While the emphasis is on privatization of water services, Moneylife looks back at the battle fought by Arvind Kejriwal against the Delhi Jal Board and the World Bank to prove the fraud and the conspiracy to privatise water supply and make it expensive for Delhites
The ministry of water resources has been undertaking public consultations across the country for quite sometime to formulate the New Water Policy to be probably implemented in March this year (the last revision was in 2002). While the general feedback it got points to proper water management and augmentation at the grass-root level, the draft policy being circulated recently dangerously lays emphasis on privatization of water services.
According to news reports, the draft National Water Policy encourages privatization of water supply services and gives liberty to private operators (who would look at profits first) to “fully recover” their operational and administrative costs, which could obviously lead to steep hike in water rates for the end consumer. The draft also suggests that the government should shrug of its responsibility of being a service provider for water and has curiously put the onus on private operators.
In fact, Section 13 of the National Water Policy, 2002 states: “Private sector participation should be encouraged in planning, development and management of water resources projects for diverse uses, wherever feasible. Private sector participation may help in introducing innovative ideas, generating financial resources and introducing corporate management and improving service efficiency and accountability to users. Depending upon the specific situations, various combinations of private sector participation, in building, owning, operating, leasing and transferring of water resources facilities, may be considered.” The latest draft National Policy further hammers this issue, in complete disregard to peoples’ right of being delivered water at reasonable rates.
The first battle fought against the World Bank and Delhi Jal Board (DJB) was in 2005 when RTI activist and social reformer Arvind Kejriwal through his non-governmental organisation (NGO) ‘Parivartan’ steered a tenacious campaign against privatization of water. For this, he obtained, under the Right to Information (RTI) Act, voluminous 9,000 pages of documents pertaining to correspondence between the World Bank and DJB of biddings, DJB’s correspondence with state and central government as well as reports of various consultants.
RTI documents revealed that the DJB had approached World Bank in 1998 for a loan to upgrade its water utility services to Delhi. The bank suggested that they hire a multi-national consultant who would ‘suggest’ basic reforms for the DJB to carry out. The bank offered a $2.5 million loan to DJB for hiring the consultant. States Arvind Kejriwal, “Delhi has 21 water zones. The management of each water zone was to be given to four experts for each zone at a salary of Rs25,000 per month which is Rs11 lakh. The per annum cost of the salaries would come to Rs108 crore. The total budget of the DJB was Rs168 crore thus 60% of the money would be spent on salaries on foreign consultants. Roughly estimated, this would lead to nine times increase in water tax for Delhites.”
RTI documents further revealed how the World Bank arm-twisted DJB to favour a particular multi-national company. The DJB invited tenders for which 35 consultants applied and six of them were to be short listed. An evaluation committee consisting of senior officials of the DJB ranked them in order of merit as per the World Bank guidelines. PricewaterhouseCoopers (PWC) was curiously termed as a ‘desi’ company because it bid from its Kolkata branch but was ranked 10th. However, the World Bank arm-twisted the DJB to prop it up to the 6th position. States Mr Kejriwal in a protest letter that he wrote to the World Bank after studying the documents, “This provision was misused to bail out PWC as it was treated as an Indian company because the branch of PWC which had applied is incorporated in India. Thus, PWC featured amongst the top six short-listed companies.
Mr Kejriwal’s letter to the World Bank further states: “Thereafter, technical and financial proposals were invited from the six short-listed companies. A company needed 75% marks in technical evaluation to qualify. An evaluation committee, consisting of senior officials of DJB, evaluated the proposals on the basis of the criteria given in World Bank guidelines. PWC again failed. Only two companies, namely Deloitte of USA and TAHAL of Israel, got more than 75% marks.
“The results were sent to the World Bank for their “no objection”. The bank was strangely dissatisfied with the results. It nevertheless blatantly displayed its interests in PWC. It demanded an explanation from the DJB as to why did they give such low marks to PWC.” DJB was stunned at this reply from the World Bank and in a note, the official placed on record that he strictly abided by the World Bank norms and no company procuring below 75% could be eligible for procuring the contract. If PWC is considered, the official wrote in his internal correspondence, it would go against the principles of transparency and would cause great embarrassment to the DJB.
DJB opposed this arbitrary interference but the World Bank bullied it into revising the criteria, audaciously stating this was not the first time it had so intervened.
Shockingly, DJB, the state and central government revealed their helplessness before the World Bank. Despite their many objections, DJB had to comply.
Mr Kejriwal further states: “Fresh bids were invited. A new evaluation committee was formed. The new committee was careful this time. At every step, they obtained bank’s approval. The bank interfered in the formation of the committee. The composition, structure and procedures were all laid down in great detail by the bank. The new committee was formed with the approval of the bank.
“However, PWC again failed to get pass marks. Only one company, namely M
Watson of UK, qualified. Amazingly, the bank was again dissatisfied. It called for the detailed scores given by each member of the evaluation committee.
This time, the bank transgressed all limits of interference and violated all norms of fair play and decency. It demanded that the scores given by RK Jain, one of the members of the evaluation committee, be omitted because ‘evaluation made by Mr Jain is at considerable variance with the evaluation made by other evaluators.’ Interestingly, the evaluation committee mentioned in its report that RK Jain gave low marks to PWC and SK Chhabra gave low marks to M/s Sogreah. But the World Bank demanded omission of Mr Jain’s scorecards only. The bank’s bias could not have been more apparent.”
“DJB was “requested” to recast the scores accordingly. This time, there were no protests from DJB. DJB obliged and PWC scraped through.
The documents were carefully studied by the alumnus association of IIT Delhi and Kharagpur and they had held a press conference urging the Delhi government to withdraw the World Bank loan, but to no avail. Mr Kejriwal whipped up a mass public campaign and was joined in by noted RTI activist Aruna Roy. Buckling under pressure, DJB was forced to withdraw.
In an article in The Delhi Science Forum website authored by Raghu (http://www.delhiscienceforum.net/others/342-privatisation-of-delhi-water-supply-by-raghu-.html) states - “The World Bank has a long and inglorious record of advocating privatisation of public utilities. In the water supply sector, the bank-funded projects run by European and American multi-nationals are being implemented in the country after country in Africa, Latin America and Asia. In Tanzania, Colombia and the Philippines, for example, the World Bank-funded water supply projects have left a trail of disaster, debt and impoverishment. The MNCs have imposed enormous tariff hikes, denied water to the poor and others unable to bear these hardships, diverted water to luxury resorts and golf courses and reaped exorbitant profits. In the face of inevitable public protests, in some places at the level of popular uprisings, the MNCs have fled these countries, leaving behind stranded water utilities, governments with huge uncovered loans, infructuous infrastructure costs and, adding insult to injury, have demanded and often extracted compensation invoking contractual clauses imposed by the World Bank. As a result, these discredited policies are now being rolled back all over the world including in Europe where such privatisation began during the Thatcher era.”
Despite this, the National Water Policy may just give a green signal to privatization of water supply and put the country under the barbaric control of multi-nationals. Any sense?
Links for Arvind Kejriwal’s campaign against privatization of water supply in Delhi - http://www.youtube.com/watch?v=8XwiyWgZHMA and http://www.youtube.com/watch?v=xOmr7aXj_hA
(Vinita Deshmukh is consulting editor of Moneylife. She is also an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte. She can be reached at [email protected])
RBI governor D Subbarao said, “If the government goes beyond the (targeted) number and gives details about how the number is going to rollout next year and beyond, I think that would be very credible not only for the RBI but also for all those people who are planning investments in India”
Mumbai: With public finances coming under coming under pressure, the Reserve Bank of India (RBI) has advised the government to stick to the road-map of fiscal consolidation as it affects the credibility of the system, reports PTI.
An unusually combative RBI governor D Subbarao, who has served as the Union finance secretary, also blamed the fiscal expansion for the ineffectiveness of the central bank's repeated rate hikes over the past two years.
Speaking to reporters at the customary post-policy press conference, Mr Subbarao said there is no doubt that the fiscal deficit has to be brought down but suggested that the targeted number is “actually fleshed out in some detail about how they will actually be materialised.”
He said, “If the government goes beyond the (targeted) number and gives details about how the number is going to rollout next year and beyond, I think that would be very credible not only for the Reserve Bank but (also) for all those people who are planning investments in India.”
The government should focus on both revenue augmentation and expenditure compression, he said.
The government had pegged fiscal deficit target at 4.6% of the gross domestic product (GDP). However, it is expected to exceed the Budget expectation.
Like on the revenue front, where the government has a specific list on the agenda such as the rollout of reformative measures Direct Tax Code (DTC) and the Goods and Services Tax (GST), Mr Subbarao said there is a need to come out with expenditure compression measures as well.
He said the government can focus on the discretionary spending and come out with a plan on how it plans to bring down the spend.
Mr Subbarao, who had unsuccessfully unleashed a series of 13 rate hikes over the past 18 months till December 2011 with an eye on inflation, also blamed the expansionary fiscal stance for the non-effectiveness of policy measures.
“We have raised policy rates over the past two years as you know. And one of the reasons the policy rate raising has not been completely effective was because there was demand coming in from the fiscal side,” he said.
Meanwhile, in the policy statement, the RBI said in the future, it will ‘constrained’ from not rolling back policy rates in the event of fiscal deficit staying high.
Making clear his intentions on the aggressive posturing, Mr Subbarao said that this is aimed at getting the right measures being included in the forthcoming Budget.
“The forthcoming Union Budget must exploit the opportunity to begin this process (of fiscal consolidation), in a credible and sustainable way,” the policy document said.
Mr Subbarao also rubbished a question which suggested that RBI is acting as the debt manager to the government through its buyback of government securities or open market operations (OMOs).
The government, which had targeted to contain the fiscal deficit at 4.6% the Budget, has been struggling to keep up with the target and even the finance minister has conceded that meeting the number will be tough.
In the face of dwindling revenues, the government has been forced to increase its borrowing by Rs92,000 crore in addition to the budgeted Rs4.20 lakh crore.
However, the final word on the issue was taken by the governor, reminiscing of his days as the finance secretary. “I wouldn’t have said that if I was in the government, but....” he said to grins in the RBI headquarters on the Mint Road.
“There used to be lot of variation in the weekly food inflation numbers and the monthly data, that is why it has been decided to discontinue the practice,” an official said, adding that the weekly data were not giving any “clear and holistic” picture of the inflation situation
New Delhi: The government Tuesday decided to do away with the practice of releasing the weekly food inflation data as the figures were not portraying the ‘holistic’ picture of the price situation, reports PTI.
The government henceforth will only release the monthly headline inflation figures, sources said.
The decision, according to sources, was taken by the Cabinet Committee on Economic Affairs (CCEA), chaired by prime minister Manmohan Singh.
“There used to be lot of variation in the weekly food inflation numbers and the monthly data, that is why it has been decided to discontinue the practice,” an official said, adding that the weekly data were not giving any “clear and holistic” picture of the inflation situation.
The ministry of commerce and industry compiles and releases the Wholesale Price Index (WPI) data on primary articles and fuel and power every week, mostly on Thursdays.
The primary articles include food items.
The government also releases monthly data on overall or headline inflation measured on WPI. The food inflation has a weight of about 14% in the overall inflation.
Food inflation stood at -0.42% for the weed ended 7th January. Headline for December was 7.47%.
In September 2010, the government had changed the base year for calculating WPI to 2004-05 from 1993-94.
The new WPI series has 241 more items than in the old index. With the additional items, the WPI now measures a total of 676 items against 435 earlier.
Earlier, the government used to release the overall inflation data on weekly basis. But in October 2009, it changed the calendar and decided to release the comprehensive data on inflation on a monthly basis, but continued to release price movement of primary articles, including food, and fuel every week.