Smart but pricey

Why automatic water meter technology is not the best idea for households

By Bharat Lal Seth
Published: Saturday 31 March 2012

Smart but pricey

Automated Meter Reading (AMR) is being touted as a cash cow for India’s water service providers, most of whom have dismal records of revenue collection. Instead of a meter reader knocking on the door, an official walks or drives by with a handheld device that automatically reads meters via a radio frequency within a stipulated radius. That’s the promise of AMR meters. Last month, the Delhi Jal Board (DJB) invited bids to supply and install 300,000 such meters, enough to cover one-sixth of the capital’s water connections. This is the largest tender for automated meters in the country.

Goa too has sought 70,000 such meters, convinced that automation will enhance revenue collection. But initial experiences suggest the idea of enhancing revenue is misplaced, and a pilot needs to be conducted before large-scale implementation as in case of Delhi.

Tracking growth

The AMR technology is gaining credence at those places in India where meters are often located in congested and difficult-to-reach locations. Meter readers in connivance with households often report that at the time of visit the doors were locked and so the meter could not be accessed. In such cases, average rather than volume-based tariffs are applied, benefitting the consumer. AMR technology, on the other hand, is faster, allows for frequent billing and does away with manual errors.

imageMumbai was the first city to introduce AMR meters in 2008. About 66,000 have been installed across the city. An AMR connection costs more than Rs 12,000, while a meter with the same accuracy but without the automated technology would come at a tenth of the cost. Keeping this in mind, the Brihanmumbai Municipal Corporation (BMR) has decided against installing them in slums. In their experience, meter parts including the sensor were damaged or stolen. It costs Rs 5,000 to replace a sensor. “We have also faced problems in maintenance and picking up remote meter readings. In future, we will be more conservative,” says Rajiv Jalota, additional municipal commissioner, BMC. Theoretically, it is good but a pilot should be conducted before being scaled up , he adds.

In Malkapur town in Maharashtra, all 4,200 water connections have been installed with meters with AMR technology. Instead of a fixed annual tariff, households are being charged for actual consumption. In 2008 the utility suffered a loss of Rs 32 lakh. It earned a profit of Rs 3 lakh in 2010. At the centre of this turnaround, say utility officials, is an accurate metering system.

Utilities are spending more on better systems of metering since one cannot manage without measurement. It is also a way out of the vicious cycle of low revenue and low investment. Metering is becoming a necessary component of water supply schemes and constitutes up to five per cent of the project cost, says Neville Bhasin, project manager at Forbes and Marshall, a flow meter provider. “But we are looking at the wrong end of the stick,” he says. “To enhance revenue generation, we need to target the vital few; in most urban areas 20 per cent of the connections consume 80 per cent of the water supplied,” Bhasin adds. The meters should be installed for bulk consumers like industrial and commercial establishments, suggests Bhasin. “We are unnecessarily raising political temperature and wasting money on domestic metering.” The consumer is not complaining since he does not have to directly bear the brunt of these higher costs; all such investments will be covered by grants from the Centre.

Agencies invest in precision technology only when it is essential for payment or tariff purposes. Considering domestic consumption and low tariffs, few private operators are opting for the automated metering technology since the returns do not justify the higher costs. DJB, without rolling out the first batch of AMR meters, already has plans to install 300,000 more.

Mangalore has set an example by recently going in for AMR for 5,500 connections targeting commercial and bulk non-domestic consumers. The city earns a major chunk of its revenue from these users. Its plan is to shift focus to domestic consumers, if returns justify the cost of automation.

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