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ASIA: Water Services – Fee or Free?

Irfan Shahzad

KARACHI, Nov 2 2007 (IPS) - Access to safe water may be touted as a human right, but inadequate supplies, crumbling water systems and the galloping needs of growing populations are forcing experts, government utilities and funding agencies to ponder over devising sustainable water service networks in Asia’s teeming cities.

At least 40 percent of poor people living in urban areas across the Asia-Pacific have no connection to piped water. Despite the region’s record rates of economic growth over decades, the biggest challenges for them include the basic need of how to provide their people with sufficient quantities of safe drinking water.

This concern will be among the main areas of focus of a report, called ‘Asian Water and Development Outlook’, that the Manila-based Asian Development Bank (AsDB) is due to release later in November and at the first Asia-Pacific Water Summit in Japan on Dec. 3-4 this year.

For generations, water has been seen as a free, natural resource. But debate continues to revolve around whether water, although a right, should have a certain economic value – a price – attached to it.

"In the next 20 years, the practices and processes of water management will change more than in the past two thousand years," predicted Prof. Asit Biswas, the Indian-born Canadian who heads the Mexico-based Third World Centre for Water Management who won the International Stockholm Water Prize in 2006.

Likewise, many societies consider it the government’s obligation to provide water to the entire populace. "What are the governments’ kitty and taxpayers’ money for?" is a blunt question many would ask.

But the reality is that governments – local, provincial and national – are often clearly short of money for just about everything.

"All rights come with responsibilities attached to them that are placed on the beneficiaries", said Geoff Bridges, a water consultant. "For instance, in water supply, it could be simply to pay the water tariff or not to waste water."

Public-sector water utilities in Asia have been crying for funds to develop their systems, saying that many water users pay marginally or do not pay at all.

"Financed from general taxation, the water service competes with other sectors for limited funding, and it is not easy for governments to allocate sufficient resources to all competing sectors," Bridges said. "How do you balance the financial demands of water sector with health services, transport, education, power, security and defence etc?"

Many people have the tendency to waste what is free. "People are an important part of the (water) equation, but at the same time, they may be creating water problems themselves", argued Yuanyuan Li of the Water Resources and Hydropower Ministry of China.

Some experts explain that free provision of water does not convey to beneficiaries the financial and resource costs of service provision. This does nothing to encourage consumers to avoid waste and conserve water, and to avoid damaging assets such as public taps and stand posts, they add.

"Contrary to current belief, I do not believe that water scarcity is a problem," said Prof. Biswas. He believes that the common perception of water as being of a fixed quantity, like oil and gas, is wrong. "This is a fallacy because in oil and gas you can say this since it’s a non- renewable resource. But water is a renewable resource… if we improve our management practices we can improve it further."

Thus, water industry experts argue that it is important to make consumers realise that clean water is a precious asset that needs to be used economically – and that the best way to do this is to attach a financial value to it.

"Once people are made to understand that if they pay, service quality will improve, they do (pay)", said Prof. Shantanu Jha, entomologist and chairman of the Kalyani Municipality Council near Kolkata, India.

There are various models for making water available to poor urban communities, depending on factors ranging from a country’s economic conditions to the legal status of a particular locality.

The word ‘privatisation’, when it comes to social services and water, generates a lot of protests. But privatisation is one thing, and making consumers pay for what and how much they use is another, other water experts argue.

"Investments are needed regularly to modernise the delivery systems, and government subsidies are too low to finance the operation and maintenance cost", said Islam-ul-Haq, managing director of the Water and Sanitation Agency of Rawalpindi, Pakistan.

Governments often look toward funding agencies, which are however hardly interested if the projects are not financially sustainable. Thus, governments like those in the Philippines have opted to give ‘water concessions’ to private firms to provide water to residents.

"We have found that it is possible, and it is imperative, that you align your social and environmental goals with business goals," said Antonino Aquino, president of Manila Water. "For us this is the reason that we even publish a sustainability report showing how we rate ourselves with the quality of the life of the people we are serving."

In the Maldives, when the capital Male urgently needed piped water and sewerage, the private sector was given full rein to design, construct and operate the water system.

Some advocate financing services via cross-subsidisation and partial subsidisation of water supplies. "Charge very little or nothing at all for the first 20 or 30 litres of water and then charge an appropriate cost plus price," suggested Bhanoji Rao, a former professor of economics and public policy at the National University of Singapore.

"There is no divine law that water utilities should never make money. It’s just that they should not do so through employee corruption fostered by bad service to the poor and good service to the rich," added Rao.

Zahir Mohmad from the Ministry of Water and Power of Pakistan added: "The real problem is quality of water, and another issue is the equitable distribution of available water for agriculture and domestic level. "There is water available but there are certain sections of the community which do not get it."

Thus, Asian countries need to address the issue of management of the region’s vast water resources. "People will not wait for five to ten years. They will take water now, legally or illegally," warned K.E. Seetharam, principal water and urban development specialist at the AsDB.

(*This story is being distributed by IPS Asia-Pacific under a communication agreement with the Asian Media Information and Communication Centre, in Singapore, which produced it.)