Dinakar Sethuraman: The hole in Delhi's bucket

Since the capital loses more than half its water supplies due to leaking pipes, even getting more water from Uttar Pradesh or elsewhere is not the solution to the water shortage.

When the Delhi government proposed building an expensive water treatment plant a few years ago, Promod Mitroo of Veolia Water India told the babus in Delhi Jal Board to put the Rs 750 crore to better use "" for starters, fix the capital's leaky pipes. "We did not bid (for the 140 million gallons per day treatment plant)," said Mitroo. The reason Veolia shunned the lucrative Sonia Vihar deal lies in the 10,000 kilometres of water pipes, criss-crossing India's capital and losing more than half of what the Delhi Jal Board produces.

Delhi is a leaking bucket. The state-owned Board produces 670 million gallons of water a day compared to the 830 million gallons per day the city estimates it needs today, with projected demand expected to rise to 1,140 million gallons per day by 2011. Spending on new water production facilities without rehabilitating existing distribution infrastructure makes no sense.

Demand for potable water is rising sharply in Indian cities, while inefficiencies and losses mount at local utilities. Utilities such as the Delhi Jal Board are anachronistic when it comes to supplying 24/7 water to a 14-million population in the capital. The government lacks the technology, management expertise and the funds required to provide better service; more so, it lacks the incentive. The only solution is to let the private sector manage the business of supplying water.

Outsourcing your distribution network helps in two ways. First, it assures a regular and accountable supply of water. Second, in some cases, it whips up state utilities into shape. Take Chennai, for example, where allowing Veolia, a French waste management company, to clean the more affluent parts of the city under a seven-year cleaning contract made the Chennai Corporation much more efficient and innovative in keeping the rest of the city clean. The Corporation introduced door-to-door collection of garbage in the poorer sections of town, a successful experiment in keeping slums in north Chennai clean.

But the private sector is having a tough time convincing fickle-minded politicians and NGOs that they should be given the mandate to compete with state utilities in distribution of water. In the case of Tamil Nadu, which has been quite forward looking in allowing private companies in critical state functions such as waste management or water supply, local politicians gave a tough time to Hyderabad-based IVRCL over a 100 million litres per day desalination unit. IVRCL won the desalination bid earlier this year under a global tender launched by the previous AIADMK government. But a new DMK government reopened the water supply agreement between IVRCL and Metrowater, the local utility, accusing the previous government of negotiating unfavourable pricing terms. Environmental clearances, from a ministry headed by a DMK functionary, also got delayed. As a result the project, which was conceived to supply a water-starved Chennai, has been delayed by nearly a year.

In other parts of the country there is a fierce resistance to handing over distribution systems to private contractors. NGOs and communist parties, which are promoting water privatisation in West Bengal, blocked plans in 2005 for a World Bank-funded pilot plan in Delhi to improve water supplies and plug leakages.

The wealthy areas of the city "" populated by politicians and bureaucrats, are awash with domestic water supplies "" 220 litres per person per day, but many parts go without water or must rely on expensive private water suppliers. "There is no water scarcity in Delhi, just inefficient management of water resources," says Saurabh Chugh, a water expert with The Energy Research Institute in Delhi.

The Delhi Board proposed to hire a contractor to monitor, manage and improve distribution of water to two million citizens in south Delhi. Over a period of five years the contractor would embark on a program to stem the leaks in the system, and improve billing, which would be taken as benchmarks and implemented to serve Delhi's 14-million water users. But the proposal never took off, crippled by allegations that DJB favoured PricewaterhouseCoopers, a World Bank-referred consultant. Meanwhile a DJB-type plan for outlying areas in Bangalore has proved a success, with Veolia planning to manage water supplies on a trial basis by the end of last year.

Many households in Delhi end up spending nearly Rs 2,000 a month on water supplies via tankers, water filters, power bills to pump water and mineral water sachets. "If we manage Delhi's water distribution we can supply potable water all day at a little over Rs 450 a month," estimates Mitroo. DJB handed over operations of the new Sonia Vihar plant to Ondeo Degremont when it realised that the French utility could operate with one-tenth of the staff. But DJB is less inclined to subcontract existing operations because 26,000 employees are set against private contractors, which would employ only a fraction of the workforce.

Also political rivalry has diminished the enthusiasm of private companies, especially foreign utilities, to get involved. Most of Delhi's raw water comes from the Yamuna river, Bhakra storage and the Ganga canal; ground water constitutes the remaining 100 million gallons per day. Uttar Pradesh's Chief Minister Mulayam Singh Yadav has held back water supplies for more than a year, partly due to political rivalry with the Congress party. Recourse to courts only means long legal delays before any water is delivered to Delhi.

The Sonia Vihar water treatment plant could only deliver 65 million gallons per day when commissioned last month. Although completed in 2004, the plant has been unused due to the lack of raw water. Now it's started to rust. "We don't know when full production will come," says a senior DJB official, whose Board failed to secure agreements over raw water supplies when planning the treatment facility. For some part of August, residents of east and south Delhi got a first taste of Sonia Vihar water, but UP has once again threatened to reduce supplies. Project costs here increased three-fold. About 17 storage facilities and pipelines still lie incomplete.

Earlier, the collapse of a tunnel during the construction of the Tehri dam in the foothills of the Himalayas delayed the transport of water to the Upper Ganga canal. So the Sonia Vihar plant, reliant on Tehri dam water, cannot function. Relations between both states frayed further when UP's Irrigation Minister Mairajuddin Ahmad told reporters last year that without quenching the thirst of Uttar Pradesh, there was no possibility of providing water to Delhi. He also said that it was unlikely that the Tehri dam would now be completed before 2010.

"There is no political will for reforms," says John Briscoe, a World Bank water expert. Increasing population, fundstarved state governments and plunging groundwater levels indicates that some form of private participation is imminent. Electricity supply in Delhi is privatised and people are paying tolls to use new roads and bridges. "People will pay for reliable supplies. But then why pay when I can get it for free," says Briscoe. The answer lies in fixing Delhi's leaky pipes.