World Bank attempt to privatise Mumbai’s water runs aground: Citizens reject report

On 3rd June, the Municipal Corporation of Greater Mumbai (MCGM) held a stakeholders meeting in which the New Zealand based consultant group Castalia (hired by the World Bank and the Public Private Infrastructure Advisory Facility) to conduct a study in the K-east ward of Mumbai, presented their findings and recommendations after a year-long study, for the Water Distribution Improvement Programme (WDIP). The meeting was attended by the MCGM Labour Union, K-east ward residents, activists, experts in water management and a few elected representatives. Shyamal Sarkar of the World Bank (WB) and Bhavna Bhatia of the PPIAF were special invitees. The presence of the citizens, labour unions and activists proved disastrous for Castalia and the World Bank. Both organisations were exposed for presenting a report based on inflated data in order to push through water privatisation.

Brief History:

In mid 2004, the PPIAF (a consortium which includes the World Bank) approved a grant of US $6,92,500 (approx. Rs. 30 million) for assisting Mumbai in procuring suitable consultants with international experience in private sector participation in water supply services, specifically in preparation of bid documents, for pre and post qualification of bidders for the implementation of management contract in the in K-east ward (Andheri, Jogeshwari and Vile Parle) of Mumbai city. The PPIAF also authorized the World Bank to be the executing agency for the grant. The K-east ward is one of the most profitable wards for the MCGM where the operating cost of water is Rs. 65 million, while revenue collection is Rs. 400.43 million per annum. The choice of K-east ward is therefore strategic because it is bound to result in successful implementation of the management contract.

The PPIAF and the World Bank appointed Castalia for the K-east WDIP (Water Distribution Improvement Project) study and a Contract and a ToR (Terms of Reference) was signed between the World Bank and Castalia (a French consultancy firm having its offices in New Zealand and USA). Castalia was expected to study, design and develop a model so as to eventually curb water leakage, pilferage and contamination and ensure an efficient 24x7 water supply through outsourcing the services to a multinational private operator. If successful, this pilot project in K-east ward would soon be replicated in the rest of Mumbai.

What happened at the workshop?

The Additional Commissioner (Projects, MCGM) Manu Kumar Srivastava began the proceedings by clarifying that "they had no pre-conceived notions of any management style for improving water distribution in K-east". This statement was in sharp contradiction to the "inbuilt provision of the Contract and the Terms of Reference (ToR) which proposed "a public private partnership management model for bringing in water reforms". It also became evident in Castalia’s presentation and recommendations that they, in fact, had been commissioned exclusively for activating a privatization process complete with setting up the logistics for selection of a private agency for the same. This conclusion is borne out by the fact that Castalia’s findings to support some such form of privatization was based on insufficient research, unreliable technology, inaccurate methodology and specious logic, resulting in MCGM themselves finding their report unacceptable. Read this article