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LATEST NEWS UPDATES | Every drop of treated water counts -Manish Agarwal

Every drop of treated water counts -Manish Agarwal

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published Published on Sep 12, 2014   modified Modified on Sep 12, 2014
-The Hindu Business Line


To address the water crisis, recycling plants can work as PPPs and industry should switch to using such water

Some stark facts: India has 18 per cent of world's population with only 4 per cent of total usable water resources. Annual per capita availability of water has declined by 15 per cent in the past 10 years and is estimated to fall to as low as 1140 m3/year by 2050.

The situation could worsen across regions, with variations in distribution of rainfall, proximity to river basins and ground water table levels. Many states may reach water stress state (1700 m3/yr) by 2020 and water scarce state (1000 m3/yr) by 2025. Hence, there is a need for optimum management of existing water resources.

Alternative options

The National Commission on Integrated Water Development Plan suggests that the efficiency of surface water irrigation systems can improve from 35-40 per cent to around 60 per cent. For industrial and domestic users, more technology intensive solutions like desalination projects, industrial and municipal water recycling can be explored. The need to explore supply solutions is critical for industrial users, whose needs are met after meeting the requirements for drinking, irrigation and hydro power, in that order. For industrial users, certainty of supply is more important than water cost, as it consists of 0.2-1 per cent of total cost. Hence, technology-intensive options should be explored to cater to industrial demand. In water stressed states like Tamil Nadu, bulk water rates are already about INR 60/kl while water cost from a typical desalination plant would be in range of INR 50/kl.

Making it work

Desalination projects are primarily in the states of Tamil Nadu, Kerala and Gujarat, the majority being captive. In terms of waste water recycling, about 50 per cent of industrial sewage water generated goes untreated.

The key reason for this is the lack of a holistic framework for coordination and policy making across agencies. Under the Constitution, 'Water' is a State subject with Central Government involvement limited to formulating guidelines like National Water Policy and managing inter-state distribution conflicts.

However, the implementation of such guidelines rests with several agencies. For instance, the National Water Mission calls for overall efficiency improvement of 20 per cent in water use through various non-conventional methods. It states industries consuming significant water should focus on recycling; however, the percentage of water to be recycled is not mentioned. The responsibility of setting up such standards rests with Ministry of Environment & Forest (MoEF) and execution with state governments.

Many states have come up with water policy documents. However, the focus of such policies is on prioritisation, tariff setting, penalty and licensing and there is limited focus on putting together a framework to boost waste water treatment/ reuse, sea water desalination and water conservation.

There is also a need to enhance private participation in technology intensive methods of alternative sources like desalination, water treatment and recycling units. However, there is also a need to ensure that risks are adequately managed among private and public entities from a project finance perspective.

For projects to succeed, two key aspects need to be addressed: Re-prioritisation of alternate supply sources and pricing mechanism.

In brownfield developments, where long term demand for technology intensive solutions like desalination/recycling units is visible, but existing users are already being supplied water from various sources (rivers/ground water etc), there is a need for 'switching off' such sources and reprioritising them for domestic/irrigation use.

Prioritisation of desal/recycled water for industries and contractual flexibility to use earlier water sources as a variable quantity to meet additional demand (which cannot be met through the desal/recycling projects) need to be clearly established.

Pricing mechanism

Though industrial users may be willing to pay higher water tariffs for technology intensive supply solutions, there would still be a need to put in place measures make tariffs acceptable. Commercial blending of tariff is a possible option, especially in dedicated industrial/economic corridors with multiple suppliers. In such regions, rather than having differential pricing for technology intensive solutions and conventional sources, a blended tariff across board would help incentivise use of technology intensive sources.

Again, to make above solutions actually implementable there is a need for developing an integrated approach,.

Resolution of such aspects would go a long way in development of alternate water supply solutions and aid the bridging of the water demand supply gap. (With inputs from Dhruv Gadh)

The writers are with PwC India


The Hindu Business Line, 11 September, 2014, http://www.thehindubusinessline.com/opinion/every-drop-of-treated-water-counts/article6401675.ece?homepage=true


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