Privatization of Water in Mumbai

It has been proved beyond doubt that privatization in different fields have led India be a global player and a force to be reckoned with. But is this privatization in the essential services good for Indians?

Water is increasingly becoming a crisis issue everywhere, assuming threatening dimensions since it affects all life forms. Over the last 10-15 years, it is slowly being turned into a commodity through privatization of water resources. Fortunately, citizens’ groups have been active internationally, sometimes militantly, resisting moves to commercialize drinking water supply.

In Mumbai, the K-East ward has been selected for water privatisation through a Water Distribution Improvement Project (WDIP) with an objective to improve the water supply. The K-East ward has been chosen for the pilot project, as it comprises industries, commercial and residential complexes and slums. If the project is a success, then it will be replicated in all the other wards. In January 2006, an agreement was signed with Castalia, French consulting firm based in New Zealand to develop a pilot project for privatisation of the water system in K-East. This consultancy has been funded through a US$ 692,500 (approx Rs. 2.6 crore) grant by the Private Public Infrastructure Advisory Facility (PPIAF), a multi-donor agency run by the World Bank.

Though the Municipal Corporation of Greater Mumbai (MCGM) denies that this project involves any privatisation and they will never outsource, sell, or privatize its water and water assets, reality is quite different. The terms of reference (TOR) given to the consultant states, in “A Precise Statement of Objectives” that “MCGM envisages to award a "Water Distribution Improvement Contract" to a professional Operator to demonstrate, in a selected pilot area, that it is possible to achieve an improved water supply service....”. Indeed, the very involvement of PPIAF indicates that privatisation is involved, for the PPIAF has been set up with the express aim of “helping developing countries improve the quality of their infrastructure through private sector involvement.” Also the TOR indicates that privatisation even deeper than management contract may be possible, and even sale of assets cannot be ruled out. In fact, as part of its water privatisation drive, the Brihanmumbai
Municipal Corporation (BMC) is in the final stage to implement its proposal for putting ‘pre-paid water meters’, similar to a pre-paid phone card, in the slums and chawls in order to phase out public taps and reduce the use of non-revenue water.

In fact, the World Bank pushed for exactly the same kind of management contract in Delhi Jal Board in Delhi that Castalia has been asked to develop for K- East ward. But this project was dropped under massive protests by the Delhi citizens. Previous attempts to privatize water supply have taken place in Cochabamba (Bolivia), Atlanta and Pekin (U.S), Argentina, Philippines, Nicargua, Turkey, Ghana and South Africa. However, all of these attempts have been failures. In fact in countries like Ghana, Gambia and Philippines, Castalia involvement has led to water delivery being contracted out to private companies and increase in tariffs.

he citizens of Mumbai have a bitter experience of steep hike in the electricity bills after BSES was handed over to the Reliance Energy.

An organization called Mumbai Paani is involved in getting the support of citizens of Mumbai to protest against this move and tell people that as concerned citizens it is important to keep our water in our own hands. Only time will tell if privatization of water, if indeed it is privatized, is beneficial or does it bode bad times.