Tuesday, 12 October 2010

The Commodification of Water: Deconstructing water privatisation


All of us have felt the joy of slaking one's thirst with water, washing away the unforgiving heat of a Delhi summer with a cool glass of water. But have you ever paused to think about where we get our water from? How are we using this resource? Is it finite or will be always get clean water, everyday, for all our needs? Today, water quality and access issues are plaguing most countries of the world, with India being one of the most glaring examples. Termed as 'blue gold' scientists predict an age of water wars in the near future, where scarcity of water will trigger civil unrest and battles over this live giving commodity.

Traditionally, water has been regulated by local governments. In India, under the Seventh Schedule of the constitution, water finds a place under the State list, giving the state government jurisprudence over resources within its boundaries. On the other hand, the more contentious water flowing from one state to another is regulated by the central government to avoid conflicts. Sometime in the 1990's, the World Bank and IMF decided that a comprehensive way to tackle water scarcity and overexploitation of this resource would be to privatise water, treating it as a commodity that could be bought and sold at a price. Privatisation would put the onus of water extraction and delivery on private companies, thus assuring efficiency, while the price would act as a deterrent to wastage and overexploitation. However, the crucial point missed was that private companies are profit-driven enterprises. Providing a resource as vital as water was not a moral obligation for these companies but a prudent business decision. And thus began the era of water privatization.

How does this supposedly distant decision relate to us, as individual consumers of water? Today, water is a $ 400 billion dollar global industry; the third largest behind electricity and oil. Most of the privately owned water in the world is in the hands of four major companies, Suez and Veolia being the largest. To understand the significance of the commodification of water, exploring the Bolivian story may provide pointers (See Box).


Looking at examples closer home, India's National Water Policy, 2002, recommends water privatization as a way to address increasing water scarcity. This has led to a thrust on privatising water at the state levels and several projects have sprung up in the last decade. In 1998, a 23-km stretch of Shivanath River in Chhattisgarh was given to Radius Water for a 22-year renewable contract. The aim of the project was to supply water to the Borai industrial area supplying 4 million litres/day at the rate of Rs 12.60/litre to industries, the railway station and a railway colony. With increasing reports of the river drying up and monopolization of a common resource like water over which everyone has a right, the government later declared the scheme constitutionally illegal and revoked the contract.

In 2000, the Delhi Government awarded Degrémont (a subsidiary of the French water company, Suez) a Rs 2 billion contract with the Delhi Jal Board (DJB) towards a water treatment plant in Sonia Vihar. While the company could collect water free of charge from the Upper Ganga canal of the Tehri Dam, it would provide the water to DJB for a cost which will be levied from the consumers, through a possible tariff hike. Interestingly, Degrémont was relieved of revenue collection and was to be compensated for land, electricity, and treatment costs. In 2005, protests led by social activist Arvind Kejriwal, the contract was revoked.

However, in spite of glaring negative impacts on users, water privatisation driven by international agencies and companies is only posed to grow in the coming years. Add to this the pressure of a burgeoning population and overexploitation of our existing resources, and we have a significant problem facing us. As a start, let us begin asking questions. Questions about our water. Where does the water in your house come from? How can you minimise the water you use? Once we begin asking the correct questions, the correct answers will follow. 

For information on water privatisation in Delhi, check Kejriwal's talks (Part 1 and Part 2)
To learn more, start with Flow: For the Love of Water (documentary)

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