Sunita Narain: Sustainable cooperation?

DOWN TO EARTH

Under the Millennium Declaration Goals (MDG) of the United Nations (UN), it has been agreed to halve, by 2015, the number of people without access to safe drinking water. The Johannesburg Plan of Implementation "" agreed at the World Summit on Sustainable Development "" has added the global sanitation goal.

All this has meant that the UN is busy drawing up strategies for meeting this massive goal. It has been estimated that achieving the target would require providing access to drinking water to an additional 1.6 billion people by 2015.

The crisis involves the poorest; more than four out of five people without access to drinking water live in rural areas of the world.

Furthermore, these estimates do not even begin to understand the crisis of quality of the drinking water source, which is increasingly contaminated with sewage, industrial waste or underground toxins like arsenic or fluoride "" an issue we in India understand all too well.

The UN estimates that roughly $ 26 billion will be needed just to meet the water goal over the next 11 years. How then will these targets be met? Till about a year ago, when these targets were set, the expectation was that the private sector would provide the key to reform. But now, the reality seems to be sinking in.

The progress report of the UN secretary-general presented to the Commission on Sustainable Development in April admits that private investment in the poorest regions of the world has been "virtually non-existent". Over 90 per cent of the business has gone to the richer east Asia, Pacific and Latin America. But that does not mean that the poor have benefited.

The secretary-general's report says that in Latin America "privatisation generally failed to take the interests of the poor into account with regard to the affordability of service and access to connections".

Why am I not surprised? For the past many months, I have argued that the private sector will not invest in water and sanitation services in the poor regions of the world. I have argued this simply because the water business is not altruistic, the private sector will invest only if there is money to be made.

It is evident that on the one hand, the poor cannot pay. On the other hand, the well-to-do middle-class, used to subsidy in the name of the poor, will not pay for the "true" cost of water and sewage services.

Therefore, the private sector will only be interested in making a fast buck, based on concessions it can receive from the state. For instance, cheap or free groundwater that it can bottle and sell to the rich as drinking water; water or sewage treatment plants that it can run as contracts from the state or under Enron-type guarantees.

Worse, because the real costs are in taking back the sewage and treating it, private business will avoid it, skimming off profits by supplying water. This will leave the public sector utility to take back the sewage, and now with even less money on hand. With its water business gone, it will have no option but to dispose it untreated in waterways, deepening the quality crisis.

I think it is quite obvious that we need to get beyond this rather-simplistic debate on the private sector's involvement in water and sanitation services. The answers will be complicated and diverse.

But most of all, the answers will demand that government plays an effective role in providing the institutional and legal framework for service providers to work. It is not about water, but about governance.

I would argue the following: ensure water is a basic human right through a provision of a certain daily quota of free or subsidised water. Then charge "" price the water and sanitation services "" and recover the costs by billing the users based on the quantity consumed.

Once the water use is metered and cost recovery is proposed, the role of the service providers and their capacity to be efficient in providing for the rich and the poor can be considered and legislated.

But just because the cost is paid does not mean that the private sector will be seduced into supplying water. The question still is whether the middle-classes of the developing world will be able to pay for the increasing costs of water treatment (increasing pollution means more expense to clean up) and the costs of the modern pipe- and treatment plant-based sewage disposal. I suspect not.

Therefore, the big issue is how technology costs of water distribution and sewage disposal can be reduced. That's when innovative solutions will have to be found. By involving the small-scale water service providers who can cut costs and work efficiently to provide for the poor.

By reducing water consumption "" 80 per cent of total water used in houses leaves as waste. By finding technologies that are far more cost effective in treating sewage. Or by ensuring that the drinking water source is not polluted so that the cost of treatment is reduced.

This and much more will need to be done to meet the goal of drinking water for all. There are no quick-fix solutions like the private sector in this game.