The UN has declared 2005-15 as “Water for Life” period. This means how to use available water and find out the alternative measures for future. This states the urgency to come out of thinking that water is a “free resource” on this planet as for millennia, this has been true. The population of human beings was well below the level the planet could support. But once the advancements of science and technology have enabled this race of Homo sapiens to weather the “vicissitudes of nature” at least to a greater extent than before, the population and standard of living have begun to rise. This has been particularly so over the last 300 years, starting with the Industrial revolution in the West. In case of India and China, the need of water is increasing with burgeoning population that needs more water for domestic consumption than ever. The crisis of water in the cities of India during summer season is the live example of such a situation. Apart from domestic consumption, water is very much needed for industrial and agricultural purposes. 

Water has become an essential and precious resource, one which human beings cannot do without. Therefore, there have been attempts by various local communities and the governments to get control of water and pressurize the rival community. A classic example of this is the battle for water in the Negev Desert and along the banks of the river Jordan between Israel and Palestine. Israel is basically a dry country and therefore,water is a scarce resource. Five million Israelis need the waters of the Jordan river to live on. This has been well understood by the Palestinians, who have tried to use this tool for political purposes. This has resulted in the Israeli Armed Forces keeping a tight control of the same. Back home, a similar type of activity has taken place on the commercial front, over the last two decades.

Once it was realized that “water is wealth” and “water is power”, many large water management companies have tried in various ways to exert control over the world’s fresh water resources. Here, the moves are not political—they are purely commercial. Various reports of international agencies hint at a level of greed and the attempts to create an oligarchy of sorts, in the management of water,

In India, water has been the subject of fierce local and regional disputes. There is a very clear historical perspective regarding this. Prior to Independence, 200 small kingdoms managed their local water issues. There was generally so much water around that nobody bothered about this.

With the advent of Independence, things changed somewhat, but slowly water was very much at the bottom of the agenda, as were natural resources in general. There was no question of management of natural resources or the environment .It was somehow assumed that it would “be there”. This state of affairs continued till the early and mid-60s, when irrigation suddenly came into focus, due to the Green Revolution. Then the mantra became ‘irrigation management’. Various task forces were set up, which basically focused on the building of large dams. Little was done to enhance the management of urban water. The strength of the civil society was too weak to raise the issue. There were hardly any Non-Governmental Organizations (NGOs) around. The question of any infrastructure work (other than pure construction) being given to the private sector did not exist. This was an era when even private industries were being regulated on a licensed basis.

This is the stage at which many developing countries, especially those of the Far East and Japan began to widen the gap between themselves and India. While India was quibbling about dam construction, countries like Malaysia, Korea and even the Philippines began to approach the private sector by offering various Government guarantees for the same. End user fees were still an issue, and many people in these countries still regarded water as a free public resource, but by the mid-‘80s, the management of water truly began.

And what about the developed countries? The US allowed the private sector to have greater involvement with infrastructure projects. Water was not an exception. But it was in Britain and France where the great private water management companies emerged, but water still continued to be regarded as a public resource.

Many cities, counties and townships are turning to giant conglomerates that promise to pick up the tab for renovating and/or operating outdated water utilities in exchange for a guaranteed profit under monopoly authority. These arrangements are called “build-own-transfer” or “build-own-operate” contracts.

When a local government cannot provide clean and safe water to its citizens, outside help is welcomed. But with large foreign-based multinational corporations increasingly acquiring the US utilities, there is concern that Americans might find themselves dependent on foreign ownership of water as they are on foreign oil. And critics of utility privatizationcharge that multinationals that win utility concessions sometimes transfer debt burdens from other subsidiaries to their utility divisions and then on to the utility customers.

Moreover, even the World Bank is singing the multinationals’ tune. A World Bank White Paper—“Private Capital in Water and Sanitation”—puts in writing the new emphasis of the World Bank and the International Monetary Fund (IMF) on utility privatization as a condition of badly needed financial assistance for developing countries. As critics have noted that these entities tend to favor government rather than private solutions, it is surprising that the Paper “Private Capital in Water and Sanitation” by the World Bank and the International Monetary Fund (IMF) asserts as follows:

”Private capital and initiative can help accomplish operational efficiency and investment objectives if two stringent requirements are met:

(1) Projects must generate revenues that cover operating costs and debt-service payments, and earn a competitive rate of return on equity, and

(2) Risks that are internal (for example, construction and operation) and external (for example, regulatory and foreign exchange) to a project must be identified and clearly allocated to the parties that are in the best position to mitigate them. With their own capital at risk, lenders and investors have strong financial incentives to ensure that a project is built on time and within budget, and is operationally efficient.”