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Sunday, February 28, 2021
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LOVAINA, Aug 14 2007 (IPS) - It is well known that even in countries where mineral water is public property, it is private companies that are making major and easy profits from selling it, writes Riccardo Petrella, founder member and General Secretary President of the International Committee for the World Water Contract, and professor at the Catholic University of Louvain. In this article, the author writes that the \’\’business\’ of bottled mineral water has become one of the most lucrative and fast-growing sectors around the world. The Swiss private bank Pictet forecasts that by 2015 private companies will supply water to almost 1.75 billion \’\’consumers\’\’. In this context, it is not surprising to learn that water management companies are among the most hotly bought and sold businesses, much the way shoes or refrigerators are. The last major instance of this was the sale of of Thames Water, which in fifteen years passed from being a public entity to a private British company to a holding of a German energy giant and now of an Australian bank. It should not be excluded that in ten more years Thames Water could pass into the hands of a Chinese company specialising in urban waste removal.
It is now becoming equally well-known that the private water distribution companies, as well as those private-public concerns ever more numerous in the water service sector, are taking possession and/or control of potable water around the world.
The French firms Suez-Ondeo and Vivendi-Veolia alone manage the water supply of over 250 million people, a number that doesn’t include those whose water is provided by companies in which Suez and Vivendi have major stock holdings. The Swiss private bank Pictet forecasts that by 2015 private companies will supply water to almost 1.75 billion ”consumers”. In this context, it is not surprising to learn that water management companies are among the most hotly bought and sold businesses, much the way shoes or refrigerators are.
The last major instance of this was that of Thames Water – the largest water company in the UK and number three in the world (after the two French firms named above)– which was bought by Australia’s Macquarie Bank from Germany’s RWE. RWE, a European energy giant, had bought Thames Water in 2000 for 7.1 billion euros in its bid to become Europe’s top multi-utility company (bridging energy, transport, waste removal, water, telecommunications…). This move towards a multi-utilities strategy also pushed the Italian energy company ENEL towards a possible acquisition of Acquedotto Pugliese. For various reasons, the management of RWE recently decided to focus exclusively in its area of expertise with the goal of keeping its position as one of the world’s energy giants in the process of restructuring and consolidating. Thus Thames Water was sold as quickly as it had been bought.
Macquarie Bank paid 14 billion euros for Thames Water. An Australian bank specialising in financial services and infrastructure investments, it has never had anything to do with water. For example, it owns the airports of Brussels and Copenhagen. At present it has about 8900 employees in 24 countries.
So why did Macquarie invest so heavily in the water sector – also buying the American company Acquarion for USD 860 million. Certainly not because it has an industrial-environmental plan to modernise the water infrastructure for the 13 million inhabitants of greater London and the 50 million other people Thames Water serves.
The reason is purely financial: to increase the Group’s profits by entering a very profitable sector destined to become even more so in the future as long as the process of water privatisation continues and potable water grows in shorter and shorter supply. Then-prime minister Margaret Thatcher privatised water in 1989 stating that the English didn’t care who supplied their water. The important thing, she reasoned, is having a high-quality product at an affordable price, she said.
But privatisation has not worked out as expected: the price of water has not dropped but rather shot up, and as far as quality of service is concerned Thames Water was recently reprimanded by the authorities for failing to reduce the number of leaks to the quantity legally agreed.
As for Britains’ apparent lack of concern for the nationality of the water supplier, in fifteen years Thames Water passed from being a public entity to a private British company to a holding of a German energy giant and now of an Australian bank. It should not be excluded that in ten more years Thames Water could pass into the hands of a Chinese company specialising in urban waste removal.(END/COPYRIGHT IPS)
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