Pricing water right: The way ahead for Bengaluru

BWSSB is running at a loss, looking at the government for help prennially. The water bills and sanitary charges do not entirely fund its operations. However, the government seems to be serious about hiking the price of water this time.

Every morning, Lakshmi, a college student residing in a low-income area in Bellahalli village on the outskirts of Bengaluru, goes to a nearby ‘water ATM’— a reverse osmosis water dispenser system that provides potable drinking water— to buy drinking water. She has to pay Rs 5 per upto 20 litres of water.

Contrast this with a household in Bengaluru, where people pay a maximum of Rs 45 for 1,000 litres of water to Bangalore Water Supply and Sewerage Board (BWSSB) — India’s first water board formed in 1964 and the custodian of the city’s water supply.

BWSSB pumps water from reservoirs built 100 kms away on the Cauvery and Kabini rivers. People use this water for everything, including cooking, carwashing, and gardening.

This is the story of Bengaluru, where those who can afford to pay more ned up paying less for drinking water while people from lower economic strata have to pay more.

Safe drinking water is a basic human right that ensures better health and hygiene. Access to safe drinking water for all has been advocated in sustainable development goals drafted and advocated by the United Nations.

The government does recognise that water is a basic right. When the water problem hit the city in March this year, RO water plants dried up due to the drastic groundwater situation. Low-income areas, including slums, were the worst affected. Fights erupted among the waiting crowd when the tankers arrived.

Acknowledging the agony and unrest, the government started providing free water in such areas. The Bangalore Water Supply and Sewerage Board (BWSSB) augmented supplies in many areas with water tankers and RO water, while about 1,700 water tanks were installed in identified areas. Tankers filled the tanks, and people could collect water without crowds at their convenience.

Need for a price hike

While this is one side of the story, BWSSB’s balance sheet tells another—that of a company running at a loss, looking at the government for help prennially. The water bills and sanitary charges do not entirely fund its operations.

However, successive governments kept pushing the price hike proposals, fearing a public backlash. The last water tariff hike was in 2014.

In June 2023, BWSSB officials made a case for a water price hike by presenting the dire situation to Karnataka Deputy Chief Minister D K Shivakumar, who oversees Bengaluru. The BWSSB had then sought a 10 per cent hike in the water tariff for residential buildings and 15 per cent for commercial establishments.

The presentation revealed that the Board’s monthly revenue was Rs 110 crore, while its monthly expenditure was close to Rs 125 crore, and every electricity tariff hike added to the expense.

“We are lifting water and pumping it for more than 100 kilometres. About 55 per cent of the expenses are for electricity. Electricity price hikes are frequent, but there has been no water tariff hike for ten long years,” said M N Thippeswamy, retired BWSSB engineer-in-chief.

Thippeswamy pointed out that in the mid-80s, a provision was made to empower BWSSB to increase the water tariff with every hike in the power tariff without seeking the government’s permission. The BWSSB chairman could decide on it. However, this provision was rarely used, as price hikes are “politically sensitive” and anti-popular as well.

“Electricity bills, salaries for manpower, and other operational expenses will keep increasing. BWSSB has been at a loss for many years now. Hiking tariffs should be a regular exercise. A hike is required every year to match the growth in inflation,” he explained.

The coverage of the water and sewer network has widened, and power charges have increased. Maintenance, operations, etc., have increased. The BWSSB also has to spend money on water and sewage treatment. He added that there is a need for additional money, and the BWSSB cannot bank on the government forever.

“Losses in the system should be handled by charging extra for non-domestic, bulk and industrial users. If the company is not profitable, getting funds for future projects from national or international agencies will be difficult. They will look at BWSSB’s balance sheet,” explained Thippeswamy.

Preparing to bite the bullet?

The government seems to be serious about hiking the price this time. A few weeks ago, the deputy chief minister hinted at it, saying the BWSSB is incurring losses that must be covered.

Meanwhile, the BWSSB is also exploring other avenues of income generation and power consumption reduction.

“The price hike is the government’s decision. We are trying to augment the shortfall by exploring alternative sources of revenue. Selling treated water for construction purposes, taking up bio-CNG projects, selling the sludge from STPs, and minimising energy costs by going for green energy sources are some of the ideas,” Ram Prasath Manohar, Chairman of BWSSB, told DH.

He added that the BWSSB is exploring taking on projects in a private-public partnership mode to reduce expenses. Other reforms are also being taken up to reduce the cost of water.

“Unaccounted water was 40 per cent earlier; we have brought it down to 28-30 per cent. We target reducing it to 14 per cent and have already done it in many areas. The core city area has old pipelines. If these are replaced, the leakage will be further reduced,” added Manohar. Fixing water leakages can increase water availability and decrease the cost per MLD.

The BWSSB also wants to go for a pilot on smart metering. “After the pilot, we will implement it in commercial and industrial units. Domestic units will be the last to get it,” said Manohar.

It remains to be seen whether the government is ready to bite the bullet for the sake of BWSSB’s financial health while ensuring equitable water availability for vulnerable sections of society.