Water was available for 1 to 2 hours every 5 days or so, covering only 50% of the population. Since all households did not have individual meters, a fixed rate of Rs 90 per month was charged to all residents. The richer households met their additional water needs by buying water from tankers at a price of Rs 150 per tanker. Others would invest in storage tanks and electric pumps to make the most of when water would flow. The poorer households would line up for hours on the day water would come through the pipes and would therefore miss reporting for work and forgo their wages for the day. Today, 25,000 individual households or almost 2 lakh residents enjoy the benefits of 24x7 water supply, with a world-class water distribution system.
This is the result of a pilot project with public-private partnership covering the three cities and costing Rs 237 crore over a period of 5 years. The pilot covers approximately 10% of the population of these cities, which now has access to 24x7 water at a cost that is lower than what they paid earlier, especially when one considers payments for private supplies and loss of wages incurred while queuing up to get public supply of water. All property connections are metered, and computerised records are maintained. Average monthly water bills range from Rs 80 to Rs 150, depending on consumption. Customer service centres operate 24x7 to address customer complaints and queries. With this pilot scheme, the Karnataka Urban Water Sector Improvement Project has successfully demonstrated the technical feasibility of providing water round the clock to all the residents of the pilot project area. Fittingly, the project received the National Urban Water Award for public-private partnership from the President of India on August 13, 2009.
Arvind Shrivastava, managing director of the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) pointed out to us that in Gulbarga for the first 6 months, customers received their bills based on actual consumption, but had to pay only the old fixed charge. After seeing that the new charges were mostly lower than earlier, the customers willingly switched to the new system of consumption-based payments.
The project focused on (i) physical investments in the system, and (ii) strengthening of institutions for service delivery. The latter, which in many ways is crucial, meant improving information systems, benchmarking services, pricing services to recover the cost of operations and management, and putting in place other measures designed to improve the performance of the public sector. The reforms covered the municipal corporations, the Karnataka Urban Water Supply and Drainage Board (KUWSDB) and KUIDFC.
The role of the private operator, French water company Veolia Water, was to develop an investment programme to refurbish and transform the existing system and to implement the programme. The private sector involvement revolved around single accountability, with a review of the existing systems, data validation, system design, network revamp, operations and maintenanceall handled by a single party.
This was tied into a performance-based contract with stringent performance requirements and payments linked to achievement of the targets. The management fee of Rs 22 crore to the private operator had a fixed component of 60%, while the remaining 40% was linked to performance. The contract also included a maximum bonus of Rs 5.6 crore and a penalty of up to 10% in case of failure to meet the performance targets. In any event, all performance targets were met, said a beaming KA Joseph, regional director of the private company.
The operator was responsible for providing 100% customer connections as well as billing. Actual collections remained with the corporations. Providing adequate bulk water to the private operator was the responsibility of the KUWSDB. The project has comprehensively proved wrong the perception that a 24x7 supply requires more bulk water. Against the 135 lpcd assumed for the project, average water consumption is actually 100 lpcd. The funding for the project came from the World Bank (77%) and the government of Karnataka (23%).
The project protects the interests of the poor through a cross-subsidy in the tariff structure such that a minimum lifeline supply of 8,000 litres per household is provided at a subsidised rate for the poor, and connection charges are also waived. Not having to store water in large containers means that household space is freed up. Improved water quality has also meant less spending on medicines for waterborne diseases. For example, cases of diarrhoea and dysentery at the Belgaum corporation maternity hospital dropped from 402 during the fiscal year 2005-06 to 177 during the fiscal year 2008-09.
A touching revelation during our interaction with the women in the slum area of Madhavpur in Hubli-Dharwad was the enthusiasm of the women for the project. When a politically motivated man tried to intervene by saying that 24x7 water is good but it should be made available cheaper and that women did not realise the value of money since they did not earn it, the women protested by saying, first, that they were also earning wages and then, what would men know about the inconvenience of bringing water from distant locations Empowerment was writ large on their faces.
The political will at the level of the urban local body was evident in our discussion with the corporators. So was the effort at social intermediation. PS Vastrad, municipal commissioner of Hubli-Dharwad, highlighted the importance of involving the local NGOs who took the message of the benefits of the programme to the communities.
Much to the delight of the residents in other areas of the cities that were not covered in the pilot project, the government of Karnataka has approved the upscaling of the project to the entire population of the three corporations within the framework of a public-private partnership. If three cities in Karnataka have shown that 24x7 water is indeed deliverable, should other cities and other states of India remain far behind
Isher Judge Ahluwalia is chair, Icrier and chair, the high powered expert committee on urban infrastructure. Ranesh Nair is a consultant to the committee. Views are personal
This is the first in a monthly series on urban infrastructure issues