76537 INNOVATIONS IN DEVELOPMENT Karnataka Three Towns Pilot 24/7 Water Supply Karnataka Urban Water Sector Improvement Project 12 MINISTRY OF FINANCE Department of Economic Affairs THE WORLD BANK IN INDIA 2013 ISSUE 12 SUMMARY W ater from the tap 24 hours a day, Karnataka has now proved that 24/7 water seven days a week is a distant supply is indeed possible, affordable, and dream for almost all Indians. sustainable in urban areas. About 200,000 Even those fortunate enough to have a tap people in Belgaum, Gulbarga, and Hubli- receive water for a couple of hours a day at Dharwad are now getting continuous water most, and often only on some days a week. supply under the World Bank-supported Everyone spends large sums to get water— Karnataka Water Supply Improvement the rich install expensive tanks, pumps, and Project. The introduction of water meters filters, while the poor often do not have any and payment of tariffs based on water use water connections at all and have to queue has reduced citizens’ private expenses for up for hours at municipal standpipes, wait securing water, led to the generation of for tankers to supply them, or buy water from revenues for the municipal water service private sellers. While villages in Maharashtra, provider, and helped conserve water. The Punjab, and Uttarakhand are piloting 24/7 experience provides valuable lessons for water supply, there is widespread skepticism other cities and states that strive to improve that water can be provided continuously in water supply for their citizens. India’s urban areas. 2 MINISTRY OF FINANCE Department of Economic Affairs THE WORLD BANK IN INDIA KARNATAKA CONTEXT Urban Water Sector Improvement Project T he Government of Karnataka (GoK) An experienced private operator was engaged has been making significant efforts to under a Performance Based Management improve services for urban residents. In Contract to deliver 24/7 water supply to 2002, it adopted a policy on Urban Drinking these areas by undertaking the necessary Water and Sanitation, among other initiatives. improvements to the system through a The policy aimed to ensure that all households structured management and engineering willing to pay for services receive coverage, reform plan. The operator was to use best that minimum service levels are maintained, practices for pipe-laying and pipe-testing and operations are commercially and economically to establish a customer billing and customer viable, and that water resources are preserved. service center. Subsequently, the operator was to manage the system for an initial period of In 2004, GoK, in partnership with the World two years, ensuring that the quantity, quality Bank, launched the ambitious Karnataka Urban and pressure of water was maintained. The Water Sector Improvement Project (KUWASIP) operator brought considerable technical to initiate reforms in the water supply and expertise. sanitation sector and demonstrate that it is possible to provide urban dwellers with safe Revenue for the services was to be collected water supply at sufficient pressure for 24 hours by the municipal corporations based on tariffs a day, seven days a week - something no city set by urban local bodies using Government of in India was able to do at that time. In the Karnataka guidelines. Community participation process, authorities would learn to address the was envisaged through nongovernmental political, social and technical challenges that organizations, appropriate feedback would emerge in reaching and maintaining this mechanisms were set up, and a strategic level of service. information, education, and communication campaign was developed. Five areas in the three cities of Belgaum, Gulbarga and Hubli-Dharwad (called Table 1: 24x7 Water Supply Demonstration Zones “Demonstration Zones�) were selected for Demonstration Zone Approximate piloting 24/7 water supply. These areas could population covered be isolated hydraulically and included a cross- Belgaum (South) 39,988 section of consumers, many different types of housing, and a range of topographies. Belgaum (North) 39,550 Approximately 200,000 people, about 10 Hubli 53,810 percent of the population of each city, were Dharwad 37,739 involved (see table 1). Gulbarga 30,617 TOTAL 201,704 THE WORLD BANK IN INDIA 3 INNOVATIONS Preparation T where they were being squeezed out of shape he first task in the preparation phase was by the weight of the traffic plying on the road to determine the number of potential above. There was a similar challenge with consumers and their likely demand for the house consnections, all of which were water. In addition, the condition of the existing leaking or likely to leak once the mains were pipes and other assets was to be assessed, pressurized. followed by the hydraulic design of the new Based on field observations and computer system. This was the most difficult stage as analyses, the operator proposed to replace there was little information available. There the entire distribution network, as partial were no bulk water meters, no household replacement was not found to be technically meters, and nobody knew where the water was feasible. This full replacement uncovered all going. Guesstimates placed water losses at 40 the illegal connections, solved the challenge to 50 percent. of leaking house connections, and facilitated The operator took samples of the existing efficient operation and maintenance (O&M) of 15-to 20-year-old plastic PVC pipes and, the distribution network for years to come. having tested them in a laboratory, found that Implementation they would not be able to withstand higher pressures. The operator also found that many Once the Karnataka Urban Infrastructure pipes had been installed at too shallow a depth Development and Finance Corporation 4 MINISTRY OF FINANCE Department of Economic Affairs THE WORLD BANK IN INDIA KARNATAKA Urban Water Sector Improvement Project (KUIDFC) - the nodal agency for the project Between 2006 and 2007, the new water - had approved the investment plan, the distribution pipes were brought into service, and operator was able to hydraulically isolate the new household connections were made with demonstration zones, and install an all new high-quality links (ferrules) to the distribution pipe network, including service connections. network to avoid leakages. New meters were They also installed bulk and consumer water installed in all households and there was full meters, as well as devices to manage and metering of bulk water supply. Three types of monitor water quality, quantity, and pressure. In water connections were offered, in response addition, a billing and customer service system to the needs expressed by customers: a single was established along with a performance standalone tap in the front yard of the property, monitoring system. a direct connection to the internal plumping of the house, and a connection into the ground- Works were implemented either by directly level tank of the property. The Karnataka Urban procuring the material or through sub- Water Supply and Drainage Board (KUWSDB) contracting, with efficient quality control ensured the supply of the required quantity of standards. Competitive bids were selected, water from the reservoirs. after a thorough evaluation to meet the highest technical standards. Works were coordinated with other utilities to ensure that telephone connections, electricity THE WORLD BANK IN INDIA 5 supply etc. were not disturbed. It was also Criteria to pay for water were determined on ensured that water supply to other parts of the the basis of the study. They were as follows: city was not affected by these works; in fact, Households able to pay would be charged other areas also benefited from some of the based on the volume of water used, moving improvements that were implemented across away from the flat rate being charged earlier the city’s water supply system. regardless of the water consumed. Setting Water Tariffs The urban poor would receive subsidized water In the demonstration zones, all households, supply. The project’s “Pro-Poor Policy� identified including the poor, were offered a house the urban poor as those living in dwellings with connection, and all connections were metered. built-up area up to 600 square feet, regardless Before the project, households with registered of whether they lived in or outside a slum. connections paid a flat rate of Rs. 1,000 per year For these households, the normal one-time (Rs. 83 per month), but many households did connection deposit was waived and a lifeline not have connections and many connections supply of 8,000 liters per household per month were not registered. A study on affordability would be provided at a concessional rate (fixed and willingness to pay indicated that customers by the municipal corporations) of Rs. 48 per were willing to pay as much as Rs. 125 extra month. This covered about half the actual cost. per month to receive reliable 24/7 water. Cumbersome procedures requesting various 6 MINISTRY OF FINANCE Department of Economic Affairs THE WORLD BANK IN INDIA KARNATAKA Urban Water Sector Improvement Project documents were eliminated and ration cards that improvements in water supply would and similar ID cards were considered sufficient mean much higher tariffs. proof of residence to provide a connection. To To clarify people’s concerns, a Water Tariff strengthen the sense of ownership, households Awareness campaign was conducted by had to cover the cost of the water meter, in NGOs in the demonstration zones through installments. In the end, all households in newspapers, handouts, pamphlets and posters the demonstration zones opted for household in various languages (Kannada, Marathi connections, and public standposts were and Urdu). Door-to-door campaigns were essentially eliminated, contributing greatly to conducted, group consultations and focus reducing leakages. While the policy contained group discussions were held, as were meetings provisions for public water kiosks, in the end with elected representatives, the press, self- they were not needed. help-groups, and residents at both the ward Paying for water consumed and street level. Conscious of the difficulty of charging for water, In addition, a Core Committee headed by the project authorities sought to convince citizens Commissioner of the City Corporation was that they would benefit from the project. They constituted in each ULB to resolve issues. The also sought to establish the habit of paying Core Committee met weekly for a period of monthly water charges based on the quantity time to sort out issues as they emerged. of water consumed, and to dispel the notion THE WORLD BANK IN INDIA 7 IMPACTS T he demonstration areas have now had of collecting and carrying water were also water 24 hours, seven days a week for substantial; while no study on this has yet been over four years, proving that it is indeed conducted specifically on this project, a 2007 possible to provide continuous water supply study estimated the value of savings at about in urban areas in an affordable and sustainable $4 per month. manner. The project also proved that the poor are good customers and pay bills even more In interviews and focus group discussions, women indicated that reliable water supply promptly than higher-income customers allows them to take up work outside the when they are provided with reliable service. A house, benefiting them financially. Beneficiary number of benefits were recorded: surveys showed an increase in school Consumers are benefitting attendance in the demonstration zones. There is anecdotal evidence that property values in Households received continuous water supply the demonstration zones increased by 40-60 at the designed pressure, with water in taps percent. inside their homes, even in third-storey apartments. The water which came out of Water consumption has reduced the pipes was potable (additional chlorination Contrary to expectations, the provision of facilities were built to ensure that the water 24/7 water supply resulted in less water being was properly disinfected) and anecdotal reports consumed. People tended to conserve water suggest that health has improved. when they were sure of reliable supply and were A 2010 survey found that lower-income made aware of the value of water and cost of its households were paying much less than they provision. There were fewer leakages and tanks were paying earlier and for a far better service: overflowing, water taps were no longer left about 20 percent of the customers in Hubli open, and no extra water needed to be stored. and Belgaum, 24 percent in Dharwad, and 21 Initial investments in the distribution network percent in Gulbarga were paying the lifeline and efficient operations and maintenance also tariff of Rs. 48 per month. helped reduce water losses, with technical losses falling substantially, from an estimated Higher-income households saved on electricity 50 percent to 7 percent in the demonstration costs as pumping to water tanks on the roofs zones. of their houses was no longer necessary. The savings achieved in terms of the time and cost 8 MINISTRY OF FINANCE Department of Economic Affairs THE WORLD BANK IN INDIA KARNATAKA Urban Water Sector Improvement Project O&M costs are being covered project ended, over 80 percent of consumers In 2003, before the project began, the three were paying their bills, enabling the municipal participating urban local bodies recovered less corporations to recover O&M costs, along than half of the Operations and Maintenance with arrears. This was far more than in other (O&M) costs of their water supply systems. Indian cities, where, according to 2010 data The project aimed to cover 80 percent of from 28 cities, 60 percent of consumers were O&M costs by the end of the initial two-year paying their bills and 67 percent of O&M costs maintenance period and achieve a billing and were being recovered (data from the Ministry collection efficiency of at least 70 percent by of Urban Development’s first Service Level the end of the project. In March 2011, when the Benchmarking Data Book.) THE WORLD BANK IN INDIA 9 LESSONS Several important lessons were learned: the remaining 23 percent was lost because of In addition to proving that continuous leakages in the old network and in consumers’ water supply does not require more water, premises, as well as through illegal connections. and that social intermediation is critical It took several months to resolve the issue, for gaining support, the following lessons and volumetric tariffs had to be reduced. concerning tariffs were learnt: The agitation was not only a setback for the Consumers need time to switch to the Hubli Demonstration Zone but also sent the new system wrong signal to the Dharwad and Belgaum Demonstration Zones, delaying the introduction In the Hubli Demonstration Zone, continuous of water tariffs in these areas. pressurized water supply was provided from December 1, 2007, and charges based on The key lesson learnt was that when an the approved volumetric tariff were levied intermittent water supply system is converted from January 1, 2008, under instructions from into 24/7 water supply, consumers need the Hubli-Dharwad Municipal Corporation sufficient time to (i) gain confidence about the (HDMC), only a month after the new service reliability of the 24/7 supply, (ii) get an idea of started. Accordingly, the operator issued bills their monthly water charges, and to (iii) control to consumers in February 2008 for the water consumption and undertake any repairs in their consumed during January 2008. internal plumbing to reduce leakage. The hasty decision of HDMC to implement the Learning from the experience of Hubli- volumetric tariff for 24/7 water supply within a Dharwad, the City Corporation of Gulbarga month of beginning the service threw up some adopted a different approach: Consumers challenges. Higher-income consumers, who continued to be charged for several months at used larger quantities of water, were surprised the ULB’s prevailing water tariff, while receiving by the large amounts of their bills, which were dummy bills based on the volumetric tariff for much higher than the flat rate they were used 24/7 water supply. This enabled them to gain an to. idea about the quantity of water they consumed and their likely monthly charges. By the time Almost 700 consumers complained, arguing the new volumetric tariffs were introduced, that they had not actually consumed such consumers had been given sufficient time to high quantities of water. A detailed analysis adjust to the new system and the introduction was carried out, indicating that 77 percent of proceeded smoothly. the water billed was actually consumed, while 10 MINISTRY OF FINANCE Department of Economic Affairs THE WORLD BANK IN INDIA KARNATAKA Urban Water Sector Improvement Project Arrears should be de-linked from new GOING FORWARD charges The smooth implementation of the volumetric With the proven success of 24/7 water supply in tariff for 24/7 water supply in the Gulbarga the three demonstration zones, the Government Demonstration Zone was also due to the fact of Karnataka aims to extend service to other that the City Corporation of Gulbarga delinked zones in the three cities. Several other cities in the payment of arrears from that of new the state—among them Birur, Kadur, Mysore, charges, and started a fresh billing system. and Shimoga—have also made plans to expand This was wholeheartedly accepted by the provision. Cities elsewhere are also seeking to community. replicate the approach and have applied for support to the Ministry of Urban Development On the other hand, in the Belgaum and Hubli- under the national Jawaharlal Nehru National Dharwad Demonstration Zones, where the new Urban Renewal Mission (JNNURM). bills included old arrears, the charges were disputed by several consumers. Moreover, the arrears were collected by the private operator, and some did not trust that they would be passed on to the water utility. Gulbarga’s approach of starting a new billing system made it possible to take strong action against new defaulters. These were, however, few as consumers were generally satisfied with the improved services and found the new tariffs reasonable. THE WORLD BANK IN INDIA 11 KARNATAKA Urban Water Sector Improvement Project For more information contact Darpan Jain Managing Director Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) Raghava Neti Senior Infrastructure Specialist Design: www.digitatemedia.in The World Bank New Delhi MINISTRY OF FINANCE THE WORLD BANK IN INDIA Department of Economic Affairs