Urban water supply is being privatized in a big way in the form of public private partnerships. This is going on both in metros like Delhi, as well as in small towns like Khandwa in Madhya Pradesh. Everywhere, it is facing increasing opposition from the people.
In Khandwa, a small town in Madhya Pradesh, the people have been opposing the water privatization project in the town. The campaign against privatization has included local social organizations, the district bar association, pensioners association, and so on. There has been a move to organise a referendum against privatization of water in different parts of the town. People are more and more conscious of the problems they will face when the project gets completed, and they are increasingly seeing that they have the strength to oppose it. Those organising the campaign are trying to get to as many residents as possible to get their views on the privatization project and its consequences. The people are being requested to fill up forms against the privatization project. Due to this increasing public pressure, the MP from Khandwa has requested the Urban Development Minister, Madhya Pradesh, to reconsider the implementation of the project.
On May 8th, 2012, a large public gathering took place at Manik Public Library in Khandwa on the issue which discussed the effects of UIDSSMT (Urban Infrastructure Development Scheme for Small and Medium Towns). Forced by public opinion, the Khandwa Municipal Corporation had to organizethe meeting to provide clarifications about the project. However, it was not able to face the questions asked by the people. The KMC has been an ardent advocate of the privatization project. In these conditions, the struggle against privatization of water supply is mounting.The PPP has been awarded to Vishwa Infra, at a project cost of Rs.115 crores to supply 45 mld water to Khandwa town in phases.
In the first two years of the project, the private company is supposed to carry out the construction requirements of the project — raw water pumping, treatment, bulk water supply, rehabilitation of the distribution system including laying out pipelines and building overhead tanks in the town. After the construction phase, it will be in charge of the operations and maintenance of the bulk water supply system for the next 23 years. It is clear that under the terms of the agreement with the private party, the user charges for water are going to be astronomically high. The mass of people are going to be unable to pay these charges. An explosive situation is being created.
Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), funds are being poured into "urban development" in recent years. The UIDSSMT, which is a similar scheme for small and medium towns, ensures that 80% of the funds of a project are provided by the Central government, 10 % by the state government, and the remaining 10% by the local bodies like the municipal corporations.
UIDSSMT ensures that the current model of water sector reforms must be implemented by the state governments and the local bodies if they are to benefit from the central governments funds which are, as mentioned above, a whopping 80 % of the total. The reforms include financial stability, full cost recovery, user charges and private participation in urban municipal services.
Recent trends show that urban local bodies are increasingly taking the path of PPP. In this route, they do not have to even put in the 10 % of funds they are supposed to, as the private party will more than be willing to do the same, especially as it can inflate the costs.
Till August 2010, in 5 years, 979 projects with the cost of Rs 19,936 crores had been approved in the country as a whole. Out of these 524 were water supply projects costing Rs 10,478 crores. If projects related to sewage, sanitation, solid waste management, storm water drains and conservation of water bodies are included, the number of projects increases to 843 costing Rs 18,506 crores. That is under UIDSSMT, 93% of the funds are being spent on water sector related projects. As of August 2010, 763 projects related to water sector in 640 towns in the country have been approved under UIDSSMT. Out of these, 501 municipal bodies have shown readiness to accept PPP under the reforms agenda. 464 bodies have already started implementing PPP projects (report - Private Water Supply Augmentation Project in Khandwa, August 2011, published by Manthan Adhyayan Kendra).
Privatization of water sector is being pushed in our country for some years now. It has met with massive resistance in our country. Worldwide too, privatization of water has become discredited as a result of massive public opposition. In these conditions, the bourgeoisie is pushing the PPP route to privatization.
The PPP model ensures that the profits of private companies are guaranteed, while the risks and the responsibility of social obligation services are taken by the state. Under the PPP model in UIDSSMT for example, 90% of the funds are guaranteed by the Central and State governments, and 10% by the urban local body. Thus, 100% of the funds are supposed to be invested by the public and the profits will be siphoned off by the private party. It is a different matter that some corporations like the Khandwa Municipal Corporation have asked the private company to invest its share of 10% project costs, citing lack of funds, and in return surrenderedeven more control of the project to the private operator.
Water is a gift of Nature and an essential requirement of human life; it is the responsibility of society and the State to manage the flow of water and ensure its availability for various essential needs (agricultural, domestic, industrial etc.). Workers, peasants and all responsible citizens should oppose the policy of converting water into a commodity to be sold at monopoly capitalist prices. We must not permit the State to hand over this important social responsibility into the hands of private profiteers. The struggle against privatisation of water supply must be stepped up all over the country.