PSI Calls for an End to Water Privatisation

On World Water Day PSI Calls for an End to Water Privatisation

Water privatisation has caused deterioration in services, higher prices for the poor, more corruption, environmental problems and more. The list of problems is long and the consequences of privatisation can be disastrous for communities and governments. Just ask citizens of Manila, Buenos Aires or Cochabamba.

Water privatisation has failed to deliver its promises. It does not give the poor better access. It does not free up more money for major investments. It does not lead to better management. Evidence of these problems can be found in the reports section at http://www.psiru.org.

Despite these problems, many northern countries insist on privatisation of water services. The European Union is pushing for it in the WTO’s General Agreement on Trade in Services (GATS), despite widespread opposition. Donor countries continue to make privatisation a condition for access to development loans or grants. And recently, the United Nations is being pressured by member states to endorse these failed privatisation policies.

The motive for privatisation is corporate ambition to generate massive potential profits. The biggest water corporations by far are the French Ondeo-Suez and Veolia (formerly Vivendi). Third is the German RWE-Thames. A number of other corporations are getting active, including the USA’s military and construction specialist Bechtel, as well as Japanese construction firms Marubeni and Mitsui. And some financial groups are sticking their toes in, including French Paribas Affaires Industrielles (PAI) and a number of Asian investment groups.

The problem is that the water sector does not respond to market dynamics. It is operated as a natural monopoly. There is no substitute to water. Clients are captive consumers, they can’t live without it. And water is an inherently political issue, requiring decisions affecting the poor, the ecology, international relations, etc. All of these factors make private, for-profit management extremely problematical.

Says David Boys, PSI’s Utilities specialist : “Donor countries and the international institutions must get this one right. Governments need to ensure safe and reliable water services for all citizens. This is not a responsibility which can be abdicated through privatisation or ‘commercialisation’. It will require making funds available, especially to local authorities, to ensure that public utilities can invest for the long-term. And citizens should have a say in what happens with their public services.´

The global union federation PSI is challenging governments and international institutions to support quality public services. Says Hans Engelberts, PSI General Secretary, “We challenge governments, development banks and the UN system to stop this misplaced emphasis on privatisation. We must rebuild our public services. Workers and their unions will support such policies, and we offer our collaboration in reforming an improving public water services.”

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