Reclaiming public water and Power in Delhi: In transit and en route
Biraj Swain | February 15, 2014
[This article appeared in the Feb 16, 2014 edition of Governance Now. It was written before Arvind Kejriwal resigned as Delhi chief minister.]
The pro-transparency cum anti-corruption movement reinvented as political party, Aam Aadmi Party’s government marked its first month in office in Delhi this January. While they have courted unnecessary controversy on the way, their Bijli-Paani policy deserves a dispassionate closer and harder look.
Two days into office, they had made lifeline water at 20 kilolitres per month per household free (calculated at 140 litres per capita per day with reference to the World Health Organisation standards). This, at a time when the Comptroller and Auditor General’s report of 2013 had stated that 24.8% of the households in Delhi were unconnected to piped water supply, has resulted in both the corporate media and establishment press slamming the decision as wasteful and misdirected populism. Their central argument was that, it will only benefit the already connected rich households and result in wastage.
However, by making lifeline water free across class and caste, from the super-elite Lutyens’ zone to the ultra-poor slums, the government established the right to water in principle and practice. This is aimed at stopping the poor from being priced out and keeping the budgets under control, just like Manila-Philippines, Grenoble-France and Argentina. This is called re-municipalisation of water, reclaiming public water and variant versions of this method and pathway has played out from Southeast Asia to Latin America via Africa (Tanzania’s Dar Es-Salam’s rollback of Bi-Water contract and Ghana-Accra’s re-municipalisation efforts) and Europe. By coupling the 20 kilolitres free water with steep hikes beyond the slab, the Delhi government is attempting to tackle wastage with punitive tariffs. This has also uncapped a new enthusiasm for water meters amongst domestic consumers.
Meanwhile, they are also expanding the piped water network, to make potable water affordably accessible to all. The same World Bank which has been the chief brand ambassador cum principal author of privatisation in utilities, claiming it as the ultimate panacea, had also put out a meta-review of case studies across 40 countries saying connection subsidy benefits the poor more than consumption subsidy since it expands the network and is non-transferable. So the Delhi government has actually taken a mature step by phasing the lifeline tariffs with expanding the network to connect the poor. Bulk of the expenses borne by the poor is in acquiring a household or community connection. In absence of connection, informal markets like the tanker economy flourish and coping costs go northwards!
The government has also come down heavily on corrupt officials of the utility and the water-tanker mafia nexus. It is common knowledge that utilities across the world are some of the most corrupt bodies and their technical nature makes their operations inscrutable to the man on the street. Public or private, that utilities providing essential services like water and electricity have to be accessible and accountable to the citizenry, should be the standard operating guide.
Little wonder that Delhi chief minister Arvind Kejriwal, a trained engineer, has already led a successful anti-privatisation campaign against the Delhi Jal Board (DJB, the water utility) in 2005. Using the Right to Information Act, he unearthed 9,000 pages of proposed reforms plans. And reforms were a euphemism in those pages for privatisation. Salient features of the plan would make any ardent critic of DJB and cheer-leader of privatisation shudder!
From expensive concession contracts to uber-expensive management consultants at huge salaries and exponential tariff hike, the roadmap had all the makings of a water war. Delhi’s 21 water zones were to be managed by private multinationals with obscene salaries of $25,000 (in 2005) per month amounting to 60% of the utility budget going to salaries of management consultants. To finance this bizarre roadmap, a 900% tariff hike had been proposed which was clearly infeasible, both politically and economically. This at a time, when, the utility had no accounting of the total water entering Delhi water works, the total water getting treated or the total water running via pipelines and the amount being siphoned off via the tanker nexus. Also writ large on those papers were a saga of the World Bank’s meddling in the Delhi government’s contract bidding, arm-twisting, retro-fitting the consulting agency PriceWaterhouse Coopers for the job tantamount to rough-shodding over our sovereignty.
This was also a time when debt-financed water sanitation had already resulted in many cities in India and South Asia defaulting and perfectly healthy municipalities like Mysore and Ramanagaram going bankrupt. Countries like Bangladesh and Nepal who had access to concessional loans from the World Bank and Asian Development Bank had on-lending practices resulting in concessional loans at 0.25% interest rate ending up as expensive loans at 12-14% for the end-user citizens!
It will serve all nay-saying Delhiites and Indians to remind ourselves of the efforts of Arvind Kejriwal in rolling back that ill-advised, irrational and motivated privatisation of DJB under the garb of reforms. His government’s new measures are chapters in that story aimed at making the sector efficient, accountable and equitable.
However, unlike water, in case of power, the distribution is already privatised. And another Kejriwal-like social movement was unleashed in 2006-07 under the then activist and current Bhartiya Janta Party spokesperson Sanjay Kaul and his People’s Action group to break the evil triumvirate of private distribution companies (‘discoms’), the then Delhi government and the regulator, Delhi Electricity Regulatory Commission (DERC). From fast-running digital metres to wiring flaws that made the meters tick constantly, from discoms inflating their operating costs under oath to the DERC to committing perjury, he had exposed it all! He had also exposed the severely compromised nature of the regulatory commission members and their serious conflicts of interest. He had exposed that the DERC members chose to look the other way while the private discoms cooked the books was not by sheer coincidence but by design!
Thanks to steep domestic tariff hikes, Delhi’s electricity is one of the most expensive in the country. The power supply is managed by the two biggest corporate houses of India, the Tata and the Anil Ambani groups. Kaul had incessantly advocated for more competition and a third provider, as had many political parties. They had also called for relooking the 2003 Electricity Act.
Choosing to privatise in haste and regretting at leisure was the hallmark of Odisha, the first state to privatise power, which continues to remain the poorest when it comes to per capita electricity consumption/availability. The enigma becomes a farce when you realise that it is also a power-surplus state! Governance Now has covered regularly the ailments of the Odisha power sector. Delhi could ill-afford to replicate those mistakes, but it did. But unlike Odisha, the Delhi citizens’ power also chose to mount a resistance, and so they did, under the able leadership of Kaul.
It is sheer political chicanery to forget all that and criticise the Kejriwal government’s moves to rewrite the script on power! Short-term memory is not good for democracies, nor is blatant partisan politics. Like water, in case of electricity, the government has unleashed a bouquet of measures such as sharp cuts (up to 50%) in the first 400 units’ of domestic tariff and incremental slab rates after that.
January also saw the power regulator locking horns with the government and hiking electricity tariffs by 8% unilaterally on the back of outage threats from Anil Ambani’s BSES Group. This is standard ‘corporate bullying 101’ in essential sectors like water and electricity. From Veolia, RWE ThamesWater to Ondeo Degremont, every single private provider has resorted to this trick in the book somewhere in the world. Indian companies aren’t to be left behind. However, what defies logic is what is driving the navratna public sector under-taking National Thermal Power Corporation (NTPC) to chime along with the BSES Group and not wait for the CAG findings.
Unlike telephony and even healthcare (to certain extent), water and electricity are natural monopolies. They need heavy infrastructure layout and single provider framework. It is difficult to switch providers without affecting services. In a city-state cum national capital of almost 18 million population, this challenge is doubly so. And unlike in many countries, neither our regulators operate with consumer/citizen protection remit, nor are there well articulated exit clauses for the state. This gives an unfair advantage to private providers in their negotiations with the state. And the power providers are doing exactly that with dollops of help from the regulator and some ever-willing officials in the nodal departments.
By asking the country’s statutory auditor, the CAG, to audit the books of private power distribution companies, the government is re-scripting the rules of engagement in public-private partnership (PPP). In an era where PPP is touted as the silver bullet for all essential services’ challenges, the state is often forced to retreat. The chief minister is mounting a resistance by redrawing the boundaries of that very state and reintroducing citizen-state oversight on utilities and their functioning.
It remains to be seen if this experiment will succeed in bringing down the power bills sustainably while keeping the access equitable. But it has resulted in unprecedented public debates and education on the functioning of the power and water sectors, hitherto inaccessible to the common man on the street. While we can be agnostic about public or private nature of utility and provisioning, there can be no debate on greater accountability and transparency of utilities and their operations. At stake is governance; citizen-state power and municipal finance.
The next step is to rewrite the remit of utility regulators and bring in greater transparency into their selection processes. Maharashtra, the first state to have a water regulator, has the bizarre distinction of missing protection of human rights from its job description. That, this was a regulator set up at the behest of a World Bank-assisted contract is hardly surprising! But, that this regulator has to take the all-important decision of allocation without any consideration of equity or human rights makes the regulatory mechanism a screaming joke! Alarmingly more and more states have replicated this regulatory mechanism, from some northeastern states to Uttar Pradesh and Andhra Pradesh. This does not bode well, either for the resource stressed zones or the people residing there.
Stopping the regulators from becoming the halfway house for effete bureaucracy or retired judiciary with serious conflicts of interest, would be an onerous task. Making these regulators bark and bite for public interest with the principles of equity and efficiency, should be the goal. Opening their decisions for public scrutiny, anytime, every time and all the time should be the only embedded ideology and not just pro forma.
One month is a very short time in a five-year electoral mandate. For a public action movement reinvented as political party hardly a year ago, it is even shorter. But if these experiments of greater transparency, lifeline allocations for all, tariff rationalisation and increased public scrutiny succeed, then it will be another victory in the glorious tradition of Cochabamba-Bolivia, Recife and Porto Alegre-Brazil et al.
Agitational politics which has been the hallmark of people’s water and electricity movements across the globe is also the hallmark of this party. The Delhi government is scripting a story with greater public engagement which would be very difficult to roll back. And public-public partnership could be a real counter-narrative, in India, South Asia and globally.
Swain is a member of the Right to Water Coalition and has just finished a study on small towns’ water sanitation challenges in South Asia and East Africa (under publication). She has led a meta-analysis of Asian Development Bank lending and its impact on water sanitation access to the poor. She works on issues of poverty, public policy and citizen-state engagement in South Asia and Horn East and Central Africa. She can be reached at firstname.lastname@example.org
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