Ways to mitigate risks in water sector joint ventures

The Indian water sector saw a major overhaul post economic liberalization in the 1990s with the entry of private participation in water sector projects. Subsequently, the formalization of the National Water Policy, 2012, acted as a catalyst in encouraging private sector participation in the planning, development and management of water resources.

With as many as 75% of public-private partnership contracts awarded since 2005, the potential for private sector participation through various joint venture models, in collaboration with state utilities, urban local bodies (ULBs) for water supply, and distribution businesses, stands at around US$1.75 trillion.

Under the Indian constitution, “water” is the subject of legislation at three levels: the centre, states and ULBs. Thus, each state has the prerogative to legislate and establish its own set of rules and regulations governing water supply while the centre looks at inter-state water disputes only.

Sunil Seth is a senior partner and Vasanth Rajasekaran is a partner at Seth Dua & Associates.