Water Treatment in Industrialised India

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Privatising Benefits

Providing water has historically been the prerogative of urban regulatory bodies, which have also been responsible for the development of water management infrastructure. However, undertaking investments in this area has proved problematic as the government is pressed for ways to make good the expenditure incurred on developing these plants and other facilities. To date, all attempts made to tariff water have been vehemently resisted by various groups, who stubbornly hold on to the notion of water as a ‘free resource’. And so, government bodies find themselves snared in an ironic paradox, where public unwillingness to pay for water generates poor water quality and limited supply, owing to inadequate infrastructure, which in turn, further weakens the argument for paying for water.

In recent years, the governments of several countries around the world have been adopting alternative routes to break out of this cycle—while some countries like the United Kingdom have completely privatised the water sector, others have been tapping into the private sector more moderately with the help of private-public partnerships (PPP).

These partnerships are based on contracts between the government (or, the relevant statutory entity) and private players for the financing, building, implementing and operating of water infrastructure on the payment of user charges, or tariffs. The private player is responsible for the development and management of the infrastructure, while the government (or public sector) retains ownership of the asset and controls the tariffs levied.

The concept of PPP is still relatively nascent in India; however, this model has been successfully applied in several projects across the country, which, in turn, has prompted the government to consider the PPP model as a means of providing quality service, and improved management and accountability rather than simply another financing alternative. Some of the recently concluded projects that have leveraged the PPP model include:

Build-Operate-Transfer (BOT) for Tirupur water supply project

Service contract for Navi Mumbai domestic water, managed by Mahindra Water

Water supply augmentation project on BOT-Annuity basis at Khandwa, Madhya Pradesh

Management contract of Jamshedpur water supply by JUSCO

Provision of clean drinking water on Build, Own, Operate and Transfer (BOOT) basis by Doshion at Shivpuri, Madhya Pradesh

BOT for underground sewer drainage system at Alandur, Tamil Nadu, by IVRCL

Chennai water desalination plant on BOOT basis by a joint venture between IVRCL and Befesa (Source: Tata Strategic Management Group)

Not a Short Term Quick-Fix

The tremendous rate of industrial expansion in the country will undoubtedly create an ever stronger demand for water, in the years to come. In a situation where the onus of water management and treatment lies solely on the government, the supply of water is sure to fall far below the surging demand. The establishment of PPPs is a major step towards harnessing state-of-theart technologies in use around the world, without the fear of prohibitive costs. Further, these partnerships will lend a healthy boost to the budding Indian private sector, while also adding more efficiency to the entire value chain with enhanced managerial and technical expertise from experts in the private sector. Industry experts believe that the key to effective and sustainable water management lies in developing long-term solutions that hold value for all the stakeholders.

Further, encouraging industries to switch to newer technologies in their water treatment plants will also help them to reap multiple benefits in terms of cost savings and a reliable source of water for their operations, thereby contributing to their productivity. With newer, improved and cost-effective technologies being developed around the world, water treatment in India will no longer be confined to global giants, but will be a vital component of a small or mid-sized industry’s operations in times to come.

* The author is a member of the PROCESS India Editorial Team.

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