"Kautilya says that the state should not only construct reservoirs of water but also should give
necessary  support  for  private  contractors  who  undertake  to  build  such reservoirs." - Dams in Ancient India Anandakrishnan Kunholathillath Department of Sanskrit Government Brennen College
History seems to be an underrated source if inspiration for today's leaders. 
Couldn't we think of securing water resources & building housing (they go hand in hand) as something akin to constructing Wonders in that PC game Sid Meier's Civilizations? You know, give it meaning.  Leadership and Labor is all that's needed for digging holes (dams, SW attenuation) & building houses from CSEB's. It makes sense that the growth and maintenance of any new systems should be run by competent persons. It seems more likely that a privately run enterprise would be better, but you can't rule out government's role in facilitation and mobilization. It's possible to work together, too bad its so complicated.