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Mar 24 2006
Supplied or written by Webmaster
http://www.ipsnews.net/news.asp?idnews=32611
Pipe Dreams Over Private Water Supply
Sanjay Suri

LONDON, Mar 23 (IPS) - As the only country to have totally privatised water
supply, Britain can lay some claim to the triumph of privatisation of water
supply. But this is still not the unqualified success privatisation lobbyists
can uphold, experts say.

Most developed countries have public water systems, but privatised water supply
in Britain is efficient enough. ''The UK system has certainly not 'broken down'
and there has not been the intensity of opposition that you find in the global
south,'' Peter Hardstaff from the World Development Movement (WDM), a leading
independent watchdog on development issues told IPS.

''This is largely because despite the price hikes and the huge profits that
water companies made over the first five to ten years of privatisation, water
still does not take up a high enough proportion of peoples' income to make it
the kind of political issue it is in the global south.''

The honeymoon with privatised water may not last, though. Given the coming water
shortages, over the next ten years ''the government may have to step in with
some kind of investment rescue package, and water will be back on the political
agenda -- just as rail transport is in the UK.'' Privatisation of railway
services has been and has been acknowledged by British Prime Minister Tony
Blair to have been a disaster.

But efficient as it is, privatisation has not brought any exceptional benefits
either, Hardstaff said. ''If you compare the privatised UK system with public
systems in other developed countries, based on price, quality, leakage rates,
pollution control etc, then the UK system is not, by any stretch of the
imagination, 'way ahead of the rest' -- which you would expect it to be if the
privatisation advocates were right.''

There is little point in replacing well functioning public systems in developed
countries with privatised utilities, Hardstaff said. ''Even though
privatisation in developed countries does not face some of the problems it
encounters in the developing world, it is still hard to justify on cost,
investment, efficiency or competition grounds. I can't see any reason why a
developed country government would do it -- aside from pure political ideology
-- which is perhaps why no other country has followed the 'UK model'.

The problem in developing countries can be severe, he said. Difficult issues
arise ''such as the need to extend networks to large populations living in
extreme poverty with little ability to pay for the costs of connection, or
exchange rate problems when companies need to pay back shareholders or lenders
in dollars or euros or pounds but generate revenue in local currency.''

The World Water Forum that concluded in Mexico City Wednesday has not achieved
much, Vicky Cann from the WDM said. ''Important voices have been excluded and
while we have been told that there is a consensus on issues such as finance
which includes public private partnerships, that is not an accurate
representation of the vibrancy of debates happening outside the forum.''

But there were some bright spots, she said. One was the role of the Bolivian
government who made clear their opposition to water privatisation and the need
for public solutions to the global water crisis. ''Secondly, the UN Secretary
General's water and sanitation board has officially endorsed the idea of water
utility partnerships,'' she told IPS.

''The crucial thing about these is that these are operators working together to
capacity build but on a not-for-profit basis. This is an important part of the
debate and we have to hope that south-south public- public partnerships can
develop out of this initiative.''

The private sector had been active at the water forum, she said. ''However, it
is not just the private companies that are moulding the debate. Discussions
with official delegations and international finance institutions here
demonstrate that the push for private water continues in these arenas too.
Discussions have been held by groups inside the forum to look at public
solutions to water but we are a fair way off from seeing that taking a central
part of the debate.''

In a report ahead of the water forum titled 'Pipe Dreams', WDM and the
non-governmental organisation Public Services International warned that ''water
privatisation in developing countries is an ongoing disaster and the private
sector is failing to deliver the investment necessary to meet international
targets on water and sanitation.''

The report speaks of the failure of water privatisation particularly in Africa.

- Just half of one per cent of private sector investment has gone to sub-
Saharan Africa, the area that needs investment in water services the most. -
The public purse is repeatedly used to subsidise or bail out the private sector
and pay for new connections. - In every case where the private sector has been
responsible for extending water access in sub-Saharan Africa, it has failed to
deliver the promised level of investment. - 70 per cent of African water
privatisations have either been terminated early or are currently in some form
of distress.

The report points out that 1.1 billion people lack access to clean water, and
2.4 billion lack access to basic sanitation, and that 6,000 children die every
day because of water related diseases. (END/2006)





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