1 – INTRODUCTION The availability of water critically influences human well-being and directly affects ecosystems and the environment. Issues related to water supply and demand are particularly more complicated in areas of rapid urban and population growth. Projections indicate that by 2025, 46 to 52 countries and a total population of 3 billion people will be under water stress (Rosegrant, 1997). And to increase the complexity even further, there is the fact that water availability is not homogeneous. Water is unevenly distributed and, as a result, water problems are region-specific. Water supply and demand problems usually fall into the category of wicked problems. Their complexity is based on the fact that they have many interdependencies, are multicausal and have no clear solution. Furthermore, water problems lead to behavior change and are usually associated with political decisions and planning efficiency. There is usually a problem of conflicting interests, meaning that the “solution” for one party may be a “problem” for the others (Freeman, 2000). The aim of this study is to understand the social, economic and biophysical aspects of this problem and the interactions between them. Water scarcity can be viewed as physical or economic (Ricci et al, 2000). Physical scarcity deals with the biophysical aspects of the problem and is beyond human control. Economic scarcity is associated with the available technology and costs associated with the process of exploiting, treating, distributing and reusing water. The analysis will take into consideration both economic and physical water demand and their interactions.2 – BIOPHYSICAL ASPECTS Water resources are basically extracted from two sources: surface water and groundwater. The primary source that provides your… middle of the paper… s. BioScience, 54, 909-918.RICCI, P.F., RAGAINI, R.C., GOLDSTEIN, R. & SMITH, W. 2000. Global water quality, supply and demand: implications for megacities. Available: http://www.federationofscientists.org/PMPanels/Pollution/Water_Quality.pdf [Accessed 31/03/2014].ROSEGRANT, M.W. 1997. Water resources in the twenty-first century: challenges and implications for action. IFPRI Vision Discussion Papers 2020.WAKODE, H. 2011. Urban growth and its effect on water supply demand in Hyderabad. Urbanization and water [Online]. Available: http://www.waterandmegacities.org/urban-growth-and-its-effect-on-water-supply-demand-in-hyderabad/ [Accessed 03/31/2014].WANG, J., D.A., L., SONG, K. & LI, B.-L. 2008. Temporal variations of surface water quality in urban, suburban, and rural areas during rapid urbanization in Shanghai, China. Environmental pollution, 152, 387-393.