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Afsar Jafri*
O n 3rd June, the
Municipal Corporation of Greater Mumbai (MCGM) held a stakeholders
meeting in which the New Zealand based consultant group Castalia
(hired by the World Bank and the Public Private Infrastructure
Advisory Facility) to conduct a study in the K-east ward of Mumbai,
presented their findings and recommendations after a year-long study,
for the Water Distribution Improvement Programme (WDIP). The meeting
was attended by the MCGM Labour Union, K-east ward residents,
activists, experts in water management and a few elected
representatives. Shyamal Sarkar of the World Bank (WB) and Bhavna
Bhatia of the PPIAF were special invitees. The presence of the
citizens, labour unions and activists proved disastrous for Castalia
and the World Bank. Both organisations were exposed for presenting a
report based on inflated data in order to push through water
privatisation.
Brief History:
In mid 2004, the PPIAF (a
consortium which includes the World Bank) approved a grant of
US $6,92,500 (approx. Rs. 30 million) for assisting Mumbai in
procuring suitable consultants with international experience in
private sector participation in water supply services, specifically
in preparation of bid documents, for pre and post qualification of
bidders for the implementation of management contract in the in
K-east ward (Andheri, Jogeshwari and Vile Parle) of Mumbai city. The
PPIAF also authorized the World Bank to be the executing agency for
the grant. The K-east ward is one of the most profitable wards for
the MCGM where the operating cost of water is Rs. 65 million, while
revenue collection is Rs. 400.43 million per annum. The choice of
K-east ward is therefore strategic because it is bound to result in
successful implementation of the management contract.
The PPIAF and the World
Bank appointed Castalia for the K-east WDIP (Water Distribution
Improvement Project) study and a Contract and a ToR (Terms of
Reference) was signed between the World Bank and Castalia (a French
consultancy firm having its offices in New Zealand and USA). Castalia
was expected to study, design and develop a model so as to eventually
curb water leakage, pilferage and contamination and ensure an
efficient 24x7 water supply through outsourcing the services to a
multinational private operator. If successful, this pilot project in
K-east ward would soon be replicated in the rest of Mumbai.
What happened at the
workshop?
The Additional Commissioner (Projects, MCGM) Manu
Kumar Srivastava began the proceedings by clarifying that "they had
no pre-conceived notions of any management style for improving water
distribution in K-east". This statement was in sharp contradiction
to the "inbuilt provision of the Contract and the Terms of
Reference (ToR) which proposed "a public private partnership
management model for bringing in water reforms". It also became
evident in Castalia's presentation and recommendations that they,
in fact, had been commissioned exclusively for activating a
privatization process complete with setting up the logistics for
selection of a private agency for the same. This conclusion is borne
out by the fact that Castalia's findings to support some such form
of privatization was based on insufficient research, unreliable
technology, inaccurate methodology and specious logic, resulting in
MCGM themselves finding their report unacceptable.
Srivastava also conceded that since there was "no
report" from Castalia till date, another stakeholders' meeting
would be held with adequate time for the stakeholders to deliberate
over the subsequent submissions of Castalia, before any conclusive
decision would be taken by MCGM. Interestingly, T.V. Shah, former
Chief Hydraulic Engineer (MCGM) and now on Special Duty, confirmed
that Castalia's report submitted earlier was categorically rejected
by the MCGM. Mr. Shah in his presentation said that "they do not
agree with the figures and findings of the report. The figures
enumerated in the study are mere approximations and fail to present
the true picture of water distribution in the ward". Mr. Shah also
said that the Hydraulic Department engineers are quite capable of
improving the water supply and can even provide 24x7 supply but it is
due to the inherent limitations in the department that they are
incapable of doing this (e.g. the water engineers don't have powers
to purchase an equipment worth Rs. 250).
Castalia recommendations:
David Ehrhardt, MD of Castalia, made recommendations
for improving water supply which were a combination of outsourcing
contracts to private agencies on the basis of his findings. According
to Castalia's study, the K-east get 540 million liters daily (mld),
out of which 252 mld is supplied to three wards including K-west,
H-east and H-west wards, and the K-west alone gets its 113 mld
entirely from K-east. So the ‘unaccounted for water' in K-east
ward is inordinately high, at 21% (114 mld out of 540 mld, while the
total leak in the Mumbai city is only 550 mld out of 3250 mld).
Going by the water balance arrived at from MCGM
figures, this shows that K-west was generating water (billing more
than the water supplied) since MCGM's billing was 170 mld. This
also implied zero leakage in K-west against 21% in K-east!
Interestingly, despite projecting an inflated
leakage figure, Castalia failed to pin-point the sites where pipes
are leaking. Nor could they find a single case of large scale illegal
consumption. Mr. David also fumbled when he was asked whether the
leaks are in the main pipeline or in the distribution outlets. Though
the leakage figure showed by consultant is quite high yet they could
not find a single case of contamination, even though high leakage
should lead to high incidence of contamination. Surprisingly, the
report shows supply to slum-dwellers was 134 liters per person per
day (lpcd). When the norm in Mumbai is 90 lpcd for slums, the study
failed to justify the need for improvement.
Most importantly, when drilled by the public about
equipment and methodology used for measurement, David was forced to
concede that due to lack of other options, they used inappropriate
methods and obsolete instruments (e.g. insertion flow meters) not
preferred anywhere else in the world. He also admitted that a high
degree of error in the readings was possible due to this. Mr. David
also pointed out some operational and logistical lacunae in the MCGM
functional set-up, which constrained the MCGM and where reforms were
necessary.
The overview presented by Ehrhardt used convoluted
logic to make imperative the need for 24x7 supply given high leakage,
and therefore to outsource/ privatize water distribution to private
operator. The unanswered question remained that leakages could only
increase if supply (water flow) is increased from 6 hrs to 24 hours.
A matter of grave concern to the citizens was the complete silence
from the Addl. Commissioner (MCGM) and the World Bank representative
on the prevarications and anomalies in Castalia's presentation.
The privatisation agenda:
Castalia recommended that
MCGM hand over the responsibility of water distribution in K-east to
a single private operator. They recommend five different
non-departmental management options which are into two parts
"outsourcing options" and "Public Private Partnership (PPP)".
Under Outsourcing
options, the first one is Multiple Small Contracts for 1-2 years in
which integrated water loss reduction programme (IWLRP) (which
include detect and repair leaks, stopping illegal use, creating
pressure zones after studying elevations, metering, bulk meters
mains) as well as laying slum networks to be outsourced to different
private firm while bill collection, operations, management of ward,
customer service and the capital fund will remain with the MCGM; and
secondly, the Single Medium Term Performance Contract for 6 years in
which customer service, IWLRP and slum networks will be outsourced to
single firm on integrated performance contract and rest will be
managed by the department.
Under the PPP options,
they recommend, the Management Contract for 4-6 years in which a
private firm will manage the ward while rest will be with the
department; secondly, the Lease for 10-15 years in which the fund
capital will be with the department while rest will be with the Lease
Contractor and the last option is Concession model for a period of
15-30 years in which a private firm will take over operating,
maintenance and capital costs on a pre-agreed fee per liter of water
delivered.
Castalia ignored the
option of improvement within the current structure under the
Hydraulic Department of the MCGM. Yet, their finding shows that the
water supply system in Mumbai is the best in South Asia and the water
supply in the K-east ward is comparable to London and Germany. As per
Castalia's findings the average water consumption in K-east
non-slums is 250 lpcd (equal to Shanghai), while in the slums the
average consumption is 134 lpcd which is as high as an average
consumption in developed European countries like Germany (129 lpcd)
and London (150 lpcd).
When Addl. Commissioner
was questioned on improving the internal functional set up to augment
water reforms, he agreed to consider a proposal from the Hydraulic
Department on their vision on improving water supply in the K-east.
It was very surprising to see the World Bank
associated with a project like this where there is a complete lack of
transparency, no updates on website, no deliverables, and change of
ToR near the fag-end of the project. Mr. Shyamal Sarkar of WB,
however, promised that the Castalia's final report along with the
revised Terms of Reference (ToR) will be put on the website within a
week.
The task ahead:
However the Mumbai Paani
(a group of concerned citizens and organizations which took up the
cause to oppose the privatization of water in Mumbai after the PPIAF
money was given for the study) network is quite apprehensive about
future agenda of the World Bank to push water privatisation in
Mumbai. Therefore Mumbai Paani has worked on an action plan to
educate the consumers in the K-east ward about the Castalia report,
the MCGM officials hidden support to the privatisation process and
WB/PPIAF agenda to push for public private partnership. Mumbai Paani
along with all the other civil society organizations in the K-east
plan to take out ‘Torch March' to build up pressure on their
local representatives in the Bombay Municipal Corporation (also
called as MCGM) to completely reject the Castalia's report and call
for the withdrawal of the World Bank and the PPIAF from basic
necessities like water. Mumbai Paani will also organise meetings with
local residents, MCGM corporators and senior citizens of Mumbai to
build up pressure on the municipal corporation to reject their plan
for water reforms through private participation and initiate a
process of public-public partnership (with the Hydraulic Engineer of
the MCGM to help evolve a proposal) which can be the only possible
solutions to deal with the current water problems.
*Afsar
Jafri is a research associate with Focus on the Global South, one of
the constituent groups of the Mumbai Paani network . He is based in
Mumbai . click here to contact him
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