1,735 Words Essay on Privatisation of Water in India

The Indian author Vandana Shiva lists nine principles underpinning water democracy. At least two of these principles are directly compromised by the privatization of water. Point number four states “water must be free for sustenance needs.

Since nature gives water to us free of cost, buying and selling it for profit violates our inherent right to nature’s gift and denies the poor of their human rights.” When private companies try to make large profits through high water prices, it denies the poor the inalienable right to the most necessary substance for life.

In accordance with this fact, point number seven states, “water is a commons. It cannot be owned as private property and sold as a commodity.” How can one justify claiming water as their own through contractual agreement while letting another human being go thirsty?

Water is a commons because it is the basis of all life, water rights are natural rights and thus are fractural rights, meaning that water could be used, but not owned. As far-fetched as water ownership may seem, it is happening at an increasing rate around the globe.

Currently there is a rush to privative water services around the world. The World Bank and International Monetary Fund (IMF) are pushing for the privatization of water services by European and U.S.-based companies. They are pushing privatization through stipulations in trade agreements and loan conditions to developing countries.

These privatization programmes started in the early 1990’s and have since emerged in India, Bolivia, Chile, Argentina, Nigeria, Mexico,Malaysia, Australia, and the Philippines, to name a few. In Chile, the World Bank imposed a loan condition to guarantee a 33 percent profit margin to the French company Suez Lyonnaise des Eaux while the company insisted on a margin of 35 percent.

This privatization of services is only the first step toward the privatization of all aspects of water. Through this new globalization and privatization of water resources, there is an effort to replace collective ownership of water sources with corporate control.

This effort is being met with increasing opposition. Supporters of privatization say that it has a great track record of success, increasing the efficiency, quality, reliability and affordability of services to the population.

Yet the industry has a track record of hazards and failures. For example, private companies most often violate standards of operation, and engage in price fixing without many consequences.

This leads to water stress among the poor populations of these areas, causing people to drink water that is often very contaminated and hazardous to their health (even though case studies have shown that privatized water can be very contaminated as well).

In our country, on 13th June 2005, 5 farmers were shot dead in Tonk during a protest demanding their share in the water from Bisalpur dam, which is diverting water from villages to the city of Jaipur under an ADB project for water sector “reforms” in the State of Rajasthan currently ruled by a BJP government.

Sonia Gandhi, President of the Congress Party, rushed to Tonk, called the firing barbaric and offered relief to the families of the farmers killed.

Yet the Congress government in Delhi is determined to create mother Tonk in Muradnagar, with its demand to divert 635 million liters of Ganga water per day to the Sonia Vihar Plant, which has been privatized to Ondeo Degrement a subsidiary of Suez.

The real politics of water is not Congress versus BJP It is World Bank/ADB and other aid agencies creating water markets for global water MNCs while robbing the Indian people both hydro logically and financially. Delhi, India’s capital has been sustained for Centuries by the river Yamuna. Two decades of industrialization have turned the Yamuna into a sewer toxic drain.

Instead of stopping the pollution, using the scarcity created by the pollution, the World Bank started to push the Delhi government to privatize Delhi’s water supply and get water from the Tehri Dam on the Ganges, hundreds of miles away.

The privatization of Delhi’s water supply is central on the Sonia Vihar Plant. The Sonia Vihar water treatment plant, which was inaugurated on June 21, 2002 by chief Minister of Delhi, is designed for a capacity of 635 million liters a day on a 10 year BOT (build-operate-transfer) basis, at a cost of 1.8 billion rupees (approx. 50 million dollars). The contract between Delhi Jal Board (The water Supply Department the Delhi Government) and the French company Ondeo Degremont (subsidiary of Suez Lyonnais des Eaux water Division – the water giant of the world), is supposed to provide safe drinking water for the city.

The water for the Suez-Degremont plant in Delhi will come from Tehri Dam through the Upper Ganga Canal up to Muradnagar in Western Uttar Pradesh and then through the giant pipeline to Delhi. The Upper Ganga Canal, which starts at H arid war and carries the holy water of Ganga up to Kanpur via Muradnagar, is the main source of irrigation for this region.

Delhi’s ever growing water demands have already led to major diversions of water from other regions. Delhi already gets 455 million liters from the Ganga. With the Sonia Vihar plants demand of 635 million liters, this is 1090 million liters per day of diversion from Ganga. Further diversion of 3000 million cubic meters per second from the Ganga is built into the Sharda and Yamuna river link.

Delhi is also demanding 180 million liters per day to be diverted from Punjab’s Bhakra Dam. Water will also be diverted to Delhi from the Renuka Dam on Giri River (1250 million cubic liters per day) and Keshau Dam on Tons River (610 million cubic liters per day) from distant Himachal in the Himalayas.

On December 1, 2004 water tariffs were increased in Delhi. While the government stated this was necessary for recovering costs of operation and maintenance, the tariff increase is ten times more than what is needed to run Delhi’s water supply. The increr.se is to lay the ground for the privatization of Delhi’s water, and ensure super profits for the private operators.

Increasing tariffs before privatization is part of World Bank’s “tool kit”.

It is part of a stepwise approach to “secure at least some private sector involvement in risky countries”. Before full privatization, the “private-public partnership” is to increase tariffs through a public utility, so that increased tariffs can support a commercial operation (ie “guarantee profit margins”). Service and management contracts can be introduced while the government increases tariff.

The tariff increase is not a democratic decision, nor a need based decision. It has been imposed by the World Bank. The Delhi Jal Board cites the justification for increase in tariff as based on a study done by Price Waterhouse Cooper under the World Bank study on privatization. It also cites World Bank technical, paper No. 386 of 1997 on water pricing.

Delhi’s water operation and maintenance budget is Rs. 3.44 billion. The public utility has been recovering Rs.2.7 billion due to 40-50% non-revenue losses such as leaks and thefts. During a conference on public participation, we showed how public and community participation can recover revenues of Rs. 5.00 by preventing leaks and theft. This allows Rs. 7 to 8 billion recoveries, which is twice the amount needed to operate and maintain the water system.

However, the tariff increase will allow a recovery of Rs. 30 billion, tenfold more than needed, guaranteeing a super profit of Rs. 26.66 billion to the corporations waiting to grab Delhi’s water supply. A 10% increase is built into the tariff restricting which will double the profits for water privateers in 7 years. This profit is created not by better services but by doubling the financial burden on citizens, especially the poor.

The tariff increase hides significant increases through changes in categories. Schools and agriculture have been redefined as “industry”. “Pianos'”, a core part of India’s culture of the gift of water, must also pay for water. How will they give water to the thirsty? Cremation grounds, temples, homes for the disabled, orphanages which paid Rs. 30 will now pay thousands of rupees, the cash strapped social institutions cannot pay.

The World Bank driven policies explicitly state that there needs to be a shift from the social perception to a commercial orientation. This worldview conflict lies at the root of conflicts between water privatization and water democracy. Will water be viewed and treated as a commodity, or will it be viewed and treated as the very basis of life?

Many privatization myths have been used to justify the tariff increase. The first is the myth of “full cost recovery” the mantra for privatization. However, as far as operations are concerned, the tariff increase implies a “ten-fold recovery”, ten times more than “full cost”. As far as investments are concerned, the private operators have made no investment, but will harvest public investment of Rs. 1 trillion. The “full cost recovery” logic when applied fully requires that water systems stay in the public domain as a common good.

At the National Development Council Meeting on June 28th 2005, Shiela Dixit, the Chief Minister of Delhi called for the federalization and prioritization of drinking water. (Pioneer, 29th June, 2005).

However, the World Bank driven 24×7 scheme is not to provide drinking water to Delhi’s slums, it is to provide rich colonies with the luxury of 24 hour running water seven days a week in a period of severe water crisis. The water crisis demands reductions in water use Privatization is encouraging increased water use.

This increase in urban consumption will come at the cost of rural areas. This is part of the privatization process. Four global companies are already in the bid for the 24×7 distribution including Suez, Bechtel and Saur.

The common argument for privatization and price increase is that higher costs will reduce water use. However, given the extreme income inequities.

A tariff increase that can destroy a slum dweller or poor farmer is an insignificant expenditure for the rich. Privatization as dictated by ADB and the World Bank thus means that water will be diverted from the poor to the rich, from rural areas to urban/industrialized areas.

And each diversion will create water wars as it did in Tonk. This is why U.P. has been refusing to divert Ganga water to Sonia Vihar. Non-sustainable and inequitable use will increase with privatization because the rich can afford to pay for water waste.