Pricing of urban water supply schemes

Rapid urbanization in Maharashtra, India is resulting in an increasing demand for water supply and other public services. Under the present policy, the responsibility for adequate water supply rests with the municipal authorities, but is subsidized by the government by way of a grant. Other sources of financial support include loans from lending institutions and other governmental and international organizations. The report presents tariffs and financing policies from each institution in detail. Case studies have been carried out by the Maharashtra Water Supply and Sewerage Board in Dhule, and several major existing water supply schemes have been analyzed in order to make financial proposals based on a 20 year scheme. Among the recommendations were that the schemes must be subsidized for the first five to ten years, that the water rates were compulsory, that sharing of capital costs for an irrigation dam should not be accepted, that reputable contracting firms should be used and that price escalation should be considered.