In 1914, the Rajarshi of Cochin, Rama Varma XV set up a water treatment plant, – one of the oldest in South India – on the banks of the Periyar at Aluva with machinery imported from England; continuing the tradition of the erstwhile Dutch and Jewish communities who believed the waters to have medicinal properties.
Little did Rama Varma XV know that 110 years later, the Chowara water treatment plant he helped set up would eventually be placed under Jalanidhi, a World Bank-funded project implemented by the Kerala Rural Water Supply and Sanitation Agency accused of major scams, unscientific implementation and low fund utilisation.
Increasing trend of handing control of drinking water supply projects to foreign banks
This comes at the heels of an increasing trend towards handing over control of drinking water supply and management projects in Kerala to foreign banks, with the latest move being the proposed privatisation of the Kerala Water Authority for the cities of Kochi and Trivandrum through a Rs. 2,510 crore project funded majorly by the Asian Development Bank (ADB).
Since its first investments in India in 1986, the ADB has unleashed around Rs. 4.6 lakh crores through public sector loans, grants, and technical assistance in states such as Chhattisgarh, Madhya Pradesh, Assam, Gujarat, Sikkim and Kerala. While ADB-driven projects largely continued unhindered, in Kerala it faced stiff resistance.
In 2002, the ADB office in Trivandrum was vandalised by a leftist group and had its 7th floor office sprayed with engine oil and graffiti after the state government announced that it would accept “stringent” conditions set by the ADB for a loan. The next day, democratic groups formed a “Quit Kerala ADB” campaign voicing opposition. The movement saw groups of feminists, environmentalists, and scholars registering their protest including a dalit activist binding himself in chains in front of the secretariat. Feminist groups staged protests, claiming the night for their own, painting and dancing to express their anger and discontent.
While parliamentary left groups in the state initially joined the campaign, they were themselves instrumental in starting negotiations with groups such as the World Bank and the ADB in the 1980s. They now oversee the implementation of these schemes today.
In 2012, while hearing a case where the Kerala State Electricity Board cut off electricity to the Kerala Water Authority offices due to unpaid bills, the Kerala high court stated, “The government has to find a solution to the problems being faced by both bodies. We are of the view that the government should take a policy decision to privatise water supply in the state, which alone can solve the current problems”.
Fast forward to 2013, and a Water Protection Council was organised to protest the Kerala government’s order setting up the Kerala Drinking Water Supply Company Ltd. three months after Kerala was declared a “drought-affected state”.
The Council’s first convention saw V.S. Achuthanandan, the then leader of opposition from the CPI(M), alleging that the company, which was in the form of a Public-Private-Partnership, was another attempt to privatise the natural resources of the state while allowing private parties to set the price for water, disproportionately affecting marginalised communities and their access to water which the Supreme Court itself has declared a part of the Fundamental Right to Life. The proposed bottling plant company was later scrapped after public opposition.
Centre imposing decisions on states despite water being a ‘state subject’
In 2017, the Union Government asked the Kerala government to speed up privatisation of drinking water distribution in the cities of Kochi and Trivandrum as part of assurances promised to the ADB, bringing to question aspects of federalism in the sway of the Union imposing decisions on states despite water being a “state subject” in the seventh schedule of the Constitution.
The Rs. 2,510 crore project, out of which Rs.1,757 would be availed as an ADB loan at an annual interest rate of 2% with the state’s share of Rs. 753 crore, was intended to ‘develop’ the water distribution chains of the cities of Kochi and Trivandrum pledging to reduce water loss and revamp its pipes.
Also Read: The Privatisation of Water Is a Threat to Global Health
This decision has been met with uproar from organisations like the Kerala Water Authority Employees Union (CITU), Water Authority Staff Association (INTUC) and the Ernakulam District Residents Associations’ Apex Council who have criticised the lack of transparency with regards to details about the agreement, the calculation of drinking water loss and the differences in the tender conditions from the DPR. Controversies have also surrounded the tendering process alleging it to be “approved illegally”.
Despite Minister for Water Resources Roshy Augustine saying that there was no bid to privatise drinking water supply in Kochi, the move was finally confirmed on 20th August 2024 in a state-level empowered committee led by the Chief Secretary that the project would go ahead as planned, entrusting the city’s water distribution system to a foreign firm for the next 10 years. All of this while, elected representatives such as Ernakulam MLA T.J. Vinod said that the government had not informed him about the details of the project. Recently-elected MP of Ernakulam constituency, Hibi Eden, stated that he was opposed to attempts of privatising the Kerala Water Authority.
In 1991, the Government of India opened the power sector to private players, a sign that other critical public utility sectors would soon see the infiltration of privatisation, especially in the form of “Public Private Partnerships”(PPP). The previous two decades had seen the entry of multinational conglomerates like Suez-Degremont, Veolia, Coca-Cola, Pepsi, Tata, Reliance and many others in the business of water, sanitation, solid waste management, sewerage, bottled water, beverages, with many in the form of PPPs.
Microfinance Institutions (MFIs) like the World Bank and the ADB also began lending credit loans in the early 1990s and 2000s while attaching conditionalities to their loans that prescribe private sector participation in the water sector. If the state government is so insistent on entrusting drinking water resources to the ADB, one would believe that surely it has done its homework. But evidence suggests otherwise.
Ravi Raman writes about how the ADB’s involvement in Kerala through Urban Sustainable Development projects comprise larger systems of Centre-State relations, federalism, budget deficits and decreasing tax devolutions that have pushed even social democratic centre-left parties to embrace a neoliberal restructuring of government policies, especially public utilities, based on market principles and private participation.
This was followed with loan conditionalities that chipped away the state’s decision making freedom and sovereignty while amounting to a virtual takeover of the state’s domestic policies. Drinking water, for example, which was earlier distributed to the public free of charge came to be priced and commodified and the entire management of the system was handed over to local self-government institutions.
One such example is the World Bank-funded Jalanidhi project that focused on revamping water distribution in gram panchayats beginning in the year 2000. The language of “decentralisation”, with the devolution of responsibilities and power to raise funds, has been co-opted by these MFIs to increase pressure from external agencies on domestic policies leading to a skeletal “minimalist welfare state”.
ADB-conditionalities such as direct intervention in policy matters including the extension of the voluntary retirement scheme and the employee separation scheme have also been linked to these contracts.
Precedents of water privatisation in other countries paint a grim picture
While water privatisation is touted to lead to improvement in water delivery, services and stopping leakages, especially in cash-crunched water departments, the costs have seemingly outweighed its benefits. In the UK, Thatcher’s neoliberal austerity moves selling the water sector to private water and waste water firms led to underinvestment, increase of water borne diseases, profiteering, and rising costs with the average household bill for water and sewerage rising by 40 per cent.
Overburdened by debt, water companies in England today face a gloomy choice between submitting to lenders like the Bank of China or renationalisation. In Bolivia’s Cochabamba, a public uprising rose after a proposed World Bank-led water privatisation plan called for rate hikes and water cut-offs triggering “water wars” while in Buenos Aires and Manila similar moves led to tariff hikes and significant debt. South Africa’s Johannesburg saw poorer communities being cut off from water while in the US’s Atlanta it exacerbated racial disparities, disproportionately impacting African-American communities.
Moreover, the ADB has a questionable track record in India, to say the least. In Manipur, Kuki-Zo communities have raised alarm at the ADB and World Bank-led development of the Imphal Ring Road amidst an ongoing ethnic cleansing that could see a misappropriation of funds with the project also failing to take the consent of affected communities and conducting a detailed environment impact assessment.
In Gujarat’s Kutch, a Rs. 4 billion Coal Based Thermal Power plant has decimated the livelihoods of thousands of fishworkers while the ADB’s push for hydro-projects in India, particularly in the Himalayas, in the name of clean energy programme has had adverse environmental and social fallouts with a complete failure of its safeguard policies. It has pushed for expensive swanky metro projects, such as in Bangalore with cost overruns reaching up to 300%, while shifting policy away from strengthening other forms of public transport.
Beyond India, the ADB has been mired in other controversies. In the Philippines it has been involved in financing heavily polluting coal power plants disturbing local ecosystems and the livelihoods of fisherpeople while leading to the country having the highest costs of electricity in the world and reneging on the Paris 1.5°C climate goal.
It has been criticised for a $350 million “Access To Justice” programme in Pakistan that focused more on the police, judiciary and consultancies than on pro-poor and labour reforms while putting pressure on commercial exploitation in the Khirthar National Park in order to privatise the energy sector.
In Uzbekistan, the ADB’s pandemic aid was misused and the whistleblower silenced, while its Greater Mekong Subregion (GMS) initiative oversaw the forceful eviction of indigenous people, flooded elephant habitats and caused losses to fisheries while benefiting corporations and the urban elite. A highway project in Cambodia witnessed delayed compensation payments to those displaced while consultancy firms in Australia bagged glossy contracts.
Even a report in partnership with the ADB by “WaterAid” noted that the ADB had considerable leeway in deciding government policy regarding water distribution policies in Nepal and Bangladesh leading to inadequate focus on services reaching poorer sections of society.
For example, in four projects developed by the ADB in India, only 3% of the total project cost was allocated to slums and informal settlements while in the Madhya Pradesh scheme only 4 – 7% of the slum population was addressed. Water tariffs were also found to be as high as 6% of a poor family’s monthly income while subsidies benefitted households who were networked to the system and used more water.
A pattern of neocolonial corporate colonisation
This pattern of neocolonial corporate colonisation now flows into the plains of Kerala. The ADB has made this clear in statements like directly arguing for an increase in the prices of water or other such public utilities. An ADB report in collaboration with the Union Govt Ministry of Urban Development itself states that there is a need to “Phase out public taps that provide free water” (pg. 13) which is a clear assault on the right to access water, especially for Dalit and Adivasi communities as well as the urban poor.
The Kerala Water Resources Minister Roshy Augustine stated in 2013 that there were ongoing talks of phasing out the 1,62,556 public water taps in the state due to financial burdens and water leakages and instead called for household water connections under the Jal Jeevan Mission to provide access. Time and time again it has been shown that these household water connections systematically overlook informal settlements and poorer sections of society – which in India disproportionately fall on Bahujan communities.
In August 2024, the Kerala Water Authority announced a steep increase in water tariff rates ranging from 200% to 5000%.
The multi-headed “Hydra” of MFIs like the ADB continue reaching its tentacles across the stretch of the world, wielding massive amounts of capital to elbow governments and municipalities to open up to market-oriented reforms.
It resembles a more “humanitarian” East India Company with shareholders in Western capitalist countries who know so much better than the developing countries they sink their claws into, dictating government policies and directing capital flows from advanced capitalist economies like the United States and Japan.
All this while Western consultancy companies churn out fancy PPTs and DPRs to convince local caste elites and bureaucratic structures how tantalising are their proposals of “sustainable development.” They are funded by the masses of the public all the way from Latin America, Africa, South Asia and the Pacific islands.
Conglomerates masquerading as humanitarian assistance banks pave the way to uproot indigenous communities cloaking the veil of progressive language and mortgaging future generations of the Global South to foreign loans.
Water privatisation schemes systematically leave out Dalit colonies
Water is deeply intertwined with Caste in India. Nearly a century ago, Dr. B.R. Ambedkar marched to the Chawdar Tank of Mahad in defiance of oppressor-caste Hindus who forbid “untouchables” accessing water from the tanks, which was later purified by local Brahmins by drawing 108 pots of water from the Tank and then adding milk, curd, cow dung and cow urine in it, reciting mantras, offering flowers.
Caste Hindus later filed a case that the Tank was their “private property”. In a study of the World Bank-funded Jalanidhi project in Kerala that provided drinking water to panchayats who signed up for the scheme, scholars have noted that the scheme systematically left out Dalit colonies. Public taps were destroyed according to the rules of the Jalanidhi and many Dalit colonies who were not members were cut off from drinking water supply.
Later, a major scam was unearthed in 46 grama panchayats to the tune of crores where non-transparent selection of contractors was seen with many contractors being benamis of committee members themselves. These schemes weigh towards upper-caste and patriarchal interests consolidating Brahmanical social power over marginalised sections; mainly Dalit women.
Kerala would be better off if it looked at restructuring its expenses, strengthening the public sector, revamping Centre-state relations, harnessing migrant remittances, plugging brain-drain, cracking down on tax evasion, keeping a check on resource accumulation and investing in resources through redistribution while not hollowing out its public sector and losing sovereignty to a boardroom 4,831 kms away in Manila.
Burdening the state with foreign loans with opaque financial rules
Regardless of what follows, if Rama Varma XV was around today it would be quite a sight to try and explain that his palace’s taps would now be controlled from an office in the Philippines with American and Japanese businessmen deciding over how his kingdom’s finances would have to be spent.
A former European colony, Cochin now sees itself being courted by MFIs, with pressure from the Union government, to allow for austerity measures and foreign control over such a resource as water, as kickback to unlock development aid, especially when the two major donors of the ADB, Japan and the United States, have had extensive influence over lending, policy and staffing decisions.
By driving the state into foreign loans with opaque financial rules all modelled to fit India’s turn towards the neoliberalisation of its economy, Kerala risks running into reversion of whatever remains of the Kerala model of social development, but more fundamentally, risks altering the state’s socio-political trajectory especially as the NDA led by the Hindu Nationalist BJP’s vote share reaches historic highs in the state.
The decimation of public services under a secular-socialist political dispensation in a country that already sees the intertwining of Hindutva and neoliberalisation should be a cause of concern. If this is the path taken by a relatively progressive state led by a party that regularly defends the Constitution amidst an impending assault from the Hindu Right, it stands to blemish its own credentials to put people before profits.
In Chennai, the CPI(M) staged a walkout with the CPI and the VCK at the Greater Chennai Corporation opposing the privatisation of solid waste management, despite the former being at the forefront of privatising Kochi’s water supply.
India’s slide towards a majoritarian nationalism, led by a paramilitary organisation inspired by European fascism, seeks to fully integrate itself with global capital through rapid liberalisation of the economy, urgently necessitating the formation of a counter-narrative. With the latest move, Kerala walks down a costly, gloomy road that will be hard to return from and blurs the lines between the electoral choices that are put up for vote.
Callistine Lewis, a Kochi-native, is a student of Conflict and Peace Studies at Jamia Milia Islamia and studies coastal fishing communities and the impact of multinational organisations and development projects.