Heavily subsidised water for domestic users, massive leakages and theft in pipelines and the staggering cost of dam projects in the works mean the current water tariff in Mumbai is unsustainable, says Sharvari Patwa.
Soon after the Aam Aadmi Party (AAP)-led Delhi government announced 667 liters of clean water daily to people for free, the Shiv Sena-led Brihanmumbai Municipal Corporation (BMC) quickly complimented itself claiming it is already supplying 566 liters of free water to Mumbaikars every day.
“Currently, residents pay Rs 4 for 1,000 litres, for which BMC spends Rs 9.90 in purification and supply. Every family is provided 1,075 litres water every day, of which they are charged for only 509 litres. The balance 566 litres is free,” Sena corporator and BMC’s standing committee member Rahul Shewale claims.
Official data suggests that while the BMC provides about 200 litres per person per day, the production and supply cost is actually Rs 11.37 per 1,000 litres. While Shiv Sena may jump to take credit for subsidised water, it remains a fact that the BMC has been providing subsidised water for 40 years now.
But such subsidies may not be the best way to encourage water conservation. And given the rising demand for water, the civic body has little choice but to hike user charges for water in the long run. To be fair, the reality is not lost on BMC either. In its budget for 2012-13, the civic body had proposed a revision in water charges in proportion to the increase in the expenditure on salary of employees, administration, operation and maintenance cost, power supply and bulk water supply on actual basis, but not exceeding 8 per cent every year. Since then, the water rates have been hiked twice, from Rs 3.5 to Rs 4 per 1,000 litres in June 2012 and further to Rs 4.32 in June 2013 for residential users.
What is worrisome though is the increasing gap between the cost of production, the charges levied and the cross-subsidisation of residential consumers. According to BMC data, the civic body supplies about 2,000 million litres of water daily to an estimated six million residential population and 6.5 million slum-dwellers. While it continues to give a 65 per cent subsidy to residential users, it cross-subsidises this with higher charges levied on commercial users, which is Rs 60 per 1,000 litres of water. So, while the charges for residential use have increased 17 times in the past 40 years, the same has increased by 50 times for commercial users.
The water charge for residential use was 25 paise per 1,000 litres in 1974. Since then, the water tariff has been increased nine times, of which five were during the rule of Shiv Sena in BMC. But it’s still low — Rs 4.32 for residents and Rs 3.25 for slum-dwellers.
The civic administration, however, incurs a cost of Rs 11.37 to supply 1,000 litres of water on transportation and filtering of water before it is supplied to residents. While Shiv Sena may promise free water to the city, both the party and the administration are aware of the widening gap between the cost of production and user charges.
An analysis of data provided by BMC shows this gap has widened since 2001. While the civic body provided a subsidy of Rs 2.25 per 1,000 litres in 2001-02, the current figure is Rs 7.05.
With an estimated Rs 42,000 crore worth of ongoing and proposed water supply projects in the pipeline, senior civic officials admit it will be difficult to fund these without a significant water tariff hike.
The civic body estimates a massive 13 per cent increase in the city’s population in the next 10 years, from 124.33 lakh in 2012 to 140 lakh by 2021. In another decade, it is expected to rise to 156.6 lakh. The basis for the estimates was the projected increase in high-rises based on ongoing and proposed redevelopment projects.
Using these estimates to justify increase in water charges, the BMC has hiked tariff for residential societies from Rs 3.50 to Rs 4.32 per 1,000 litres in the last two years. Societies with per capita consumption of over 150 litres per day have to pay as per telescopic rates adopted in 2008. It also increased water charges in slums and chawls from Rs 2.25 to Rs 3.50 per 1,000 litres, Rs 18 to Rs 30 per 1,000 litres for commercial establishments, Rs 25 to Rs 40 per 1,000 litres for factories and businesses, and Rs 38 to Rs 60 per 1,000 litres for hotels rated three stars and above.
At current water tariff, a family of five with a total consumption of around 675 litres per day now spends Rs 87.5 per month as opposed to the earlier Rs 71 a month. For residential users, any increase in the water usage from 150 litres per capita per day would mean telescopic rates.
A total of 26 lakh households are provided water through 3.6 lakh water connections, each of which on an average serves about eight families. The water supply is provided for one-to-four hours through a 1,000-km-long water supply network.
The current allocation of BMC’s water supply between the island city, eastern suburbs and western suburbs is quite unequal as water is not allocated as per the zonal population. For example, residents of south Mumbai, on an average, receive more water supply compared to those in the eastern suburbs (37 per cent less water), which have the second largest population and a large number of industrial establishments.
An average Mumbaikar pays less than one paisa (0.0035) per litre of water (in stark contrast to the Rs 15 for a litre of bottled water). Interestingly, while the city supplies less than 10 per cent of its total water to bulk and commercial consumers, it earns about 60 percent of its total revenue from them.
Unlike the BMC, which can fix its own water tariff, a municipal council in the state such as Badlapur charges water tariff fixed by the Maharashtra Jeevan Pradhikaran (MJP). The water charges for domestic users in the state are thrice the price charged by BMC. In rural Maharashtra, a domestic user pays double the amount paid by a Mumbaikar for water. In Shanghai, which has similar demography and population parameters, the pricing of water across all types of consumers is fixed with the sole idea of covering the maximum operational cost incurred by the water utilities. As such, a domestic consumer in Shanghai, where the per capita consumption is 155 litres per capita daily (LPCD), pays nearly Rs 20 for 1000 litres.
Although residents usually make much noise and express reluctance at paying higher water charges, the water tanker business in the city shows otherwise. Private water tankers in Mumbai charge anywhere between of Rs 3,000 to Rs 4,500 for a 10,000-litre tanker of clean drinking water.
While the cost to procure and deliver water has steadily increased for the civic administration, Shewale’s statement of promising free water indicates the political parties’ reluctance to implement the 8 per cent water rate hike every year. “If this happens, it will be very bad economics. The cost of procurement is likely to jump further once additional water from Gargai and Pinjal starts flowing. The cost is expected to escalate up to Rs 21.10. Given the usual cost overrun due to delays, the actual cost is likely to escalate much further. Good economics demands that water tariff should go up along with that,” said Dhaval Desai, author of study titled ‘Time Is Running Out: Does Mumbai Have Enough Water?’ brought out by Observer Research Foundation in Mumbai.
“The country’s richest civic body with an annual budget of Rs 27,000 crore has no system of compiling water consumption data for its 24 wards, rendering water consumption calculations merely a guess work,” states a 2012 report by Desai.
The civic administration has provided roughly 3.83 lakh metered connections, of which more than 90 per cent are defunct, forcing the BMC to bill consumers on the basis of average readings. Civic officials say the annual revenue generated by collection of water charges is on an average Rs 1,000 crore, which is only for 2,242 MLD. BMC does not know where the revenue for the remaining 1,200 MLD supplied goes.
By BMC’s own admission, about 700 million litres of water daily (20 per cent ) is lost due to leakages and thefts every day from its 1,000-km long pipeline network. The figure is more than the neighbouring Pune’s total water supply daily (650 MLD).
In addition, about 160 MLD of water is stolen by private water tankers, which are estimated to be around 10,000 in number, each having a minimum carrying capacity of 10,000 litres. “Most of these tankers make multiple trips daily and charge Rs 4,000 per tanker. BMC is blatantly allowing illegal profits amounting to Rs 4 crore per day and 1,460 crore annually,” says Desai.
Meanwhile, an ambitious plan to install automatic water meters (AMRs), first mooted in 2009, is yet to be completed. After a series of hurdles, the BMC, which began the project late last year, has installed 86,000 AMRs and is expected to install another 40,000 in the next six months. However, senior civic officials say the project will not be as useful as envisaged. “We have decided to install all the AMRs which were delivered after the first tender. But we will not implement the project across the city since we are devising an alternative plan that concentrates on maximising revenue,” the official said.
The plan to install AMRs across the city, which is an essential benchmark to be achieved under the Jawaharlal Nehru National Urban Renewal Mission, had to be modified midway.
“In 2010, technical glitches in the AMRs forced us to delay the project. Although we have begun installing the AMRs in residential areas, many buildings have either been demolished or are under redevelopment. So the AMRs bought to be installed in those areas are of no use since the new buildings, most of them highrises, will need bigger AMRs depending on the amount of water they draw,” says a civic official.
Through AMR system, consumption, diagnostic and status data of users can be collected from individual meters automatically and details transferred to a central database for billing. The advantage is that it allows billing based on almost real-time consumption rather than depend on previous or predicted readings. At present, the buildings in the city have mechanical meters installed by the residents or owners of buildings, which are mostly defunct.
While the BMC has decided against AMRs in slum areas, whose 6.5 million population consumes about 690 million litres daily, it is planning to install mechanical meters, having almost no resale value, to reduce chances of theft.
On the flip side, the AMR project is not financially viable for the BMC with each unit costing between Rs 5,000 to Rs 12,000. Also, many of these meters stopped working some time after installation while a few showed figures 50 per cent below the actual consumption.
With its plan to spend a whopping Rs 42,000 crore over the next two decades on water supply in the city, the BMC is expected to take the per capita per day level much above the current 200 litres.
Until monsoon last year, the civic body had been supplying close to 135 litres per capita per day (LPCD) to residents. After the BMC started receiving an additional 455 million litres per capita daily in September last year, thanks to the completion of the Rs 2,800-crore Middle Vaitarna project, the supply increased to 200 LPCD.
With an additional 2891 MLD expected through three separate projects in the next 10 years, the BMC has begun planning big.
Under the Pinjal project currently being undertaken by the BMC, which involves constructing a dam across the Pinjal River, the city can hope for an extra 865 million litres of water daily. The project is part of the Damanganga-Pinjal link project, which also involves construction of another two dams, which will augment water supply to the city by an additional 1586 MLD.
The Pinjal project is expected to begin by 2015 and completed by 2021.
Damanganga-Pinjal is one of the 30 link projects, including 16 inter-basin links planned in peninsular India and three in central India. It involves construction of a 72.27-metre high dam across Damanganga river near village Bhugad (bordering Valsad district of Gujarat and Nashik district in Maharashtra), a 79.82-metre high dam across Vagh river at Kharghihill in Thane district and another 70-metre high dam across Pinjal river to be constructed in Wada taluka of Thane district. The water from Pinjal will then be brought to Gundavali reservoir in the city through a tunnel. The first two dams will be constructed by the agencies chosen by the National Water Development Agency (NWDA) and Central Water Commission(CWC) while the Pinjal dam will be made by the BMC.
Under the Gargai project, the BMC will construct a dam across the Gargai river in Wada taluka of Thane district, is expected to yield around 450 million litres of water to the city daily. While the BMC has completed feasibility studies for the project, the proposal is now awaiting the nod of the Union Ministry of Environment & Forest (MoEF) as it falls within the Tansa wildlife area.
The work on the dam, which is expected to start in 2015, is scheduled to be completed in three years.
The civic administration is also planning to improve the existing water supply system in the next few years at an estimated cost of Rs 350 crore. This project includes a comprehensive water supply distribution improvement programme to monitor and detect leaks, water quality, ensure 24×7 water supply and GIS-based maps of water supply network.
The BMC is already constructing tunnels for water supply, which include the primary network from Gundavali to Bhandup via Kapurbawdi (15.1 km), Malabar Hill to Cross Maidan (3.6 km), Maroshi to Ruparel (11.85 km) and Veravli to Adarsh Nagar till Yari Road (6.1 km), all of which which are part of the Middle Vaitarna Project.
The civic body also plans replacement of 45 kms of pipe from Tansa that supplies water through two mains of 1,800-mm diameter each. A provision of Rs 1,069 crore has been made for the project, expected to be completed in the next one year.
Work on two more tunnels will be taken up this year — one from Chembur to Trombay reservoir and the other from Chembur to Parel. In addition, the BMC is also constructing three reservoirs, at Worli hill, Bhandup hill and Malad hill, for which a provision of Rs 42 crore has been made in the previous budget.
However, experts express concerns over these plans, citing previous failures and lack of an efficient water supply system to absorb the additional water. They point out to the unaccounted loss of 900 MLD, which is equivalent to two days of water supplied by the Middle Vaitarna project.
As T V Shah, formerly a hydraulic engineer with the BMC, pointed out at a public forum last year, “The project to replace the 100-year old Tansa pipelines under the Sujal Mumbai Abhiyaan at a cost of Rs 1,000 crore for five years has failed. Under the scheme, Rs 200 crore were allocated per year to replace old pipes and connections, without identifying the works. As it turned out, contractors haphazardly dug out and replaced pipelines.”
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