Urban water supply: Smart solutions the way forward

By Abhaya Agarwal & Maansi shah

The seven-year programme Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was launched in 2005, for 65 mission cities, as one of the first interventions in urban infrastructure development, in which water supply and sewerage projects took precedence. With a wide-ranging agenda, it focussed on improving service delivery through increased accountability of the states and urban local bodies (ULBs). The JNNURM disbursements were reform-linked. But arising from pressures of the political economy, this approach was rescinded, and focus turned to progress on disbursement against target sanctions for projects. Service-level benchmarks were developed, but monitoring of progress was inadequate, limiting the overall impact.

The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) programme was launched in June 2015, casting a wider net of 500 mission cities, but reducing the number of reforms to be achieved. The disbursement of the Central Government’s grant funding is guided by the scheme formulae in which the latter instalments are conditional on achieving previous stage project milestones and utilisation of at least 70% of the previous tranche release. While these were linked to reform conditionality, the framework of linkage has been diluted with the pressure to reach financial disbursement targets against sanctioned projects.

The key learning from both schemes is that overarching reforms are difficult to accomplish all at once. So AMRUT later altered its approach from penalisation to incentivisation, with 10% of funds to be given on the basis of the credit-rating of ULBs. Weighting the reforms, professionalisation of municipal cadre, land titling law and policy for value capture finance were visualised to have far-reaching impact. But again, the progress on these reforms is primarily a self-certification validated by State-level committees, essentially diluting the robustness of the scheme. But unlike JNNURM where the Centre would appraise all the projects, AMRUT rightly stoked cooperative federalism by devolution of necessary power to the States and ULBs.

The recently announced five-year Jal Jeevan Mission-Urban (JJM-Urban) has subsumed the AMRUT Mission. It aims to provide water connections to all statutory towns and sewer connections to all AMRUT cities. The total outlay proposed for JJM(U) is Rs 2,87,000 crore which includes Rs 10,000 crore for continuing financial support to AMRUT Mission and will be disbursed in tranches on achieved outcome basis. Private partnership has been encouraged by mandating cities with a million-plus population to undertake PPP projects worth a minimum 10% of the allocated fund. Improved monitoring of progress through digital technology-based platform, and monitoring of beneficiary response are envisioned to support reform-linked fund disbursal.

Various challenges hinder the urban water infrastructure schemes: unplanned settlements and encroachments; loss of revenue due to incomplete metering and billing; distribution losses which account for a significant chunk of the non-revenue water; poor maintenance affecting the longevity of the distribution system; unviable groundwater dependency; high cost of water production due to distant sources.

Earlier schemes have also demonstrated that infrastructure development in silos will not yield the desired outcomes. Thus, JJM-U looks at a more ecosystem-centric approach with integration of water management into city-wide planning. It draws focus on sustainable urban drainage, lake rejuvenation, circular economy, rainwater harvesting and aquifer management.

Many challenges may be addressed by exploring decentralised solutions, in place of capital-intensive, centralised approaches. Rationalised pricing policy for self-sustenance, capacity-building for adequate utilisation of investments and maintenance of services, convergence and synergy with other schemes, alternative financing mechanisms are undeniably the way forward.

Abhaya Agarwal is Partner-Strategy and Transaction, Infrastructure practice, EY India. Maansi Shah is senior professional, Strategy and Transaction, EY