There is tremendous latent opportunity in India's water and wastewater management sector.
India is urbanising at, what a Union Minister has termed, a very 'dramatic' clip. It today has 50 cities with a population of over one million. As per the 2011 Census, the total number of cities and towns in the country had increased to 7,936 from 5,161 in 2001.
Presently, 31 per cent of India's population lives in urban areas. This figure is expected to double to 60 per cent by 2050. As per data compiled by the UN, of the world's 20 fastest-growing cities with 5 million residents, four are located in India, which is next only to China's ten cities. And GDP growth rate is expected to come in at 7 per cent (or above), that presently makes India the world's fastest-growing economy. And lest we forget, the South Asian country is also expected to displace its largest neighbour as the world's most populous nation by 2022.
According to data from the Ministry of Water Resources, 18 per cent of the world's population lives in India. However, the country has barely 4 per cent of the total usable water resources. The data further reveals that the annual per capita availability of water has notably decreased from 1,816 cubic metres in the year 2001 to 1,545 cubic metres in 2011.
Simultaneously, a significant number of Indians lack access to safe drinking water. The World Bank estimates that 21 per cent of communicable diseases in India are due to unsafe water and lack of hygiene.
The country's agricultural sector utilises around 79 per cent of the available freshwater supply even as it wastes a substantial part of the resource. The consumption of the commodity by domestic users is around 6 per cent and industry 5 per cent. By 2030, the demand for domestic water is expected to double to 108 billion cubic metres, while industrial demand will likely quadruple to 196 billion cubic metres, pushing overall demand growth close to 3 per cent per annum.
It is not that this challenge is unique to India. Most countries the world over are confronted with it in varying degrees. However, as H Balasubramaniam, Managing Director, Xylem India, noted in his 2014 article 'Treating India's Wastewater: Why inaction is no longer an option' in the UK newspaper The Guardian, 'Whether in California or Zhejiang, China, all regions of the world are grappling with often-severe cases of water scarcity. This is a hard nut to crack even in relatively wealthy, developed countries. But in developing countries that lack basic infrastructure, inadequate financial resources combine with rapid urbanisation and increased industrialisation to create crisis. Nowhere are these challenges more evident than in India.'
A highly critical Dr Suresh Kumar Rohilla, Programme Director, Water Management, at the New Delhi-based think-tank Centre for Science and Environment (CSE) opines, 'One of the major issues is that of the widening demand-supply gap in the water sector as well as treatment of wastewater. There is also the question of efficiency, effectiveness and sustainability about the efforts being made currently. And in terms of solutions, there is a total disconnect between technological solutions, society and economic costs.' Rohilla feels that this lack of coordination has resulted in a consumer being reduced to a mere subscriber number.
As the nodal agency for water in the country, the Ministry of Water Resources (MOWR) provides policy formulation to infrastructure support. Other than MOWR, other departments active in different aspects of water management include the Ministries of Agriculture, Power, Environment & Forests, Rural Development, Industry and Urban Development, Central Pollution Control Board (CPCB), and Indian Council of Agricultural Research (ICAR).
Opportunity despite obstacles
Saibal Ghosh, COO, Suez India succinctly emphasises, 'Intense urbanisation, growing industrialisation and rising living standards have all led to an increased pressure on resources in India. With a population of over a billion, ensuring reliable, sustainable safe drinking water supply and sanitation continues to be a challenge.' So much so, that from being 'water-stressed' India may well be on its way to becoming a 'water-scare' country.
A 2015 study by an Indian consulting firm in water and wastewater management EA Water warns that the country is set to become water scarce by 2025 due to demand-supply mismatch. 'India's demand for water is expected to exceed all current sources of supply and the country is set to become a water-scarce country by 2025,' says the report. Nearly 70 per cent of the country's irrigation and 80 per cent of domestic water use comes from groundwater, which is rapidly getting depleted.
The report, however, goes on to add that the sector is expected to see investment of $13 billion from overseas players in the next few years. Overseas players from Canada, Israel, Germany, Italy, US, China and Belgium see a lucrative investment opportunity in the domestic water sector. Consequently, the industry is expected to receive Rs 18,000 crore in inflows over the next three years.
In 2014, business information provider Global Water Intelligence (GWI), identified India as one of the top four markets in global water treatment with Brazil, China and the US. The rapid pace of industrialisation coupled with population and economic growth, will require reliable supplies of municipal and industrial water.
India is one of the biggest markets in size and growth rate, but among the top markets, its volume of capex is the lowest. This again suggests that the country has enormous untapped growth potential. It, therefore, offers ample opportunities for firms engaged in areas as diverse as wastewater and sewage treatment, water technology, desalination, engineering and environmental consulting.
The private sector's role
Although the water sector in India shows a lot of potential, several factors have inhibited its expansion. Experts have long cited poor quality of water and wastewater infrastructure and need for reforms in the sector. The Planning Commission has allocated $26.5 billion in the 2012-17 Plan to provide safe water to all urban and rural Indians. Wastewater management has been accorded high priority in the 2012 National Water Policy, which also encourages water reuse.
In 2016, the National Institution for Transforming India (NITI) Aayog, which has replaced the Planning Commission, launched the Urban Management Programme on capacity building of officials of state governments and urban local bodies - among other areas - water, wastewater and solid waste management. This initiative of NITI in partnership with Singapore Cooperation Enterprise (SCE) and Temasek Foundation Singapore provides a platform to state governments and urban local bodies to share the challenges being faced in urban transformation in these key areas and to evolve and design efficient solutions to some of these challenges through partnership with sector experts from Singapore. Tamil Nadu, Andhra Pradesh, Maharashtra, Gujarat, Uttar Pradesh, Delhi and Assam are participating in this initiative.
Leading global and Indian water companies such as Suez Environment, Veolia Water, GE BetzDearborn, Xylem, Nalco Water and VA Tech Wabag are today participating in several high-value projects.
Asserts Suez's Gosh, 'We believe that India's water sector will grow significantly, with steady participation from private operators. With years of experience working with municipal corporations, we have solid understanding of the market needs and the ability to provide sustainable solutions based on excellent customer service and commercial efficiency.
We are confident that with this experience, we will be able to provide smarter and sustainable water solutions.'
Players like Suez are keen to participate in ambitious government initiatives like the Rs.20,000 crore Namami Gange Programme, which seeks to stop discharge of untreated sewage and wastewater from 118 of the 222 towns and cities along India's holiest river. The Supreme Court has assigned the National Green Tribunal to enforce water quality statutes on industries along the 1,600-mile-long river and its tributaries.
Similarly, Nagpur-based Vishvaraj Infrastructure sees tremendous opportunity in reuse of treated water by industry provided the government properly incentivises it. The company's Chairman and Managing Director, Arun Lakhani suggests, 'Industrial water needs to be priced in such a way that buying treated water becomes more attractive. Without such a policy in place, it will be difficult for industry to justify buying treated water in lieu of cheaper freshwater.'
The private sector is expected to play an important role in improving the state of water and sanitation services. In a sector that has been traditionally been owned and operated by the government, several regulatory reforms have been undertaken. Various models of funding such as public-private partnership (PPP), engineering, procurement and construction (EPC) and hybrid annuity model (HAM) are also being encouraged in a bid to attract private sector participation.
Meanwhile, Maharashtra is fast developing as a hub for the country's water sector. Over 12 international firms have already established design and engineering centers in Mumbai and Pune. An estimated 1,200 players dealing in water and wastewater, are provide services to small and medium sector enterprises across India.
Lucknow adopts online water supply network
Taking a cue from Mumbai and Delhi, Uttar Pradesh's capital Lucknow has also adopted a supervisory control and data acquisition (SCADA) system to monitor the city's water infrastructure earlier this year. The city administration has identified 15,000 houses and seven wards for installation of special water meters.
Along with such meters, 250 sensors will be installed in areas covered by the SCADA system. Once the system is in place, all households will receive 24x7 water supply, and their total consumption will be recorded. Water charges will be calculated based on usage. The water supply network management system will not only monitor water consumed by each household but will also send out alerts on possible leakages.
Additionally, the system will also keep the city corporation informed about improper distribution and water scarcity in particular wards. Since the system is Internet-based, any information is just a click away on a real-time basis. This is expected to not only enable checking of unaccounted wastage of water, but also maintain stable supply during all seasons.
Jalgaon maps water infrastructure using space tech
Following alarming revelations thrown up by an emergency review of urban town water supply schemes by the Maharashtra government, the Jalgaon Municipal Council (JMC) proactively invited tenders for a technical and commercial audit of its water supply systems. The idea behind the move was to curb heavy loss of water due to technical issues, theft and illegal connections. This included carrying out consumer surveys, water audit, energy audit, provision and installation of flow meters, geographic information system (GIS) development and mapping, hydraulic modelling, and computerised water billing and collection system. Nagpur-based GIS and engineering solutions firm ADCC Infocad provided high-resolution satellite imagery for digital data extraction. A door-to-door survey was also conducted to obtain details of properties.
The survey data helped JMC in hydraulic modelling, water audit, and demand supply analysis. Several improvements have been envisaged for improving the service levels to consumers of Jalgaon, over the next 30 years.
Suez rolls out water-on-demand project in New Delhi
Started in 2013, the Malviya Nagar Water Services Contract with Delhi Jal Board is an integrated water-supply improvement programme for 40,000 connections in New Delhi's Malviya Nagar. The objective of this PPP project is to enhnace water supply, reduce wastage, improve service and increase revenue. To achieve these targets, Suez defined an effective action plan, integrating forecasts and realistic objectives to help optimize both capex and opex, created an accurate database of all assets and customers by linking it through GIS, detected leaks through helium leak detection technique and set up a 24x7 call center for prompt redressal of consumer grievances. In four years, the project has several milestones to its credit. A 20 per cent increase has been registered in the number of connections, 90 per cent increase in billing and 400 per cent increase in revenue. Replacing house service connections with leak-proof HDPE/DI saddles has resulted in a significant decline in complaints pertaining to water contamination. Additionally, decommissioning of tubewells in the area has helped save nearly 3-lakh kV in energy consumption.
MP's first water plant in Sehore
Xylem India is supplying advanced wastewater treatment technology to the first-ever sewage treatment plant in Sehore, Madhya Pradesh. The plant, which is expected to be operational by August 2018, is being developed to accommodate the anticipated rapid industrial growth in Sehore. The construction of the plant assumes even more significance after a 2015 study revealed that river stretches in the central Indian state had some of the highest rates of pollution. Xylem's contract includes designing the treatment process, supplying and installing all treatment technology, and commissioning the plant. The treatment technology will include the Sanitaire ICEAS Sequential Batch Reactor (SBR) system, diffusers, decanters, and control and instrumentation technology. Nearly one lakh residents of Sehore are expected to benefit once the plant becomes operational.
- Manish Pant