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Water Privatisation And Water Wars


1. Will Muradnagar be the next Tonk?

On 13th June 2005, 5 farmers were shot dead in Tonk during a protest demanding their share in the water from Bisalpur dam, which is diverting water from villages to the city of Jaipur under an ADB project for water sector “reforms” in the State of Rajasthan currently ruled by a BJP government.

Sonia Gandhi, President of the Congress Party, rushed to Tonk, called the firing barbaric and offered relief to the families of the farmers killed.

Yet the Congress government in Delhi is determined to create another Tonk in Muradnagar, with its demand to divert 635 million litres of Ganga water per day to the Sonia Vihar Plant, which has been privatized to Ondeo Degrement a subsidiary of Suez.

The real politics of water is not Congress vs BJP. It is World Bank/ADB and other aid agencies creating water markets for global water MNCs while robbing the Indian people both hydrologically and financially.

Delhi, India’s capital has been sustained for centuries by the river Yamuna.

Two decades of industrialization have turned the Yamuna into a sewer and toxic drain.

Instead of stopping the pollution, using the scarcity created by the pollution, the World Bank started to push the Delhi government to privatize Delhi’s water supply and get water from the Tehri Dam on the Ganges, hundreds of miles away.

The privatization of Delhi’s water supply is central on the Sonia Vihar Plant. The Sonia Vihar water treatment plant, which was inaugurated on June 21, 2002 by Chief Minister of Delhi, is designed for a capacity of 635 million litres a day on a 10 year BOT (build-operate-transfer) basis, at a cost of 1.8 billion rupees (approx. 50 million dollars). The contract between Delhi Jal Board (The Water Supply Department of the Delhi Government) and the French company Ondeo Degremont (subsidiary of Suez Lyonnaise des Eaux Water Division – the water giant of the world), is supposed to provide safe drinking water for the city.

The water for the Suez-Degremont plant in Delhi will come from Tehri Dam through the Upper Ganga Canal upto Muradnagar in Western Uttar Pradesh and then through the giant pipeline to Delhi. The Upper Ganga Canal, which starts at Haridwar and carries the holy water of Ganga upto Kanpur via Muradnagar, is the main source of irrigation for this region.

Delhi’s ever growing water demands have already led to major diversions of water from other regions. Delhi already gets 455 million litres from the Ganga. With the Sonia Vihar plants demand of 635 million litres, this is 1090 million litres per day of diversion from Ganga. Further diversion of 3000 million cubic metres per second from the Ganga is built into the Sharda and Yamuna river link.

Delhi is also demanding 180 million litres per day to be diverted from Punjab’s Dhakra Dam. Water will also be diverted to Delhi from the Renuka dam on Giri River (1250 million cubic litres per day) and Keshau Dam on Tons River (610 million cubic litres per day) from distant Himachal in the Himalayas.

On December 1, 2004 water tariffs were increased in Delhi. While the government stated this was necessary for recovering costs of operation and maintenance, the tariff increase is ten times more than what is needed to run Delhi’s water supply. The increase is to lay the ground for the privatization of Delhi’s water, and ensure super profits for the private operators.

Increasing tariffs before pivatisation is part of World Bank’s “tool kit”. It is part of a stepwise approach to “secure at least some private sector involvement in risky countries”. Before full privatization, the “private-public partnership” is to increase tariffs through a public utility, so that increased tariffs can support a commercial operation (ie “guarantee profit margins”). Service and management contracts can be introduced while the government increases tariff.

The tariff increase is not a democratic decision, nor a need based decision. It has been imposed by the World Bank. The Delhi Jal Board cites the justification for increase in tariff as based on a study done by Price Waterhouse Cooper under the World Bank study on privatization. It also cites World Bank technical paper No. 386 of 1997 on water pricing.

Delhi’s water operation and maintenance budget is Rs. 3.44 billion. The public utility has been recovering Rs. 2.7 billion due to 40-50% non-revenue losses such as leaks and thefts. During a conference on public-public participation, we showed how public and community participation can recover revenues of Rs. 5.00 by preventing leaks and theft. This allows Rs. 7 to 8 billion recovery, which is twice the amount needed to operate and maintain the water system.

However, the tariff increase will allow a recovery of Rs. 30 billion, tenfold more than needed, guaranteeing a super profit of Rs. 26.66 billion to the corporations waiting to grab Delhi’s water supply. A 10% increase is built into the tariff restricting which will double the profits for water privateers in 7 years. This profit is created not by better services but by doubling the financial burden on citizens, especially the poor.

The tariff increase hides significant increases through changes in categories. Schools and agriculture have been redefined as “industry”. “Piaos”, a core part of India’s culture of the gift of water, must also pay for water. How will they give water to the thirsty? Cremation grounds, temples, homes for the disabled, orphanages which paid Rs. 30 will now pay thousands of rupees, the cash strapped social institutions cannot pay.

The World Bank driven policies explicitly state that there needs to be a shift from the social perception to a commercial orientation. This worldview conflict lies at the root of conflicts between water privatization and water democracy. Will water be viewed and treated as a commodity, or will it be viewed and treated as the very basis of life?

Many privatization myths have been used to justify the tariff increase. The first is the myth of “full cost recovery” the mantra for privatization. However, as far as operations are concerned, the tariff increase implies a “ten-fold recovery”, ten times more than “full cost”. As far as investments are concerned, the private operators have made no investment, but will harvest public investment of Rs. 1 trillion. The “full cost recovery” logic when applied fully requires that water systems stay in the public domain as a common good.

At the National Development Council Meeting on June 28th 2005, Shiela Dixit, the Chief Minister of Delhi called for the federalization and prioritization of drinking water. (Pioneer, 29th June, 2005) However, the World Bank driven 24×7 scheme is not to provide drinking water to Delhi’s slums, it is to provide rich colonies with the luxury of 24 hour running water seven days a week in a period of severe water crisis. The water crisis demands reductions in water use Privatisation is encouraging increased water use. This increase in urban consumption will come at the cost of rural areas. This is part of the privatization process. Four global companies are already in the bid for the 24×7 distribution including Suez, Bechtel and Saur.

The common argument for privatization and price increase is that higher costs will reduce water use. However, given the extreme income inequities. A tariff increase that can destroy a slum dweller or poor farmer is an insignificant expenditure for the rich. Privatisation as dictated by ADB and the Wrold Bank thus means that water will be diverted from the poor to the rich, from rural areas to urban/industrialized areas. And each diversion will create water wars as it did in Tonk. This is why U.P. has been refusing to divert Ganga water to SoniaVihar. Non-sustainable and inequitable use will increase with privatization because the rich can afford to pay for water waste.

2. The Planning Commission as Water Privateer

The government’ priority for commodification and privatization of water was clearly stated by the Planning Commission Deputy Chairman, Montek Singh Ahluwalia’s statement in his opening remarks at the NDC that farmers should pay for water. While Mr. Ahluwalia argued that rich farmers are the real beneficiaries of free water, the reality is that when water is commodified, it is the rich who can afford to pay. The poor peasant, already struggling under the burden of debt, driven to suicide, will be wiped out of she/he is denied access to water and made to pay for a resource that is their common property. If poor peasants are pitted against rich agribusiness in competition for water through water markets, agribusiness will monopolise irrigation. If poor villagers are pitted against rich city dwellers in a water war, the rich will win.

The problem of water waste is not agriculture per se but chemical industrial farming mistakenly referred to as the Green Revolution. It is possible to produce more nutrition per acre growing millets that need only 200 mm of water. We can increase food availability 200 fold through simultaneously conserving our biodiversity and scarce water resources. It is possible to decrease water use while increasing food output by shifting from chemical farming to organic farming. However, these water conservation strategies were not what Mr. Ahluwalia proposed He proposed more water intensive cultivation of fruits, vegetables, shrimps for exports. In other words, while India is gripped by a severe water crisis, and even more severe water conflicts, our Deputy Chairman of the Planning Commission is recommending that we export water as a “virtual water” subsidy to the rich consumers of the North and instead of calling for water conservation through organic farming, be wants the impoverished peasantry to finance insane schemes like the $200 billion River Linking Scheme. The Deputy Chairman stated that “chasing short term benefits that accrue from vote bank politics, instead of seeking long term gains that flow from prudent economic policies, has become the bane of our decision-making process.” (Pioneer editorial, 29th June)

What Mr. Ahluwalia is calling “short term benefits that accrue from vote bank politics” others call democracy. What he refers to as “prudent economic policies” are the World Bank/IMF/ADB paradigm of water privatization which has already led to the killing of farmers in Tonk and could lead to many more water wars.

The only long-term and prudent water policy is to recognize nature’s limits, live within the water cycle, and guarantee every Indian their fundamental right to water. Privatisation is not a solution to our water crisis. Conservation and Community rights can help overcome the scarcity we face in both rural and urban area.

Water is a commons, a public good. Privatisation is the enclosure of the water commons. Water privatization aggravates the water crisis because it rewards the waste of the effluent, not the conservation of resource prudent communities.

Sustainable and equitable use needs water democracy, not water privatization.

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