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.”