Water Vending in India
Tuesday, September 15th, 2020
By Dennis Abraham
In today’s global setting and with increasing human demands, people often like to get what they want, where they want. This is the same for drinking water as well. Gone are the days when people had to carry bottles filled with water at home; such practice was replaced with bottled water being sold at retail outlets. While bottled water is a convenient option, it is neither economically feasible to all the sectors of the population (due to high pricing), nor is it sustainable, due to the amount of plastic waste being generated.
The best solution at this juncture is a water vending machine, most commonly called a water ATM.
A water ATM, as the name implies, is a water vending machine similar to bank ATMs, except that money is inserted into the machine in return for water. These machines (which run on a cash as well as prepaid card or smart card systems) are built, owned and operated by private companies that have been granted rights over public resources such as land and water.
Since the 1990s, the government has encouraged several private-sector projects in the water industry, in the hope that transferring the responsibility of water to private companies will bring more transparency and accountability to the process. International financial organizations (like the World Bank, Asian Development Bank and Japan International Cooperation Agency) also support the Indian government by providing external funding for various projects. Several of these projects are operating on the public-private partnership (PPP) model.
The concept of water vending is simple: the customer owns his own bottles and fills them at his convenience. An added bonus is 24-hour access. Water vending provides a fantastic opportunity for existing water business operators, provided adequate support is given by local governments or governing bodies. Water stores usually start small but end up having to increase staff as business grows. A vending machine in a storefront can also ease the need for additional labor requirements.
Table 1 shows the continued growth of both bottle and bottle-less water dispensers in the US. Table 2 shows the Indian market of vending machines is growing exponentially with a broad scope of future usage, in view of current forecasts.
While we can observe from these statistics that water dispensers are a growing business, the success of this industry is mostly dependent on the support from the governments. The core fact that we all have to understand and acknowledge is that access to pure and safe water is a basic human right and governments are completely responsible to provide pure, safe and affordable drinking water to its citizens. Nevertheless, in context to the extensive geography of India, providing 100-percent pure, safe and affordable drinking water to the last mile or the end user is a task for local and federal governments alike. The best solution towards solving this problem would be setting up decentralized water treatment systems, such as the water dispensers/water ATMs.
Water is one of the most commercial products of the century. Though it may sound bizarre, it’s true. The stress on the multiple water resources is a result of a multitude of factors. On the one hand, the rapidly rising population and changing lifestyles have increased the need for fresh water. If opportunity costs are taken into account, it would be clear that in most rural areas, households are paying far more for water supply than the often-normal rates charged in urban areas. Meanwhile, other sources of water (such as tanks) have dried up. As the problem of water shortage increases by the day, slum dwellers are being forced to fetch water from other sources located at a distance from their houses. There are also reports of quarrels between slum dwellers over fetching water from public taps.
Conceived with an objective to provide clean drinking water to people, water ATMs are widely used in different public places today and their benefits can be felt at both social and individual levels:
- Meeting community needs. These clean water dispensing machines prove to be particularly beneficial for the less-developed pockets in India, where more than 163 million people do not have access to clean water. The installation of water ATMs can not only enhance lifestyle in some of these drinking-water-scarce regions, but can also reduce the waterborne disease in communities that lack access to clean drinking water. In multiple locations of rural India, these water stations brought clean and safe drinking water to hundreds and thousands of families that suffered immensely due to the lack of access to safe drinking water and that was without taxing them financially. Delhi is a good case in point.
- Awareness building. When people have to pay (no matter how much) for their drinking water, they come to realize the value of this resource. They start considering it as a valuable commodity that has to be used prudently. Growing public awareness helps prevent water wastage. Clean and affordable drinking water in public places immensely benefits individuals who have to stay outdoors through the better part of the day.
Be it daily commuters using local transport or long-distance travelers using railways, tourists thronging to vacation destinations or pilgrims visiting the country’s holy places, people suffer immensely due to lack of easy access to safe, affordable drinking water while spending a long time outdoors. Governments, as well as corporate bodies, are introducing initiatives on a large scale to combat this challenge. Water ATMs have become a real solution in providing tourists, commuters and others with easy access to affordable drinking water. Installed in multiple sites (ranging from railway platforms to a bus terminus, market places to temples), these water dispensers help people quench their thirst in a pocket-friendly manner. Additionally, these facilities can go a long way to enhance the image of a city or any place/organization that installs a water ATM.
Nowadays, automated vending machines are in wide use as they make various activities not only easier but also more efficient. The machine has numerous input and outputs to supply service to the customer, similar to a vending machine. Coin-operated, it accepts only coins (such as an Indian rupee, in any sequence) and delivers water. The main focus of this technique is to avoid environmental pollution and water wastage, with the assistance of water control valves.
Water scarcity is quietly associated with poor water allocation, inefficient use and lack of adequate and integrated water management. In recent decades, several monitoring systems integrated with water level detection are accepted; therefore, water-controlling system implementations have potential significance within the society. The vending machine is to be developed in such a way that water will be efficiently and cost-effectively served to the customers. The specified quantity of water and amount of cash required for purchase are set to affordable levels for most.
The main benefits of a water vending machine for public places are:
- 24 / 7 water provision
- Water quality accountability and control
- Cashless dispensing and pay-per-use methodology
- Price transparency and flexible purchase
These systems also benefit project sponsors/stakeholders as follows:
- Off-grid functionality and environment-friendly
- Low operation and maintenance requirements ensure the water fee is affordable.
- Information layering (through Cloud connectivity) for accountability (tracking each user transaction)
- Service optimization by monitoring key process parameters in real-time online
- Adaptable to various location types (community, school, hospital, etc.)
- Potential for targeted subsidies
- Increases social impact (per rupee) invested
India’s urban scene is expected to undergo a sea change in the future with multiple smart city projects expected to take off in the upcoming years. The concept of water ATMs can play a critical role in water system management for these young cities. Urban players, however, get to choose the proper solutions for installation.
While all the above factors provide fair demand-side opportunity to the solution providers, it is a hard fact that none of the companies (for profit) who have set up and are operating water ATMs in India are making profits; 80 percent have not even reached a break-even point. This brings us to the point of retrospection about the functionality and modalities of private players establishing and operating the water ATMs (the PPP model). This scenario is taking a toll on most companies and though there is a demand and necessity for decentralized water dispensing solutions, most of the companies are backing out from existing and upcoming projects due to the non-viable structure of the PPP model.
If we look deep into the PPP models of Indian governments, when a private company proposes an interest to establish a water ATM, the government assumes that the private company would take all the burden off its shoulders. While this may be possible in other sectors, it is definitely not a possibility in the water supply sector. Rather, the private companies could facilitate technologies and robust solutions towards ensuring supply of pure and safe drinking water to the end user.
On the other hand, amenities that are under the government’s purview (such as water, electricity and land) are provided only as payable commodities to the private partner. On the contrary, the government decides the price at which the private partner has to sell water at the ATM kiosks. Thus, private companies ultimately suffer losses due to nil subsidies, lack of support from the local bodies, etc. If the governments want to charge these businesses for projects such as water ATMs, the core ideology of safe water being considered as a human right is at stake.
At a time when the water crisis is escalating in several places, the government must ensure adequate access to clean and pure drinkable water. The government sector is very active in delivering basic services, such as drinking water. The private sector now needs to step up and support those government initiatives. From a business point of view, installing water vending machines in schools, bus depots and factories can be an excellent CSR activity.
E-Rikshaw water ATM
To quench the thirst of the people on roads and markets, many municipal corporations across India have approved the installation of smart public drinking through automated mobile water vending machines, called e-water ATMs. The operating company pays rent to the municipal corporation for putting up such machines across the city. A pilot project using recyclable paper containers with drinking water at WHO standards will be launched in the near future, in which one can operate the machine with coin, prepaid cards or through a mobile app.
The machines will dispense water in 250-mL (0.06-gallon) amounts with payment of two rupees and one liter for five rupees. The recycled paper containers will be of one-liter capacity. The e-water ATMs will also have display screens showing the product-water purity along with the temperature—if the temperature increases above 20°C (68°F) in the machine, water dispensing will be stopped automatically.
How should customers pay?
There are several ways to simply accept money through the machines. The simplest and most trouble-free may be a straight coin acceptor. Many operators choose this method because the cost to get and maintain equipment is low. There are few moving parts and service requirements are rare. A downside is exact change is required. But most customers are repeat customers and know the coin requirements. Coin changers offer the ability to provide change to the user.
Some operators also offer prepaid cards. This provides cash up front and allows the operator to offer volume and frequency incentives to increase customer loyalty. Prepaid cards and the card readers required to use this technology are extremely varied, with multiple platforms that usually are not interchangeable. Operators should consider a card system carefully. Purchasing a machine with a card system often can restrict the owner to a single manufacturer’s system. Some systems allow programming through the machine’s card reader itself, while others require a separate programming unit.
Inevitably, all equipment will require servicing at some point. Potential operators should ensure that the machine is simple enough for them to work on themselves or with minimal assistance from any competent water or vending technician. Simple electronic board replacement should be possible, as well as easy access to plumbing parts and assemblies.
Ensuring that a machine can be upgraded to deal with the future growth of a business is another factor to consider. Operators may choose to purchase a coin-acceptance-only unit at the outset, but may need to upgrade to a coin changer and bill validator later on. There is no end to sophistication and product betterment.
Roadblocks to growth
Water kiosks can be the future, if the government or funding agencies like the World Bank take complete or part ownership of the asset, while establishing a fixed remuneration for maintenance by the private partners. Government should support and channel funding like CSR, etc., for existing water kiosks or new ones. It is most important to push for ecological, natural and dynamic water treatment options that can treat water that comes to the kiosks through government-supplied water. In most states during the rainy season, it becomes difficult to consume due to higher rates of sediment runoff, dissolved impurities (fertilizers, pesticides, chemicals from industry, etc.) bacteria and viruses that can cause dysentery and other waterborne diseases. Just installing RO and demineralizing water or using chemical-based treatments could jeopardize the utility of a kiosk, which might also be needed during times of water distress. Thus, if government places emphasis on resolving these issues and moving ahead with a collective approach, the water ATM model would definitely benefit all stakeholders involved.
About the author
Dennis Abraham Thazhamon, Managing Director of Josab India Pvt Ltd for the India and Southeast Asian regions, is a highly qualified marketing and management professional with a primary focus on entering new markets. A water expert who focuses on sustainable living for everyone , he has been honored with the 51 Fabulous Global Water and Water Management Leaders award. Abraham is currently working towards making a difference in the lives of people via natural treatment of water so they can continue enjoying good health by drinking treated, natural water.
About the company
Josab India Pvt Ltd, a fully owned subsidiary of Josab Water Solutions AB, Stockholm, Sweden, has been providing safe drinking water solutions in India since its launch in 2012. The company produces and sells products, solutions and services for ecologically sound water purification. Because of the Aqualite™ filter material, large volumes of water can be purified in an ecologically safe way at a low cost, leading to long-term sustainability. The company’s primary focus is on rural areas, where access to safe drinking water is barely minimal. Since its launch in India, Josab’s Aqualite-based technology has been approved and acclaimed by various public and private entities. Currently Josab India is expanding its territories in terms of acquiring market and diversification where the requirement for pure water is pivotal.