Privatisation of water supply

**Double Edge** · 16 Dec 10,, 11:50

This seems to be an ongoing trend here in India but resistance is growing. I'm not sure whether for the right reasons or not. The argument seems to be over whether govt can privatise water over the natural rights to sustenance.That privatising public utiltities infringes on the 'public' ness of the utility.

What have people's experiences in their own towns been with privatised water supply ?

YAY or NAY

Source
The dangers of letting MNCs sell ‘our’ water
By Ambrose Pinto S J
Wed 15 2010
‘Kannada Ganga’ is a deceptive name for water privatisation plan in Karnataka.

The project claims to provide 24/7 water supply in 16 cities across the state. Though the name of this project may sound progressive, the documents reveal a secret plan by the state and private companies to privatise water in the whole of the state.

Does any government have the right to privatise water? Supporters of privatisation of water say that it has a great track record of success, increasing the efficiency, quality, reliability and affordability of services to the population. But those who oppose have stronger reasons. Water should be free for sustenance needs.

Since nature gives water free of cost, buying and selling it for profit violates our inherent right to nature’s gift and denies the poor of their human rights. When private companies try to make large profits through high water prices, it denies the poor the inalienable right to the most necessary substance for life.

Since water is common and public, it cannot be owned as private property and sold as a commodity. No one can justify claiming water as their own through contractual agreements while letting human beings go thirsty. Water is the basis of all life and water rights are natural rights. Water can be used, but not owned. Issues of fairness or equity are being systematically sidelined in the water privatisation plan.

Water is so fundamental to life that we cannot let private companies, Indian or foreign take over water or let them make profit out of it. In fact, privatisation of water is a threat to national sovereignty. The corporates have their designs in privatising water. According to some studies, water companies are making more profits than oil, gas and mining companies. That would mean that selling water is even more profitable than selling petrol.

Companies know that they can control the world if they can control waters. ‘Kannada Ganga’ therefore is the deadliest assault on people’s right over water in Karnataka. What is tragic to note in all these decisions to privatise water is that the elected representatives and the people are completely kept in the dark.

Privatisation woes

In 1998, the water in Sydney was contaminated with high levels of giardia and cryptosporidium shortly after its water was taken over by Suez Lyonnaise des Eaux, a private company. At least seven people died as a result of E. coli bacteria in Walkerton, Ontario, after water testing had been privatised by A&L Labs in Canada. The company treated the test results as ‘confidential intellectual property’ and did not make them public.

Consumers saw the price of water increase threefold after the water service was privatised in Casablanca. When a Suez Lyonnaise des Eaux subsidiary purchased the state-run water company Obras Sanitarias de la Nacion in Argentina, water rates doubled but water quality deteriorated. The company was forced to leave the country when residents refused to pay their bills.

Food & Water Watch cites dozens of examples from across the country where water privatisation has gone woefully bad. High rates and bad service plague communities who transfer control of their water service to the hands of corporations. Common complaints include skyrocketing rates, sewage flooded basements, broken pipes, bad water quality, and cost overruns. The water barons prioritise stockholder returns over public wellbeing and leave municipalities to clean up the mess. Many of these examples of the failures of water privatisation are occurring in developed countries. The most severe effects surely will be on the developing world.

The World Bank and International Monetary Fund (IMF) are pushing for the privatisation of water services by European and US-based companies through stipulations in trade agreements and loan conditions to developing countries. Countries faced with large debts are forced by the World Bank and IMF to privatise water.

In 2000, out of 40 IMF loans distributed through the International Finance Corporation, 12 had requirements of partial or full privatisation of water supplies. They also insisted on the creation of policies to stimulate ‘full cost recovery’ and the elimination of subsidies. African governments, such as Ghana, increasingly gave in to pressures for water privatisation. In Ghana, the World Bank and IMF policies forced the sale of water at market rate, requiring the poor to spend up to 50 per cent of their earnings on water purchases. There is an effort to replace collective ownership of water sources with corporate control. Given the ill-effects of privatisation of water, should we in Karnataka allow water to be privatised? The citizens in Karnataka are aware that the current state of water supply in the state is gravely inadequate. The situation of water especially in smaller towns and villages is dismal. Instead of being accountable to the people, the state government has decided to privatise the state’s waters.

Water supply in parts of Hubli, Dharwad, Gulbarga and Belgaum have been given to Veolia -- a French company, while JUSCO and a TATA company have taken over its supply in Mysore. We are yet to know other secretive deals by the state.

There is an immediate and urgent need for the people of the state to come together to start a movement and give a clear message to the government that its very stability would be at stake if it does not reverse its decisions to privatise water. The least we expect from governments is to provide access to water to all citizens. If the state fails to do that, do we need a government at all?

(The writer is the principal of St Joseph’s College, Bangalore)

**S65** · 16 Dec 10,, 19:35

I'm not sure about how your project will work out. However, I can comment on how it works where I live.

Quickly looking over the article, the author mentions how water is provided free in nature and thus should not be sold. The government authority here that provides water to my home sends a bill requiring me to pay, or else I'll lose my water supply.

What natural rights to sustenance exist? If water is agreed to as a free resource because it is vital to life, how about food? Shelter? Land? The opposition to privatization seems to rely solely on this "natural right" in the face of greater utilization to the consumer. The author also places water distribution as the highest of government functions. How about defense, keeping the peace, and so on?

Remember that nature provides water with all manner of metals, parasites, bacteria and viruses. The author's resistance to profit is borne out of ignorance. I can go on about the profit mechanism, how if water yields great profits than more individuals will choose to become suppliers and so on. If water prices tripled after privatization, were government subsidies keeping the price down? If so, how did that affect water quality and distribution? Subsidization imposes economic costs on your water consumers anyway. If the company simply raised prices independent of any idea of costs, are competitors allowed to supply water as well?

Is the current method in which water is distributed good? Will this company have government protections if it does a bad job, thereby jeopardizing the competitive drive to produce a good product? Are mechanisms in place for others to join in water treatment and distribution?

If the company enjoys government protections that change its incentives to do anything other than compete for its survival through providing superior service, this would cause many quality and other issues. If a water market can work, I'm all for it -- yay.

**gunnut** · 16 Dec 10,, 20:03

Great points, S65.

The author of the article claims nature provides water for free, yet claimed that water was contaminated by E. coli after a private company took over. Maybe the private company just returned to water to its natural state, with E. coli and all.

If water were free for all, then who would want to filter it and clean it for you? What's in it for me? I'll filter and clean the water that I need. Screw you! Since I am "not permitted" to sell water at a profit, then I will keep all the water that I filtered and cleaned for myself.

Further more, if water were "free" for all people, then who will decide who gets how much? Is it a government agency? Is it a civilian agency? Is it the guy who lives next to the river? How about if the guy lives next to the river gets as much water as he wants because it's so convenient for him?

Privatize water supply, I say. It's better than having government control over it.

People have a very strange notion that somehow private/corporate control is evil while government is benevolent. I can tell you that governments in various forms have resulted in enslaving and killing more people than any private entity ever could.

**Double Edge** · 16 Dec 10,, 20:28

Originally Posted by S65

Quickly looking over the article, the author mentions how water is provided free in nature and thus should not be sold. The government authority here that provides water to my home sends a bill requiring me to pay, or else I'll lose my water supply.

Thats exactly the way it works here too. The govt does charge and that seems to be ok but not if non-govt does it.

Originally Posted by S65

What natural rights to sustenance exist? If water is agreed to as a free resource because it is vital to life, how about food? Shelter? Land? The opposition to privatization seems to rely solely on this "natural right" in the face of greater utilization to the consumer. The author also places water distribution as the highest of government functions. How about defense, keeping the peace, and so on?

Right, and i wonder why the author needs to indulge in such spurious pretexts. It seems designed to appeal to those against private enterprise.

Originally Posted by S65

Remember that nature provides water with all manner of metals, parasites, bacteria and viruses. The author's resistance to profit is borne out of ignorance. I can go on about the profit mechanism, how if water yields great profits than more individuals will choose to become suppliers and so on. If water prices tripled after privatization, were government subsidies keeping the price down? If so, how did that affect water quality and distribution? Subsidization imposes economic costs on your water consumers anyway. If the company simply raised prices independent of any idea of costs, are competitors allowed to supply water as well?

Ah, i think you've figured what the argument is about. This is a protest against removing that subsidy. It's still early days so there aren't many other providers in the scene. The article only mentions one.

Originally Posted by S65

Is the current method in which water is distributed good? Will this company have government protections if it does a bad job, thereby jeopardizing the competitive drive to produce a good product? Are mechanisms in place for others to join in water treatment and distribution?

I think that is the fear. Otherwise the private company will not step up to the plate. The feeling is that it won't necessarily be better or marginally so than what exists already, yet the price will be much higher. TBH i've yet to understand what privatisation will actually offer over the status quo.

Originally Posted by S65

If the company enjoys government protections that change its incentives to do anything other than compete for its survival through providing superior service, this would cause many quality and other issues. If a water market can work, I'm all for it -- yay.

Right, everytime a private player tries to get into an area there are always charges of corruption and protests by the people that the govt is selling off the country to the sharks. Crony capitalism in short.

If the govt were to setup a framework and then ensures that private companies compete for service thereby improving quality and being competive on price it would be ok. Otherwise not. I'll be on the lookout for such but have not heard anything so far.

Thx for your post, it has enlightened me a lot

**Double Edge** · 16 Dec 10,, 20:54

Originally Posted by gunnut

People have a very strange notion that somehow private/corporate control is evil while government is benevolent. I can tell you that governments in various forms have resulted in enslaving and killing more people than any private entity ever could.

Let the market work its magic.

Trick is, the market has to be setup properly in the first place. And it usually isn't because the private player will work out some sweet deal with a few ministers looking to cash in and we end up with a monopoly of sorts. The private player then cannot really deliver but is just looking to cash in and then sells out.

Ppl are let down and sentiment against private control rises for the wrong reasons

**gunnut** · 16 Dec 10,, 21:32

Originally Posted by Double Edge

Let the market work its magic.

Trick is, the market has to be setup properly in the first place. And it usually isn't because the private player will work out some sweet deal with a few ministers looking to cash in and we end up with a monopoly of sorts. The private player then cannot really deliver but is just looking to cash in and then sells out.

Ppl are let down and sentiment against private control rises for the wrong reasons

Notice your example is not a true "private" market. There are government players involved.

Politicians are great at laying the blame on anyone but themselves, usually the "evil" corporations. We see that in Obama's everyday speech. Government screws up the market (Fannie/Freddie) and then blame the private players who played by the screwed up rules.

**omon** · 16 Dec 10,, 21:51

Water is Life - Water Privatization Conflicts

**Double Edge** · 16 Dec 10,, 22:16

Originally Posted by gunnut

Notice your example is not a true "private" market. There are government players involved.

There is only the govt now with a few private players trying to get into the state. The way it works is they apportion out which towns go to which companies. I don't think there will be more than one company in one town, it will be just the one.

We don't have any social security here, so what happens is the ppl that can afford to pay for water end up subsidising those that cannot in poorer areas. The govt provides this to keep them quiet and get their votes. This begs the question why they would ever allow private companies to get in as they would not have the ability to keep it up unless they raise rates so they can make a profit as well. Therefore there is no advantage in this case offered by a private player at all, in fact it would be worse as the price would go up for the same service.

Thing is in other areas where ppl do pay they do not get what they pay for so a private company might do a better job here. But again the price would go up.

In which case how would private control offer any advantages over the existing system

Originally Posted by gunnut

Politicians are great at laying the blame on anyone but themselves, usually the "evil" corporations. We see that in Obama's everyday speech. Government screws up the market (Fannie/Freddie) and then blame the private players who played by the screwed up rules.

This is even worse because you had a working system and allowed it to get subverted

**Double Edge** · 16 Dec 10,, 22:36

Originally Posted by omon

Water is Life - Water Privatization Conflicts

Awesome, i think you nailed the source the author used

The Bolivian story reminds of the plot of the last James Bond flick, Quantum of Solace.

**zraver** · 16 Dec 10,, 23:26

Originally Posted by gunnut

Notice your example is not a true "private" market. There are government players involved.

Politicians are great at laying the blame on anyone but themselves, usually the "evil" corporations. We see that in Obama's everyday speech. Government screws up the market (Fannie/Freddie) and then blame the private players who played by the screwed up rules.

And some times greed is not good. T Boone Pickins is endangering millions of lives through his purchase of the political process in Texas. He is draining the Ogalla Aquifier as fast as he can. When it dries up- no center point irrigation.

**gunnut** · 16 Dec 10,, 23:44

Originally Posted by zraver

And some times greed is not good. T Boone Pickins is endangering millions of lives through his purchase of the political process in Texas. He is draining the Ogalla Aquifier as fast as he can. When it dries up- no center point irrigation.

Again, the politics, which means government, is involved. It is not a private process any more.

Pickens is a sleezeball. He pushed whatever energy source to replace oil because he stands to make large sums of money from it. That in itself is not bad. The problem is he wants the power of government to subsidizing his profit motive.

**crooks** · 17 Dec 10,, 00:13

Water supply is a vital resource, too vital to be subject to market whims or control. I think water should be publically owned and administered, through a national utility company, with water charges to maintain piping and supply, based on usage. A flat fee is unfair, you should pay based on however much you need, which would encourage more prudent use as well. I doubt someone would leave the taps on all night (done in many parts of rural Ireland to prevent freezing) if they were paying for it.

**gunnut** · 17 Dec 10,, 01:14

Originally Posted by crooks

Water supply is a vital resource, too vital to be subject to market whims or control.

But it's ok for it to be subject to state whims and control?

Originally Posted by crooks

I think water should be publically owned and administered, through a national utility company, with water charges to maintain piping and supply, based on usage.

Public is good. Of course what does that mean, exactly? We all get a say in what to do or how much to charge? Do we all get a vote? Or does "public" ultimately mean "state?"

Originally Posted by crooks

A flat fee is unfair, you should pay based on however much you need, which would encourage more prudent use as well. I doubt someone would leave the taps on all night (done in many parts of rural Ireland to prevent freezing) if they were paying for it.

Absolutely! I will be the one to determine how much you need.

**omon** · 17 Dec 10,, 03:13

Originally Posted by gunnut

But it's ok for it to be subject to state whims and control?.

what do you recommend? who should be controlling it? maintaining aqueducts, pipes, pump stations, cleaning, purifying facilities...etc?

Originally Posted by gunnut

Or does "public" ultimately mean "state?" .

i'd say yes,

Originally Posted by gunnut;

Absolutely! I will be the one to determine how much you need.

that is not what he said, he said : you should pay based on however much you need. pretty much the way it works now, you pay by the meter, how much you use, is how much you need, very simple concept.

**gunnut** · 17 Dec 10,, 03:52

Originally Posted by omon

what do you recommend? who should be controlling it? maintaining aqueducts, pipes, pump stations, cleaning, purifying facilities...etc?

Whoever puts up the capital with the prospect to recover cost along with a chance to make a profit.

Originally Posted by omon

i'd say yes,

Who runs the state? You? Me?

Originally Posted by omon

that is not what he said, he said : you should pay based on however much you need. pretty much the way it works now, you pay by the meter, how much you use, is how much you need, very simple concept.

No, that's not how it works. The way it works now is I use however much I'm willing to pay, not however much I need.

Do I need to take a shower every single day? Yes. Do I need to take a 45 min shower every single day? Maybe. Who are you to tell me how much water I "need?" I "need" however much I am willing to pay.