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Water

By Sagar Tamrakar

Rising water business poor regulation

When you look at the water supply chain in Kathmandu, you will surely realise that we are heading towards a grave catastrophe. The five-year history of KUKL has proven that it is a failure and now with the post of the MD lying vacant in its corporate structure, it is unknown as to where the organisation is heading towards. The appointment of a new MD is in a limbo and the staff too have been completely demoralised with salaries not being disbursed since the last three months because KUKL is caught up in a tussle between the government and the private sector stakeholders of the organisation. Both the sectors want to appoint their respective representative as its MD. Deprived of salaries and facilities, the staff may anytime break into a strike halting the overall operations leading Kathmandu towards an acute water crisis. This will have its impact directly in water treatment; thus, the outbreak of an epidemic looms large. These consequences are certain to worsen the water supply scenario of Kathmandu valley which meets merely one-third of the existing demand and only one-fourth during the dry season, and consumers are not concerned about it and are managing their water supplies in any way they can. Due to the above-mentioned circumstances, the water vending business
Table 1 Wardwise distribution of Water retailers
Ward number 18 17 19 22 23 26 15 12 21 13 14 30 Total No. of Kiosks* 9 17 3 2 1 2 12 7 3 1 1 4 62

has gathered pace on a big scale. Besides the bottled-water vendors, a survey carried out by NGO Forum has reported 62 water kiosks spread around different wards of Kathmandu (Table 1). The government has no record of these kiosks which are not registered as well. They sell water collected from
Table 2 Payback period of other small scale business Business Investment (Rs)
1,00,000 1,00,000 3,00,000 2,00,000 30000

Currently, the average total investment of 62 Kiosks is Rs 4,572,500. Their investment return is Rs 1.4 crore Profit Cost Ratio: 1.59 Average Pay Back period: 6.2 months * Kiosks refer to small retailers

Profit/ month (Rs)

12000 35000 25000 15000 15000

Payback period (months)

8.3 2.85 12 18 2

Candle making Sweet shop Cold store Cyber Food Vending

different subsurface and groundwater resources stored in water tanks directly, without purifying them. The report says that the rates that they charge vary from Rs four to Rs 10 per 20 litres and there is no assurance of quality at all (Table 4). They are unregulated which is unjustifiable for a commodity like drinking water because the outbreak of a waterborne epidemic in the valley is certain to go beyond control as a majority of the consumers of these kiosks are poor people living in rent and squatters. Safe drinking water is an indispensable source of energy and forms around 80 percent of the human body mass. It is crucial for the survival of the human race and there is no substitute to it. A total of about 32,000 consumers are being served by such outlets. Along a mere stretch of 2.5 km (Naradevi to Swayambhu), there are 26 kiosks; thus, the growing potential of the business cannot be ignored. Their annual turnover is Rs 32 million and requires necessary government attention. A water kiosk has been found to generate Rs 42,606 a month with a mere initial investment of Rs 150,000 to Rs 200,000 and has been found to get returns in a matter of only six months (Tables 2 & 3). On an average, a family consumes about 10 cubic metres of water a month which it avails at Rs 368 which is seven times the tariff that KUKL charges for treated water. Therefore, it will make sense if KUKL supplies water to these kiosks through tankers which will not only enhance the quality of water but it will also be cheaper. As a matter of fact, KUKL can even charge a higher price than what it is currently doing and also encourage more

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the boss 15 Jun - 14 Jul 2011

Table 3 Monthly water supply and revenue Monthly income (Rs)

2000-5000 5000-10000 > 10000

Average cost per 20 litres

7.2 7.2 7.2

Average water supply per day kiosk (lit

400 4640 6795

Monthly supply Kiosk (lit)

12000 139200 203850

Total Cost (Rs)

144 1670.4 2446.2

Total Cost (Rs)

4320 50112 73386

Total population served: 32,000 in the service area; total volume of water supplied in a year 23 million litres; revenue generated Rs 32 million per annum [Rs 43,000 per Kiosk per month]

entrepreneurs to sell water in the water scarcity regions of the valley, thus, building a pure essence of PPP. This would mean a lot when civil society organisations have been advocating for policy reforms and programmes to ensure accessible
Table 4 Consumers applying household water treatment options Water treatment options
Boiling Filtration Using Chemicals Euro guard SODIS Nothing

and affordable water supply to the urban poor from the new water utility operator. Therefore, Kathmandu Upatyaka Khanepani Board (KUKB) sought to make amendments in its water distribution policy. This practice will certainly generate profits for
Table 5 Water demand met by the water kiosks Monthly income Level (Rs)
2000-5000 5000-10000 >10000 Total

KUKL and help it cover its losses because it is a business with a turnover amounting to billions of rupees as predicted by the survey. This will also help KUKL earn profits by partnering with the so-called competitors. Besides, it will also enable KUKB to keep track of the water kiosks which are currently being operated illegally and will help in regularising them. Moreover, the practice will be a boon for the valley denizens to come out of a probable water disaster which may hit the valley soon.
NOTE: All the above results are based on a survey conducted by NGO Forum, an NGO working for urban water and sanitation.

% of Consumers
33 37 9 1 2 18

No. of HH
9 47 44 100

Majority of the consumers apply simple candle filters for the water treatment.

No. of family members

32 151 275 458

Water demand in Lit

870 4640 6895 12405

Water supply by Vendor (Lit)

400 2270 2465 5135

% of demand met by Vendor

45.97 48.92 35.75

It was found that almost 50 percent of the water demand of the low and middle income group in the core Kathmandu city has been met by water retailers (Water Kiosks)