Karnataka Government Announces Formation of City Water Companies in Three Major Cities
The Karnataka state government has made a significant decision to establish city water companies in Hubballi-Dharwad, Belagavi, and Kalaburagi. These entities will be created under the Companies Act 2013 with the primary objective of supervising and managing drinking water supply in these urban areas. This move marks a shift from the current system where the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) serves as the nodal agency, overseeing water supply operations handled by Larsen & Toubro (L&T).
Ownership Structure and World Bank Funding
The proposed city water company will be fully owned by the local urban body, which in the case of the twin cities is the Hubballi-Dharwad Municipal Corporation (HDMC). The government has linked this initiative to the sanction of direct grants totaling Rs 2,574 crore from the World Bank, which are intended to be channeled to the company. However, the implementation hinges on approval from HDMC's general body meeting scheduled for January 31. If rejected, this could spark political clashes between the Congress-led state government and the BJP-led HDMC administration.
Political Opposition and Operational Concerns
Iresh Anchatageri, the BJP house leader in HDMC, expressed confusion regarding the proposal to accept the City Water Company (CWC) when L&T currently holds both operation and supervision responsibilities until 2035. He highlighted that L&T is tasked with laying 1,700 kilometers of pipeline and providing over 1.2 lakh new connections, with only about 40% of the work completed due to delays from Covid and other factors. Anchatageri warned that introducing or forming another company could lead L&T to exit or pursue legal action, potentially burdening HDMC with additional financial strain. He emphasized that HDMC will await the commissioner's response in the general body meeting for detailed discussions.
Criticism from Congress and Governance Issues
A Congress corporator, speaking anonymously, criticized the government's proposal as immature, suggesting it should first be implemented on a pilot basis in one city to monitor outcomes before expanding to others. The corporator also raised concerns about governance changes, noting that in a revised order, the government appointed the secretary of the Urban Development Department as chairman of the board of directors, replacing the deputy commissioner of Dharwad from an earlier 2024 order. This centralization raises questions about how the company will function at the ward level.
Board Composition and Decentralization Fears
Former mayor Ramappa Badiger pointed out that the 13-member board of directors includes only three elected representatives: the mayor, the chairperson of the standing committee on finance and taxation, and the chairman of the standing committee on town planning and development. The remaining ten members are officials, with the HDMC commissioner designated as managing director. Badiger argued that this structure marginalizes the HDMC council, undermining decentralization of power, and stated that these issues will be raised in the general body meeting for appropriate decision-making.
Salary Dispute for Outsourced Employees
The HDMC general body meeting is also expected to address a contentious issue involving the monthly salary of Rs 50.3 lakh for 201 outsourced employees in the water supply operation and maintenance division. The Urban Development Department has instructed HDMC to pay these salaries from its own resources, a directive that HDMC previously denied in a November 2025 meeting. With the UDD reiterating this instruction, HDMC must make a decision today, adding another layer of complexity to the ongoing discussions.
