Tapping profit

The upcoming facility at Charkheda from which water is to be pumped to Khandwa, 52 km away.-PICTURES: BY SPECIAL ARRANGEMENT

The Khandwa water project means people paying a private firm high rates for water supplied by a mostly government-funded scheme.

KHANDWA in Madhya Pradesh, until recently a nondescript town except for its association with the late playback singer Kishore Kumar, has suddenly acquired a unique place on the worlds water map. It will soon become the first town in India to have its entire water supply system privatised in public-private partnership (PPP) mode. The Khandwa Municipal Corporation is slated to hand over the citys water supply system by December to a private limited company.

But that is not what makes the case unique: the uniqueness lies in the way the project is being executed, totally subverting the interests of people and even going to the extent of compromising their fundamental rights.

The Khandwa Water Supply Augmentation Project is being executed under a flagship scheme of the Union Ministry of Urban Development, the Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT). Under this scheme, the Central government bears 80 per cent of the project cost, the State government 10 per cent and the local civic body the remaining 10 per cent. But owing to the poor financial health of many civic bodies, the Centre has allowed the civic bodies to use the PPP mode for their share of the project cost. Hence, in the case of the Khandwa project, which will cost Rs.106.72 crore, the Khandwa Nagar Nigam, which was to provide Rs.10.67 crore, contracted Vishwa Utilities Private Limited, a Hyderabad-based company, to execute the project.

On paper the project looks perfect. The city has a daily requirement of approximately 29 million litres of water against which the existing sources, the Sukta dam, the Nagchun dam, and borewells supply roughly 17 million litres daily. Thus, there is a daily shortfall of roughly 12 million litres, which the project seeks to make good by bringing water from the Indira Sagar dam near Charkheda village, 52 kilometres from Khandwa. This will not be Narmada water but water from the Chhoti Tawa river, which feeds the Narmada. What is inexplicable, however, is that instead of complementing the existing water supply system, the project envisages shutting down the present system, which even in peak summer meets 60 per cent of the citys requirement, and becoming totally dependent on the Indira Sagar dam.

The Nagchun and Sukta dams are natural sources of water and, as they are located at a height, supply water to the citys overhead tanks by gravity, without the use of electricity. Besides, these dams are located within 5 to 10 km from the city. The water from the Indira Sagar dam will need to be pumped to the overhead tanks, and hence will be more expensive.

Mortgaging peoples interest

The terms and conditions of the contract are heavily loaded in favour of Vishwa Utilities Pvt. Ltd. Although a gazette notification for the contract is still to be issued, the terms and conditions became public at a convention that was organised by the municipal corporation on March 27.

The company contributes only 10 per cent of the project cost but gets to control 100 per cent of the distribution system for an astonishing 23 years. The company will have complete monopoly over the supply system as the contract (of which Frontline has a copy) says no parallel supply system will be allowed to operate. One of the clauses states there is no provision for non-revenue generating water sources, which essentially means all public taps roadside and community taps and those at bus stands and railway stations tube wells, handpumps, and so on (1,733 in all) will be either closed or handed over to the company. It will charge users for the water from these sources. In essence, this will mean that slum dwellers, homeless people and others who draw water from these sources will either have to pay the companys exorbitant rates for water, a minimum of Rs.11.95 for a kilolitre, or go without it.

Before starting the supply, the company will first ask people to sign a contract that will make them accountable for any pilferage from the pipeline, any damage or contamination, and so on. People will be liable to pay a penalty for these offences. Also, each household will essentially have to take a new connection, even if it already has one, at a cost of Rs.2,500, and it is the people, not the company, who will pay for the road cutting, relaying of the road and other expenses for the laying of the pipeline. The contract makes it clear that if there are problems owing to contamination of water for any reasons, the people and not the company will be held accountable. And people will have no right to approach any court for redress of any grievance relating to the water supply. In short, people will be totally at the mercy of the private company for the full 23-year period. Since the existing supply system will be closed down and no other parallel service will be allowed, in case of any default for whatever reason, the city will go without water.

What defies logic is that the existing sources of water, that is, Sukta and Nagchun, will either lie unused or be used to meet the requirement of industry and commercial ventures, disclosed a senior corporation engineer. But would it not have been better to let domestic users use the existing supply system, since it is economically priced at a flat rate of Rs.100 a month, and instead ask industry and commercial users to avail themselves of the supply from the upcoming facility since they can afford to pay the higher charges? The corporation engineers have no answer to this.

No wonder, such a sell-out to a private limited company has irked people, who are up in arms against the project. This April, a citizens action group was formed with members cutting across party lines, religions and communities. It has vowed to oppose privatisation until it becomes people-friendly. It is carrying out a referendum on whether privatisation of water supply should be allowed, and so far the verdict has been an overwhelming no. The result of this referendum is to be sent to the Central government soon.

Owing to objections from the people and a spate of representations alleging financial irregularities and the use of substandard materials, including pipes, the Ministry of Urban Development sent an investigation team to the project site in August last year. As changes had been made illegally in the pipe specifications (to make way for the substandard pipes) after the first detailed project report (DPR) was approved, the team recommended that the Centres share of Rs.42 crore (second instalment) be withheld until the State government got a revised DPR approved. But the State government paid no heed to this and made even this share of the Central fund available so that the project work would not get affected. This overwhelming love for the company executing the project, say insiders, has its genesis in a deep-rooted business-political class nexus. According to those in the know, the company has the patronage of a senior Bharatiya Janata Party (BJP) leader from Andhra Pradesh.

A study carried out by Manthan Adhyayan Kendra, a Badwani-based non-governmental organisation working in the water sector, found that the project would not have been necessary at all if the Khandwa Nagar Nigam had maintained its existing water supply sources and pipelines properly and just added a couple of more pipelines. This would have involved only a few crore rupees, and the citys water needs would have been met up to 2022.

But the PPP mode is the preferred mode these days because a huge amount of money is easily available under various Central schemes, says M. Rehmat of Manthan Adhyayan Kendra. According to him, the entire exercise was aimed at destroying the natural water sources, lakes, ponds, and so on, in the city limits (17-18 of them) so that eventually that land could become available for commercial use. Thousands of hectares in the catchment areas will become available if the ponds and lakes dry up. The real fight is for land, he says with scepticism.

Wrong precedent

What is significant here is the fact that the Khandwa project, if allowed in its present form, will become a model for many other similar projects across the country. A total of 979 projects all over India relating to infrastructure augmentation were approved under the UIDSSMT up to 2010 at a cost of Rs.19,936 crore. An overwhelming number of these, 524, at a cost of Rs.10,478 crore, are water-related, and 501 municipal bodies have opted for the PPP mode. In 464 projects, work has already begun but is in initial stages. Khandwa is the first city where a PPP project has reached the completion stage. One needs to be careful under what terms and conditions this project finally reaches people. We are not opposed to privatisation per se, but the terms and conditions as have become known so far are unacceptable. We will not allow the State government to get away with such atrocious terms. If required, we will launch agitations though so far we have remained peaceful, said Prakash Chandra Baheti and Amar Chandra Kataria, conveners of the citizens action group.

When Frontline approached the Municipal Commissioner, Dilip Kapse, for clarifications on peoples concerns, he wanted the questions in writing so that he could reply in detail. He is still to reply. Efforts to contact the representatives of Vishwa Utilities proved futile as the Hyderabad-based project coordinator, A. Srinivas Rao, refused to speak and instead directed Frontline to the companys project manager, Praveen Kumar, who remained unavailable on the phone number provided by the Hyderabad office.

A Khandwa BJP Member of the Legislative Assembly, Devendra Verma, however, was emphatic in defending the project, saying there was no favouritism in awarding it to Vishwa Utilities. The company was selected after a fair tendering process in which four bids were filed. Besides, Khandwa suffers from acute water shortage, and once Narmada water comes here this place will become heaven, he said. On being asked what would happen to the existing sources of water, he said these were in any case meant for irrigation and industrial use and that was what they would be used for. Industry and agriculture will get a boost, he said. On Indira Sagar water being more expensive, he said the hike would be affordable. Besides, many areas which have no water supply at all would be only too happy to pay for 24-hour water supply, he said.

Those opposing the project were essentially blackmailers who were misleading people for their own vested interests, he said. Only a handful of people are raising a hue and cry, but I am confident that people in Khandwa will not listen to them, he said.