In a post here at Green Inc. last week, I cited a recent Grail Research report suggesting that poor pricing for water services — along with increased industrialization and agricultural irrigation — will contribute to critical shortages in India in years to come. I included a very brief comparison of water tariffs in different cities — although those comparisons did not reflect what is known to economists as the purchasing power parity — the rate at which the currency of one country needs to be converted into that of a second country to represent the same volume of goods and services.
Updated and expanded comparisons appear in the table below. Inclusion of purchasing power parity lends credence to the notion — held by Grail Research, the World Bank, the World Resources Institute and others — that Indian water tariffs, as they stand, are unlikely to sustain a sound public water infrastructure.
|Tariff per cubic meter of water, in U.S. dollars, adjusted for purchasing power parity, for various cities|
|Addis Ababa, Ethiopia||$0.77|
|Cape Town, South Africa||$2.77|
|Note: Figures derived by multiplying the tariff per cubic meter in U.S. dollars by the exchange rate as of July 1, 2008, and dividing by the 2005 purchasing power parity rate.Sources: World Bank/IBNET; Oanda.com; WHO/CHOICE;|
But pricing comparisons don’t tell the whole story, particularly in India. Large segments of the population don’t have access to piped-in water, according to a July 2006 World Bank report, and are forced to buy it from water vendors at exorbitant prices. Other problems include the corruption and politicization of water access. In its Global Corruption Report for 2008, Transparency International, a government corruption watchdog group, noted that 40 percent of water customers in India “had made multiple small payments in the previous six months to falsify meter readings so as to lower their bills.” Customers also reported that they had “paid bribes to speed up repair work (33 percent of respondents) or expedite new water and sanitation connections (12 percent of respondents).”
Poor governance, discussed in the Grail Report, is also cited by Alexander Danilenko, the senior water and sanitation specialist for the World Bank. “There are very few water companies, per se, in India, just water departments in municipalities,” Mr. Danilenko said. “The latter are busy with other municipal issues, making water a last priority, as it is still running. “Good or bad, it is a separate issue,” he added. “And people’s perception of good services has shifted, as they are used to having water only a few hours a day or so.”