Bach was asked repeatedly to justify building a golf course and a canoeing venue for the Rio de Janeiro Olympics in 2016.
Southeastern Brazil, which includes Rio, is going through the worst drought in 80 years.
A new $20 million golf course is being built for the games. The city is also building an artificial canoeing venue, which a student described as being the equivalent to "10 swimming pools."
Student Beatriz Klimeck, 18, told Bach "the poorer the neighbourhood, the worse the situation." She made specific reference to the frustration of people living next to the golf course.
"The city of Sao Paulo and many parts of Rio are going through a water crisis that is quite severe," Klimeck told Bach. "There are neighbourhoods that have not had water for 12 days. They have no food or water to cook, but the golf course is being irrigated permanently. And this makes them feel very mad and upset."
Bach said he'd been told by Rio Olympic officials that heavy rain in February had resolved the problem, and he seemed surprised to hear otherwise.
"This (water problem) seems to be a major concern for all of you, and also for us," Bach said. "My impression so far was ... that the water crisis is and will not be a permanent crisis."
The IOC ended a three-day inspection tour of Rio on Wednesday, with Bach being briefed by the inspectors. He will remain in Rio for more meetings until Saturday.
He acknowledged that people being deprived of water and linking it to the Olympics was bad for the IOC.
"If we do not manage this — to convey it to the people and make it tangible — then all the goodwill does not help very much," Bach said.
Rio's new golf course has been tied up in numerous controversies.
The developer faced a lawsuit over breaking environmental rules to build the course in a nature reserve on some of Rio's most expensive real estate.
A public prosecutor is also looking into a suit against Rio Mayor Eduardo Paes for allegedly giving financial concessions to the billionaire developer of the course.
Rio has two other golf courses that officials said were not suitable for golf, which returns to the Olympics for the first time in 112 years.
The developer is spending about $20 million to build the course. He also plans to build 140 luxury apartments ranging in price from $3 million to $8 million.
Paes said this week he "hated" having to build a golf course in Rio de Janeiro for the 2016 Olympics.
Paes told the newspaper O Globo: "I would never have built this course, never."
Carlos Nuzman, head of the Rio organizing committee, said the same Wednesday about the canoeing venue.
"When we got the right to host the game we got a list of sports to host," he said. "After we were granted the right to host we could not oppose that. ... I was not happy having this (canoeing park) here, but we had to do it."
Rio is spending about $14 billion on the Olympics, and Brazil spent about $12 billion on last year's World Cup.
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