Countries trying to privatize water distribution

     The Union government has started laying the groundwork for privatization of water distribution in India, with the Ministry of Urban Development preparing a model concession agreement that would serve as the framework for public-private participation in the water sector in all cities.

     Water privatization is used here as a shorthand for private sector participation in the provision of water services and sanitation. Private sector participation in water supply 

and sanitation is controversial.Kerala is deciding to privatize water distribution system, hoping to tackle growing water shortage in the 17 major cities. Kerala opposed this movement. Today, there isn’t any urban water authority offering continuous water supply to major cities.

     According to World Bank report, water is available for just four hours on an average in urban  centers,  with  many  cities  actually  getting supply every alternate day. Apart from irregular supply — the huge dependence on private water tankers is proof of this — these utilities are ridden with inefficiencies and leakages. Currently, water utilities are almost entirely publicly owned and controlled. 

In a series of meetings with state government and municipal representatives across the country this month, the Union ministry tried to push the model by presenting case  studies from Manila,Philippines, as well as Nagpur. Officials also cited World Bank figures to state that,  currently only 20 per cent of  water connections in India are metered, and non-revenue water is, on an average, 40 per cent.

            Ministry sources said the model is anticipated to be finalized within months. It will address issues such as user fee, tariff indexation to inflation to mitigate risks for the private party, metering of water connections 

at the household-level and risk allocation between the public sector and the private reality.     

The private company will have to manage the capital expenditure required for repairs,maintenance, refurbishing and replacement  of water supply infrastructure in the city.  However, overall responsibility of water supply, monitoring and decision-making regarding tariff will rest with central government, which will also look into grievances regarding water supply and tariff.