ENVIRONMENT: Privatisation Dispute Surfaces in Kyoto

By Marwaan Macan-Markar Reprint | | Print |

Marwaan Macan-Markar

KYOTO, Japan, Mar 17 2003 (IPS) - A new World Bank report calls for a doubled investment in water "from public or private sector sources."

The 24-page report released here Monday at the Third World Water Forum (TWWF) says "an increase in financial flows for water will happen only if governments and the external support community change the way they operate."

The report points to an estimate by the World Commission on Water that annual investments need to rise from 75 billion dollars to 180 billion dollars over the next 20 years.

"Although the challenge is daunting, to improve the lives of today’s poor and to avoid future generations being born into poverty, the world community must rise up today and meet this challenge," says the report ‘Water-A Priority for Responsible Growth and Poverty Reduction: An Agenda for Investment and Policy Change’.

The report says it is time to move beyond debate on the involvement of the private sector. "The debate is not about public or private but about sustainable access to safe water supply."

That will have to come at a price, it says. "More investment in the water sector, be it from public or private sector sources, must go hand in hand with the recognition that water pricing is an essential instrument to enhance the sustainability of the resource."

The World Bank report adds that private sector investment will flow into the developing world only if governments provide a "supportive environment for investment, ensuring that regulation is in place, and transparent, predictable and balanced."

A senior executive says the World Bank is not trumpeting privatisation. "The bank has no ideology towards privatisation," World Bank vice-president for sustainable development Ian Johnson said at a press conference at the launch of the report. "We are interested in giving high quality water at the lowest cost."

Each country will have to determine the right mix of public and private sector involvement to provide water to their poor, says Johnson. "We have an ideology towards efficiency."

But critics are rallying for a showdown with the Bank and other advocates of privatising water. "This is nonsense. They are pushing privatisation as hard as they can," says Patrick McCully, campaigns director for International Rivers Network, a California-based environment and human rights group.

"The Bank wants private sector participation with public sector guarantees," he says. "This is worse than before, when they had to back down from the push towards privatisation."

The privatisation proposal is "clearly ideology driven," says Maria Selva Ortiz from the environment group Friends of the Earth (FOE). In Uruguay, Ortiz says, such plans are "a serious threat to the quality of water supply."

FOE says the push for a greater private sector role is intended to "increase market access for private water companies."

Activists warn of attempts to privatise water around the world. "The European Union’s push for water privatisation in developing countries is covered in a layer of sustainable development rhetoric, but the bottomline is to secure profitable markets for European water corporations," says the independent Corporate Europe Observatory.

"The EU has asked 72 member states, including many developing countries, to open up water delivery to international competition," it says in a media release distributed here.

Private sector companies control just five per cent of the world’s water sector at present. These companies include multinational corporations like Suez and Vivendi Universal from France, Bectchel from the United States, and Thames Water, an Anglo-German company.

Suez is claiming credit for connecting 1.6 million people in Buenos Aires to a drinking water network over the past eight years. "The water service charge is still less than when the contract became effective," the company claims. Many of these companies are trying to present themselves in a positive light.