hen New Delhi announced last week that it would “keep the Indus Waters Treaty in abeyance,” anxiety spiked across Pakistan. Per capita water availability has already slipped below 1,100 m³ and could fall to 900 m³ by 2050, according to the World Bank diagnostic report titled Pakistan: Getting More from Water published in 2019.

Scarcity, though, is less about cross-border flows than how Pakistan stores, moves and bills every cubic metre of fresh water. That governance gap looks riskier after the Indian military strikes on May 6-7, an escalation that could turn a legal dispute into a hard security flashpoint.

Four local failures explain why many taps run dry even in a wet year. Telemetry pilots reviewed by the Punjab Irrigation Department in 2023 found that only about two thirds of design discharge reaches canal outlets; the rest seeps away or is lifted illegally. Karachi Water and Sewerage Board acknowledged at a workshop in December 2016 that 55-60 percent of its supply disappears before reaching a paying customer.

Tariffs rarely cover energy costs, let alone maintenance. The 2018 National Water Policy handed volumetric billing to provinces without giving their utilities enough funds or political cover to enforce it. Nowhere is the drag clearer than in Sindh, where freshwater flow below Kotri Barrage has collapsed from roughly 35 million acre feet in the early 1960s to less than 6 MAF in recent years, according to the Irrigation Department’s 2023 bulletin.

Sea intrusion has already claimed more than 480,000 hectares of farmland in Thatta and Badin.

International experience has shown that clear contracts and ring fenced revenue reverse such trends. In Manila’s East Zone, a 25 year lease signed in 1997 cut non-revenue water use from 63 percent to roughly 12 percent and extended continuous service to seven million residents. The Asian Development Bank performance review published in 2008 credited automatic five year tariff rebasing and tight penalties for missed pressure targets.

Kigali’s Bulk Water Project, documented in the IFC report,Creating Markets in Rwanda (2018), built a 40 million liter per day plant with a blend of viability-gap grants and local currency debt, keeping sovereign exposure below a quarter of capital cost. The pattern is consistent: private investors step in only when cash flows are protected and political discretion is limited.

Pakistan can benefit from these lessons without selling its rivers. In the next 18 months, Karachi and Lahore will each need a special purpose water services company under the 2017 Public-Private Partnership Act. The provincial finance departments will sponsor the vehicles; utility staff will shift on secondment. Each company will tender performance-based contracts that pay operators solely for verified reductions in leakage across district metered areas.

A 15 percent annual cut in Karachi could recover nearly 190 million liters a day, enough to retire half the tanker fleet that clogs its streets. Independent auditors will validate flow data. Payments will pass through escrow accounts fed by a fixed share of existing tariffs, sidestepping any immediate rate hike.

Kigali’s Bulk Water Project, documented in the IFC report, Creating Markets in Rwanda, built a 40 million liter per day plant using viability-gap grants and local currency debt, keeping sovereign exposure below a quarter of the capital cost.

Simultaneously, the Irrigation Department and the Water and Power Development Authority should outsource lining, telemetry and maintenance of 300 kilometers of Rohri Canal to a private consortium for 15 years, paid from a share of the water saved at verified checkpoints. Restoring just eight percent of flow will bring reliable irrigation to 200,000 downstream hectares, limit further salinisation of the delta and ease pressure on the clogged Kotri outlet.

Over the next three to five years, medium-scale projects must prove bankability. The much-delayed K-IV bulk line can close if repackaged: a lumpsum EPC contract finishes civil works by 2026, after which an operations company runs the asset under a 15 year concession funded by tariffs and a modest federal grant capped at 20 percent of capital cost. The Karachi Chamber of Commerce estimates the 260 million liter uplift could reduce informal tanker spending by roughly Rs 28 billion a year.

The Punjab and Sindh should also tender three to seven year design-build-operate packages for canal telemetry and automated gates. Paying contractors a base fee plus a bonus on each verified cubic metre saved would align incentives; a ten-percentage-point bump in conveyance efficiency, mirroring gains recorded in Gujarat’s canal automation programme evaluated by the state government in 2015, could yield 13 billion extra cubic metres nationwide.

Beyond 2030, financing must shift to domestic capital markets. A federal-provincial task force led by the Ministry of Finance should draft a regulated asset base law that allows utilities to issue long term rupee “blue bonds” serviced by an indexed surcharge on every billed unit.

Pension funds can gain a reliable, inflation-linked asset; taxpayers can escape the cycle of foreign currency debt. Provinces can pair that framework with municipal irrigation integration: routing treated wastewater to peri-urban farms to free canal water upstream. A pilot in Lahore, modeled on the Asian Infrastructure Investment Bank’s 2024 wastewater feasibility study, could channel 125 million liters a day of reclaimed effluent to agriculture, releasing a tenth of Upper Chenab Canal flow for higher-value uses.

Every reform carries risk. The election year tariff freezes threaten cash flows, so concessions must include automatic indexation and limit federal guarantees to unpaid adjustments. Labor unions resist “privatisation”; Manila avoided confrontation by keeping staff on government rolls until the operator hit performance milestones, then offering transfers. Payment default fears fade when cash moves through escrow accounts that lenders control, with step-in rights after 90 days.

Concerns that private firms cherry-pick rich districts or jack up tariffs are overdone. Manila still charges under PHP 15 per cubic metre for its lifeline block—less than Karachi households pay per tanker—and 1.8 million residents in informal settlements gained legal connections. Kigali’s tariffs stay flat for a decade, with the state absorbing currency swings through a transparent formula disclosed to bondholders.

Diplomats will continue parsing treaty clauses, and border tensions may rise again. No arbitrator, however, can mend 10,000 kilometers of leaky canals or guarantee pressure at Karachi’s hydrants if half the city supply soaks into the ground. Recovering those losses through investable contracts can irrigate an extra two million hectares or provide continuous urban service, according to the Planning Commission’s Water Sector Framework 2024-30.

Halving municipal and conveyance leakage can create more usable water than any cut India can impose. By aligning responsibility with revenue and separating politics from plumbing, Pakistan can turn its most threatened resource into an asset that earns its keep instead of evaporating into crisis.

The writer is an associate research fellow at SDPI and can be reached at ahad@sdpi.org. The article doesn’t necessarily represent the views of the organisation