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by Kamini Meedeniya Vitarana, Ruk Rakaganno

In Colombo and some other towns in Sri Lanka, standposts supply free water to the poor living in tenements and shanties. The great service rendered to the poor of Colombo by these standposts is evident when we consider the fate of the poor in other Asian cities (as in Manila) which do not have standposts.

Roadside taps - a boon

Unfortunately, due to various reasons mostly prompted by the ADB as well, the National Water Supply and Drainage Board has decided to do away with these standposts as they are 'NRW'- Non Revenue Water and there is considerable waste due to careless and irresponsible acts by the public.

But the wastage from leaks in the system is much greater and accounts for 23% of the 35% non revenue component which contributes to loss of water and loss of revenue 4% due to meter errors; 4% from illegal connections, leaving only 4% unbilled water which is from standposts. Mr. Premkumar Fernando, DGM (Finance) of the NWSDB, states this in a paper to the Water in Asian Cities workshop in Manila 14-16th October. He also listed 10 points that if implemented could not only generate sufficient funds but also bring substantial benefits to the stakeholders. If these were done there would be no reason to privatize the supply of water to cities of Sri Lanka.

Then, one may ask why is it not happening now? The fact is, political interference in Government enterprises is killing the enterprise. First politicians feel that those Government corporations are the places to give job for the boys who help them during elections. These appointees feel they are above the law in the institution and do little work except at the behest of their political masters. The salary bill is thus unnecessarily inflated by persons doing little work. Scarce resources are also diverted to the politician's cronies. (An ADB consultant noted that when they were trying to repair the leaks in the system, men and materials were diverted to personal work in Colombo 7 and the project could not be successfully completed." This is happening not only in the National Water Supply and Drainage Board but also in many other Government corporations. For example it happened in the CTB making it non-viable and leading to its ultimate privatization.

The Ceylon Petroleum Corporation, the CEB all have this problem. All governments do this, since this is a democracy and if you want to get re-elected you must provide jobs for your supporters and what better place than big corporations? These corporations then become non-viable and liable for privatisation even to international companies.

This is the new imperialism, cleverly pushed by the money lenders and the incompetence of our own governments.

Change?

So how are we to change this system? Some might say, well this can only be done by privatizing. In fact some ofthe top management at NWSDB fed up with political interference and long government procedures for taking decisions, think so. The new Water and Sanitation Policy set out by the Ministry of Housing and Plantation Infrastructure, section 3.1 b says "the involvement of the private sector in water supply and sewerage services shall be sought.... from both international and national investors..." In fact this policy needs to be looked at closely since it has not been discussed at what is called stakeholder level at all.

But let us look at Cambodia in Phnom Penh in the water and sanitation sector is now fully autonomous under the Phnom Penh Water Supply Authority. It has been decided (by government too) that there will be no political interference. The authority gets external assistance from different donors/lenders - e.g. ADB, the World Bank the Government of France and Japan. They get strong support (not financial) from the Government. In getting the water supply to the poorer sections of the city they meet with and get the cooperation of the relevant community who have to see that the system and connections are not misused. The connections are given free, but the water has to be paid for - which is better than having to pay twenty times more from vendors.

They give incentives such as 10 times more salary and bonuses to their employees for good performance and have introduced penalties for bad performance.

In Sri Lanka the poor could be looked after by giving connections to those living in tenement gardens, as in Cambodia, free or at concessionary rates and organising standposts to shanties with community participation which would take responsibility for their proper use. Repairing defective meters and eliminating illicit connections and most important of all repairing the leaks and maintaining the pipes would make the whole financially viable.

It is necessary to give salaries in keeping with the times to attract the best management skills and incentives for good performance will provide motivation for committed service. In fact using the private sector managerial skills in our public enterprises and keeping political fingers out of them, except in the normal watchdog capacity of Government, seems to be the way which could pay for efficient water supply and sanitation for Sri Lanka and keeping this vital resource in our hands. The National Water Supply and Drainage Board which serves most of the cities and towns in Sri Lanka has all the infrastructure and expertise in place.

It would be a pity to lose this all to some multinational which will very likely invest the profits in another country. But this policy must be backed by the Government to be viable. A paper commissioned by the Public Services International Research Unit, University of Greenwich, London, Water in Public Hands shows that public sector water undertakings supply water and sanitation to the great majority of the population in developed countries.

It points out that except for UK, France and Spain (partly) all other EU countries and also in Japan and the USA, public sector service is the dominant mode of water supply. This, despite the fact that European companies dominate the water scene. It has also been shown that in that the UK and France where water supply has been privatized, the charges are higher and the unaccounted for water is also higher.

These companies mainly operate in the developing world as shown before. They or their subsidiaries, control also the construction, the chemicals, and the materials needed for this exercise. Prices invariably rise because, let it be remembered, private companies have shareholders who want profits. Privatized water concessions must also be given for a long term usually 20-30 years for a company to be interested. Even when the service is unsatisfactory it is virtually impossible to terminate these contracts because of the high legal costs.

Where there has been unsatisfactory performance and it has been terminated - as in Cochabamba in Bolivia where an uprising of the poor against unsatisfactory service made it necessary to terminate the contract - the State is sued by the company.

The poor performance of a Vivendi subsidiary, in Puerto Rico has resulted in the State having to provide subsidies. In fact with the bigger multi national companies, the government becomes helpless to control its own resources. In fact Sri Lanka's own Constitution fashioned in 1977, (clause 157) makes it extremely difficult to get back resources once sold to private companies.

There is another dangerous aspect to multinational companies coming into manage water. The World Trade Organisation (WTO) is trying to force countries to open up their water sector to global water corporations. This will then bring water under their General Agreement on Trade in Services (GATS). The WTO could then interfere with the work of governments. Once countries sign the GATS Agreement, WTO can enforce global trade rules and impose fines, restrictions and trade sanctions when companies are threatened. Let us beware before we get into this international quagmire with our most prized natural resource.

So far this article has considered the water supply and sanitation position, but there is another dangerous enterprise that is coming on strongly in competition for water.

This is the bottled water industry where private companies are gaining control of water sources for this hugely profitable industry. The international giants are there too in India, Indonesia and China where the markets are big. A close watch should be kept on the development of this industry and the threat to water resources in Sri Lanka too.

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