there are health related consequences of intermittent service and low pressure
or sudden pressure drops. Leaking pipes, low pressures and intermittent supplies
create back siphoning of contaminated water particularly where water lines are in
proximity to sewer lines.58
Furthermore, with low line pressures and the short time
available to draw water, many residents install booster pumps which further reduce
pressure and increase the risk of ingress of contaminated water.59
Additionally, with
intermittent supply customer meters cannot measure consumption accurately, thus
contributing further to non-revenue water.60
Above all perhaps, intermittent supply
and low pressures lead to increased customer frustration and give rise to coping
measures and additional costs for consumers, thereby adversely affecting willingness
to pay and further eroding the revenue base for the utility.61
Among large industrial
users, intermittent supply may force them to resort to other sources of water – often
54
The total length of the water distribution network in New Delhi is approximately 9,000 km. Within
this network 32% of pipes are between 10 and 20 years old, 43% are between 20 and 40 years old, and
6% are over 40 years old. Pipe materials are predominantly cast iron (65%), asbestos cement (18%);
other compositions include galvanized iron, PVC, pre-stressed concrete, and mild steel.
Halcrow Water Services, Improving urban water supply and sanitation service: Rapid distribution
system assessment and 24/7 water supply strategy for Delhi, Report 2-2 (2005)
<http://www.delhijalboard.nic.in/djbdocs/reform_project/docs/docs/doc_project_prep_docs/pdf/halcro
w_study_pdf/Report.pdf>.
Data on the existing network in Delhi reveal that frequent pipe bursts occur mainly with brittle
asbestos cement and pre-stressed concrete pipelines or with old cast iron pipelines. Improved
reliability has been demonstrated with flexible material for small diameter pipelines and malleable
material for larger diameters. Such pipeline upgrade is part of the recommended rehabilitation of the
Delhi water distribution system.
GKW Consulting Engineers, Rehabilitation program for water supply infrastructure: Part 1:
Operational zones South II & III – Water supply current situation, Report 24 (2005)
<http://www.delhijalboard.nic.in/djbdocs/reform_project/docs/docs/doc_project_prep_docs/pdf/gkw/
Vol-1%20Water%20Supply%20Report/3.%20RP-WS_Part1.pdf>.
55
Faulty customer connections in Delhi represent between 50 and 70% of physical water losses in
distribution. In volume, the loss is estimated to be around 500 liters per day per connection.
See Halcrow Water Services, supra note 54, at 4-10.
56
Estimates are that around 6% of total connections (around 83,700l connections) in the DJB operated
network are illegal. This would account for a loss of around 2% of produced water or around 14
million gallons per day.
See PriceWaterHouseCoopers, supra note 53, at 2-7.
57
Id., at 2-2.
This figure is typical of most Indian cites where water is generally available for only two to eight
hours a day.
See Water and sanitation, India supra note 7, at 34.
58
Delhi water supply and sanitation reform project, Delhi Jal Board Report 15 (July, 2004)
<http://www.delhijalboard.nic.in>.
See Water and sanitation, India supra note 7, at 34.
59
60
See GKW Consulting Engineers, supra note 54, at 18.
61

29
groundwater, which contributes to the overexploitation of groundwater62
and further
deprives the utility of revenue.
Figure 2.1 – Generalized value chain model for water. Model indicates two paths.63
The forward
path spans source abstraction, water treatment, transmission and storage, to then distribution and
supply to consumers. The second reverse path includes wastewater treatment beginning with recovery
from the customer site to then transmission and storage for processing at a wastewater treatment plant,
and eventual discharge or reuse. Wastewater treatment and water recycling can also serve as a source
inputs back into the forward path.
In addition to upgraded physical infrastructure, there is a need for improved data
collection and record management to tighten system monitoring and operational
control. Information related needs in water distribution include mapping all laid pipe
locations—preferably with a GIS based system64
, collecting flow and pressure
measurements65
, detecting leaks and illegal connections66
, and detailed hydraulic
62
63
Arthur Anderson Consulting, Recent transactions and future trends in the global water industry,
Energy and Utilities Report 3 (2000) <www.arthuranderson.com>.
64
Records held by the DJB did not include as-built drawings of the existing 8,373 km of pipeline
when the network was evaluated in 2004.
Digital GIS based (Geographic Information System) mapping would provide readily accessed and
updated pipe location information and ideally also include all service connection location information.
See, Halcrow Water Services, supra note 54, at 6-3.
65
66
Technology developed by London Based Water Research Centre uses radioactivity and a sensor that
travels in the water flow and is capable of detecting leaks as small as 1 liter per hour. It was evaluated
by the DJB and shows promise of improving leak detection.
Treatment Transmission
& storage
Distribution Customer
Service
Treatment Transmission
& storage
Recovery Customer
Service
Network
Factory
Retail
Water Supply
Waste Water Treatment
Tap
- Metered
- Unmetered
Sink
- Consumers
- Trade
- Industry
Discharge
- License
- Quantity
Source
Abstraction
- Volume
- Rate
- Time

30
modelling of the entire distribution network.67
A management information system
(MIS) is also essential as the platform to capture and utilize this information for
informed decision making.68
A substantial initiative to address distribution problems within the existing DJB
operated network was a World Bank sponsored pilot reform project that was
proposed for South Delhi in 2005. The proposed project targeted two of the 21 DJB
operational zones (South II and South III) representing 91,000 and 72,000
connections respectively, or about 12% of DJB’s total connections, with the
objective of demonstrating that continuous 24x7 service was achievable.69
The
project consisted of several components; among the priority targets were
infrastructure rehabilitation to reduce leakage, organizational strengthening, and
information management to improve utility performance. Private sector participation
in the form two six year Management Contracts was an integral part of the proposal
in order to infuse professional management into operations, maintenance, and
rehabilitation works.70
By late 2005 the reform project had stalled and was eventually shelved over public
protests led by a local Indian NGOs in what they regarded as a World Bank
controlled water “privatization” plan,71
although the proposed management contracts
had no provision involving the privatization of assets. The Parivartan NGO alleged
N. Sharma, British tech to help DJB stem huge losses, Times News Network 1 (Jan. 14, 2005)
<http://articles.timesofindia.indiatimes.com/2005-01-14/delhi/27849036_1_leakages-water-mains-
sensor>.
67
Hydraulic modeling facilitates among other decision making activities the deployment of booster
pumping stations, the replacement of distribution mains, and the design of district meter areas
(DMA’s)
68
A three tier management information system (MIS) was recommended for the DJB. The operational
level captures data from network operations; a middle level then reviews and validates this
information for top level management which makes strategic decisions and applies corrective action
as needed. An information technology (IT) unit provides the tools and support for this system.
PriceWaterHouseCoopers, Delhi water supply and sewerage project - Project preparation study, Final
Report: Part-A, Volume 1 (Main Report) 2-45 (July, 2005)
<http://delhijalboard.nic.in/djbdocs/reform_project/docs/docs/doc_project_prep_docs/pdf/final_report/
DJB_Final_Report_Chapter_1_to_10_and_TOC_and_cover_pages/final_report_vol_II.pdf>.
69
See Delhi water supply and sanitation reform project, supra note 58, at 13.
70
Delhi Jal Board, Delhi water supply and sewerage project, Project Information Document (PID)
Concept Stage, 2 (Feb. 15, 2005)
<http://siteresources.worldbank.org/INTINDIA/Resources/DJB_PID_FOR_WEB.PDF>.
71
First salvo fired in Delhi’s battle for water, The Hindu 1 (Oct. 18, 2005)
<http://www.hinduonnet.com/2005/10/18/stories/2005101814060100.htm>.

31
favouritism by The World Bank toward the American consulting firm
PriceWaterhouseCoopers by awarding them a $2.5 million contract to help design
the reform project that was to then be funded by a World Bank loan.72
There was
also protest that the World Bank had a role in setting the criteria for selecting private
operators,73
and criticism of the Delhi government itself for subjecting the country to
a World Bank loan when the money could have been raised on the domestic market
at a lower interest rate.74
Likewise, critics claimed, needed technical and managerial
skills could have been obtained within India rather than relying on World Bank
consultants.75
Without any significant reform to Delhi’s water distribution system the difficulties
and daily challenges of obtaining water will likely intensify, requiring increased use
of coping measures to compensate for the limited hours of service and low line
pressure. News stories and individual testimonies commonly relate how Delhi’s
middle class residents must rise early in the morning to turn on their taps, run booster
pumps and collect water in storage tanks for the few hours that it is available.76
In slum areas of Delhi and other Indian cities the situation is even more acute as a
single standpipe or occasional tanker truck means long waits-- especially if there are
delays because of no electricity for the pumps, and then sometimes struggles ensue to
72
The water industry in India: Private worries, 376 The Economist 53 (Aug. 13, 2005).
An Independent Peoples Tribunal headed by Mr. Arvind Kejriwal of the DJB Union examined what it
said was 9,000 pages of documents to substantiate its claims that the World Bank influenced the
awarding the consulting contract to PriceWaterHouseCoopers and that the Delhi government
acquiesced to the World Bank in seeking a loan that it could have been otherwise raised on local
financial markets at a lower cost.
A. Kejriwal, Delhi water privatization: Independent peoples tribunal on the World Bank Group, A
video file on Delhi Water Privatization 1 (Sept. 2007)
<http://uk.youtube.com/watch?v=8XwiyWgZHMA> accessed through:
<http://www.worldbanktribunal.org/Delhi_privatisation.html>.
73
Plan panel to scan 24x7 project, Times News Network 1 (New Delhi, Sept. 28, 2005)
<http://www.accessmylibrary.com/article-1G1-136810823/plan-panel-scan-24x7.html>.
74
A. Bhaduri, A mess called water reforms, Times of India Editorial (Nov. 25, 2005)
<http://articles.timesofindia.indiatimes.com/2005-11-25/edit-page/27851727_1_water-reforms-water-
sector-water-campaign>.
75
Id.
76
S. Sengupta, In teeming India, water crisis means dry pipes and foul sludge, The New York Times
1 (Sept. 29, 2006) <http://www.nytimes.com/2006/09/29/world/asia/29water.html?pagewanted=all>.
The experiences of current and recent Delhi residents who were contacted during the course of this
research further attest to the day to day frustration with water services in Delhi; personal contacts
include Dr. Dipanker Sengupta (research contact; 2005); Dr. Ramesh Bhatia, (research advisor; 2006);
and Dr. Shekhar Jayanti (business associate; 2007).

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