State not for privatisation of water-related services

Proposal in the draft National Water Policy 2012

March 10, 2012 10:00 am | Updated 10:00 am IST - KOCHI:

The State government will oppose the recommendation to transfer water-related services to the private sector, as proposed in the draft National Water Policy 2012 approved by the Union Ministry of Water Resources.

The draft policy recommends that the role of the State as service provider needs to be gradually shifted to that of a regulator of services and facilitator for strengthening institutions responsible for planning, implementation, and management of water resources. “The water-related services should be transferred to community and/or private sector with appropriate ‘Public Private Partnership' model,” it says.

Opposing the proposal to hand over water-related services to the private sector, Water Resources Minister P.J. Joseph told The Hindu on Friday that privatisation of water-related services would not be beneficial for Kerala. “This could result in a hike in charges on the services being offered to the people. Providing water is a public-utility service and the State government has a key role in it,” he said.

Mr. Joseph said the State could not withdraw from its responsibility of being a service provider for planning, implementation, and management of water resources. It would not be ideal to confine the role of the State as a mere regulator.

Asked whether the government plans to hike water tariff in tune with the recommendations of the draft policy, Mr. Joseph said a final decision in this direction would be taken only after analysing the stance taken by other States.

The draft policy recommends that water needs to be treated as an economic good and, therefore, may be priced to promote efficient use and maximising value from it. While the practice of administered prices may have to be continued, economic principles need to increasingly guide administered prices, it says.

Accepting the proposal to set up a Water Regulatory Authority in each State, Mr. Joseph said the new body would fix and regulate the water tariff system and charges. The draft policy suggests that the authority could have functions such as regulating allocations, monitoring operations, reviewing performance, and suggesting policy changes.

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