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Water privatization has been a failure all over the world

Summary & Comment: While the people of Ghana suffer, guess who stands to benefit? None other than San Francisco's own Bechtel Corp., which, along with the French companies Vivendi, Saur, and Suez and the U.K.'s Biwater, is vying to take over Ghana's system at a potentially handsome profit. This is quite vicious and blatant," Rudolf Amenga-Etego, the national campaign coordinator of Ghana's National Coalition Against the Privatization of Water, told us in a recent interview. He was in town promoting the fight against water privatization. Note interesting parallels with the USA, where only 15% of water supply is privatized; again with negative results. There is a longer exposition of the problem of water privatization at: http://www.bankindex.com/recentnews.asp?or=5 JM

Author: Savannah Blackwell Date Written: 6 November 2002
Primary Category: Economic Justice Document Origin: Public Citizen
Secondary Category: Resource Extraction Source URL: http:// http://mai.flora.org/forum/39796
Key Words: Global, Ghana, water supply, Bechtel, multi-nationals, World Bank, water cut-off

Printable Version

Water privatization has been a failure all over the world - but companies  like Bechtel haven't given up .

The people of Ghana are in trouble. During the rainy season, cholera cases reach epidemic proportions in Accra, the nation's capital. Nearly half of the recorded visits to health facilities in 2000 were related to malaria.   And the number of people infected by guinea worm is rising to the point where entire communities face economic devastation.

All of these diseases are attributable to the same fundamental problem: lack of access to clean, drinkable water. And the reason the rates of illness are increasing, activists say, is because many people, mostly the poor, have been cut off from water supplies in the country's move toward privatizing its entire water system.

In 1998 officials at the World Bank and the International Monetary Fund told Ghanaian government officials that if they wanted $400 millions in loans to rebuild the publicly owned and controlled water system, they had  to make some changes that would, in effect, prime the system for takeover by politically powerful, private water companies: The government had to end its practice of making wealthy and industrial customers subsidize the cost of providing water to poor communities. In addition, water had to be sold at full market rates.

While the people of Ghana suffer, guess who stands to benefit? None other than San Francisco's own Bechtel Corp., which, along with the French companies Vivendi, Saur, and Suez and the U.K.'s Biwater, is vying to take  over Ghana's system at a potentially handsome profit .

Indeed, the World Bank and the IMF are granting low-interest loans of a mere $70 million each (the real cost of Ghana's water infrastructure needs is more like $1.2 billion) to the two corporations that win the deal to pay for some improvements - in exchange for claiming the country's market.

" This is quite vicious and blatant," Rudolf Amenga-Etego, the national campaign coordinator of Ghana's National Coalition Against the Privatization of Water, told us in a recent interview. He was in town promoting the fight against water privatization .

"The World Bank has among its goals the eradication of poverty," Amenga-Etego said. "But its policies create poverty by excluding a significant population from water. You cannot produce a prosperous society that way. They seem to be working for corporations and not the peoples of the world."

From Ghana to Stockton

In 1998, the year after the Ghana government stopped water subsidies for poor people, the incidence of guinea worm jumped from 5,473 to 8,965, according to an August 2002 report by a special fact-finding mission to Ghana, which included representatives from such organizations as the Washington, D.C.-based Public Citizen (a consumer and good-government group  founded by Ralph Nader) and the Center for Policy Analysis on Trade and Health, a San Francisco-based, nonprofit public health research and advocacy group, and a host of experts on issues from labor rights to health care. Taps were turned off, and people couldn't afford to turn them back on. Rates have shot up 200 percent over the past three years, and currently  78 percent of Ghana's poor don't have access to piped water. Thus people are digging wells by hand, which are often contaminated with sewage and pollution - causing high rates of disease.

Unfortunately, while the problems associated with the move toward in Ghana are severe, they aren't unusual. Privatization pressure is rampant all over the world, including in the United States. And the privatization efforts that are approved often have disastrous results. The fact-finding mission  reviewed 40 IMF loans from 2000 and found that loans to 12 countries had conditions similar to those in Ghana.

Even though researchers, including those at Public Citizen and the nonpartisan, Oakland-based Pacific Institute for Studies in Development, Environment, and Security, have found that privatization often leads to skyrocketing rates, environmental damage, poor maintenance, economic inequity, and decreased accountability, the administration of President George W. Bush backs the IMF and the World Bank's policies.

In fact, Bush is pushing the policy domestically by supporting a proposed law that would require any U.S. community that wants federal money for improving its water system to consider privatization. And the European Union, where the world's largest private water corporations are headquartered, is trying to pressure the United States into opening up its water markets to private companies. (Currently, only 15 percent of the U.S.  population gets its water from private entities). From New Orleans to Stockton, officials have been toying with handing over water systems to private corporations that will reap huge profits at the expense of customers.

Amenga-Etego, who was honored by the San Francisco Board of Supervisors and has gotten the attention of Rep. Barbara Lee, is part of global efforts to fight the privatization push. On Oct. 28, 14 protesters chained themselves  together in Bechtel's San Francisco lobby to raise awareness of the corporation's insistence on suing the Bolivian government. Bolivia kicked  out a Bechtel subsidiary (the same one that wants to take over in Ghana) after its privatization of the country's water system resulted in soaring  rates and widespread civil unrest. San Francisco officials, for their part,  forced Bechtel out of a contract to manage the restoration of the regional drinking-water system last spring.

Officials in Lee County, Fla., decided two years ago to regain control of  the water and sewer systems after an audit found that private contractors  had failed to properly maintain the system. In Pekin, Ill., after private  operators spiked rates by more than 200 percent over an 18 year period, city officials started talks to reclaim public control, according to Public  Citizen. And in Atlanta, Ga., reports of problems with city drinking water,  such as a brownish tint and flecks of debris, have made officials decide to  audit the private contractors running the system.

But Oct. 15 in Stockton, the city council ignored the pleas of 18,000 residents who signed a petition asking for the right to vote on any privatization move and decided to start negotiating with a partnership called OMI-Thames Water to take over its water and sanitation systems.

Dirty water, dirty politics OMI-Thames has long raised the ire of environmentalists. Since 1999 the British corporation has been convicted of violating health and environmental laws 24 times, according to a study by Public Citizen. OMI-Thames has been purchased by the German-based RWE Aktiengesellschaft,  which is also acquiring American Water Works, the largest private water company in the United States, with business in 29 states, including California. The move into Stockton is part of a trend toward consolidation  in the industry and privatization in the country.

"The giant water corporations see the United States' public water utilities  as their next market and are trying to get their foot in the door to control profits and potentially the public's supplies in the future," said  Juliette Beck, an organizer with Public Citizen. "It's alarming because these companies have a track record of raising rates, laying off experienced employees, and slashing their [investment] costs in the systems  - not to mention environmental accidents."

Some public officials are getting the message. Unlike their Stockton counterparts, officials in New Orleans heeded public concern and Oct. 16 turned down what would have been the largest privatization deal of a water  system in the United States. And Santa Cruz county officials are asking the  California Public Utilities Commission to deny a request to raise rates in  Felton by 57 percent so RWE can pay off the cost of purchasing American Water Works. Other California communities that have been served by the California division of American Water, such as the city of Thousand Oaks,  are protesting the merger.

"Communities are usually shocked when they find out that their local utility has been bought by some multinational corporation," Beck said. " It's a classic problem of globalization. But people are taking steps to do  everything possible to reclaim public control and accountability for their  most precious resource - water."

E-mail Savannah Blackwell at savannah_blackwell@sfbg.com.
 Public Citizen California Office 1615 Broadway, Ninth Floor Oakland, California 94612
510.663.0888 www.citizen.org/california _______________________

Printable Version

Disclaimer: Opinions expressed in this article are those of the writer(s) and not do necessarily reflect the views of the AfricaFiles' editors and network members. They are included in our material as a reflection of a diversity of views and a variety of issues. Material written specifically for AfricaFiles may be edited for length, clarity or inaccuracies.

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