INTENT SUSPECT
24/7 water supply: BMC is inept, say WB consultants
Clara Lewis
Is the BMC “incompetent” to implement, on its own, 24×7 water
supply for Mumbai? If World Bank-appointed consultants are to be believed,
the civic administration is incapable of undertaking this task, going by its
pilot study in the K-East ward (Andheri east) on upgrading the water
distribution system in Mumbai. The consultants’ report goes on to recommend
that BMC must outsource all aspects of it to a single highly competent
contractor.
The French consultancy firm, Castalia, was appointed directly by the
World Bank to carry out an assessment of Mumbai’s water distribution system
and suggest ways to upgrade to a 24×7 supply system. The study was sponsored
by the bank through a non-refundable grant of Rs 3.2 crore. The bank is
known to be a strong advocate for privatisation, especially in developing
nations, with often-disastrous results, say experts.
Civic sources said the fact that the World Bank, a known advocate of
water privatisation, commissioned the study and directly appointed the
consultant, indicates a pre-determined bias for privatisation. According to
the sources, Castalia’s expertise lies in drawing up contracts and not in
water management. The ward selection for the pilot study has also been
controversial as it is the most profitable ward and not representative of
other wards.
BMC officers alleged that the field supervision for the study was
grossly inadequate with Castalia’s water expert being present only for the
first week while the study itself dragged on for over a year. Its report
submitted in March this year, was so “deeply flawed” and fraught with
“inconsistencies” that the BMC refused to accept it, officers said.
But in little over a month, the company tweaked the report and presented
a revised one. Now, additional municipal commissioner Manu Kumar Srivastava,
in-charge of water supply, says a second revision is under preparation to be
presented to stake-holders (locals and elected representatives) over the
weekend. The second report, while lauding the water supply system in Mumbai
as the best in South Asia and that in the K-East ward comparable to London
and Germany, however, states that the BMC on its own is incapable of
implementing the upgrading projects and it would be the worst option to opt
for. Interestingly, the consultants did not find a single case of
contamination though tests were conducted twice. The second time, on the
insistence of the BMC.
“The BMC does not lack financial resources or smart well-qualified
engineers. If the current BMC systems were capable of achieving desired
improvements in K-East, they would have already achieved them,” reads the
report. Pointing out the reasons for its conclusions it states that major
infrastructure works are not well integrated with operations and
maintenance.
“The system for procuring infrastructure projects tends to be slow,
fragmented and is not focused on achieving the best quality results over the
medium term. The managers at the ward level have little autonomy and
resources to implement new approaches, no incentives for
customer-responsiveness and service and there is an attachment to
traditional ways of working,” said the report.
In fact the option of improvement with the current structure scores the
least marks (8 out of 16) as compared to the other four options offered by
the consultants.
The consultants have given an option that would involve contracting with
a single contractor for up to six years. The contractor would be required to
implement all technical works required; direct teams of its own staff and
BMC to carry out active leak reduction and customer service. The BMC would
pay the contractor for implementing the technical work, and also give a
performance pay based on service improvements and cost-savings over the
period of the contract.
In the second option, the contractor would be accountable for the water
service provided and the financial results of the operation. The contract
would set progressively increasing standards for continuity of service,
quality of the water and customer service.
The contractor will collect the tariff and pay the BMC for the bulk
water, for all operating and maintenance costs. The BMC would pay for the
capital expenditure. The argument here is that if the contractor were good
at reducing costs such as reducing unaccounted for water, it would profit
from the difference between the fee and its cost of providing service.
However, it must be noted that currently the water department and
especially the KEast ward generates a large surplus. The report is not very
clear if the current huge level of surplus, especially in the ward, will
accrue to the BMC or get pocketed by the contractor, whereby the contractor’s
profits may emanate from this surplus rather than any efficiency
improvements. It also does not mention if there would be a tariff reduction
with improved efficiencies or how iron-clad would be any promise to maintain
tariffs. No mention is made of any penalties on the contractor in case he
fails to meet the set performance benchmarks.