The privatization of water

Keywords: water, blue gold, management, multinational, globalization, privatized, geostrategy, geopolitics.

According to Riccardo Petrella "the current logic of relations between States and Multinationals reduces the first to a vast system of legal, bureaucratic and financial engineering put at the service of the commercial performance of the company. The state is no longer the political expression of the collective public interest; it becomes an actor among others, responsible for creating the conditions favorable to the competitiveness of companies. The general interest is about to boil down to that of giant firms competing for world markets. And water becomes a commodity like any other "

It is becoming more and more interesting for companies to invest significant sums in the trade of water, that which one buys in bottle selling already more expensive than oil, in equivalent quantity; extraction costs are minimal and refining costs are zero.

Some transnational corporations and their subsidiaries share the cake of the private distribution of drinking water; in the “countries of the South”, they walk hand in hand to organize the water market and replace the public sphere. Their interests are totally common. Their income has kept pace with their growth. These multinationals are among the 100 richest companies in the world, with a combined income of almost $ 160 billion in 2002 and an annual growth rate of 10%, faster than that of the economy of many of the countries where they operate. .

But the liberalization of water has caused serious problems in many countries, where the intervention of foreign multinationals has notably led to a billing for water far below what the poor can pay.

Africa is chic

In Zimbabwe, Biwater finally withdrew from a water privatization project because the local population could not pay the tariffs that would have made a sufficient profit. Almost everywhere, the policy of total cost recovery has inflated consumer prices.

In South Africa, the situation has become very worrying: since 1994, nearly 10 million households have had their water cut, unable to pay their bills, and cholera has returned.

Ghana has seen the price of water increase by 300% in three years. Faucets are "disconnected" because an increasing number of families can no longer pay their skyrocketing water bills.

In Kenya, water billing has been privatized by the Nairobi City Council, without tendering, leaving 3 workers unemployed. These people were replaced by 500 overpaid executives. Consumers have borne the costs of a new billing system. The population in Nairobi pays five times more for a liter of water than a North American citizen.

While in Botswana, the Public Water Distribution Company is recognized for the increase in the number of users, which rose from 30 in 000 to 1970 in 330. Its equalization policy protects access to water. for low-income households.

Read also: 1939-2005 Oil Press Review

Latin America

In Brazil (20% of the world's fresh water reserves), Nestlé has carried out rampant privatizations by purchasing land where springs and groundwater are found; Nestlé is only interested in table water, pumped 30 liters of water per day which it hastened to demineralize, a practice that Brazilian law prohibits however, because it prevents treating anemia at lower cost. With the support of Coca-Cola, the company also tried, before the 000 elections, to change the Brazilian law which prevents demineralization of water. Two sources have dried up and the ecosystem is completely upset. Nestlé has also infiltrated all universities in Brazil, research on the issue of water is truncated.

In the Uruguayan province of Maldonaldo, water tariffs increased enormously and the reserves were contaminated when Uruqua, a subsidiary of the water company Aguas de Bilboa, obtained the right to distribute water on a lucrative basis. "Full cost recovery. The World Bank has declared the privatization of Buenos Aires a success. But an ICIJ investigation shows that the privatization of water in Buenos Aires has been robbed of greed, deception and broken promises. Its success turned out to be mainly a mirage. The privatization of water has enriched a group of union leaders, buddy capitalists and government officials from former President Carlos Menem. Several officials are under investigation for corruption.

In Mexican maquiladoras, water is sometimes so scarce that babies and children are reduced to drinking Coke and Pepsi. In addition to unjustified billing tariffs, residents who fail to pay their bills are often cut off and officials often make them wait a long time before examining their claims. Floods are much more frequent, the result of a lack of maintenance of piping and pipes. Large water distributors have shown little desire to invest in improving infrastructure. However, the idea of ​​increasing the debt load of municipalities seems to inspire them.

The Bolivian government has conceded its water for 40 years to Aguas del Tunari, a subsidiary of Bechtel. A year later, thousands of families had to pay up to 20% of their income to get their daily water. The general strike broke out and the army had to intervene violently, killing 5, according to Amnesty International. The population demanded the end of the contract with the private company and the government gave in.

The Uruguayan government has started offering concessions in wealthy cities and neighborhoods. The price of water was multiplied by 10, the water was cut to those who did not pay, families or institutions. Lagoons and other areas where these companies drew water have dried up, all so that certain cities like Punta del Este (which uses as much water as the rest of the country) can water their private gardens. But the Uruguayans managed to schedule a national referendum, with legislative value: in October 2004, more than 60% of the Uruguayan citizens forced to include in the constitution the inalienable membership of water in the public domain and the prohibition of its privatization.

Read also: Direct pollution from oil and fossil fuels

In Puerto Rico, where Suez is mandated for 10 years to provide water services by a contract in the amount of 4 billion dollars, the "Solicitor" general Carlos Lopez strongly criticized the French multinational, which devoted a lot of energy to perfect the invoicing and collection methods, but brought "no improvement" to the distribution of drinking water to consumers.

Great progress in the Philippines.

Low pressure at the tap, very few hours during the day when the water flows: families in Manila get up at midnight or at dawn to make reservations because the service is not provided continuously, especially in working-class neighborhoods . 10% of household income is now spent on paying the water bill. It is people without running water who suffer most from privatization: they buy it at prices three or even five times higher than from resellers. Cholera has even re-emerged in Manila, when no cases have been reported for a hundred years.

India: the imbecility of private projects

In India, Suez tried to buy water from the Ganges, in order to sell 635 million liters per day to Delhi. Suez's argument was classic: “Without their money, we wouldn't be able to reorganize the distribution of water. But why should the pure water of the Ganges have to water Delhi, which is hundreds of kilometers away, when the Yamuna river passes right by? Cleaning the Yamuna seems more economical and more rational. Each of the farmers who will be deprived of water - because it will be sold in Delhi - will lose enormous amounts following the fall of their harvest.

Another huge project to privatize the Hindu rivers, aims to connect the rivers together, to make them flow in opposite directions, to direct them to areas where there is money. It costs $ 200 billion; but a scientific evaluation has shown that it is completely useless, that it will cause enormous damage to society, to the ecosystem, to forests, and that it will displace populations on an unimaginable historical scale.

These mega-projects represent golden opportunities for multinational water companies, for Western companies and for bureaucrats. All this in a context where corruption is plaguing the political and legal world at all levels. But all of this privatization risks jeopardizing the collective future of the water supply.

Read also: The oil flow to 1998 2004

Merde in France

Corruption, fraud, overcharging and so on are part of the file of the multinationals Suez and Vivendi. Cities that had privatized their water services saw tariffs rise up to 400% while the quality declined to the point of leading to lawsuits for poisoning. The only country in the world where water distribution is 80% privatized, France experiences considerable price differences. The CEOs of Bouygues, Lyonnaise and Générale des Eaux have in turn been indicted in corruption cases. Many senior executives have been charged with misuse of corporate property. They are suspected of having made hidden contributions to mayors, deputies, political parties in exchange for public contracts. Alain Carignon, ex-mayor of Grenoble, took 5 years firm.

Great Britain: over here the currency

English taxpayers found themselves paying $ 9.5 billion to sell off their state-owned water treatment and distribution companies. As a result of privatization, the price of water has increased substantially, in particular to cover the investments required to refurbish the networks. It was consumers, not businesses, who ultimately funded these investments. Privatization has caused a transfer of wealth from users to owners of capital. The exceptional costs artificially reduce profits and the repurchase of shares making it possible to conceal a profitability deemed to be troublesome by the administrators.

While profits increased by $ 600 million or 35% from 1992 to 1996, employment has steadily declined over the past five years, employment has decreased by 4 jobs or 084%. If the employees and the users paid the price for the privatization, the senior managers obviously did not have to complain.

As it is the private enterprise which takes care of the recovery, the situation becomes untenable for many disadvantaged families, forced to pay excessive tariffs under penalty of being prevented from supplying drinking water. In Great Britain, large private companies have not been shy about cutting water to several thousand households because of non-payment.

Is this world serious?

By wanting to “reform the distribution of water”, a reform presented as a technique, the actors are actually touching on a certain way of organizing the redistribution of income in the countries concerned, on a certain balance between civil society and politics, lifestyles. Two-speed access to water according to household income, improper water delivery, deterioration of quality standards (private companies prefer to minimize costs), staggering price increases, scandals and cascading condemnations, activation of the North imbalance -South, net inflows for negligible, even negative states: public goods have been sold off at low prices, looting being disguised as necessary reform supposed to make up for the lack of public services, mediately lynched and decreed a priori incompetent and corrupt.

Frank Swalt

Leave a comment

Your email address will not be published. Required fields are marked with *