Veolia Water India, a Veolia Water subsidiary, has been awarded the drinking water service operation and maintenance contract by Nagpur city for 25 years, a company release said. A multilocal player, Veolia Water India, has set up a special purpose entity, Orange City Water, in a joint venture with Vishvaraj Environment Ltd, one of India's leading civil engineering and services companies.

Orange City Water will have to deliver a continuous supply of drinking water to the homes of the 2.7 million people living in Nagpur, Maharashtra, 24 hours a day and seven days a week, up from the current two to 12 hours a day. The service will be provided to the entire population of Nagpur, including the third of the population living in the city's slums. This will be a first in India.

It is estimated that the cumulative revenue for Veolia Water will be €387 million.

Awarded following an international call for tenders, the contract includes an initial five-year works programme, mainly to rehabilitate and upgrade the network and connections to homes, at a cost of €60 million. This part of the contract will be 70 per cent funded by the Indian government, through the Jawaharlal Nehru National Urban Renewal Mission, and Maharashtra government, and 30 per cent by the operator.

This is the first time that an Indian city has decided to outsource the entire operation and maintenance of its water service to a private operator for such a lengthy term.

"Our responsibility is to encourage access to water for all, whatever people's social level and living conditions. In Nagpur, as elsewhere, we will always ensure we do that, and we will pay more attention than ever before to the most underprivileged people. That's the challenge we have to take up," Jean-Michel Herrewyn, Chief Executive Officer, Veolia Water, said. "But at the same time as extending access to this basic service to everyone, we also have to take action to limit the environmental impacts of our activities by making sure to conserve water resources and combat all wastage in a country where water is scarce and precious."

The aim of Nagpur Municipal Corporation, up until now in charge of the service, is to provide sustainable water supply to the city's entire current and future population, and especially to the most underprivileged living in the slums. The water, compliant with WHO quality standards, will be provided continuously at a constant pressure. This marks considerable progress in India where no large city has continuous access to drinking water and where it is at times of very poor quality, leading to the spread of waterborne diseases.

Under the contract, the water service includes management of drinking water production, treatment, transport, storage and distribution through to the consumer's tap. The technical challenge is considerable, as it involves connecting up 2.7 million people, or 350,000 to 450,000 homes, to the distribution network. The amount of water available per person will be increased from 90 litres a day to 130 litres a day over the next five years. This will be quite a feat as an average of 6,000 to 8,000 water meters a month will have to be installed to meet the target. By way of comparison, in France, 2,000 meters per month are installed on average.

Orange City Water will invest €18 million in the project to renovate the city's six water production plants and repair the 2,500 km of network. The production capacity of the system managed by OCW will eventually be close to 750 million liters a day and leakage from the network, which is currently 60 per cent, will gradually be lowered to international standards.