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Urban Water Supply & Sanitation

Sector Overview and Challenges

More than 90% of the urban population has access to drinking water, and more than 60% of the population has access to basic sanitation. However, access to reliable, sustainable, and affordable water supply and sanitation (WSS) service is lagging behind. Are the Services Reliable? No Indian city receives piped water 24 hours a day, 7 days a week. Piped water is never distributed for more than a few hours per day, regardless of the quantity available. Raw sewage often overflows into open drains. Are the Services Technically and Financially Sustainable? Less than 50% urban population has access to piped water. The Non Revenue Water (NRW: due to leakages, unauthorized connections, billing and collection inefficiencies, etc.) is huge, estimated between 40-70% of the water distributed. Operations and maintenance cost recovery through user charges is hardly 30-40%. Most urban operations survive on large operating subsidies and capital grants.

Are the Services Environmentally Sustainable? Water quality has deteriorated in most receiving bodies and in shallow groundwater as a result of uncontrolled discharge of raw domestic and industrial waste-water. Are the Services Affordable? Most households, forced to cope with poor quality water supply and sanitation service, spend time and money on expensive and unsafe substitutes, costing much higher than their monthly water bills. The inefficiencies in services and costs are passed on to customers, with the poor suffering the most.

Poor managerial and financial autonomy, limited accountability, weak cost recovery, perverse incentives and limited capacity has led to poor services to customers across the country. Urban India is at the bottom of most international measures of performance. The major challenges are:

  • Creating consensus on sector governance and institutional arrangements;
  • Developing and testing service provider models that have characteristics of well run public companies for different market segments (large/small);
  • Improving financial sustainability of providers (commercial, energy, Non Revenue Water);
  • Professionalizing the WSS sector.

Simply creating infrastructure (normally focusing on augmentation but neglecting the distribution network) and not addressing management of service does not lead to sustainable services. Further, the easy access to financing coupled with overlapping responsibility of policy making, planning, financing, implementation, maintenance and regulation, generally vested in the State Engineering Department, results in lack of incentive for accountable and efficient services. Hardly any State has a well-defined WSS Service Improvement Program supported by sound sector policies and institutional development plan.

Government Programs and Priorities

A number of programs have been launched to increase ‘access’ to WSS ‘infrastructure’, including the centrally supported Accelerated Urban WSS Program and recent programs like Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and the Urban Infrastructure Development Scheme for Small and Medium Towns (IDSSMT). The seven year JNNURM program started in November 2005 and provides up to 80% grant financing to participating cities, with grant component smaller in the larger cities at 50%. The WSS sector has been a big beneficiary of the JNNURM program with more than 60% of total funds allocated for water and sanitation infrastructure. The Ministry of Urban Development (MoUD) also launched the National Urban Sanitation Policy (NUSP) in 2008 with the goal of making all Indian cities totally healthy and sanitized. The policy, for the first time articulated the importance of total sanitation, the need for integrated and pro poor city wide sanitation planning, with attention to operations and maintenance and achievement of outcomes. It is mandated that all states need to develop state sanitation strategies by 2011 and cities to develop city sanitation plans by 2011. To raise awareness and promote competition amongst cities, the MoUD undertook a Sanitation Rating of 423 Class I cities in 2010 and, along with bilateral donors, is supporting the preparation of City Sanitation Plans (CSPs) in 140 cities. The city sanitation planning "process" is intended to help cities articulate their sanitation requirements in an integrated manner, addressing the total cycle of sanitation (access, collection, conveyance and treatment/disposal), while also making choices that are compatible with the technical and financial capacity of the city.
While funding infrastructure creation and promoting institutional improvements, these programs are still work-in-progress and do not provide strong incentives for improving reliable and sustainable services to the beneficiary population. Hardly any State has a well-defined WSS Policy and Institutional Development Program. The true challenge is not only to increase access to infrastructure but to increase access to reliable, sustainable, and affordable services.  

World Bank Support

1. Recently Closed/On-going Projects

(i) Karnataka Urban Water Supply Improvement Project (KUWASIP): The Bank’s lending has been limited, with only one dedicated urban water project, the KWASIP which closed recently in March 2011. Benefiting about 180,000 people, its impact has been significant, demonstrating that continuous 24/7 water supply in urban India is possible, and that customers are willing to pay for, and appreciate such a model. It is found that this transformational intervention is leading to increased demand for such services around the country.

(ii) National Ganga River Basin Authority (NGRBA) Project: This recently approved $1Bn project (including some $800m for wastewater investments and service provider capacity building) provides an opportunity to address sanitation issues in urban areas along the main stem of the Ganges through an integrated set of actions, which will include investments in sewers, sewage treatment, solid waste management, accompanied by IEC to encourage behavior changes. Improving capacity of service providers will be an important feature of the project to enhance the likelihood of sustainability. Sanitation is of growing importance to urban areas and the project includes connecting households to sewers so that the benefits of cleaning the Ganges are mirrored by improvements in the urban environment felt by householders in the project cities.

2. Proposed Projects: In addition to the above projects, the Bank has received requests for the following projects, which are in initial stages of discussion:

(i) Delhi National Capital Region Project includes possible support for reform of the water sector in the National Capital Territory Delhi, and subsequent support to the Delhi Jal Board (DJB), the City’s water provider.
(ii) Shimla WSS Project where discussions with client have explored changing the focus from an initial request for bulk water supply to test out an integrated urban management project comprising water supply, sanitation, solid waste and urban transport.
(iii) UP DPL where a sector reform DPL is being discussed to address the institutional and financial dysfunction in the UP urban water and sanitation sector. The initial focus would be on the main cities which will participate in the Ganges project.

Research - Recent Analytical Work

(i) ‘India Water Supply and Sanitation – Bridging the Gap Between Infrastructure and Service’, World Bank 2006. (A major sector review identifying key challenges and providing policy and institutional recommendations).
(ii) ‘India - Improving Urban Water Supply and Sanitation Service Provision: Lessons from Business Plans for Maharashtra, Rajasthan, Haryana, and International Good Practices’ (forthcoming 2011).
(Preparation of State specific comprehensive urban water and sanitation business plans towards ensuring the universal access to reliable, sustainable and affordable water and sanitation services).


Updated: September 2011




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