Justice Sachar writes to Sheila: “Consumers will have to pay more for services”

A non-government organisation, the Water Privatisation-Commercialisation Resistance Committee (WPCRC), has written to Chief Minister Sheila Dikshit against privatising the water sector in the Capital. Drawing comparisons with privatisation of the power sector carried out earlier, the WPCRC has pointed out that bringing private companies into the water sector would mean consumers having to pay more for services.

“Private power supply companies in Delhi are offered a 16 per cent assured rate of return on their capital investment and operating costs, plus profit from operations. Profit from operations can be increased by buying power from the National Grid at a lower cost and selling it to consumers at a higher rate. Power supply companies buy less power and prioritise its sale to high-consumption clients who pay a higher consumption volumetric slab rate. This results in an artificial shortage of power in poor settlements and a surplus in richer colonies. Poor colonies with low per capita power consumption get less power, because the profit from providing power to these colonies is less,” the letter signed by Justice Rajinder Sachar, who is also the patron of WPCRC, said.

“Wiser from this experience,” the WPCRC has asked the Government to refrain from handing over supply services to the private sector “under the garb of public private partnership model”.

Hitting out at the Government for admitting to their inability to serve the people, the WPCRC said: “We are surprised when you claim that private companies would achieve what your Government could not. You have not explained so far why our public utility, the Delhi Jal Board, cannot deliver and how private companies can do a better job of supplying water.”

The WPCRC has raised questions about the feasibility of handing over services to private players, asking how the companies proposed to bridge the demand-supply gap, whose responsibility it will be to supply augmentation and whether it is government or the companies that will make the investment.

“What is ‘non-revenue water’? On what basis is it calculated? How reliable are estimates? To what extent can NRW be reduced by private companies and how? Why is the DJB unable to do the same? Does NRW include water being supplied to low-income settlements today as a social obligation and a human right for our poorer citizens?” the WPCRC has asked.

Attributing water shortage in the city to “inequality in distribution of water”, the WPCRC has alleged that while official bungalows in Lutyens’ Delhi and rooms in five-star hotels use thousands of litres of water daily, JJ clusters are supplied only 50 lpcd, which is inadequate considering that the Bureau of Indian Standard has fixed 160 lpcd for Delhi.

“The logic behind privatised 24x7 water supply schemes is that the colonies will be divided into District Metered Areas (DMA), and water would be provided to the DMAs by private companies at all times/days (24x7). The logic is that this will discourage storage and hoarding of water at the household level, thereby making water distribution more equitable and saving consumer costs in pumping and storage. But if there is already a shortage of water in many areas due to gross inequalities, how will the DJB provide water to the companies for 24x7 supply? It would only mean that private companies will run 24x7 schemes only in select colonies, the water for which will be obtained by depriving other localities,” the WPCRC letter said.

Alleging that the Government is keen on helping private companies, the WPCRC has pointed out that the three municipal corporations in Delhi have also demanded that water supply be handed over to them. “Jal Board should be looking into more worthwhile functions. It supplies 850 million gallons of drinking water per day more than its installed capacity. Its treatment facility provides for only 5.4 million gallons a day – the rest of the untreated water is one of the major sources of pollution of the Yamuna. We call on you to lift the veil over the agreements signed with private companies. What are the terms of agreement? What are the tariff hikes planned by the DJB? What are the profits companies expect to make? There is a total lack of transparency with regard to the privatisation of water services,” it has claimed.

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