India: Social Contract Formulas in Rural Areas; The India Naandi Foundation Water Treatment Plants (#407)

Providing safe drinking water to poor families is a critical development issue of India. To address the common outbreaks of water borne diseases, the Naandi foundation together with Water Health India initiated the pilot rural Community Safe Water Scheme that combines cost-effective water purification technology with community-driven and performance-based approach. This case illustrates that with awareness raising campaigns, rural households are willing to pay for clean drinking water. 

Description

Providing safe drinking water to poor families is critical development issues of India. Rural households in the coastal districts suffer frequent outbreaks of jaundice, diarrhea, and gastroenteritis. Andhra Pradesh with 80 million people routinely experiences bacteriological contamination of water due to inadequate water supply and sanitation.

Action taken

In 2006, the Naandi foundation together with Water Health India (WHI) requested Global Partnership on Output- Based Aid to fund the pilot rural Community Safe Water Scheme that combines cost-effective water purification technology with community-driven and performance-based approach. The pubic-private partnership between the village, NGO and WHI was established to finance the treatment facility.

The project districts were chosen because of their high poverty rate and lack of access to quality water services. Villages were selected based on the presence of a water source that could be purified and the willingness and ability of the village to adopt a fee-for-service scheme.

A combined financing of local funds, subsidy and a loan was employed. The grant covered the investment, community awareness and running costs. Tariffs are set at an affordable rate and cover the initial investment and O&M costs. A thorough financing discipline was critical for success of the project.

As a part of the project, targeted awareness raising campaigns helped the people to understand health benefits of safe drinking water. The project uses various techniques to target the poorest households. A benefit cost analysis and financial analysis revealed that project was financially sustainable from the operator’s perspective.

Lessons learned

  • Rural households are willing and able to pay for clean drinking water; just there is a need for awareness and campaign.
  • A tripartite agreement has been instrumental for the success of the project; partnership between the grant recipient and the technology provider is critical to success.
  • This project contributed to stimulate a wider sector discussion on issues related to appropriate water treatment technology for rural water supply, institutional arrangements of O&M, and improving accountability and transparency in service delivery.