Urban water supply at the hand of the proposed ‘Odisha Water Corporation’ has both hopes and apprehensions.
Bimal Prasad Pandia
As the Odisha government’s decision to form ‘Odisha Water Corporation (OWC)’ gradually sinks in, responses and reactions of different kinds keep bulging. The OWC will take over the urban water supply responsibility from the Public and Health Engineering Organisation (PHEO). Going by declaration of the government it will start its work first from the state capital. While the exact framework of the OWC is still unknown, the general perception of a ‘Corporation’ is that of a body that undertakes a set of business with an intention of making profits. Many state owned corporations do make losses also, but the intention is always to make profit. Hence, the initial reaction to the OWC has also been quite apprehensive as there is a great deal of difference and reservations on whether water supply to urban areas can be an area of business.
Activists argue that - water being a basic necessity - it is the fundamental duty of the government to provide that to its citizens. Many Court rulings have also maintained that providing clean water is a state responsibility. A recent Apex Court bench - while making orders in a writ petition filed by M.K. Balakrishan and others – held, “In our opinion the right to get water is a part of the right to life guaranteed by Article 21 of the Constitution.” But as cities and towns grow rapidly, the government has lagged in providing that basic necessity. Till now, the business of supplying water has been quite confined to just one entity, the PHED in Odisha – which is severely criticized for poor reach and unprofessional services. It is the only entity doing business of providing water to the urban denizens and thus has monopoly over the business. Economists caution that monopolistic business of a commodity is bad. In case of PHED, it is not bad because of its profit making intentions. It is bad because it provides very poor service with which the user has to be content with. The proposed corporation, too, will be the only entity. There will be no improvement as far as additional choice is concerned. But it comes with added apprehensions. One of the major apprehensions is that OWC, having same monopoly as the PHED but added commercial orientation of a corporation, may begin commoditization of water - a basic good, which was considered free till recently - as a commercial good.
Having raised this apprehension, we must have to admit that we have very few choices left. The urban water supply systems, the way it is being managed now, raises serious concern not just about the sustainability of the system but also about the qualitative and quantitative coverage of the burgeoning urban population. Growing numbers of people complain about lack of water distribution coverage. Those who have tap connections complain of very poor quality and quantity of supply. The PHED, on the other hand, says that people are least bothered to check wastage, leaks and illegal uses. They also say that in spite of the water rate being so cheap, the rate of collection is quite abysmal and the department’s workforce being so thin, it is not able to give proper attention towards collection of revenue and maintenance of the system. Independent watchers say that the department is not very concerned about improving the present gap in potential and achievement of its infrastructures. They rue that the department is neither answerable to the government nor accountable to the water users. Some also say that it tries to find engineering solution to every problem, whereas most of the problems relating to water use behavior are basically of social nature. With such backdrop, the PHED provides a sub-standard service and burdens a very heavy financial liability. When the cities are growing at breakneck speed, the PHED’s services and networks have almost stayed standstill. This situation is quite worrisome. Thus some kind of change is quite inevitable, some argue. The proposed OWC is probably intended towards bringing in such change.
Obvious reasons for selecting Bhubaneswar first?
While the OWC brings in hope as well as apprehensions, why Bhubaneswar was chosen as the first city for the OWC to work is a thing to ponder. A convenient answer to this could be that it is the state capital. But the feel is that there are other reasons also. Bhubaneswar has been selected for facelift under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM). The most important component covered therein is the water supply system. The City Development Plan (CDP), prepared under the JnNURM, has estimated a total capital investment of Rs. 2,220.11 Crores during the period 2007-2012 in an ‘optimum scenario’. Of this, investment in water supply system accounts for 31.14 percent; Underground sewerage system accounts for 22.35 percent and Storm water drains accounts for 5.84 percent. Thus, close to 700 Crores rupees will be spent on improving water supply system in Bhubaneswar in the mission period. This, being a big amount, probably necessitated a professional organisation to manage such a big amount.
Another important status of Bhubaneswar may also have weighed in for selecting that city first. Bhubaneswar is one of the rare cities of the country where the present installed supply capacity is almost double of the requirement of the whole city. It has been estimated that for an ‘A’ class city like Bhubaneswar, 155 Litres Per Capita per Day (LPCD) water is adequate. Bhubaneswar has a supply capacity of 276.24 Million Liters per Day (MLD). The present population of the city has been estimate at a little above 9 lakh. Thus, the PHED now has the capacity - and reportedly supplies – water at 305 LPCD. But the common men, ignorant of such statistics, draw their perception from what they get or suffer. And that’s what really matters as that is the plain truth. People with connection hardly get supply more than 4 hours a day. In addition to 578 public stand posts, the department has given only 55,340 service connections whereas the city has about three times more households residing in it. The 911 kilometers long pipe supply network has barely covered half of the city. So, while the PHED’s capacity is there to provide twice of the ideal water requirement to the whole population of the city, in practice it barely manages to reach one-third of the population directly. This managerial inadequacy is showing in its accounts. While it collects about 12 Crores an year as water dues from consumers, it spends more than that on payment to the CESCO towards energy charges alone. There are other major expenditures like repair, maintenance and salary etc. This cripples the performance of the department and makes it overly dependent on grants from the government to carry out even the routine activities. While the present finance of the water service provider is quite pathetic, the potential for doing great business and making big money is definitely present at Bhubaneswar. The present water rate for 1000 liters of supply is Rs 2.80. Thus, if the supplier supplies at a rate of 305 LPCD then it will have the potential to earn 77.35 lakhs a day. At this rate the annual income will be about 280 Crores against the present 12 Crores rupees. The department is losing substantially to leaks, theft, wastage and lack of professionalism in billing and collection.
Bhubaneswar is at least rich as far as installed capacity for supply is concerned. Most cities do not have that adequacy and hence a corporation will not have to bother about creating or augmenting supply capacity for Bhubaneswar. It will just have to look at the distribution part, at least for now. That makes the job of the corporation half done. Thus, the scope to carry out ‘reforms’ – both from technical and financial angle - is probably a lot easier at Bhubaneswar than any other city. That may have been a reason for choosing Bhubaneswar as the newly created OWC will have it a lot easier at Bhubaneswar than many other cities.
But the prominent reason for forming the OWC and selecting Bhubaneswar as its first play field is the compulsion to bring reforms in the water supply system. Without reforms Odisha or Bhubaneswar will not receive JnNURM grants. The JnNURM has set forth many mandatory conditions of institutional, financial and managerial reforms both at the state and city level. Implementation of the 74th Constitution amendment to give more powers to local urban government, i.e., the Municipality; Association of elected municipalities with the city planning function; Repeal of Urban Land (Ceiling and Regulation) Act, 1976; Rationalization of stamp duty to bring it down to no more than 5 percent within seven years etc. are some of the compulsory reform conditions set forth at the state level. The mandatory reforms requirement at the city/municipality level includes, Adoption of a modern, accrual-based, double entry system of accounting; Introduction of a system of e-governance using IT applications, GIS and MIS for various urban services; Reform of property tax with GIS, and arrangements for its effective implementation so as to raise collection efficiency to 85 percent; Levy of reasonable user charges with the objective that full cost of operation and maintenance is collected within seven years; Internal earmarking of budgets for basic services to the urban poor; and Provision of basic services to the urban poor, including security of tenure at affordable prices etc.
The idea of the OWC is, therefore, definitely aimed towards meeting some of those state and city level mandatory requirements. However, there are a lot of confusions on the scope of the OWC; and what will be its relation with the Municipalities and other organisations etc. One of the prominent requirements of JnNURM is to give the Municipalities more governance power. Presently, the PHED – not Municipalities - is in charge of making water supplies to the cities. In other states the Municipalities are in charge of urban water supply. The Municipalities have some form of public representative but the PHED has none. If the proposed OWC too works independently of the Municipalities, then there will not be much difference as far as accountability and public participation is concerned. Thus, while there will be no improvement to public participation or public accountability the OWC, on the other hand, will be more intended towards strengthening its finances. This has the threat of becoming a more dangerous proposition than the present PHED structure.
With such hope and apprehensions, the state government must be careful in making the OWC accountable to public. Doing business in water is nowhere akin to doing business in other consumer goods. General public probably will not be averse to OWC’s intentions of improving financial viability of their services because quality service can be expected otherwise. But they must come with sufficient scope for public participation in its plans and activities, more accountability and responsiveness towards the water users. Thus, while formation of the OWC is quite welcome, care must be given to make it participatory and accountable to the public. It cannot just be given the license to do business with financial considerations first.
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The author may be contacted at: bimalpandia@gmail.com
This article can also be viewed at: http://kalingatimes.com/views/20100115_Upward_Flow.htm
and
http://orissadiary.com/ShowOriyaColumn.asp?id=16259
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