5) Description of health product/service offering: Which health issue are you addressing primarily?

The primary health issue addressed is the need for major policy changes in the provision of Water & Sanitation in urban India. Lack of access to clean water is the single most significant preventable health threat in the world and nowhere is this more obvious than for the urban poor in Asia. Not only are water borne diseases a leading contributor to morbidity and mortality but lost productivity due to illness is a major barrier to economic development. Furthermore, the task of gathering and transporting water alone imposes a tremendous cost on those least able to afford it, 10 to 20 hours of uncompensated time per week per family and most of that burden falls on women and young girls who should be in school.

The primary beneficiaries will be the urban poor (particularly women and children) although in most cases all income groups will benefit from having more efficient and more sustainable water supply and healthier communities.

Currently there is not a single city in all of India that provides safe (24/7) drinking water to more than a few percent of the population and none that adequately provide for the poor.

What we introduce are policy reforms that make water distribution systems more efficient and more affordable. This makes it more feasible to extend water lines into poor neighborhoods and to protect the quality of the water being distributed through those water lines. In the absence of a continuously pressurized (24/7)distribution system, for example, even supply lines filled with expensively treated water 20 hours per day will still be subject to intrusion of street runoff and raw sewage during the remaining 4 hours and this water will promptly contaminate the entire system. In order to prevent such an occurence, water systems throughout the U.S., Europe, Japan and neighboring South East Asia have made the necessary investments to assure 24/7 H2O for all.

6) Description of innovation: Our innovation is the building of a coalition that seeks change in two key areas:

1) We believe that the current system of providing water at artificially low prices encourages waste and actually penalizes the poor. Prices are too low to encourage conservation and revenues are insufficient to repair leaks and maintain the system, much less extend water mains into poor neighborhoods. As a consequence, the poor (the intended beneficiaries of generalized subsidies), wind up having to purchase water by the bucketfull from vendors and paying 10 to 20 times as much per liter as their wealthier neighbors.

2) We also believe that a continuous (24/7) water supply system is not only feasible but that properly managed it will actually cost less and require less water than the typical leaky and poory managed intermittent (1-4 hr/day) systems and provide the most cost effective means of providing safe potable water to the home.

While such policies are standard in industrialized countries and even in such cities as Phnom Penh, Colombo and Kampala, there are virtually no cities in India that currently recover even the operating and maintenance costs of providing water, none that provide piped water to more than 70% of their citizens, none that that provide continuous (24/7) water, and, consequently, none that provide water that is safe to drink without further treatment in the home.

Ironically, while cost has long been seen as the major barrier to improvement, few recognize the quantity of the water lost or that the cost of coping with poor quality intermittent water supply (ncluding: lost time, extra storage tanks, pumps and treatment sytems)is actually greater than the cost of providing a good sustainable 24/7 system.

What has kept the current problem and potential solution hidden from view is that the problems are largely out of sight for the rich and the solutions largely out of reach for the poor.

7) Operational model: We focus on working with the media, policy makers and local citizens groups to overcome the myths and taboos that have prevented the creation of safe sustainable and affordable water supply in most areas of India today.

The first of these myths is that the poor benefit from the massive water subsidies currently provided. In fact, few of the poor are even connected to the water lines and most of the current subsidies go to the higher income groups while the poor wind up buying water by the bucketful at prices 10 to 20 times higher than their wealthier neighbors. Furthermore, as typical water rates cover only a fraction of the cost of operation and maintenance, there is little incentive to conserve water and never sufficient revenue to pay for repairing leaks, much less for extending pipelines into poor neighborhoods.

The second myth is that intermittent water supply (typically 1 to 2 hours per day) is a necessary and efficient accommodation to poverty and water shortages. In fact, in most circumstances a well managed continuous (24/7) water supply system will cost less and require less water than the typical intermittent supply system. Furthermore, while no one needs water 24 hours per day, we all need for the water lines to be pressurized 24/7 in order to prevent street runoff and raw sewage from being sucked in through leaks during periods of zero or negative pressure.

In most cases it is not the shortage of water resources or even the shortage of money but the shortage of proper operation and maintenance that prevents the poor from receiving adequate water supplies in Indian cities today. Calcutta, for example, produces over 250 liters of treated water per capita per day but nearly half is wasted during distribution and the most of the rest is contaminated because of intermittent supply. By contrast, most European and South East Asian cities provide safe reliable 24/7 supply with only about 140 liters per capita per day.

8) Human resources: Srinivas Chary Vedala, Professor at the Administrative Staff College of India and Ashoka Fellow; Ashish Kundra, Deputy Director, Delhi Jal Board; Ashok Khosla, Founder Development Alternatives; David Foster, former Urban Environmental Advisor for USAID. Other key people include staff at the Hyderabad Water Supply & Sewerage Board (HWSSB) and advisors with Civil Society Organizations and other NGOs.

9) Key operational partnerships: Key Partnerships have been established with:

* The Administrative Staff College of India (ASCI) which serves as one of the primary training facilities for IAS (Indian Administrative Service) Officers,

* Hyderabad Water Supply & Sewerage Board (HWSSB,

* The Delhi Jal Board,

* Development Alternatives, and

* The Foundation for Change Management.

In addition, we are also collaborating closely with representatives of Thames Water and other private sector entities. This latter partnership requires a bit of a balancing act, however, because many of our supporters on the NGO side are still extremely wary of private sector participation in the water sector. (See SECTION # 15 Below.)

At this stage we propose to first establish our first demonstration projects in one or more cities and then seek private participation after the first "proof of concept" has been accomplished through public sector organizations.

While we are very open to private sector participation, our primary focus at this stage concerns management rather than ownership.

10) Financial Sustainability

          • Fees charged to clients?: Yes

          • How do you assure affordability?: Financial Sustainability is a key element of this proposal. Although we actively promote increasing water tariffs in order to improve operating efficiencies, we can demonstrate that the poor will greatly benefit from this change in policy. At present, the truly poor are rarely connected to the water systems and receive no benefit from the current generalized subsidies.

In place of the general subsidies, which only benefit those already connected to the lines, we will help institute targeted subsidies to defray connection costs in poor neighborhoods and “life line” rates to assure accessibility for all.

          • Earned incomes as a percentage of operating costs: 110

          • Other funding sources: The proposed projects will be self-sustaining (at least in terms of operation and maintenance costs) and will be able to use some of the "profits" to extend water lines into poor neighborhoods. Other necessary funds for capital expansion will come from property taxes and state and federal grants.

          • Strategy for long-term sustainability: The key to sustainability is to move from a vicious cycle (Poor Service - leading to - Poor Cost Recovery - Leading to Poor Maintenance - and back again to Poor Service) to a Virtuous Cycle ( Good 24/7 Service - leading to Good Cost Recovery - leading to Good Maintenance - and back again to sustainable Good Quality 24/7 Service.

11) Current and Future Impact

          • Total number of clients: NA

          • Clients in the past year: NA

          • Percentage of low-income clients: 70

          • Impact: There is no impact at this stage other than improving public awareness of the financial and technical feasibilty of achieving dramatic improvements in urban water service in India.

          • Overall "market": The policies we are recommending and about to demonstrate are applicable to virtually every city in India. In fact, throughout South Asia most cities have still failed to adopt the policies of cost recovery and 24/7 water and will, therefore, also provide a major market for these reforms.

12) Scaling up strategy

          • Stage of the initiative: Start Up stage.

          • Expansion plan: The first phase has largely consisted of gradually gaining political and community support through technical presentations and public outreach. The second phase, this year, involves developing actual demonstration projects in one or more cities to demonstrate benefits to both rich and poor communities. The final stage will involve promoting awareness for the demonstrations and replications in other cities. Each of these efforts throughout will be supported by benchmarking and comparison studies so that citizens in one community can compare their own progress with their counterparts in other cities.

13) Policy change: In addition to the two policy changes already mentioned (changing from generalized subsidies to targeted subsidies and promotion of 24/7 water supply}, the most significant policy change would be one requiring greater transparency in the costs and benefits of subsidies and in more clearly identifying the beneficiaries of those subsidies. Rajiv Gandhi once admitted that only 15% of the subsidies intended for the poor actually reached them. Many would suggest today that Rajiv was an optimist.

14) Origin of the initiative: This initiative grew out of a growing recognition that many of the policies (including generalized subsidies and intermittent supply) adopted in the name of the poor were actually very detrimental to the poor. The feasibility of 24/7 supply with full cost recovery has now been fully demonstrated in Phnom Penh and we now need to replicate this achievement throughout India.

Contact Information:
David  Foster
Senior Advisor
Development Alternatives
(NGO)
111/-Z, Kishangarh, Vasant Kunj, New Delhi
India
Tel: (91) 98992 95022
Fax: 91 11 2613 0817
Email: dafoster@aol.com
Website: www.devalt.org