Asia’s governments need to set good water policies, and then let the utilities do their jobs. A corporate approach, separate from politics, creates the stable business environments necessary for private sector investment in safe and clean water for Asian cities.
This is the view of Professor Seetharam Kallidaikurichi, director of the Institute of Water Policy at Singapore’s Lee Kuan Yew School of Public Policy, who spoke at the Singapore International Water Week.
In an interview with Eco-Business, Professor Kallidaikurchi said governments need to create the policy frameworks that enable private firms to bring the needed technology. The firms need to know they can safely invest in it and that the contracts will allow them to reap the profits for a period of time, he added.
Professor Kallidaikurchi noted this approach of using long term contracts to create stable business environments is similar to the way pharmaceutical and telecommunications companies invest in technology in developing countries.
His presentation on sustainable urban water management on Monday kicked off the inaugural Southeast Asia Water Ministers Forum, an international gathering of water ministers and experts at the Pan Pacific Hotel.
Professor Kallidaikurichi said all cities can achieve sustainable water management systems and that it was expensive not to have such systems in place. He noted the high costs of bottled water and healthcare associated with unsafe water, in addition to the loss of revenue from stolen or leaked water.
There are two ways Asia’s cities can encourage innovation in sanitation and water treatment, he said.
“One would be for the government to set up a platform for private companies to bring new technology - but as a public private partnership, like what Singapore has done,” he explained.
Singapore’s national water utility, PUB, broke ground this week on its second desalination plant, developed as a public private partnership with Singapore-based water firm Hyflux. Hyflux will build, own and operate the plant, to be be completed in 2013, on PUB’s behalf.
“Another way would be to involve the community in the local ability to innovate new ideas,” he said, referring to what he called “the government corporate society partnership.”
Community collaboration helped Manila Water develop solutions to difficult problems relating to water delivery. Since privatisation in 1997, the utility has reduced its treated water losses due to leakages, theft and non-payment from 63 per cent to 13.5 per cent and increased the percentage of customers receiving continuous supply from 26 per cent to 99 per cent.
Local academics and universities are also useful partners for utilities, noted Professor Kallidaikurch, because they can help develop the simpler technologies that may be more appropriate for local communities than large scale industrial systems due to the fact that they are easy to make and maintain.
“In a way, water technology is…quite straightforward. You have very high tech solutions for complicated problems, but for most of the basic problems like removing e-coli and bacteria, the technology is easy to produce or develop in many developing countries. What we require is to scale them, use them and make them practical,” he explained.
One example of a simple technology used for projects on a smaller scale such as a village or a block of buildings is a faucet filter developed for households in India that costs only a couple of dollars and has a lifespan of 1,000 hours of active use, he said.
But, he warned, such technologies are only part of the equation.
“The technology needs to have both sides… the scientific part and the human aspect. That’s where society comes in,” he explained, adding that community members should be aware of whether their water was clean or not, and they also needed the expertise to use the technology appropriately.
Technology companies trying to bring new large scale water technologies into Southeast Asia’s urban areas face several challenges, including uncertain investment climates, said Professor Kallidaikurchi.
Companies do not feel confident investing in long-term projects because political regimes and government terms operate in short, five-year terms, whereas for a water business to break even a project might need ten years of consistent operations, he said, adding that companies often felt unsure about the continuation of contracts or incentives.
“If that can be changed – that (water management) will be not politicised or subject to changes - I think private companies would be more willing. Water is a long term need, so the business will be always there for somebody who is willing to engage,” said Professor Kallidaikurchi.
The way to limit uncertainty, he said, is for governments to take a corporate approach to water management and depoliticise the decisions about water: “Once you delink the decision-making, then it’s a company or agency managing the projects on behalf of the government rather than the government itself or the political leaders making decisions. Once the policy is set, then the implementation is left to the head of the utility.”
Professor Kallidaikurchi said water technology companies seeking to invest in developing countries could adjust to the political uncertainties and the processes by shifting to a longer-term, more integrated approach. He advised them to learn the political system and to engage with the government and people over a long period.
“(The water industry) has to move away from being a construction-oriented industry into a socially-oriented industry. Then there’s going to be huge business opportunities for them,” he said.
To make private sector investment work, he added, governments should tap into the public’s growing awareness of clean water issues and willingness to pay for safe water to transform water management into an enterprise – “an enterprise where government can provide (clean water) at a much lesser cost to the people…in which case there’ll be a huge ripple effect in terms of economic benefits and healthcare.”
Government politics should come in when its time to reap the benefits of a well-managed water system, according to Professor Kallidaikurchi.
“This is something the government can champion,” he said.
