The business of water

In theory, my house has a ready water supply.

Like most homes in Defence Housing Authority (DHA) Karachi, it has a municipal water connection. Pipes run into the house, and the system is meant to be managed by the Cantonment Board Clifton (CBC). On paper, the system works. In reality, the pipeline rarely carries water.

When residents complain, the response is often slow or inconsistent. Occasionally the authorities may send a small tanker, perhaps once or twice a month at an additional fee of course! But that is nowhere near enough to meet the needs of my household. The result is predictable.

Like many others in the city, we end up buying private water tankers to fill the underground tank. Water that should arrive through public infrastructure becomes something we must purchase in the market.

This domestic inconvenience reflects a much larger structural issue. Karachi’s population has expanded dramatically over the past several decades while water infrastructure has struggled to keep pace. The city faces a persistent water shortfall, forcing residents and businesses to rely on alternative sources.

In other words, when the public system stops delivering water, the market begins to sell it.

What appears at first to be a simple household problem is actually part of a much larger phenomenon, the emergence of a private water economy operating alongside the state’s own system.

When governments step back, markets move in

For most of modern history, providing clean drinking water was considered one of the most basic responsibilities of government.Cities invested heavily in reservoirs, pipelines, treatment plants, and distribution networks because safe water was essential for public health, economic activity, and urban life itself.

In economic terms, water was considered a public good, something too fundamental to be left entirely to markets. But maintaining these systems requires constant investment and effective governance. In many countries, rapid urbanisation, population growth, and aging infrastructure have placed enormous pressure on municipal water networks.

Once public supply becomes unreliable, a predictable pattern emerges. Private markets begin to fill the gap. And that is where Karachi’s parallel water economy comes in. 

Karachi provides a particularly clear example of this transformation. The city’s water demand far exceeds the official supply. As a result, large parts of the population rely on tanker deliveries to supplement or replace municipal water. The tanker economy has therefore become an essential part of daily life. But tankers represent only one layer of the emerging water market.

Another is the rapidly expanding bottled water and filtration industry where multinational companies operate through premium brands, while local brands compete across retail markets. Alongside these formal companies, hundreds of neighborhood filtration plants supply drinking water to nearby residents.

Together, tanker suppliers, filtration plants, and bottled water companies form what can only be described as a parallel water distribution system. What should be a public utility increasingly behaves like a market.

The global bottled water boom

This dynamic is not unique to Karachi or Pakistan. Across the developing world, declining trust in municipal water systems has helped fuel the explosive growth of the bottled water industry. Global corporations such as Nestlé, PepsiCo, and The Coca-Cola Company dominate this market.

The economics of this business are striking. The water itself costs almost nothing. Most of the expense lies in packaging, logistics, and distribution. In effect, companies are selling certainty and convenience rather than water itself. The global bottled water market is estimated at over $300 billion annually, according to industry estimates, just one part of a much larger and less visible private water economy.

That is the paradox of the modern water economy. From a business perspective, water represents a remarkable commercial opportunity. From a societal perspective, however, it reveals something more troubling. The rapid growth of private water markets often reflects not the success of markets, but the failure of public systems.

And this is not unique to water. Similar to many other countries, we have already moved down the same path with other essential services, such as electricity. Yet despite private participation, the fundamental challenges of reliability, affordability, and access often persist.

As evident, the presence of private players does not automatically resolve structural weaknesses in the system. Because once markets begin supplying a service, the urgency to fix the underlying public infrastructure can diminish.

Consumers adapt. They find workarounds. They pay for alternatives.

And over time, what began as a temporary gap becomes a permanent parallel system. That is the risk with water. If tanker deliveries, filtration plants, and bottled water continue to expand without corresponding improvements in public supply, the system does not get fixed, it simply gets bypassed. 

This raises a more fundamental question. As societies, are we trying to solve the problem of public service delivery, or are we simply learning to live around it? Because if we are really trying to solve the problem of public service delivery, then the growth of the private water business cannot be a sign of progress.