This document discusses water sector privatization in India. It outlines that privatization involves giving private players control over parts of the water system and treating water as a commodity. While forms of privatization have existed for ages through informal means, there is now a new wave led by large corporations and pushed by international financial institutions. This new wave involves privatizing water supply, irrigation, bottled water and more. However, privatization has led to issues like steep tariff increases, people being cut off from supplies, and private companies failing to meet obligations. The document argues for alternatives like community-based and public water management models going forward.

1. Water Sector Privatisation in India
Shripad Dharmadhikary
Manthan Adhyayan Kendra

2. Privatisation and
Commodification of Water
 Any mechanism that gives a private
player control of any part of the water
system
 An arrangement where water is a
commodity that is bought and sold, and
profits can dominate other concerns

3. Privatisation Has
Existed Since Ages
 Caste based exclusion of water
resources
 Groundwater - “owned” by the owner
of land
 Groundwater Markets
 Tankers
 Mostly individuals, unorganised sector
 Limited influence and control on any
part

4. New Wave of
Privatisation
 Involvement of large corporates
 Ability and arrangements leading to
control of (parts) of water systems,
resources
 Initially driven by international
financial agencies like World Bank,
DFID etc, now internalised, IFIs still
involved
 Policy push by these agencies using
“Knowledge”
 In tandem with global trends

5. All Sectors Included
 Bottled Water
 Urban Water Supply
 Industrial Water Supply
Nira Deoghar Project
Irrigation
Hydropower

6. Justification
 Failure of public systems
 Investments that cash-strapped
Governments not able to bring
 Cheaper Tariffs
 Better Services
 Latest Technology
 Increased Efficiency
 Reduced Corruption

7. Progress of
Privatisation
 Initial stage: Direct Privatisation –
Sheonath
 Second phase: Water Sector Reforms –
Commodification and
commercialisation of water
 Third Phase : PPP – Public Private
Partnerships – Public Risks, Private
Profits

8. Knowledge as a
Strategic Tool
 Creation of intellectual support for privatisation:
Large number of studies showing privatisation and
commercialisation as the most important, only
response
 In 1998 – India Water Resources Management Sector
Review - partnership between the Government of
India and the World Bank
Five Volumes on various parts of
water sector
Set the framework for reforms

9. Problems of Privatisation
 Social Obligations relegated to
background
 Steep increases in water and power
tariffs
 People cut off from supplies
 Private Cos. fail to meet efficiency and
coverage norms
 Private Cos. fail to bring in promised
finances
 Massive Social Unrest
 Water Supply Schemes Failing

10. Elements of Reforms
 Initiated and pushed through WB and
ADB loans
 Unbundling (separation of source,
"transmission" and distribution)
 Independent regulator to free the sector
from “political interference”
 Steeply Increasing tariffs
 Full cost recovery
 Elimination of subsidies
 Cutting off supplies for non-payment

11. Elements of Reforms - 2
 Elimination of public water sources like
public taps
 Retrenchment
 Privatisation and Public-private partnerships
 Allocation of water to highest value use
through market mechanism
 Legislation to ensure all this
 Expensive consultants for everything
including drafting legislation

12. Ultimate Goal
(ABD) ...will support the evolution of
water allocation through markets of
transferable water rights once the
necessary policy, legal, and institutional
framework for IWRM in a river basin
context have been put in place.
ADB Water Policy

13. Ultimate Goal
“Central Challenge is the development of legal
and enforceable system of water
rights...Once established.....
“..those requiring additional resources (such as
cities) will be ...able to meet their needs by
acquiring the rights of those who are using
water for low-value purposes
“..there are ... incentives for those using water
for low-value purposes to voluntarily give up
their rights, making reallocation politically
attractive and practical.”
WB WRSS

14. Successes
 Many private projects stopped
 Attempts of IFIs, corporates, Government to
create a myth of privatisation and
commercialisation as the only solutions
effectively busted
 Knowledge Hegemony Successfully
Challenged
 Growing movement for making explicit the
Right to Water
 Non-commercial, public, community based
alternatives being evolved, re-discovered,
shared

15. Way Forward
 Continuing need to monitor and critique
privatisation
 Need to broaden the debate, discussion
beyond financial sustainability to
include access, service, low cost
infrastructure, local water harvesting,
resource conservation, governance
 To document, evolve and pursue
different models of water service
delivery and management

16. Way Forward
 Public Sector still needs to take the lion’s share
of responsibility – so need to focus on its
working
 Making public sector efficient, accountable,
transparent, participatory
 Shift to broad based and comprehensive, “real”
reforms
 Restore / Create ethos of social responsibility

17. THANK YOU