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Robbing Paul to pay Peter: Industrial water vs drinking water

By Nityanand Jayaraman

India's National Water Policy of 2002 accords top priority to drinking water. In practice, however, states seem preoccupied with meeting industrial water needs. In Tirupur, Tamil Nadu, 737 textile units consume around 90 million litres -- or 7,500 tanker loads -- of water every day. The unregulated mining of water has sent groundwater levels plummeting to below 800 feet. What is the logic of setting up water-intensive units in water-stressed areas? In accommodating industry, is the government prepared to sacrifice the drinking water needs of entire districts?

The water level in the Mettur dam is a barometer of tension between Tamil Nadu and Karnataka over the river Cauvery’s waters. High levels in the Mettur reservoir, which marks the Cauvery’s entry into Tamil Nadu, generally mean more water for Tamil Nadu, and less tension between the two states. Ironically, for a river that is brought to Tamil Nadu after much struggle, the Cauvery receives a deadly welcome at the Mettur dam. Millions of tonnes of toxic ‘red mud’ -- a caustic waste produced by alumina smelters -- are dumped on the banks of the Mettur reservoir by Madras Aluminium Co Ltd (MALCO), a company owned by the UK-based mining giant Vedanta Plc.

When the reservoir is full, the waters reach within a few metres of the red mud mountain. Villagers from nearby Thippampatti say that a heavy downpour at this stage could breach the flimsy embankment and empty the entire toxic mountain into the reservoir. Such an incident would be disastrous for downstream communities.

Less than 2 km below the dam, another company -- Chemplast Sanmar -- empties untreated effluents from its chemical and PVC plastic factories into the river, at a point upstream of several government drinking water works. A recent analysis of an air sample taken from Chemplast’s effluent discharge point revealed the presence of at least 17 chemicals, including vinyl chloride, ethylene dichloride (EDC), methylene chloride and chlorofom. All four chemicals are carcinogens. EDC levels were 32,000 times more than safe levels, and vinyl chloride roughly 2,100 times above safe levels.

In July 2005, the Indian People’s Tribunal on Environment and Human Rights (IPT), headed by Justice (Retd) Akbar Kadri of the Madras High Court, released the findings of its inquiry into alleged environmental and human rights violations by MALCO and Chemplast in Mettur. Among other things, they found that the companies’ wastes have contaminated groundwater in at least two panchayats. Chemplast has buried hundreds of tonnes of highly toxic wastes, including mercury and dioxin-containing sludge, and this explains the ever-expanding plume of groundwater pollution.

While most people make do with contaminated water, or face extreme hardship in accessing adequate quantities of clean water, some get piped water from the companies. But villagers complain that company water is sometimes unpotable, and also places them at the mercy of the polluters. They say the company cuts off the water if they raise any pollution- or compensation-related issues.

“Communities in Mettur lack even drinking water. We have plenty of water in our wells, but it can’t be used because the companies have spoilt it. But both Chemplast and MALCO have been permitted to draw their requirements from the reservoir. How is it that there is plenty of water for industries, but never enough for people’s basic needs?” asks G Madheshwaran of the West Gonur Farmers Welfare Association.

Pollution pays

Lax environmental regulation is possibly one of the biggest draws for industries setting up in Tamil Nadu. The Tamil Nadu Pollution Control Board (TNPCB) is known for its tolerance towards pollution, particularly by big revenue-earning industries. Farmers living in the Noyyal river basin downstream of the textile boom town of Tirupur will tell you that.

The bleaching and dyeing operations that go into the making of T-shirts and underwear are water-intensive and polluting. Each day, the 737 textile units consume upwards of 90 million litres -- or 7,500 tanker loads -- of water, mined from places as far away as 50 km. The unregulated mining of water has sent groundwater levels plummeting to below 800 feet, drying up the already desiccated land all the way to Palladam, a town more than 30 km away.

At least 80 million litres of highly saline and heavy metal-laden effluents are returned to the environment through drains, rivers, ponds and cesspools. In the immediate vicinity of Tirupur, the ground and surface water are totally contaminated. Indeed, over a period of time, the effluents have filled the Orathupalayam dam to the brim. The irrigation dam was built over the Noyyal river -- a tributary of the Cauvery -- in 1992. However, farmers had until recently prevented the intentional release of effluents from the dam. Seasonal releases during heavy monsoons have been sufficient to render up to 3 km of land on either side of the river “completely unfit for cultivation”.

On August 22, 2005, the dam was drained of more than 10 years worth of stagnant effluents. The exercise flushed over 0.5 million cubic feet of toxic effluents into the Cauvery, and yielded more than 400 tonnes of dead fish and a reservoir bed that is several metres thick with toxic sludge. The Madras High Court has prohibited the release of any effluents into the Noyyal, and ordered the closure of the textile units until effluent treatment plants with reverse osmosis (RO) units are installed.

Frontline reports that farmers in Chinnamuthur, whose lands have remained barren for more than 10 years, have been offered ridiculous figures like Rs 412.50/acre. A number of drinking water schemes on the Noyyal have been abandoned because of the pollution, and the courts have asked the government -- not the polluter -- to pay for the remediation of groundwater.

The government, though, has shown no enthusiasm about making the polluter pay, even for damage to its own infrastructure. Nor has it questioned the perverse logic of setting up water-intensive units in water-stressed areas. In accommodating industry, the government has been prepared to sacrifice the drinking water needs of entire districts.

More water for the polluter

Having contaminated the local groundwater, Tirupur industrialists were forced to truck water in from great distances, paying up to Rs 45 per 1,000 litres of raw water in addition to transport charges. The water was disposed as effluent after one use, placing water supply areas under severe stress. Factories in industrialised nations re-use water four to five times. Rather than encourage this practice, and perhaps cap the growth of this resource-intensive industry, Tamil Nadu Chief Minister Jayalalithaa Jayaram chose to present the Tirupur industries with a uniquely designed water supply scheme.

A special company called New Tirupur Area Development Corporation Ltd (NTADCL) was set up, with $ 25 million from the US Agency for International Development (USAID), to draw 185 million litres per day from the much-contested Cauvery, pipe it over 55 km to a storage and treatment plant, and distribute it to the Tirupur industries and the municipality.

Executing the scheme for NTADCL are contractors, some of whom like US multinational Bechtel stand accused of war profiteering in Iraq and being an integral beneficiary of the American war machine. Bechtel, which received upwards of $ 11.7 billion in US government contracts between 1990 and 2002, many of which were facilitated by USAID, will construct the 55-km pipeline. In Cochabamba, Bolivia, Bechtel’s take-over of municipal water supply pushed up water-related expenses for some domestic consumers by 500%. The civil unrest following the skyrocketing water prices led to nasty skirmishes between the police and the people, resulting in the death of at least one activist.

Mahindra & Mahindra and Larsen and Toubro will build the water storage and treatment structures while United Utilities and NTADCL will run the joint venture to deliver water and collect the charges, among other things.

Of the 185 mld, Tirupur industries will receive 115 mld of water. Tirupur municipality, which includes 60,000 slum-dwellers, will get 26 mld, and 792 wayside rural settlements will share the remaining 36 mld. Reportedly, domestic consumers will initially pay Rs 3.50 per 1,000 litres, and the price will be revised upwards every two years. Industrial consumers will have to pay a rate that will allow NTADCL to recover total costs plus returns over the 30-year concession period. Specifics of the concession agreement and guarantees extended by the Tamil Nadu government remain shrouded in secrecy.

The American interests in this scheme are obvious. US brand names like Nike, Adidas, Wal-Mart, Ralph Lauren, May Stores, JC Penney and Victoria’s Secret source their hosiery from Tirupur. Bechtel is a favoured US corporation with close ties to the Bush administration. Indeed, the USAID website announces that its programme in India “advances US national interests”.

The NTADCL plan was justified by the drinking water component. However, it was also clear that the only way drinking water needs would be met is if they could piggyback on a grand plan to supply industry.

Who pays for pollution?

On the one hand, the Tamil Nadu government has stepped in to help the Tirupur industries with more secure access to treated water. On the other, it is currently engaged in bailing out the industry by seeking to invest taxpayers’ money to set up the pollution control infrastructure for Tirupur industries. The $ 1 billion industry is being projected as the victim – the poor little rich kid.

The Madras High Court order requires all Tirupur units to route their effluents through treatment plants and RO units. The equipment and installation alone will cost Rs 140 crore, a windfall for a host of civil contractors, equipment suppliers and RO membrane suppliers like US-based Dow Chemical and Hydronics, and German companies such as Koch and Grundfos.

Treatment costs are also expected to be significant -- between 8 and 16 paise per litre of waste water -- because reverse osmosis and multistage evaporation are electricity-intensive processes.

The Tirupur industry has the favour of the chief minister. In July 2005, Jayalalithaa wrote to the prime minister seeking an “absolute” subsidy for the Tirupur industries. Since Tirupur was generating substantial foreign exchange, she argued that the producers needed the government’s support.

Sources that wish to remain anonymous suggest that the Tamil Nadu government may have tied itself into an inextricable contract with NTADCL. The recent pollution-related developments may actually have grave ramifications for the viability of NTADCL and the very survival of the Tirupur industries.

If, according to the court order, the industries re-use the treated water, their water requirement could drastically reduce. That would affect the guarantee given by the state to NTADCL assuring offtake of 115 mld for use by the Tirupur industries. Going by the looks of it, NTADCL may turn into another Enron-like albatross around the state exchequer’s neck.

Contractual earmarking of water for privatised industrial supply runs counter to the National Water Policy’s stated priority for drinking water. Industrial water supply contracts such as with NTADCL or the now-cancelled Borai Water Supply deal between the Chhattisgarh government and Radius Water Ltd oblige the state to pay substantial penalties if the contract is cancelled or if assured quantities of raw water are not available for the concession-holder to process and sell.

Take the Chhattisgarh example. According to the contract inherited by the Chhattisgarh government from the Madhya Pradesh government, Radius was allowed to develop water sources (through construction of up to three barrages) over 23.5 km of the Sheonath river for supply of water -- between 4 million litres per day to a maximum of 30 million litres per day -- to existing and expected industries in the Borai Industrial Growth Centre in Durg district. With a requirement of 3.6 mld, Hindustan Electro Graphites (HEG) was, and is, the only major consumer of water in Borai.

A take-or-pay clause in the contract stipulates that the Chhattisgarh State Industrial Development Corporation (CSIDC) would have to pay Radius for a minimum of 120 million litres per month (4 mld x 30 days) regardless of whether or not the water was consumed. If demand exceeds 120 million litres in a month, CSIDC would have to pay for the actual quantity consumed, at Rs 12.60 per 1,000 litres. But if Radius failed to deliver the minimum guaranteed quantity, it would have to pay a compensation of only Rs 3 per 1,000 litres of shortfall.

Between December 2000 and June 2002, CSIDC had coughed up Rs 290.81 lakh to Radius, even though only Rs 161.61 lakh was sold to the industries.

Downstream communities blamed the Borai project for the falling groundwater table. Fisherfolk suffered because the company had blocked all access to fishing grounds over a half-kilometre stretch of the river. Downstream drinking water schemes, including for the nearby town of Durg, were threatened, especially during lean seasons.

The Borai scheme finally succumbed to the heated protests of villagers, and was cancelled by the Chhattisgarh government.

In 2002, Kerala proposed an ambitious industrial water supply scheme. The Kerala State Industrial Development Corporation (KSIDC) and the Kerala Water Authority (KWA) together prepared the Kochi Industrial Water Supply Project to sell 200-250 mld of water to “industries and other important establishments in the Kochi-Alwaye belt”. The project envisaged giving the promoters rights to take the required quantum of water from the river Periyar at a point 1.5 km upstream of Alwaye city’s drinking water scheme. The project was put on hold after activists protested the earmarking of water for industrial purposes when drinking water needs were yet to be fully met.

Industrial consumers too weren’t very keen on the idea. The project would have required the highly polluting and water-intensive units in the Edayar-Eloor belt along the river Periyar to pay Rs 15-Rs 22 per 1,000 litres of water. Currently, the industries draw water from the Periyar free of cost. Stretches downstream of the industrial belt are heavily polluted due to effluent releases by the Eloor-Edayar industries.

Bleak future

If the preferential allocation of water to high-value and industrial sectors seems to form the logic of government decision-making, other examples confound that. In all, hope seems totally unwarranted. New schemes, projects and development plans announced by state governments nationwide ignore the existing water needs for drinking and agriculture, and earmark scarce water resources for elite projects, or for activities that will degrade or waste existing water resources.

The controversial Bangalore Mysore Information Corridor Project (BMIC) envisions the acquisition of 21,000 acres of agricultural, forest and wetlands, including for a golf tourism township along the Cauvery. Nandi Infrastructure Corridor Enterprises, a consortium of small-time entrepreneurs, will develop the corridor, including the construction of a four-lane (expandable to six), walled, toll expressway and five townships between Bangalore and Mysore.

The project will divert 2,000 million cubic feet of Cauvery water from other already stressed sectors such as agriculture and drinking water. The Bangalore-based NGO Environment Support Group fears that “extraction of water from the Cauvery would increase tremendously to support the lavish lifestyles that would be characteristic in all of the BMIC townships”.

Software engineers and the IT industry don’t come cheap. They seldom go anywhere that does not guarantee uninterrupted water, fast roads, quality housing and a heavily landscaped environment. Given their penchant for using water liberally, IT industries are not the right investment for water-starved cities like Chennai and Bangalore.

But Tamil Nadu’s IT policy notes that, “in the year 2004, more than 40 IT parks in the private sector in Chennai have been cleared, totalling an area of 8.5 million sq ft. Out of this, 1 million sq ft is already built and occupied. About 6 million sq ft is expected to be ready by 2005”.

Mahindra City, a project involving Mahindra & Mahindra again, comes “completely packed with high-end infrastructure -- six-lane roads, stable power, unlimited bandwidth and abundant potable water enabling investors to set up operations with ease”.

The opening up of commercial IT complexes is expected to increase the number of newly-arrived high-income households in the city, adding significantly to population in the mid- to high-income bracket. Unlike factory workers whose needs are modest, IT workers sport lifestyles that can tax even bountiful ecosystems. Mahindra World City, for instance, is spread over 1,400 acres of land “set amidst hills, forests and lakes,” where business is “complemented by an exclusive lifestyle which would include premium housing within walking distance from the place of work and modern social amenities providing the occupants…a whole new way of life”.

Tamil Nadu Industrial Development Corporation, one of the IT corridor promoters, declares on its website: “Abundant water supply is assured by the park. Requirement is adequately met from groundwater sources and from approved government sources”. A lake falling within the property to be developed as an IT corridor will be readied for water sports, according to a note by a state industrial corporation called SIPCOT.

A research study coordinated by IIT Madras, involving town planners and architects, including from Anna University, affirms that the Chennai IT corridor is not sustainable for a variety of reasons including the aspect of “overexploitation of groundwater resources which may induce a saline intrusion”.

Meanwhile, Mahindra’s website sells a different city from the one Madrasis are familiar with:
A city...
Where lakes and forests meet undulating hills,
Where roads are six-lane expressways,
And infrastructure is plug-n-play.
Where every room in the office comes with a view,
And home is just a walk away.

The IT corridor may bring in more revenue to the state coffers. But it will aggravate the water crisis of one of India’s longest-suffering cities.

(Nityanand Jayaraman is an independent journalist investigating and reporting on corporations and their impact on environment and human rights)


InfoChange News & Features, October 2005