India’s water is running dry in corporate hands


Some 814.5 million people will be eligible to vote in India’s general elections between 7 April and 12 May this year. There are a number of key issues for this election and one of them is water.

Water privatisation has become a highly politicised issue in India. Both leading parties – the centrist Congress, in power since 2004, and the nationalist BJP – have had a hand in the privatisation of water delivery and, to lesser extent, sanitation.

But the promises which accompanied these actions are yet to materialise.

Opposition to water privatisation has been a key feature of the political platform of the new anti-corruption, anti-establishment party Aam Aadmi.

During its brief spell in power in Delhi at the beginning of the year, Aam Aadmi leader Arvind Kejriwal initiated an audit of the water privatisation ‘pilot projects’ initiated by the previous government, took on the Delhi “water mafia” and launched a free water scheme, now to be abandoned.


Same promises, same problems

In recent years, India has experienced a wave of public private partnerships (PPPs) in the water sector. These PPP contracts involve the usual transnational corporations (Veolia and Suez environnement), as well as a range of Indian business interests – particularly construction companies, aiming to expand on their ‘expertise’ in extracting private profits from public contracts.

An investigation by the Multinationals Observatory , a new project dedicated to monitoring the impact of French transnational corporations worldwide, has shown that these PPP contracts have led to the very same problems as almost every attempt at water privatisation in the global South for the past 20 years: issues of corruption and conflicts of interest, stiff water rate hikes, growing resistance from local residents and politicians, and innumerable practical difficulties demonstrating how transnational companies such as Veolia, with its ‘one size fits all’ business model, are actually poorly prepared to take over local water services.

The official rationale for promoting PPPs is that only private sector capital and expertise can expand and modernise the country’s failing water systems, finally providing India’s urban dwellers with continuous, 24/7 water supply. In practice, however, most PPP projects are heavily subsidised, with private companies getting all the credit for the resulting improvements…except that these improvements have largely failed to materialise.

A 2013 survey of 30 water PPP projects by the Indian magazine Outlook concluded that every single one of them had failed to deliver on their objectives, while water rates had doubled. In addition, four projects were on the verge of collapse.

Critics also point to the fact that very few of these PPP contracts include sanitation – which is highly critical in Indian cities and much more difficult to manage than water service itself.

The focus on purely quantitative objectives and on capital-intensive infrastructure models is certainly good for the construction firms involved in the projects, but much less so for the sustainable management of water resources.

Nagpur – a crumbling showcase for water privatisation

So far, Nagpur – with a population of 2.5 million – is the only Indian city that has chosen to outsource its entire water system through a PPP contract, to a Veolia subsidiary.

Veolia has gone out of its way to promote its Nagpur PPP contract as a resounding success. One example was the company’s decision to invite a group of French journalists to see the project just a few months after it took over the city’s water system.

At the time, complaints from residents and local politicians were already piling up: there were important delays in the programme of works, allegations of corruption, and conflicts of interest were beginning to surface.

Local politicians argue that the privatised water service turns out to be more expensive for Nagpur than running the system directly, because of the contractor’s heavy management fees.

Most importantly, the Nagpur PPP contract does not appear to have done much to improve the lives of those whose needs Veolia and its partners were claiming to prioritise – women and poor people.

In the Dharampeth zone, another ‘pilot project’ which had been hailed as a model for water privatisation, some people still receive their water from a fleet of tanker trucks, whose drivers have repeatedly been accused of asking for bribes in exchange of their (supposedly) free service.

The example of Nagpur shows how water can run dry when in corporate hands.

It is now time for Indians to decide who should administer their right to water.