The Co-opting Cooperative Governance Systems to Privatize

Pani Panchayat and Swajal Schemes of the World Bank

By usurping the word “Panchayat” for creating user groups or “stakeholders” who pay for water, the World Bank is undermining the concept of community control over this natural resource. The World Bank's Pani Panchayats or Water Committees do not represent the entire community, but are formed with those who have financial, social and political clout, and who support the local administration. These groups, working with selected Service Organizations (SOs) or Special Purpose Vehicles (SPVs) take control over the community's water resources, operate and manage it in return for fees paid by the users. Users have to repay the capital (fixed assets) costs over a period of time, and have to pay immediately in full for the operation and management.

In Orissa, the price of lift-irrigation water to users has increased almost 10 times since the creation of the Pani Panchayats.

In Uttaranchal and Uttar Pradesh, the World Bank scheme for water privatization is known as “Swajal”. Of the total cost of US $ 71 million for the time-bound (1996-2002) project, the World Bank's share is 84%, the state government 5%. The rest of the cost (US $ 7.64 million) has to be borne by the user groups. In addition, the groups have to bear the entire operation and management cost from the inception of the project. Thus, for latrines and other individual assets such as compost pits, each user pays almost 40% of the capital costs, taking sanitation and sustainable agriculture out of the reach.