The Hindu : Row over'`privatisation' of water supply

Online edition of India's National Newspaper
Friday, Aug 02, 2002

Southern States

Southern States - Karnataka

Row over'`privatisation' of water supply

By Our Special Correspondent

Bangalore Aug. 1. The Opposition in the Karnataka Legislative Assembly today alleged corruption on the part of the Government in an "illegal'' move to allow privatisation of water supply in Bangalore.

The Opposition members staged a dharna in the House dissatisfied with the reply of the Law and Parliamentary Affairs Minister, D.B. Chandre Gowda, that the Government had through a notification issued on July 11, 2002 only permitted the Bangalore Water Supply and Sewerage Board (BWSSB) to hold negotiations in the matter with two French firms.

Mr. Chandre Gowda replied in the absence of the Chief Minister, S.M.Krishna, who was away in Kerala.

The leader of the Janata Dal(U) Group, P.G.R.Sindhia, saw an "unseen hand'' in the decision to entrust the distribution to the French firms, Northumbrian Water Group and Vivendi Water Environment Company.

The contract to be awarded was of the order of Rs.400 crores for five years to distribute water on an experimental basis in two areas in Bangalore. "The contract gives rise to suspicion about the Chief Minister as he is the Minister concerned,'' Mr. Sindhia alleged. He wanted to know what authority the Chief Minister had to award such a contract.

Raising the issue, Suresh Kumar of the BJP warned the Government that the privatisation move would end up as another "Enron deal.'' The Government issued the order on July 11, 2002 when the House was in session, and it had failed to keep its promise to hold talks with the legislators from Bangalore on the issue. The order should be withdrawn. The Government should explain how privatisation would help the citizens.

V. Somanna (independent) opposed the privatisation move and said that the 44 advisers from the two French companies had become a burden on the BWSSB. Their fee came to Rs.2.4 crores a month, whereas the Board was spending only Rs.4.34 crores a month on the salaries of its 2,900 employees.

B.N.Bache Gowda of the Janata Dal(U) called it "daylight robbery'' and alleged that the Government was entrusting water distribution to two "bogus companies."

K.Subramanya Naidu and K.N.Subba Reddy of the BJP demanded that a House committee be set up to go into the matter. Public opinion was not sought on the privatisation move, they said.

B.Somashekar of the Janata Dal(U) said that the move was illegal. The BWSSB Act of 1964 did not provide for it.

In his reply, Mr. Chandre Gowda refuted the Opposition claim that the Government had decided to privatise distribution. The July 11 notification was only to enable the BWSSB to negotiate with the French firms. To this, Mr. Suresh Kumar said that the word `entrust' had been used in the notification.

Privatisation had been mooted keeping the consumer in mind and to check distribution losses and pilferage, Mr. Gowda said.

Refuting the allegation that the two companies were bogus ones, he said that the French were the world leaders in water supply and sewerage disposal.

The two companies were operating in 120 countries and their turnover was of the order of $ 26 billions (Vivendi Environment) and $ 38 billions (Northumbrian). There was nothing to hide in the matter.

Mr. Gowda noted that the Chief Minister had promised the Upper House that the matter would be discussed with legislators from Bangalore before the final negotiation with the French firms.

He said the actual operational cost of privatisation would be Rs.244 crores. Though the contract was of the order of Rs.584 crores, negotiations would be held to reduce it by Rs.340 crores.

The French firms would be asked to provide an assistance of Rs.200 crores, reduce operation fee by Rs.80 crores and cut interest by Rs.60 crores.

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