Innovative water privatisation plan sparks Indian ire

In India, where rivers are worshipped as deities, where about 200 million people still lack access to safe drinking water and where droughts create havoc every other summer, water is an emotionally charg-ed political issue.

But for Kailash Soni, a 41-year-old businessman, water was an opportunity. He wanted to prove to Indians that when a water supply is privatised, it is often managed better, as he had observed in Britain and France.

He knew the issue was volatile in India, so he decided to start small. He asked the government to first allow him to supply river water to a cluster of factories in the central Indian state of Chattisgarh, one of the country's few landlocked states. He built a low, gated dam and reservoir on the Sheonath river to exclusively draw water for the industries.

"Overnight, everybody became my enemy," said Soni, who heads Radius Water Ltd. "I was portrayed as the water mafia, the water don, the evil capitalist who profits from water."

For the thousands of villagers, who had been fishing, farming and praying on the banks of the Sheonath river for generations, the unthinkable had been done. Their river had been sold.

In a nation where the government is still perceived as the best guarantor of people's needs, the question of who controls precious natural resources such as water is an explosive one.

Although the villagers continue to have access to the river, they question the notion of a private company controlling its flow to cater exclusively to the needs of industry. They complain that as the factories get more priority, less water is available for their use.

"We have been living on the Sheonath banks for generations, and the river belongs to everybody," said an angry Nirmala Mishra, 45, chief of Peeparchedi village on the riverbank. "We can only trust the government to regulate it, not a private company." Soni insists that it is the supply of water that has been privatised, not the river.

"I don't own the Sheonath river. I only own the assets that I have built on the river, like the barrage, the tank, the pipelines and treatment plant," he said. The project, in which he leases a 15-mile river stretch, is India's first experiment with a privately run water supply.

Last year, when the water level in the Sheonath river dropped during the summer, some government officials and employees of Soni went to Mohlai village on the banks and cut off farm irrigation pipes that drew water from the river. This fuelled public outrage and protests, and the pipes were restored.

"What if the rains fail us next year and the river shrinks?" said Chabilal Yadav, 50, a rice farmer from the village. Shatrughan Dheemar, 35, a fisherman living on the banks of the river, said that before Soni built the dam he could fish even in the summer months.

Defending his project, Soni argues the threat to the groundwater table has declined since his company began supplying uninterrupted river water to the factories. In the southern state of Kerala, a local village council took a Coca-Cola factory to court, charging that it was extracting excessive groundwater for its bottling plant.

The court said this month that groundwater was a national resource that belonged to the entire society and ordered the soda giant to close its bore wells within a month.

"We are open to privatisation, but we have to move very cautiously. We cannot just hand it all over to the private companies," said M.E. Haq, a senior official at the Water Resources Ministry in New Delhi. "The consensus of local communities is essential. And that has not been done so far."

A report, Corporate Hijack of Water, by Navdanya, a New Delhi-based conservation group, listed examples in which scarce river and groundwater was diverted for industry at the expense of community needs.

The report warned that privatising the supply of water to industrial enterprises was only a step away from handing over the supply of drinking water to private companies, a subject of bitter debate in many developing nations.