Amy Lin, Mumbai Guest Contributor
Slums in cities like Mumbai are growing exponentially due to the massive demographic shift to urban settlements. These dense human habitats are often characterized by grossly inadequate access to basic services, including safe drinking water and sanitation facilities. To satisfy the essential daily drinking water need, many slum residents and other low-income urban households face issues of inconsistent quality and unreliable availability. The repercussions for India's urban poor are substantial: high incidence of waterborne disease, lost time and productivity, and the imposition of daily stresses around procuring water. In India, over 1,000 people die every day from diarrhea due to consumption of unsafe water.
Yearlong research by Monitor Inclusive Markets (social change unit of Monitor, the global strategy consulting firm) in the slums and other low-income neighborhoods of Chennai, Delhi, Hyderabad, and Mumbai showed that the water quality was problematic and highly seasonal — over half of all samples did not meet government standards. In summer, this figure was particularly alarming, with over three-quarters of samples not meeting the criteria for potable water. In addition, residents found water difficult to access, with limited hours of availability and multiple days without supply. This uncertainty leads to self-rationing of water, the use of poorer-quality water sources to supplement their primary source, and even fights at shared taps or tankers. Furthermore, waiting times can be substantial — a quarter of respondents who use shared water access points wait for almost an hour or more even after reaching the source.
To respond to this dire situation, MIM has launched a project to examine this need for safe drinking water and to develop a financially sustainable, pay-per-use water plant solution that provides water in an affordable, accessible, and reliable manner. This decentralized model is already in use in rural India, where water solution providers partner with local governments to install, run, and maintain filtration plants that purify water. Villagers then collect purified water from the plant for user fees ranging from INR3-7 ($US0.05-0.13) for a 20L jerry can. These fees cover the plant's running, and sometimes capital, costs. For BoP communities with limited and uncertain incomes, this model is well suited to their circumstances:
- Pay-as-you-go: Instead of paying a large, upfront cost for the plant or other technology, customers pay usage fees for only the water they consume. In addition, they don't bear any equipment ownership risks of plant failure, theft, obsolescence, etc.
- Economies of scale: Supplying larger volumes of water reduces the cost of each litre of water.
- User-friendly: Customers don't need to source input water, identify the appropriate technology, learn how to use it, or plan for any maintenance. The professionally trained plant operators manage all of these technical aspects.
- Reliability: The professional plant operator oversees all operational aspects to ensure the water is consistently safe and available during the promised opening hours or according to the home delivery schedule. This is a significant advantage over some existing water sources in these communities, whose availability can fluctuate significantly.
While this model is thriving in rural areas, adapting this model to an urban setting is a sizable task. Labor and other expenses tend to be higher in cities, requiring a larger revenue volume to break even. This challenge can be offset by the higher population densities in cities, enabling water plants to reach more customers — thus generating greater impact — through both over-the-counter and delivery channels. The government structure that exists in a city is also fundamentally different than that of a village. Whereas in villages a single panchayat (local council) approval is sufficient to open a plant, the web of government authorities and institutions that make up a city municipality can jam a plant permission for months.
To help tackle these issues, MIM is working with a diverse set of implementing partners and supporters, including critical government stakeholders, to develop a successful model for the urban setting. From large conglomerates to social enterprises and community-based organizations, MIM's partners are establishing urban pilot plants across the country. As these plants mature, this project will test the model's assumptions, assess where and how it is best applied, and share these findings with interested stakeholders. As the project learns from the experiences of the initial water pilots, these findings can inform the sector on how to maximize the usage, reach, and social benefits — thus serving more of the BoP families who are currently battling each day to secure their next can of drinking water.
Amy Lin is a manager at Monitor Inclusive Markets (MIM), where she leads the work on developing social enterprise models that provide safe drinking water in low-income urban communities.
Photo 1: Water cans to be refilled at the WaterHealth plant in Mulbagal. (Photo: WaterHealth)
Photo 2: There is limited availability of water in many urban BoP areas.
Comments
Visitor replied on Permalink
A fascinating project
This sounds like an extraordinarily well thought-out project, especially in its consideration of the adaptations required to transplant such a program successfully from a rural to an urban setting.
That said, I find myself wanting to know more. For instance:
What are the differences in approach (if any) between its implementation in the four cities referenced: Chennai, Delhi, Hyderabad, and Mumbai?
What are the specific administrative and procedural hurdles in a large municipality as distinct from a village setting?
Who are the implementing partners and supporters involved, including those inside and outside of government?
What are the success metrics for this program? Is there a way to track its evolution?
Is this an approach that could be applied in other cities, including those outside India?
Other questions come to mind, but that will probably do for now.
Thanks for the very thought-provoking article! I look forward to seeing what others have to say.
Amy Lin replied on Permalink
While the customer research
While the customer research and water testing by MIM focused on the 4 large metros of Chennai, Delhi, Hyderabad and Mumbai, actual urban pilots have started operating in both large cities (like Bangalore, Delhi, Ahmedabad, etc.) as well as smaller municipalities (like Mulbagal, Karnataka, as shown in the photo). The overall structure and design are similar across both larger and smaller cities — however, the nuances of the implementation can change from one locality to the next, for reasons such as the following:
• Government structure may be similar, but navigating the process in each city can vary greatly. For example, in villages and very small municipalities, there is only one body which is giving permissions for land, water, electricity, etc.; however, in large metros, one has to coordinate and seek permissions from multiple authorities (like the slum board, water board, electricity board, etc.) to set up a water plant and these can vary by location.
• Water providers are different — some are community-based organizations, while others are for-profit companies (albeit with a social focus). Some provide all services in-house while others split the different roles across different organizations or with individual entrepreneurs, leading to different operating structures. MIM is working with a range of organizations and operating approaches to test this model and its variations in low-income communities.
• Different demand activation, marketing and delivery methods — each site has different dynamics based on the demographic profile of the catchment area, presence of different sociopolitical groups, income ranges, and education levels.
This model is in the process of being validated or proven for the urban setting so success would be demonstrating on the ground that urban plants can provide safe drinking water reliably, serving enough low-income customers that the user fees at least cover operating costs and increasingly contribute towards covering capital costs as well. Since this is an early stage, it is also important to understand in which sites this plant model can be used most effectively and how. We are working with our partners to understand all of these aspects as well as identify and help address the key challenges. Given that we are starting to see water plants reliably serve the urban BoP, we think this model has enormous potential and could be adapted to meet drinking water needs in other geographies. Just as the rural drinking water model has already started growing in West Africa and other locations, we think the urban model could serve the BoP outside of India as well.
Visitor replied on Permalink
Good article!
Thanks for posting this. A good endeavor I must say.
Are the prices the same in urban (as rural)? If the costs increase in urban of running a water plant, then wouldn't the price also be higher, in say, a Mumbai as opposed to a village?
And if the prices are higher, then is the BoP still being served?
Amy Lin replied on Permalink
Thank you for the kind words!
Thank you for the kind words! Yes, you are absolutely right about higher costs — for example, labor costs are typically higher in urban areas. But these can be offset by the higher population density in the urban catchment area, allowing urban water plants to spread the higher costs over a larger volume of sales. Also, the equipment costs typically don't vary much between rural and urban settings. Thus, the pilots have shown that the prices in urban and rural regions are comparable — and therefore both able to serve the BoP.
— Amy Lin, Monitor Inclusive Markets
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