In 2014, the Government of India launched the Swachh Bharat Mission-Urban (SBM-U) to resolve India’s sanitation bottlenecks and accelerate the development of sanitation markets. Targeting the elimination of open defecation through universal toilet access, over 5.5 million urban toilets have been built till date. Given that two-thirds of urban households were already dependent on On-site Sanitation Systems (OSS), developing the Faecal Sludge Management (FSM) value chain has become both a market and policy priority. To strengthen the evidence-base for sustainable and scalable service delivery models while encouraging private-sector-participation in FSM, the Centre for Policy Research (CPR), with support from Bill and Melinda Gates Foundation, undertook a study across four cities in India. As a follow up to an earlier study, these case studies were designed to complement supply-side assessments with an understanding of demand dynamics and government interventions. Focusing on four cities with installed fecal sludge treatment capacity through a mix of co-treatment and dedicated technologies, the study found that thriving FSM markets depend largely on ‘bulk’ customers rather than individual households- a learning that will have significant implications for the continued development of Indian FSM markets. Furthermore, as FSM service delivery becomes increasingly centralized and state-driven, per-trip profits and market turnover decrease steeply, crowding out or stifling private sector entry. On the basis of these studies and earlier work, an extensive market-risk assessment was undertaken to identify market risks and mitigation strategies for a range of stakeholders across the sanitation value chain. As the FSM market evolves, it will be crucial to identify mechanisms that adopt different PPP models for varying city sizes, optimal risk allocation and explore possibilities to forge partnerships between market, government and communities.
