Privatizing supply and delivery of water

Privatizing supply and delivery of water



 
May 2007 -   More than 138 civil 
society groups and trade unions from 48 countries are urging donor 
governments to withdraw their support for an agency of the World Bank 
determined to privatize the supply and delivery of water. The campaigners 
say that water, like air, is so essential to life that access to it is a 
human right, and water should not be treated as a commodity. 
In an open letter, groups argue that the bias of the Public-Private 
Infrastructure Advisory Facility, PPIAF, towards private sector 
"solutions" to water access represents a poor use of aid money. PPIAF 
works in a range of sectors including transport, and telecommunications, 
but this open letter is directed towards the agency's activities in the 
water sector. 
Coordinated by the World Development Movement, Friends of the Earth 
International, the Norwegian group FIVAS, and the Transnational Institute, 
the letter was released ahead of a May 23 meeting of the 13 donors to 
PPIAF. 
Current donors are the Asian Development Bank, the World Bank, the 
European Commission, and the governments of Canada, France, Germany, 
Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom, 
and the United States. 
The UK is the largest donor by far, contributing over 50 percent of 
PPIAF’s funds, an amount which totals £53 million (US$104 million) from 
1999 through 2008. 

Women fill the pots lined up near a public water source in the city of 
Bangalore, India. 
Earlier this year, the Norwegian government announced that it will not 
support PPIAF in the future as it no longer believes the agency is 
increasing access to water for the poor. 
In their open letter to PPIAF’s remaining donors, the groups say, "The 
evidence shows that the private sector has shown a great reluctance to 
commit finance to connecting the poorest people to clean, affordable 
water." 
"Our conclusion is that aid could be better spent and we ask donors to 
withdraw this funding accordingly," wrote the nongovernmental 
organizations, including some from poor countries where PPIAF has funded 
water privatization processes. 
Elías Dias Pena of Friends of the Earth in Paraguay says, "In Paraguay, 
despite public protest and a parliamentary vote against it, water 
privatization is still pushed by the PPIAF, the International Monetary 
Fund and powerful private companies. But opposition remains strong." 
"A new law on water developed by civil society groups and members of 
Parliament declares water a property of the state and access to water a 
fundamental human right," said Pena. "The law is awaiting its final vote 
in the Paraguayan chamber of deputies right now." 
PPIAF says its activities in the water sector help people to obtain clean 
drinking water. In a statement issued in advance of the May 23 meeting, 
PPIAF says, "Solutions don’t have to be either public or private - 
everyone can benefit from creative partnerships that recognize the 
strengths of both." 
"Private companies, from small businesses selling water through kiosks to 
local and international operators with global expertise, have much to 
offer," the agency says. 
To reach the targets set out in the United Nations' Millennium Development 
Goals, investment needs to double, PPIAF says, pointing out that 55 
countries are already off track to meet their goals. 
"The public sector, which now funds about 70 percent of infrastructure 
needs, can’t do it alone. Donors, the private sector, and consumers all 
must play their part too," says PPIAF. 
As an example of its positive results PPIAF points to one of the projects 
it helped to finance in Kenya. 
"In Kenya community-owned piped water systems are run on a commercial 
basis, with little support from the government," PPIAF explained. "To help 
pave the way for market-based lending to small water providers, PPIAF and 
partners launched a pilot project to build up business development 
services to support them - such as business planning, construction 
management, access to markets, and audit features." 
"Now under way, the pilot will also identify innovative instruments to 
make loans more accessible to small, community-owned piped water systems," 
PPIAF said. 

A shallow well with handpump in the Lower Tana area. 
A multi-donor trust fund, The Global Partnership on Output-Based Aid, 
established in 2003 by the UK's Department for International Development 
and the World Bank, is providing financial support with subsidies covering 
40 percent of the total project cost. 
"These 21 subsidized systems will serve 60,000 people," PPIAF said. 
But Afsar Jafri from Mumbai Paani, a citizens’ coalition against water 
privatization in India, says, "PPIAF does not believe in democratic 
governance or public utilities and basically acts as an agent of 
corporations on behalf of the World Bank." 
"This has been demonstrated in Mumbai where consultants from Castalia - 
funded by PPIAF and the World Bank to conduct a study on water 
distribution improvements – have recommended handing over water services 
to private contractors in their final report," said Jafri. 
Denied permission to observe PPIAF’s annual meeting, campaigners are 
organizing a forum in The Hague on Tuesday to discuss PPIAF, its role 
within the World Bank and progressive alternatives in the area of water. 
On PPIAF’s agenda is a proposal to extend its remit further and give the 
agency a stronger role in World Bank water policies. 

Demonstration against water privatization in Los Angeles, California. 

Activists believe that donors should reject this extension and instead 
create a wholly new fund to support water utilities in the global south 
based on "public-public partnerships." 
They argue that PPIAF undermines the right of poor countries to decide how 
to run their public services. 
PPIAF has funded projects in many poor countries where international 
financial institutions such as the World Bank and the International 
Monetary Fund have attached water privatization conditions to loans, debt 
relief or aid. 
Campaigners are particularly critical of PPIAF’s funding for 
"consensus-building" projects which try to persuade stakeholders in 
developing countries to accept water privatization. 
In a report published last year, campaigners said that since 1999, PPIAF 
has funded one or more processes aimed at developing private sector 
participation or privatization in water and sanitation services in 37 
countries. 
In at least 16 countries, PPIAF has sought to "build consensus" for water 
privatization projects. 
Building consensus refers to activities that promote the benefits of 
privatization or particular privatization options andattempt to persuade 
skeptical members of governments, parliaments, business, trade unions, 
civil society and citizens that privatization is in their interests. 
In at least 18 of the countries in which PPIAF has worked on water 
privatization, donors have made their support conditional on 
privatization.    

       
      

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