Water demand in large cities is expected to rise by almost 80 billion cubic meters, or 40 percent more than current urban global levels and at least 20 times what New York consumes today, McKinsey’s report on urbanization said. India, second only to China in population, will account for 15.8 percent of the municipal water demand growth, it said.
Meeting drinking, industrial and municipal demand as more people move to cities will require investments in water supplies and sewage treatment of about $480 billion by 2025, with $200 billion of that from emerging markets, McKinsey said. The 440 emerging market cities cited include 36 from India, where the urban population is expected to climb by about three-quarters by 2030, according to a 2010 McKinsey report.
Mumbai, Delhi, India’s third-largest Kolkata, Chennai, Bangalore and Hyderabad are swelling as more villagers among its 1.2 billion population migrate in search of better jobs. The nation, where 93 million reside in urban slums, needs to spend $2.2 trillion improving infrastructure by 2030, McKinsey said.
Fouled WaterA lack of toilets among infrastructure needs costs India at least $50 billion a year, mostly through premature deaths and hygiene-related diseases, a World Bank study found. Lost productivity, illness and other consequences of fouled water and inadequate wastewater treatment trimmed 6.4 percent from India’s gross domestic product in 2006, according to the World Bank’s Water and Sanitation Program.
Providing basic services such as water and housing can be as much as 50 percent cheaper for large Indian cities than in rural areas, according to the report.
The nation is among those in east and south Asia expected to account for more than half of the increase in the world’s urban water consumption. These countries may focus almost 75 percent of their infrastructure spending on improving water supply to cities by 2025, the report said.
The study suggests that companies looking to market products in India as well as China consider local city clusters instead of country-specific investments.
The study of what McKinsey calls the biggest growth of urbanization ever said governments across 600 cities in the world will need to invest more rapidly in infrastructure to support growth. Of these, 440 cities in the emerging markets may add 1 billion new consumers to world growth by 2025, it said.
By Archana Chaudhary and Chisaki Watanabe@Bloomberg Businessweek