Enhancing Efficiency

Water network management initiatives taken in Greater Mumbai

Greater Mumbai has one of the oldest water supply networks in the country, dating back to 1860. At present, its water supply requirements stand at about 3,800 million litres per day (mld). The per capita supply of water is 240 litres for residential areas and 70-80 litres for slum areas. The Municipal Corporation of Greater Mumbai (MCGM) has the largest water treatment facility in Asia which is located at Bhandup and has a treatment capacity of 900 mld. Further, it has an underground tunnel network of about 110 km to supply water across the city.

In view of the increasing water demand, in the past few years, the civic body has undertaken several projects to revamp its water supply network. It is also working towards setting up new sewage treatment plants (STPs) to meet the water requirements for both potable as well as non-potable purposes. Further, it is also looking at ways to enhance its operational efficiencies by reducing non-revenue water (NRW) or unaccounted-for water in the coming years.

NRW management

In all, the MCGM has about 450,000 water connections in the city. Of these, it has metered 350,000 connections while the remaining ones in the old city are charged at traditional flat rates. The MCGM has installed about 90,000 meters with automatic meter reading technology and 9,000 municipal mechanical meters. Further, consumers have installed about 250,000 private meters in the city. The billing and collection efficiency of the MCGM is high at 80-85 per cent. However, the NRW level is also high at 38 per cent, and is in stark contrast to the international average of 7 per cent-8 per cent at the consumer end and 3 per cent-5.5 per cent at the transmission end. In India, the benchmark NRW is close to 15 per cent. The major issue faced by the civic body in reducing NRW is not a lack of technological expertise, but the fact that water is a highly subsidised commodity. Thus, the pricing mechanism has a key role to play in this. The production cost incurred by the MCGM is close to Rs 19 per kilolitre (kl) whereas the water is actually supplied at a price of Rs 3-Rs 5.50 per kl for domestic consumers. The utility’s water supply to the slums or non-institutional areas, at a low rate of about Rs 3.50 per kl, stands at about 20 per cent. This huge gap in the cost of water supply and revenue earned adds to the urban local body’s (ULB) burden. Other services such as metering and advanced leakage tracking further raise the marginal cost for the ULB. Besides, the inadequate additional revenue streams generated after incurring huge investments in the water supply sector render projects unviable.

The MCGM increases water tariffs by 8 per cent every year and is one of the few ULBs to hike water rates annually. However, the base price still remains low, making the revenue stream insufficient to cover operational expenses. The MCGM’s annual expenditure on water supply is close to Rs 22 billion whereas its revenue collection stands at around 14 billion. So, there is a revenue shortage of 40-50 per cent for the water supply department. However, being financially sound, the utility covers its expenses through cross-subsidisation. It has managed to reduce NRW by 2 per cent in a span of two years. Its objective is to bring down the NRW level to 25 per cent by 2030.

Emerging opportunities

At present, even though the MCGM sources about 4,200 mld of water from seven dams, there is still a demand-supply gap of 300 mld-400 mld of water in the city. To bridge the gap and meet the city’s rising water demand, the MCGM has planned new dam projects – Gargai, Pinjal and the Daman-Ganga interlink. Alongside, it is also looking at promoting the reuse of treated wastewater in the city. It is planning to construct eight large STPs with a combined treatment capacity of around 2,000 mld, and plans to undertake tertiary treatment of sewage at these STPs and make it fit for potable use. The utility is also making alterations in its building plan regulations wherein new projects will be required to install parallel plumbing and storage structures so that recycled water can be used for non-potable purposes such as gardening, cleaning and flushing.

The MCGM is also working on a plan to replace the distribution pipelines, which are extremely old and need upgradation. Besides, it also plans to generate green energy from solar plants. At present, while the utility is not looking at installing smart meters in the city, it plans to appoint zonal agencies to address issues pertaining to water meter repair at the earliest. It aims to keep the mechanical meters, including private meters, in a good state by addressing issues related to repair efficiently.

Impact of Covid-19

Typically, of the MCGM’s total water supply, about 82 per cent is supplied to domestic users while the remaining 18 per cent goes to commercial establishments. Though most of the industries and commercial establishments were shut during the Covid-induced lockdown, there was no reduction in water demand during the pandemic and water supply continued at pre-Covid levels due to frequent hand washing and cleaning practices. Industries in the city have now begun to open up in a phased manner with due attention to the safety guidelines. This could lead to an increase in water demand if there is no corresponding reduction in domestic demand. On the expenditure front, the MCGM has continued to incur expenses as per the budget estimates even during the lockdown. However, there has been a decline in revenues from water supply, although these are only deferred payments and are expected to be realised eventually. Further, there has been no annual hike in the water tariffs in 2020 on account of the pandemic.

The way forward

The provision of drinking water is a purely civic responsibility. However, there are opportunities for private sector players in the development of water supply infrastructure such as pumps and tunnels. The MCGM is planning to float an international consultancy tender for the conversion of treated wastewater into potable water. The tender is expected to be issued in a year’s time as wastewater treatment facilities planned by the civic body will come up in the next four-five years. Further, there is also scope for private sector participation in the marketing of recycled wastewater to end consumers in the coming years. The civic body is also looking at the conversion of sludge from STPs to biogas fertiliser and this too is expected to open up opportunities for the private sector.

However, there are a number of issues faced by the ULB such as leakages in the aged distribution network, open connections in slums and a gap in collection efficiency of bills of about 18 per cent. The MCGM has covered almost the entire city with metered water connections. However, there are issues faced due to the inaccuracy of readings from mechanical meters. The deviation in the readings lies between 5 per cent and 10 per cent, and needs to be urgently addressed to achieve higher efficiency levels in network management. A complete revamp of the water distribution network is required in the long run. Also, there is an urgent need to correct the pricing mechanism. The MCGM’s annual capex on physical infrastructure improvement is to the tune of Rs 8 billion-Rs 10 billion and its operating expenditure is much higher at about Rs 18 billion. As the current water tariff rates are extremely low, making heavy investments in water supply infrastructure is unjustifiable due to the low returns.

Based on remarks by

P. Velrasu, Additional Municipal Commissioner, Projects, MCGM, at a recent India Infrastructure conference

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