The Slow Road to the Private: A Case Study of Neo-liberal Water Reforms in Chennai

The process of reforming Chennai's water service began in 1978, with the formation of an autonomous water board, divorced from local government and oriented toward global “best practice” principles, with financial viability as the central goal. The process was shaped and steered by the World Bank since the inception of the Board. A study of the documents of the water utility – including World Bank mission aide memoires, project proposals and reports -- reveal the continuities between this step of corporatization, and later moves toward commercialization and privatization of the water service. Social and political relations encasing the water service were transformed through this process of reform, as the utility adopted “institutional strengthening” measures that focused on enhancing its financial health, introducing commercial forms of accounting, and building professional management systems modeled on the commercial sector. The World Bank simultaneously pushed the utility to implement tariff reforms aimed at full cost-recovery, reduce cross subsidies from industrial to domestic consumers, and, crucially, to roll back its obligation to serve the poor populations of the city who did not contribute to its revenues.

This paper outlines the structure, patterns and implications of neoliberal water reform orthodoxies through a case study of the reforms pursued by Chennai's Metrowater over a twenty-five year period, using archival documents from the agency as the primary source of data. It provides an instance of how the World Bank's agenda of putting water supply in Third World cities into the hands of the private sector is achieved through gradual, incremental and “rational” steps that have become commonsense in the water sector.

Later phases of reform emphasize consumer-satisfaction and public relations measures explicitly associated with the drive toward cost-recovery from users. The paper shows how the neoliberal compulsions of demand-responsiveness and consumer satisfaction pull against the agency's mandate to protect and ensure the long-term sustainability of the resource. The institution of “modern water rights” – individual, tradeable rights over groundwater – emerges as a crucial strategy through which utilities attempt to assure endless supply to metropolitan centers through extraction from peri-urban acquifers.