Water supply is not getting privatized

After Mysore City corporation announced the water supply PPP with JUSCO (Tata arm that manages water supply in Jamshedpur), there have been concerns that water supply is being handed over to private players, and the rates may go up. Read an informative article in Biz-standard which gives more details on the PPP arrangement, most important of which is a stat that says that the PPP will cut MCC's water supply maintenance cost to almost half (30 Cr vs 16.2 crores) of what it is today!

http://www.business-stand...

Some interesting snippets sourced from above:

"MCC Commissioner K.S.Raiker said the MCC was spending Rs. 30 crore for maintenance of water supply in the city. However, the revenue was only Rs 18 crore, with the monthly collection of water charges standing at Rs 1.5 crore. Of this amount, 10 per cent was paid to the KUWS&DB. As JUSCO will be paid Rs. 16.2 crore annually for maintenance, it will result in considerable savings for the MCC."

Thats interesting isn't it, Rs 30 cr being spent right now on maintenance will come down to Rs 16.2 crores. Down to almost half!? That sounds too drastic, how to explain it? JUSCO will be so much more efficient, or will sourcing services from one single entity (and not ten different contractors via lengthy tendering process) bring most of these savings? I am reading around to understand this better.

Further, the article states:

"there would be no increase in the water rates and the present staff would continue. The MCC itself would make payment of salaries to the water supply staff. JUSCO will only supervise the personnel."

So JUSCO will provide supervisors, or managers on top to bring more efficiency. Hmmm, lets see how that goes.

As per the article:

He (MCC, Mr Khan) made it clear that the Mysore City Corporation (MCC) and the elected council will continue to have the say as the powers are with it ... “The contract with JUSCO is only to remodel, manage and maintain the drinking water supply system in the city and the criticism of it being privatized is totally baseless,”

So looks like the arrangement is that JUSCO will run the "back end" of water "supply chain", MCC will be distributing the water and collecting tariffs for it. JUSCO gets fixed annual sum to keep the water supply chain running, and I am guessing the amount will be subject to revision as water demand of Mysore goes up.

Sounds like a winner project to me, though MCC needs to be very transparent, and should run good PR for this project so that public gets to understand the benefits of PPP, and we learn to scrutinize such arrangements.