Maharashtra is one of India’s largest and best developed states. Yet more than a quarter of its inhabitants live below the poverty line. The urban population is large and growing, with almost a third of people living in slums. Water services cannot keep pace and poor people especially need far better services.

Water infrastructure coverage in Maharashtra’s cities is high but water availability and quality is low, especially in slum areas due to poor operations and maintenance, low tariffs, unauthorised water use and lack of treatment facilities. A United Nations Research Institute for Social Development (UNRISD) paper explores experience with privatisation and other reforms in the state.

Currently, very few of the elected urban local bodies responsible for water provision recover even the operation and maintenance costs from the revenue collected. Since massive investment is needed to achieve universal access to water, private sector investment will be necessary. A number of proposed contracts giving the private sector responsibility for water systems have recently failed, however.

The key challenges faced by both public and private sectors working on improving water services in Maharashtra include:

• Planning occurs at the state level, with little input from local officials or citizens. It is badly coordinated since different bodies have responsibility for different aspects of water supply.
• Infrastructure is outdated but urban authorities cannot afford improvements.
• Tariffs are too low but political pressures make increasing them difficult. Revenue collection is poor because of disorganisation, unauthorised connections and malfunctioning meters.
• Rainfall is unpredictable and storage insufficient. Little attention is given to managing groundwater sources.
• Bad experiences with the private sector exploiting natural resources and raising tariffs beyond the reach of poor people, has led to suspicion of private sector involvement. Meanwhile, subsidies have created resistance to realistic tariffs.

Where private sector participation has been small-scale there have been successes. Some towns, for example, have leased out operations and maintenance or revenue collection to the private sector, which has increased efficiency and innovation. Generally successes in water sector reform have been seen where:

• There is transparency and open dialogue with local authorities and citizens at all stages.
• The local authority retains decision making power but contracts certain services to the private sector encouraging efficiency and new thinking.
• The water source, urban and rural water use and of different demands on water such as irrigation and drinking water are managed in an integrated manner.
• Planning is integrated with related sectors such as health and education.
• Planning for infrastructure provision and upgrades takes specific account of poor people and slum areas.
• A local, accountable and independent body, which includes citizen members, exists to regulate the water sector to oversee contracts, tariff setting and revenue collection.

Source(s):
‘An assessment of water sector reforms in the Indian context: The case of the state of Maharashtra’ UNRISD, prepared for the UNRISD Project on ‘Commercialization, Privatization and Universal Access to Water, by Vasudha Pangare, Neelesh Kulkarni and Ganesh Pangare, September 2004 Full document.

Funded by: UNRISD

id21 Research Highlight: 15 November 2005

Further Information:
Vasudha Pangare
OIKOS Consultants
D-10, Raanwara,
NDA-Pashan Road, Bavdhan
Pune 411021, India

Tel: +91 20 2953112
Fax: +91 20 2953409
Contact the contributor: pangare@vsnl.net

OIKOS Consultants, India

United Nations Research Institute for Social Development (UNRISD)

Other related links:
'Communities can create their own water supply and sanitation'

'Cut out the waste says WaterAid report'

'Boosting water and sanitation services in Ecuador'

'Putting water and sanitation at the heart of poverty reduction'

'Taps run dry in Dar es Salaam as prices soar after water privatisation'

'Private services deliver water and sanitation in Chile'

'Will water privatisation deliver the services?'