March 16, 2016

Truthout: India’s water war: City workers fight corporate privatization efforts

By Papri Sri Rama, Truthout.

Nagpur’s water privatization scheme is a pilot project, a test case for the rest of India.

Rivers and other bodies of water in India are sources of the country’s spiritualism. Activists working for water rights say capturing India’s waters is akin to capturing the nation’s soul. The law in India is that all bodies of water are state property. As such, the government can do whatever it pleases with the waters of India. Right now, India’s water war has three fronts.

The first is the battle for drinking water being waged between citizens and corporations. Companies like Coca-Cola and Pepsi have already gained notoriety for illegal use and overuse of groundwater. There are issues of huge displacements by power projects and dams.

The second front is pollution. Rivers like the Ganges are polluted by industrial effluence in cities like Kanpur in the state of Uttar Pradesh, and waste disposal at religious sites like the city of Varanasi, which is represented in India’s Parliament by Prime Minister Narendra Modi. Groundwater is contaminated in the periphery of nuclear power plants like the Koodankulam.

Lastly, there are territorial disputes and tensions over China’s diverting of the Brahmaputra River’s water.

Since 2007, Vishvaraj Infrastructure Ltd. has emerged as the biggest player in India’s drinking water scene, thanks to a partnership with a French multinational. The World Bank held an ownership stake in the company’s Indian subsidiary until 2014. Vishvaraj Infrastructure Ltd. is a small, privately owned Indian company based in the central Indian city of Nagpur. It had no previous expertise in water treatment, distribution or management. Activists in the state of Maharashtra are quick to agree that the company’s only claim to fame is its closeness to the ruling dispensation, the Bharatiya Janata Party (BJP), and its ideological parent, the Rashtriya Swayamsevak Sangh, also headquartered in Nagpur, the third-largest city in Maharashtra.

Radius Water Ltd. is another such company: It controls rivers – and therefore, drinking, irrigation and livelihood water – in another BJP-ruled central Indian state called Chhattisgarh, which was carved out from the state of Madhya Pradesh in 1998. The rivers were sold when Chhattisgarh was still a part of the larger state of Madhya Pradesh, which was also ruled by the BJP.

Veolia – a company discredited completely in its World Bank-promoted public-private partnership project in Lagos, Nigeria – is another such company, and yet another multinational corporation, Suez, is also making a foray into India’s water privatization market.The potential profit from this market is huge, if the government of India’s present urban development plan remains on track.

The Nagpur Municipal Corporation Employees Union has been protesting water privatization since 2011. The union’s leader, Jammu Anand, told Truthout that the protest is “part of a larger struggle to stop 1.2 billion Indians from having to pay through their nose to privately controlled companies for their drinking water.”

“Nagpur is the first step in controlling the fate of India’s 600 smart cities of the future,” said Wilfred D’Costa of the Indian Social Action Forum, one of the two dozen all-India groups protesting the privatization of drinking water in the subcontinent. India plans to make 600 of its existing cities into smart cities by 2023, with the announcement for the first 20 made in early February. All the cities will be run as business centers, with privatized water, sanitation and more.

A joint venture company called Orange City Water Private Limited, set up by Vishvaraj and Veolia to privately supply Nagpur, already has eyes on supplying Bhopal, yet another central Indian city, under a BJP government.

Nagpur’s water privatization scheme is a pilot project, a test case for the rest of India. Though the water supply project is not even 40 percent complete and has not proven its efficacy, “in a sudden recent move, the Narendra Modi government has accepted the Nagpur model of public-private partnership as the ‘most successful’ model for drinking water supply in the country, without even reviewing the necessary data,” Anand told Truthout, calling for the return of Nagpur’s drinking water supply to the urban local body, the traditional service provider for Indian cities.

The change in laws, friendly to corporate interests, began as early as the 1990s, with India’s so-called economic liberalization. By the early 1990s, state governments were told to withdraw their involvement in services like education, garbage collection and water treatment. By 1998, in Chhattisgarh, for example, whole rivers were being sold by the government to companies like Radius Water Ltd., the Jindal Group and many others.

Another curious example is the attempt to privatize Delhi’s drinking water, traditionally supplied by a government entity called the Delhi Jal Board.India’s capital city, Delhi, at the time housed more than 15 million people. It is divided into 21 water supply zones. The city-state was, at the time, ruled by the BJP. The cash-rich city government decided that the water board should seek a loan from the World Bank to privatize drinking water; the Bank stipulated that the supplier had to be a multinational company. “It has never been explained why a [World Bank] loan would be necessary for a surplus reserves state,” said Arvind Kejriwal, now Delhi’s chief minister, in a YouTube broadcast.

Before the loan, the World Bank asked the Jal Board to appoint a consultant to manage each zone. Each zone would have four experts in the team, and each expert would be paid $25,000 per month by the Delhi water board, according to Kejriwal. A few years ago, Kejriwal and his supporters demanded to see the project papers under the Right to Information Act (which came into force 2005). The 9,000 pages of documents subsequently made available to public scrutiny showed that the water board earned 1.63 billion rupees and that 63 percent (annually about 1.08 billion rupees) of its money would go to paying these experts. To meet this consultancy charge, the water board would have to raise the piped drinking water tariff in Delhi by nine times. The World Bank forced the water board to cancel the technical bidding twice, as its consultant choice, PricewaterhouseCoopers, did not meet the set criteria. So now, Delhi’s twice-elected chief minister Kejriwal asks a very pertinent question, “Are we citizens of an independent nation?”

The Nagpur case, too, has a long genesis.

In 2005, the coalition government led by the Indian National Congress Party initiated a $20 billion project, called the Jawaharlal Nehru Urban Renewal Mission, which was a massive city modernization scheme. Under the Urban Renewal Mission, the definition of what constitutes a “city” was changed. Anand told Truthout that a city went from being a place with a distinct cultural character to an “engine of growth,” simply an “economic center” of profit and loss, “which is only possible if it is an investment destination.” The Urban Renewal Mission said cities’ local bodies would no longer be responsible for providing civic amenities like waste clearance and drinking water. This paradigm shift made urban local bodies just “facilitators” for profits.

The mandatory reforms demanded that certain laws of the local bodies be changed and jurisdictions relinquished, as well as a double accounting system be adopted and a user charge regime introduced. In 2014, when the Modi government came to power, it scrapped the Urban Renewal Mission and initiated a “special purpose vehicles” model (based on the creation of financial entities structured to prevent certain aspects of businesses from being affected by the rest of the company’s business) for every sector of civic function. This way, all civic decisions would be “special purpose vehicles” decisions, not decisions made by an elected local body (a decision by people’s representatives). These non-elected entities would make recommendations to the legislative councils, local councils and municipalities.

One other thing that happened with the economic reforms is the mandatory process of an audit for every such project. Three things that all such audit reports now always say are: 60 percent of resources (water, energy etc.) goes to waste; 50 percent of the supply is unaccounted for; and existing departments, whether for electricity or water or waste disposal, are suffering leakages and losses and are incapable of managing supply, often due to the indifference of elected representatives. In other words, India’s civic bodies – which have been public managing agencies overseeing services like water and sanitation for the last 70 years – are incompetent. Once this premise was set, privatization was a cakewalk for the companies.

Nagpur is the political platform of Nitin Gadkari, a high-profile BJP leader. His dream has been to make Nagpur a logistical hub for goods and services. The ideological leader, the Rashtriya Swayamsevak Sangh, has theoretically always opposed the privatization of services like water and electricity and calls itself totally “national.” However, it has been completely silent on these issues ever since the Modi government came to power.

Veolia said it had the ability to provide 10,000 households with drinking water in European cities. This is peanuts when compared to the drinking water needs of millions of people in one Indian city, like Nagpur, which has a population of 2.4 million.

Nagpur is divided into 10 water zones. The new joint venture, Orange City Water Private Limited, took up one as a demo zone before the 2014 elections. Under the new “special purpose vehicles” mechanism, it became mandatory for the Nagpur Municipal Corporation  to borrow 30 percent of its funds from financial institutions like the World Bank. The Nagpur Urban Local Body also has to buy raw, untreated water and electricity for the treatment plant and pumping stations and to provide tankers and petrol for the distribution network, where piping is not complete. The Urban Local Body has to pay Orange City Water at the rate of 10.38 rupees per unit for 250 million liters of water supplied daily to the city, while Orange City Water collects for the Nagpur Municipal Corporation only 6.38 rupees per unit as a water tariff from the consumer. Thus, the Nagpur Local Body now pays 4 rupees per unit as a subsidy to the private company Orange City Water ($1 is equivalent to about 70 rupees). The Nagpur municipality used to spend 90 million rupees to supply water to the city.

The rationale for privatization was to overcome losses for the Urban Local Body; in 2016, the Nagpur Municipal Corporation will shell out 1.8 billion rupees. There is also a 2 billion-rupee scam in meters. Despite Prime Minister Narendra Modi calling repeatedly for “made in India” technology, Orange City Water Private Limited buys and fits euro-norms compliant meters and sells them at twice the purchasing cost to the Urban Local Body.

If this is going to be the model for India’s “smart cities” (cities with privatized utilities) like Delhi and Nagpur, smart city citizens need to rethink their water needs, as the water war of the future is likely to be long and drawn out.


Photo credit: India water via Shutterstock

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