People's Democracy

Corporate Takeover of Water Resources

Amit Sen Gupta

SINCE antiquity it has been assumed that water is a common resource that can
and should be shared according to the needs of people. This assumption is
being challenged across the world, as water becomes a scarce resource.
Already 160 km3 of water is pumped out each year from groundwater sources
that are not replenished. In Africa and parts of Asia women spend an average
of 3 hours every day to collect water. The global demand for water has
increased more than six fold over the past century -- more than double the
rate of population growth, and 1.1 billion people in the world do not have
access to safe water.

The answer to the huge challenge of managing water resources could have been
sought in a framework of equity and pledging of greater public resources.
Instead it is sought to be located in a framework that advocates
privatisation of a resource that was long considered a key public resource.

WORLD FORUM

ON WATER

The World Forum on Water (in which all major countries of the world
participated and which came out with a Ministerial Declaration), that took
place in the Dutch city of The Hague in March 2000, and organised by the
World Water Council (WWC), overtly proposed the commercialisation of water
through a world wide private oligopoly. It is a proposal that has been
echoed by multilateral agencies such as the World Bank. The World Bank has
even advanced the increase of water prices to force a reduction of demand.
Interestingly the World Water Council includes two French Companies - Suez
and Vivendi - which are the largest water Multinationals in the world!
Vivendi Water calls itself "the world's leading provider of outsourced and
privatised water and waste water treatment services and systems", a
characterisation that Suez Lyonnaise des Eaux also applies for itself. While
Vivendi claims to have 110 million customers in more than 100 countries all
over the world, Suez claims to supply water to 115 million people in 130
countries in five continents.

The global oligopoly on water that exists today is formed by Suez and
Vivendi, along with eight other private British and U.S. companies,
including Thames Water, Biwater, and others. Thus the international
committee that studies the global problem of water is at the same time
partially controlled by the companies that eventually would profit from the
solutions the committee proposes. It is hence not surprising that the
"integrated water resources management" proposed by the WWC strongly
advocates "handling water as just another merchandise, whose just price can
only be set by the market."

The World Water Forum in its Hague document defined access to water as a
"universal need" as opposed to a "human right". This was consciously done as
defining the access to water as a human right would have restricted the
freedom of private institutions involved in water management.

WORLD WATER

VISION

Subsequent to the Hague Declaration on Water Security in March, 2000, the
World Water Commission, Global Water Partnership, World Water Council and
the World Bank, in their own ways, have been advocating global water
management as a response towards the water crises around the world. The
lynchpin of the vision of multilateral financial institutions like the World
Bank, as articulated in the World Water Vision, is that: Water is now more a
commodity than a natural resource. To understand the underlying principles
of the new approach one has to look carefully at the "word Water Vision"
that was issued after the Hague Conference.

The World Water Vision while not addressing the issue of water quality
degradation through urban and industrial use, blithely advocates that
efficiency is achieved through pricing and privatization. It explicitly
states that pricing water will lead to equity, efficiency and
sustainability. It states: "Because of its scarcity, water must be treated
as an economic good. To give this concept meaning, this Report recommends
that consumers be charged the full cost of providing water services".

Clearly opening the way for entry of the private sectored, the Vision
statement argues that: "More investments are needed in water infrastructure
- from current levels of $70-80 billion a year to about 180 billion, with
$90 billion coming mainly from the local private sector and communities…".
Such an argument has a familiar ring - we have heard it when projects like
the Dhabol project by Enron were justified on the plea that they would bring
in private investments in public utilities.

A further push towards privatisation of water is going to come soon through
discussions under the General Agreement on Trade in Services (GATS). While
no WTO member has made a commitment under GATS on services related to water
distribution, it is an area that is likely to see intense lobbying soon.

THE BOLIVIAN

STORY

Let us turn to the record of one recent example of water privatisation. In
1999, the Bolivian government, under heavy pressure from the World Bank,
sold Cochabamba's public water system to Bechtel's Aguas del Tunan. Details
of the deal still remain secret, with Bechtel claiming the numbers
constitute "intellectual property"!

That Bechtel's subsidiary was intent on obtaining maximum returns on its
investment, as quickly as possible, is clear. Within weeks of hoisting their
corporate flag over local water facilities, Aguas del Tunari slammed
water-users with rate hikes of double or more. Protests against the move
became so sustained that President Hugo Banzer was forced to clamp martial
law in response to weeks of protests, general strikes and transportation
blockages. While ninety percent of Cochabamba's citizens believed it was
time to return the water system to public control, the government insisted
otherwise. Ultimately the government had to give in and Bechtel was thrown
out of Bolivia.

Bechtel is a global giant, with more than $12.6 billion in revenue in 1998.
IWL is its subsidiary through which it pursues water-privatisation schemes.
Bechtel claims that IWL "with its partners, is presently providing water and
wastewater services to nearly six million customers in the Philippines,
Australia, Scotland, and Bolivia and completing negotiations on agreements
in India, Poland, and Scotland for facilities that will serve an additional
one million customers."

The World Bank's role in the Bolivian fiasco is worth recounting. A Bank
spokesperson argued that giving public services away leads inevitably to
waste, and said that countries like Bolivia need to have a "a proper system
of charging."

Bechtel, seeking to pin the blame on anything but its own irresponsible
corporate venality, released a statement claiming that "a number of other
water, social and political issues are the root causes of this civil
unrest." Moving to shift the blame, Bolivian government it said the
"subversive" protest was "absolutely politically financed by
narcotraffickers. But the uprising had nothing to do with drugs: It was all
about water. And the real culprits were not narcotraffickers but the
well-groomed executives of the Bechtel Corporation sitting smugly in their
San Francisco Financial District offices a hemisphere away.

INDIA FOLLOWS

THE SAME PATH

The newly formed Chhattisgarh State has privatised water supply from a
semi-perennial river Sheonath. This is the first case of a river water being
handed over to private interest in India. Called the Rasmada scheme, it is
owned by a local entrepreneur called Kailash Soni. The scheme, commissioned
18 months ago, supplies water to the Chhattisgarh State Industries
Development Corporation, which has bulk buyers in distilleries, sponge iron
units and thermal power plants (for instance, the Bhilwara group's Hindustan
Electro-Graphite Industries or HEG). Currently, the Rasmada scheme can
supply 30 million litres/day to the CSIDC.

Prime Minister Atal Bihari Vajpayee in his speech to the National Water
Resources Council said that "the cornerstone of the new National Water
Policy should be an explicit recognition that water is a national resource
and ...the policy should also recognise that the community is the rightful
custodian of water." But with his government attempting to outdo "banana
republics" in their blatant attempts to sellout to corporate interests,
Bolivia may well be repeated in this country.