The war over blue gold

The water industry slowly shaping up, writes Tirthankar Nag.
Diamonds are expensive as they are rare, yet have very little use for our daily needs. On the other hand, fresh water which is essential to human existence is often thought of as a free or low priced commodity, mostly due to its abundance. However in the near future this may change with demand for fresh water slowly inching towards its supply potential.

India and China with one third of the world’s population has less than ten percent of the world’s water resources. Some studies project that a fresh water crisis may be in the offing for two thirds of the global population within the next quarter of a century. In addition countries like India suffer from huge geographical and seasonal disparities in distribution of water with its north-eastern region receiving more than a hundred times more rainfall than its western part and that too concentrated mostly during the summer monsoons. As per estimates, by 2025 a considerable part of India’s population will live in urban areas and face issues around water.

Water has two particular features which differentiate it from any other commodity. First, we cannot replace our need for water by anything else. Secondly, using water is not the same as consuming oil – whereas we breakdown the oil into its constituent chemicals, the usage of water only transforms it to a different form.

Thus, in the near future, as scarcity builds up, a lot of activities are expected to happen around this sector. In many developed countries like the UK, we come across increasing private sector focus in this sector. In India too, a lot of activities have started shaping up in the private space in this business. The water sector can be broadly classified into two segments from a supply perspective – treatment of water and distribution to consumers. Whereas the treatment segment has generated a lot of interest among corporate players, the distribution segment has been slow to take off due to risks around metering, billing and collection coupled with low tariffs. In the treatment segment there is a lot merit in looking at treatment and recycling of waste water, eighty percent of which goes untreated. Also recovering fresh water by treating sea water can be another option. An extreme example can be found in some of the Middle Eastern countries who generate water from the air due to extreme scarcity. However, all these technologies are fairly energy intensive and contribute further to climate change issues.

On the usage side, the sector caters to industrial, commercial, domestic and agricultural consumers. While reforms are being taken up in this sector in India, supply to domestic and agricultural consumers are expected to be regulated with states intent on putting up independent regulatory authorities following the first one in Maharashtra.

Some of the corporate players in India in the water business include names like JUSCO, Doshion Veolia Water Solutions, Degremont, Subhash Projects, IVRCL, Jindal Water Infrastructure, Ion Exchange, Mahindra, L&T and a host of others. Also there are lot of efforts from both the government and corporate to structure meaningful private public partnerships. JUSCO’s project in salt lake, Kolkata involves supply to industrial/commercial consumers and evacuation of waste.

With gradual dipping of ground water tables and possibilities of many rivers not reaching the sea in the future – water or blue gold may truly become scarce – maybe as prized as diamonds. Leaving aside the prospect of drastic innovations or leapfrogging technologies, we can only try at spreading the awareness that usable water as a resource is really finite and aim at adopting various water conservation techniques. And look out for a huge industry that is shaping up around water with its own opportunities and challenges.

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