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Provision of safe drinking water is a basic necessity and has been a major topic for key political discourses in the country over the last decade. The Government of India has been focusing on safe drinking water since 1972-73 when it introduced the Accelerated Rural Water Supply Program (ARWSP) to assist States and Union Territories to accelerate the coverage of drinking water in the country. Despite increased outlays since then, access to safe drinking water in India remains a challenge. Apart from access, water quality and sustainability of resources (water points and infrastructure developed) are issues of major concern. The National Rural Drinking Water Program (NRDWP), which is supplementing the efforts of the State Governments by providing technical and financial assistance, is looking at rural drinking water from a holistic viewpoint. The Ministry has shifted its focus from hand pumps to piped water supply systems with the aim of providing monitored clean water and is focusing on those States which have low levels of piped water supply. The Water and Sanitation Program has compiled an excellent collection of success stories and best practices from the States of Kerala, Karnataka, Maharashtra, Gujarat, Jharkhand, Punjab and Uttarakhand which address these key constraints. Some of these success stories, such as the Asoga village intervention in Karnataka which showcases a unique demand driven approach to facilitate participatory decision making leading to community ownership, the Bidholi piped water supply scheme in Uttarakhand which manages and recovers 100 per cent operation and maintenance costs from the community, the Shikayat Nivaran Kendra experiment in Punjab which uses information technology for online web enabled centralised complaint redressal and the Water and Sanitation Management Organisation experiment in Gujarat where the registered body acts as a facilitator in developing water and sanitation facilities owned and managed by communities, are all outstanding examples of how to address various challenges and shortcomings the program is facing.

The Government of Punjab, through Government of India’s (GoI) Department of Economic Affairs (DEA) had requested the World Bank to provide non-lending technical assistance (NLTA) to provide high quality basic urban civic amenities to the residents of cities of Ludhiana and Amritsar in the areas of: water supply, sewerage, storm water drainage, solid waste management, and modern urban transport system. The study is expected to recommend measures and technologies to overcome the existing problems and transform the cities in to modern cities with substantially developed urban civic amenities. Capacity building, institution, and legal reforms will also be the component of the project report. After initial discussions with sector officials, a Bank team visited both Amritsar and Ludhiana cities to identify priority service level innovations and institutional challenges that have to be addressed under this NLTA for achieving desired transformative change. Currently, water supply is drawn from hundreds of unprotected bore wells across length and breadth of the city - which supply polluted water through an unplanned haphazard network. Utility, fully owned by the municipal corporation, will have operational autonomy to manage water and waste water services, whilst still be accountable to the corporation. Financial position will become clear, it can focus on becoming financially self-sustaining. The utility will make long term plans for water supply and sewage; and with government support may also be able to mobilize resources through this is unlikely in the short term in Amritsar.

Successful mid-sized cities will be vital to India’s growth and prosperity in the coming decades. Indian cities are home to over 375 million people now, and their population is likely to double by 2035. Yet water supply in most mid-sized cities falls short of Government of India benchmarks for service, efficiency and cost recovery. In many of them water flows in the pipes for 2 hours a day or less, its quality is poor, and it is provided by utilities that cannot even cover their operating costs. Following a brief introduction to the three city case studies (section two), the report lays out the Indian water sector’s unique challenges, and using case examples to substantiate findings (section three). The challenges include day-to-day operational issues associated with running a utility, as well as policy and planning issues that affect the utility’s governance and investment planning to meet current and future demand. The results of a financial viability gap analysis, applied to Bhubaneswar and Coimbatore reveal the magnitude of improvements required, and the key drivers that affect the utilities’ financial performance (section four). These complex challenges make traditional PPP models, Management Contracts, Concessions and Leases, less amenable for use in mid-size Indian cities. As section five describes, this is because the traditional models are too risky for the operator or government or too limited in scope to create lasting improvements. The remaining sections focus on explaining the design and procurement strategy for the two innovative PPP models, the phased performance based contract and the Joint Venture (JV) Partnership (section six and seven). These models have the potential to deliver better results than the traditional PPPs and business as usual scenarios. This is because in addition to reforming dysfunctional utilities into focused and accountable organizations, they are able to respond to information uncertainty, include strong incentives, have clear sources of funding, and promote capital efficiency.

This toolkit for the preparation of a drinking water security plan provides a model for taking a Gram Panchayat and Support Organization through an action planning process. The toolkit includes a basic action planning format. It is a step-by-step process, covering practical guidelines and a water security plan template. The practical guidelines are designed to standardize and streamline water security planning for all the pilot blocks. The toolkit focusses on the planning and community mobilization as well as the institutional and financial aspects of implementing a drinking water security program in pilot blocks.