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DEVELOPMENT: ‘Water Valued Only When Priced’

Frances Suselo - Asia Water Wire*

BANGKOK , Feb 14 2006 (IPS) - Apichart Anukularmphai would rather conceded the title of ‘world’s champion rice exporter’ to Vietnam than to his own country Thailand. This, he says, is because Thailand is actually giving away its water for free every time it sells its rice.

“Just to produce 10 tonnes of rice, Thai farmers would need 3,000 cubic metres of water,” explains the chairman of the South-east Asia technical committee of the Global Water Partnership, which groups together multilateral and government agencies, companies and institutions working on water management.

“This cost (of water) is not being taken into consideration when we export our rice.” Thailand, among the world’s top exporters of rice, sold 8.5 million tonnes in 2005.

Putting a price on water is controversial in an increasingly thirsty Asia where not only farmers but households and even hard-boiled trans-national corporations (TNCs) regard water as a free resource.

In December 2003, a court in India’s southern Kerala state ordered the Coca Cola bottling plant at Plachimada village to stop mining water following complaints that wells in the region were going dry. The plant, the TNC’s biggest in India, has stayed shut since and the matter is now pending before India’s Supreme Court.

Activists said Coca Cola was doing nothing but adding colour, sugar, flavour and fizz to water it extracted freely and selling it at high prices on the strength of its brand name.

But asking farmers to pay for the water they use is more difficult. “It’s politically impossible to implement,” says Apichart. “The majority of people everywhere still view having water as a birthright. No politician would even mention this because that will be political suicide.”

Farmers traditionally regard water as a free commodity and around 70 percent of all freshwater withdrawals worldwide is used for agriculture. Many residential users across Asia also believe that water, being a national resource, should come free.

“If water is free, then it becomes a subsidy, which is actually a WTO (World Trade Organisation) issue,” says Ramon Alikpala, executive director of the Manila-based National Water Resources (NWRB), a government agency. “People would also take water for granted, so you get a situation where when a pipe leaks, nobody feels responsible to fix it.”

Participants at a journalists’ workshop on water issues in Bangkok, earlier this month, agreed that while those who can afford it do not mind paying for clean water delivered to their homes, no politician dares suggest that raw water itself should be priced.

Ganesh Pangare, chief of the World Water Institute in India believes in a middle ground. “I agree that farmers should pay for irrigation water, but remember, at the end of the day, it is water that decides whether the farmer can make a profit and eat,” he said at the workshop. ”If you want more crop per drop, farmers should come first.”

In Asia, Pangare noted, 80 percent of the food supply is produced from just 40 percent of the region’s cultivated land that has irrigation.

Pangare also agreed that strong political will is needed for water reforms to take place. “People need to stop thinking ‘let the government take care of the water problem’, and they need to stop believing politicians who promise that ‘water would be free for all’ in their election campaigns.”

“Promising free water does not actually mean the politician would be obliged to do it. If water is already viewed as ‘free’, then what’s the point?” stated Pangare. “Can’t we at least get water fees from users for operation and management?”

The challenge lies in finding the right price for raw water, says Alikpala. “If the price is too low, then it will be useless. On the other hand, if the price is too high, there will be massive outrage.”

Alikpala believes that water companies should pay for the raw water themselves and not pass on the cost to their customers. “The customers should only pay for the companies’ services, such as for cleaning and delivering the water.”

Nevertheless, any water company, whether managed publicly or privately, needs to have a very efficient management system to ensure maximum water coverage and access.

Proof that water delivery can be managed by a public sector company comes from the example of the Phnom Penh Water Supply Authority which, over a period of ten years, transformed itself from being an overstaffed, badly maintained utility relying heavily on government subsidy to a socially responsive, highly efficient water supply company that boasts a 95 percent coverage, 100 percent connections and 24 hours service.

”We changed our policy from government subsidy to full cost recovery. Of course, we also had to greatly alter Phnom Penh people’s attitude of believing that water is free, to actually be willing to pay for water,” said Chea Visoth the authority’s general manager. ”But nobody is complaining because water prices are now five to ten times cheaper than before.”

The company effectively used the media to get its message across to the 1.3 million residents of the Cambodian capital. “We explained to the people why they need to pay for clean, safe, drinkable water,”

Visoth said the media was also useful in convincing “delinquents” to pay their water bills. “We simply told them, either pay your water bill, or see your face on the television.”

Private participation in water delivery has been successful in places like Manila where the privately- owned Manila Water takes care of part of the Philippine capital’s water supply, sewerage, sanitation and customer services.

“After massive rehabilitation, we now have 35.4 percent water loss, which is comparable to other Asian cities,” said Sherisa Nuesa, financial officer for the utility. “We have a policy on insider trading and consistent rules. We also hold public hearings and use arbitration to settle disputes.”

Ian Fox at the Manila-based Asian Development Bank (AsDB) said so-called water solutions actually bring a crop of new problems. “When you tug on one thing of nature, you find out that it’s attached to the rest of the world.”

(*This story was written for the Asia Water Wire, a series of features on water and development coordinated by IPS Asia-Pacific.)