Eleventh Five Year Plan

170 Eleventh Five Year PlanBox 5.4PPP in Urban Water SupplyTamil Nadu has emerged as forerunner in attracting PPPin urban water supply sector. At 42%, it is a highly urbanizedState in the country. The State has already commissionedthe ‘Tirupur Water Supply and Sewerage project’at a cost of Rs 1023 crore. The cost per kilo litre of waterat estimate stage is Rs 30, which is high due to recovery ofthe sewerage capital cost, operating expenses, and capitalcost. The next project on PPP is 100 million litres per day(MLD) desalination project for Chennai Water Supply.5.44 The large number of institutional issues in watersupply sector discussed during the formulation of theTenth Plan are still valid. The rationale of financingwater supply schemes fully or partly as grant, inabilityof the urban local bodies (ULBs) to raise funds dueto low tariff recovery, their weak financial positionpreventing any augmentation efforts, tossing aroundthe responsibility of water supply from the State levelutility to local bodies/Panchayats with large liabilities,etc. are continuing.5.45 Despite the large grants by TFC for local bodiesto maintain the water supply systems, things have yetto improve a lot on the ground. Overlapping ofresponsibilities between various institutions like ULBs,State-level agencies, and departments dilutes the accountabilityand responsibility to the customers.Tariff and O&M5.46 Evolving realistic water tariff so as to discourageexcessive use of treated/potable water is one of theimportant management tools for demand management.Not much has been done on this importantaspect in many urban local bodies in the countryexcept a few larger cities that have undertaken somemeasures by way of installing water meters for consumers.The major reason for slow progress in thisregard is that good quality meters are not availableon a large scale since the meter manufacturingfacility is vested with small-scale industries at present,which do not have the capacity to produce meters ona large scale.5.47 Poor O&M due to inadequate financial resourcesis one of the primary reasons for low sustainabilityand equity in water supply. The responsibility ofoperation, maintenance, and revenue collection isgenerally vested with the elected ULB, while thespecialized bodies are not able to raise the watertariff without the approval of the provincial governments.The local bodies generally receive grantassistance ranging from 10% to 60% for capitalworks on water supply and sanitation from the StateGovernment. Usually, they do not receive any grantassistance for O&M of water supply and sewerage.Municipal bodies in many parts of the country sufferfrom inadequate resources. Assessment of demandand ‘willingness to pay’ by the communities wouldhelp to arrive at a basis for pricing water managementservices and to clarify the scope for adopting‘full cost recovery’ policies to achieve financialsustainability.ELEVENTH FIVE YEAR PLAN PROGRAMMES FORURBAN WATER SUPPLY5.48 With a view to provide 100% water supplyaccessibility to the entire urban population by the endof the Eleventh Plan in 2012, it has been estimated thatRs 53666 crore is required. With a view to providereform-linked infrastructure facilities in the urbanareas, the GoI has launched the two new programmesnamely—(i) JNNURM covering 63 cities with populationabove one million as per 2001 census, including35 metro cities and other State capitals and culturallyimportant towns.(ii) UIDSSMT for the remaining 5098 towns havingpopulation less than one million to cover all thetowns as per 2001 census, irrespective of the populationcriteria.5.49 JNNURM is envisaged for implementation overa seven-year period starting from 2005 to 2012 witha tentative outlay of Rs 100000 crore, which includescontribution of Rs 50000 crore to be made by theStates and ULBs. Water supply and sanitation isaccorded priority under the programme and is likelyto receive 40% of plan funds. It is important to tapthe other sources like higher Central and State sectoroutlays, institutional financing, PPP, and externalassistance.