Where are the investor-friendly policies?

Ashish Tandon, MD, Egis India, rues the lack of concerted political will to tackle India´s water supply and distribution woes.

What is the right model for urban water supply problems?
First and foremost, water is a scarce commodity. If at all there is a war, it will be for water, now. Unfortunately, in India, the per capita availability of water has decreased in the past decade (if I go by the official record) from 1860 cubic metres in 2001 to 1545 cubic metres now. The second issue is, since it is a need, it has become a popular scheme for people. There is a cost to everything. If you start offering free water, allow leakages, do not meter it properly, no private investor will come forward. That is one reason why although there are many who are ready to invest in roads, airports, power plants, there are not very many takers for water distribution or maintaining 24×7 water supply. The first objective, if you really want to go in for a PPP mode, is to make it investment-friendly. If I put in money and if I am able to provide world-class services in terms of availability and purity of water, there should be a return on my investment, and it won´t come if I am asked to provide free water!

Before I even talk about what is a better model, where are the investors for water management? How many states or areas have been privatised or private organisations have come forward for maintaining water supply or distribution?
It is all through the government and municipalities. In the existing set up, upgrades did not take place even though our cities grew. There was no investment for decades together. There was a time even in small town like Lucknow or Kanpur there used to be potable water on taps 24×7, some 35-40 years back. It is not that we never had that infrastructure. We did, but we never looked at it for decades together.

This infrastructure was first created by the British…
I can only say that even if they put up that infrastructure, they did leave in 1947. Even till the early 60s, in these places, water was available. There were chlorination plants and potable water was available on taps. Nobody knew about bottled water at that point in time. However, did we continue to harvest the resources and expand infrastructure? Did we also look at conservation? We only ate into our resources. If rainwater harvesting had been looked at three decades ago, the crisis wouldn´t have been this severe now. Look at cities like Gurgaon or Faridabad. They are fully developed cities but has enough thought and planning gone into their water and waste management systems?

As there is no clear water policy, it is up to each municipality to tackle their problems. Do any of them approach you?
Not really. Many are busy talking about smart cities today and assuming all this would happen in those projects. The AMRUT schemes have been launched but if you look at these schemes, are we inviting technology globally or are we more worried about costs and not quality? We have started talking about water today but where are the policies? If tomorrow, you give Delhi 24×7 water supply to a private organisation, will anyone be forthcoming to invest? Because he has to give a certain quantity of free water per head/household.

There is a project ongoing in Delhi, isn´t there?
Well, I firmly believe policies need to be changed to invite private players into this to invest and upgrade the whole system not only for supply but even for harvesting and improving water resources and making water potable and distributing it. Yes, there is a huge gap, but is there a political will to address it? The government needs to take stock of the situation. The power distribution sector also had the same problem. However, policies were modified and people started investing. Nonetheless, any policy or system needs to be looked into and updated every two to three years because the dynamics are such that things change. After burning their hands in PPP in power plants and on distribution, a lot of companies also burnt their hands in roads and highways. Today, people are very skeptical to invest in water because even before coming into the sector, there are schemes being announced for free water. You had to do away with all that in the power segment and only then people came forward. If you want to give it free, then the government should subsidize it, right? Therefore, there has to be a very clear-cut policy and a one-window solution for investors for them to come forward.

Well, we have seen the success of the Orange City Water Project in Nagpur…
What amazes me is after seeing the success at Nagpur, why is the government not trying to replicate this? They should start with smaller cities for the purposes of testing and trying it out.

What is the roadblock?
No decisions are being taken even though the government has the will to do it. Everything gets stuck in Parliament. The Parliament does not function. The laws have to be amended and the system has to be revamped.

What exactly is the problem?
Municipal corporations, on their own, have to take an initiative and each one of them have limited pockets.

Can you pick out one or two of these policies that are not investor-friendly?
For instance, even if you want to get all the houses metered, it is a huge problem. If you want to re-lay a line again, you have to go to 10 windows for clearances for re-laying the line whereas it was a little easier in the power segment. You had to remove the poles and it was a little easier as there was no blockage of traffic. Hence, the clearances were easier with just a single agency. The success of Delhi Metro is another example. If a certain piece of land was required or certain right of way, it was given and even the courts never stayed that. We all resist change, so there will be some resistance if you are digging up and changing things or putting up meters. However, there has to be a strong law to support change.

Basically, execution bottlenecks?
Also, the return on investment is not guaranteed.
If you want to put meters, it is impossible. One has to bring in technology, to go in for the Quality-and-Cost-Based Selection (QCBS) system for evaluation and awarding contracts. It should not be only price-based and there has to be support to bring about these changes because there will be resistance. AMRUT tenders are being floated. There is so much variation. Some states are going for QCBS which is 90-10, some for 80-20 and some for 70-30. The quality of work that will come up in 70-30 will be far inferior to what will come up in 90-10. There will be no uniformity. India is a single country and if you don´t bring uniformity on the quality of work across states, you are creating further problems.

Are there any projects you are working on?
We started doing PHED (Public Health and Engineering Department) in Rajasthan and the amount of problems we are facing there is phenomenal. In the previous government, Rajasthan PHED had placed an order on us for 24×7 for three years for four cities. Today, it has come to a standstill, even in the current regime. This red-tapism has to go. I am now not looking at any project of water supply after my experience here until and unless it is not a quality-based requirement and at least financed by somebody.

However, we are into the water segment in areas like dam rehabilitation. We are right now in a niche market because that is one area where there is no technology available in this country. We are doing rehabilitation of more than100 dams. It is a World Bank financed project of the Central Water Commission (CWC). We are doing a sanitation project in Orissa, financed by JICA. We are also doing a development embankment asset management system for Bihar. It is a consultancy service. So, we are there in a big way in the water sector. The only thing is wherever people really need quality, sustainability and technology, we are ready to offer that.

What are your suggestions?
The municipality or the government, someone should say that they are ready to offer an area as a pilot for an infrastructure investor to own and ensure 24×7 water and run it the way they want to – as long as potable water is available 24×7 and he is not overcharging. The irony today is that people are ready to put a generator set and run it on diesel with the unit cost at about Rs.15-18 but not ready to pay the Electricity Board even Rs6 a unit. We are ready to by a mineral bottle for Rs20 but we want 500 lt free!

I had even offered some Members of Parliament to run an area under their control with the proceeds of their MP Local Area Development (LAD) fund. I would like to put up a system of waste disposal involving segregation at the household, and also a water system. I can take it as a pilot project and if it works, it can be replicated. However, none of the MPs were ready to use their funds and take up this project for their respective areas. This is why I said political will is required. Sooner or later, it will be forced upon them. Power was forced. In Delhi itself, people would be on the roads for hours on end due to outages. Unfortunately, in water there will be a calamity before it is forced upon us because if people do not get water, they will suffer or die. Due to environmental issues every year, we are facing severe droughts which never happened before. Where is water conservation? It is so disheartening to see water wastage through pipe leakages for two-three days continuously. Why can´t the authorities take the first step and give the maintenance to a professional and an expert? Houses can be metered, wastage can be curbed, and utilisation will be better. A better system can be gradually put in place which can be monitored and taken forward. We are all talking but no initial steps have been taken.