Volume 7, No. 1, January. 2006

It is a betrayal of gigantic proportions. Not only has water been defacto privatized with bottled water now having a Rs.10,000 crores market, the very water distribution in the country is being handed over to foreign multinationals. A natural resource like water which should be free is now being made into an enormous source of profits. Already bottled water sells at the price of milk. Once fully handed over to the MNCs the monthly water bill for a middle class family could vary from Rs.1000 to Rs.1,500 and for a slum dweller could be around Rs.350.

The World Bank, since 1999, has been on an aggressive campaign to ‘privatise’ water. And in their eyes the only ‘private’ companies are the international water mafia companies like Vivendi (French), Suez Lyonnaisse (French), Bechtel (US), Saur (French), Thomas Water (Germany/UK) etc. In order that these TNCs can make windfall profits the government has been raising the water rates, and once fully privatized could be 800 times the present rates. Politicians and bureaucrats are being heavily bribed by the International bodies to aggressively push through the privatization of water.

The plan for the privatization of water is to make profits from the scarcity situations that a prevailing throughout the world. In the global scenario over 1.3 billion persons lack safe water and by 2015 would result in another 1.6 billion persons in need of water. Demand for water will exceed supply by a staggering 30%. The international water mafia, backed by the World Bank, seeks to make windfall profits from these scarcity conditions just as hoarders make huge profits during droughts and famines.

What has already taken place in some countries is an indication of what will happen here. In the Bolivian city of Cochabamba a consortium of private water suppliers charged people 75% of their salary as the monthly water bill. They were later kicked out by the people. In Bolivia water prices shot up by 200% within a few weeks after privatization. In Manila water prices went up by 700% within three years of privatization.

According to the UN the availability of fresh water in Asia is only 3,000 cubic meters per person per year. This is the lowest figure for any continent. India’s situation is even worse at 2,500 cubic meters per person and is predicted to go down to a mere 1,000 cu met. per person per year. Already the situation is serious.

About 39% of the urban population has no access to water. In 1985 there were 750 villages with no water sources; in 1996 these were 65,000. Ground water is becoming non-sustainable due to excessive exploitation particularly in AP, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Rajasthan, Tamilnadu and UP. 80% of children suffer from water-borne diseases of which 7 lakh die each year. 4.4 crore people suffer from problems related to water quality due to the presence of fluoride, iron, nitrates, arsenic heavy metals and salinity.

And it is into this situation of scarcity that the international MNCs have entered riding on the back of the World Bank, IMF and WTO.

It was in the mid-1990s that the international institutions took a decision to push for the privatization of water. A World Bank policy paper on water recommended the creation of "markets to tradable water rights". At the Fresh Water Conference in Bonn it was openly stated that water soon would be sold like oil through pipelines and tankers. The WTO’s General Agreement on Trade in Services (GATS) is forcing backward countries to privatize water through the introduction of "Environment Services". The Trade and Environment Section of the Doha Declaration presses for including water in National Commitments so that countries like India will be forced to provide national treatment and market access rules to benefit MNCs.

Soon after this the World Bank began to aggressively push the privatization of water in the country. A host of water-related projects have been set up by the World Bank in India since then. Some of these are: Karnataka Rural Water Supply and Sanitation Project, Karnataka watershed Development Project, Kerala Rural Water Supply and Environmental Sanitation Project, District Poverty Initiatives Project, Tamilnadu Urban Development Project, Tamilnadu Resources Consolidation Project, Madras Water Supply Project, UP Water Sector Restructuring Project, UP Diversified Agricultural Project, UP Rural Water Supply and Environmental Sanitation Project, AP Irrigation Project, AP Hazard Mitigation and Emergency Cyclone Recovery Project, AP Economic Restructuring Project, Orissa Water Resources Consolidation Project, Bombay Sewage Disposal Project, Rajasthan Water Restructuring Project, Haryana Water Resources Consolidation Sector Restructuring Project, Integrated Rural Water Supply and Environmental Sanitation Project, World bank aided Water Supply and Sewage Project, etc.

Besides this the World Bank has been pushing through the privatization of the Delhi Jal Board and also the privatisation of water in Mumbai, Bangalore and all major cities. In addition the EU has taken up projects in Kerala, Rajasthan, Orissa Pondichery and Maharashtra; Japan in AP, MP and Orissa; The Netherlands in Kerala and AP; France in Manipur and Gujarat and Germany in Maharashtra and Orissa.

Signing on the dotted line dictated by the World Bank the Central government brought out the National Water Policy 2002 calling for private sector participation in planning, development and management of water resources. Soon all the State governments have fallen in line. The above agreements show that nearly all the State governments are being enveloped in a net of foreign funding to privatize their water systems and hand them over to multinational. Here we shall give just two examples of Maharashtra and the DJB of Delhi to show the extent to which the governments are willing to go to loot the people of the States of their hard-earned incomes, in the interests of the foreign companies. 

In April of 2005 the Maharashtra Assembly passed the "Maharashtra Water Resources Regulatory Authority Bill" (MWRRA). This called for the "drastic increasing and rationalizing of water rates". It called for the "big-bang approach" rather than gradual increases. The Bill warns that "water shall not be made available from the canal unless the cultivator adopts drip irrigation" (whose capital cost is a minimum of Rs.20,000 per acre). Besides in Hitlarian style the Bill says that those with more than two children from the day it is passed will have to pay 50% more than the revised rates. (Earlier the Bill said "farmers who have more than two children after the Bill is law will be denied access to irrigation waters and the existing irrigation benefits that they enjoy will be cut off". It was only after an uproar against this clause that it was changed to charging 1½ times the normal rate.)

It adds that the MWRRA will ensure that "water charges shall reflect the full recovery of the cost of irrigation management, administration, operational and maintenance costs and recovery of capital costs". It is estimated that the price of water for irrigation purposes could go up as high as Rs.8,000 per acre!!!

Also the Municipal Corporation of Greater Mumbai has decided, in consultation with the World Bank, a pilot project for the privatization of one most populous ward with a population of 10 lakhs. Like the DJB this is to be done through an international consultant for which the WB has given a loan of Rs.3 crores. In the targeted ward NGOs have been taking meetings of the residents to create the necessary climate for privatization.

This is taking place in Maharashtra which faces acute water shortage. In the last summer nearly 50% of the state faced acute shortage of water for drinking and irrigation purposes. 3,000 villages depended solely on tanker-supplied drinking water. Of the 48 lakh hectares of arable land in the State only 11 lakhs are irrigated. It is in this scenario of acute water shortage that the government plans privatization, ruining lakhs of lives in order that the foreign companies can make huge profits from the sale of water.

The story is much the same as in Mumbai and Delhi. Here too there is a Rs.658 crore World Bank sponsored project for ‘clean’ water to Bangalore city. This goes under the name of the Greater Bangalore Water Supply and Sewerage Project (GBWASP) to privatize the water supply. The plan entails bringing an extra 700 million litres of water from the Cauvery, 95 Kms away. The entire project is to handed over to private companies, all of which will be the same TNCs. Privatization entails the privatization of regulation, monitoring, billing, maintenance, etc. Under the GBWASP residential units will have to pay Rs.2,500 to Rs.15,000 a year depending on the area of the dwelling unit. As with the other projects as reported in the press "the city has retained the World Bank groups International Finance Corporation to assist in structuring and implementing a management contract with one or more private-sector companies to operate and manage the Greenfield water distribution and waste water collection systems covering the eight urban local bodies".

At the DJB, whose chairperson is none other than the Chief Minister, the scandal is even worse. The prices are to be hiked up so substantially that the yearly collection from water is planned to go up from Rs.350 crores today to Rs.3,000 crores. In the name of 24-hour supply the World Bank Report set out a roadmap for the full privatization of the DJB by 2011.

It granted a $2.5 million loan to the DJB to appoint a consultant for the entire process. After much arm-twisting the consultancy contract was awarded to Price Waterhouse Cooper (PwC) in Nov.2001. PwC had lost out in the normal bidding process not once but thrice, but the World Bank arbitrarily intervened every time and got PwC the contract. It was nothing but fraud. Finally after PwC won the contract immediately one-third of the contract money of $1.9 million went into the London Bank account of Pricewaterhouse Coopers Development Associates, London, even though the contract was to be given only to an Indian company (the Indian branch of PwC). How much of this money went into the pocket of Sheila Dixit and the CEO, Rakesh Mohan, only time will tell!! Since then the PwC has acted so as to transfer the DJB to the MNCs at throw-away prices and by a gross undervaluation of the assets. It has also recommended that "water tariff be depoliticized so that elected representatives would have no control over water prices".

The PwC has also said that that the operators can only be foreign companies as "there is no experience in India in providing 24/7 water supply". And the DJB has faithfully obeyed by short listing only four foreign companies — Manila Water (Betchtel), Vivendi, Saur and Degremont. The PwC have also drafted legislation for the government called the Delhi Water and Wastewater Reform Bill, 2004 for the entire privatization process. The PwC’s plan guarantees a minimum profit to the companies and a huge payment of Rs126 crores annually on salaries alone. The DJB has 21 water supply zones. Once privatized each zone will have a core team of 4 managers, with a monthly fixed fee of $24,400 (Rs.11 lakhs) for each manager in the team. This alone comes to Rs10 crores for the city. These huge costs of course the people will have to pay. The PwC estim-ates that in the very first phase revenue from consumers will go up from Rs.69 crores to Rs.725 crores. Yet it says that inspite of this hike the DJB’s cash deficit will be Rs.7,746 crores by the year 2012.

The PwC report has given total powers to the independent regulator to "frame principles and regulate tariffs with respect to water supply and removal of waste water". Besides, for the non-supply of water from the Sonia Vihar, as per an agreement between the DJB and Degremont the DJB will have to pay the company the equivalent of Rs.3 crores per year as penalty. The Sonia Vihar is still not functional.

The very Sonia Vihar Treatment Plant has been built on the basis of a secret agreement between the DJB and Degremont, the Indian subsidiary of the global giant Suez Lyonnaaise at an estimated cost of Rs.880 crores. Though the plant is ready the water which was to come from the Tehri dam is yet to flow. The DJB has to ensure for the supply of water to the Sonia Vihar or else pay penalties amounting to about Rs.80,000 per day.

According to a local organisation "if you remove all subsidies and cross-subsidies by 2011 as recommended by PwC the price of water for a middle class family will go up to Rs.1,750 per month and for a slum-dweller to Rs.350 per month".

The essence of the privatization of the DJB is to hand over its assets to foreign TNCs at throw-away prices and then allow them to make huge profits all of which will be paid by the people of Delhi. Besides, the very loan from the World Bank is at interest rates above the international market rates. This too the people will have to pay for besides the huge consultancy costs of PwC and other such, not to mention the kick-backs to Sheila Dixit and her other cronies.

The example of the DJB, though temporarily postponed due to public outrage is an example on the extent to which the comprador rulers will go to sell out our country and its resources to TNCs at the cost of the livelihood of the people.

Similar will be the story of all water privatizations throughout the country. The people of the country will not look on silently at these blatantly traitorous polices of the Indian rulers. They cannot be fooled indefinitely by the politicians. Their anger will break into revolt.

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