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Paying Through Our Noses
Perils of water privatisation
Praful Bidwai
, 2 January 2005
Barely a week after World Water Day (March 22)—which, with its "Water as Life"
theme, highlights the universal right to water—, the Delhi Jal Board has jacked up
rates by a huge 400 percent-plus at one go! Ironically, the tariff rise will be
sharpest for the poor, who only have access to meagre, unreliable and faltering
water supply at the best of times. Instead of 35 paise per kilolitre (kl), they must
pay Rs 2/kl or 571 percent more if they consume 6 to 20 kl a month and 2,000 percent
more for the next (20-30 kl) slab.
Earlier, the poor, who consume a very small quantity (under 10 kl p.m.) and account
for 60 percent of DJB consumers, paid a flat minimum of Rs 30 p.m. This will spurt
to between Rs 52 and Rs 120—without any likelihood of improvement in the quality of
supply. By contrast, rich households, who consume three times more water, won’t
shell out even a rupee more even as they flush a third of the water they get
round-the-clock down the toilet. The rate difference isn’t even remotely equalised
by the somewhat higher "service charge" for the rich. There could be no more
grotesque water injustice.
This story is being repeated in city after Indian city. Delhi, being the Capital, is
pampered. What other cities are experiencing via acute water shortages, impoverished
quality, and a sharp rise in tariffs, is far worse. Matters will deteriorate further
if water is privatised and control over it passes into the hands of giant
corporations—as is happening in a creeping way in Delhi.
Privatisation of water supply is fast growing globally. Ever since water was first
privatised in England under Margaret Thatcher, corporations have tightened their
grip over "Blue Gold". Between 1989 and 1999, they made a whopping $15 billion in
profits from selling water. Today, more than 300 million people in 56 countries are
their customers. Twelve years ago, then number was barely 50 million. In Asia, and
in India, 20 percent of urban water is expected to be privatised in five years.
Water privatisation is a highly contentious, divisive matter. It raises major
ethical issues about private control and ownership over an invaluable natural
resource and a universal need of every human being. It means turning a fundamental
right into a commodity to be sold for profit. It also means ignoring the
conservation of this increasingly scarce resource, over which future wars will be
waged.
Privatisation has invariably meant widening of disparities in access to water, and
unconscionable rate hikes. No wonder it provoked strong protests wherever it was
imposed first—in Bolivia, Argentina, Ghana, South Africa, Philippines, even the
United States. As a result, giant predatory corporations, led by French
multinationals like Veolia (earlier Vivendi) and Suez have moved into new markets
like China, India, Southeast Asia and Europe. It is imperative that their entry be
resisted and community control over water reasserted. We in India must do so before
full-scale privatisation is forced down our throats.
Why has the present crisis in water arisen? It’s only partly attributable to an
absolute paucity of water, of the kind that marks, say, Chennai. There, rainfall has
been scanty and major reservoirs seldom filled up over a decade. Groundwater has
been haphazardly mined by a mafia, creating salinity and aggravating scarcity. (Last
year, Metrowater stopped piped supply to much of the city, and started sending
tankers every alternate day to deliver a small quantity for each household.) Most
Indian cities face different problems. Their water infrastructure was built 30 to 50
years ago and never upgraded even as their population doubled every 15 years.
Neither supply sources, nor pipelines and treatment facilities, have kept pace with
demand.
A second problem lies in great inefficiencies, poor cost recovery, pilferage, and
lack of accountability, which ensure that a fifth to one-half the supply is not even
metered. Most water boards have become victims of elitist politics under which water
is brazenly stolen by privileged people. Thus, commercial and industrial users
rarely pay its full cost. The politicians and bureaucrats who run the boards rarely
have the incentive or compulsion to come clean before the public so they can argue
for tariff revision. Rather, they tend to play down losses and the need for
targeted, balanced tariff hikes and cost-cutting measures.
Our water boards also face a financial crisis. Most have huge accumulated losses and
work under near-insolvent state/municipal governments. Most boards are forced to
turn to the World Bank and Asian Development Bank. These have been (at least until
very recently) zealously pro-privatisation. The vulnerable boards have few options,
given their weak leadership, but to privatise.
Some boards use devious tricks to profiteer on the backs of slumdwellers. Many levy
a flat rate upon each household, say, Rs 45/month, assuming that its consumption
would be, say, 20 to 30 kl/month. But the household rarely gets even half this
quantity. Spread over large numbers, this unearned profit cross-subsidises the
affluent. Excellent studies by Centre for Human Sciences (Delhi) researchers show
that the average household annually spends over Rs 2,000 on compensatory strategies
to cope with unreliable supply. The poor pay proportionately much more from their
income. This is grossly unfair.
Privatisation is no solution to the crisis. Indeed, with it, the crisis usually
worsens. That sums up the experience whether in Bolivia or the Philippines, and the
US or South Africa. This has been critically analysed in one of the finest books on
the subject, Blue Gold: The Battle Against Corporate Theft of the World’s Water by
Maude Barlow and Tony Clarke (Toronto, 2002). In Cochabamba, Bolivia’s third largest
city, water privatisation become extremely unpopular because of exorbitant access
fees (e.g. $450 for a meter) and high rates claiming a fourth of poor peoples’
budgets. The corporation responsible had to quit in ignominy.
Similarly, water companies were chased out of Argentina, Uruguay, Chile, Ecuador,
Peru and Mexico and became deeply unpopular in Indonesia, Brazil, Poland and Canada.
Their record is no better in France, Hungary, Germany or Britain. In many states of
the US too, they beat a retreat when faced with protests—e.g. Florida, New Jersey,
California, Louisiana, Texas, West Virginia, Massachusetts and Ohio.
There are stories of heroic resistance from South Africa and the Philippines. In
Johannesburg, Suez came up with a diabolical scheme: install pre-paid meters in the
homes of the poor. When the money ran out, the water would stop. People would then
draw untreated water from the rivers. Cholera broke out, killing 260 and infecting
over 10,000. The scheme was abandoned. Yet other schemes for full "cost recovery"
and "user access charges" were similarly defeated. Today, even the World Bank
embarrassedly admits that some of its "model" private projects, like that in
Metro-Manila, have failed.
Bank officials now say that they have "learned the hard way" that the private sector
"may not necessarily deliver water and sanitation." This is belated wisdom. The Bank
has lent some $20 billion to water schemes including private ones and helped develop
a global market worth up to $3,000 billion. The admission is nevertheless welcome.
We might for some time see corporate grabbers of water restrain themselves. It must
be hoped that they will quit projects like the Rs 800-crore Sonia Vihar plant in
Delhi, which was originally designed to supply water to privileged South Delhi
colonies.
According to a study by the US-based non-profit organisation Public Citizen, there
are at least 10 reasons why the privatisation of drinking water could spell doom.
Privatisation not only leads to unaffordable rate increases. It typically reduces
poor people’s access to water. It undermines water quality because corporations
sacrifice safety for profits. Companies are at best accountable to shareholders,
never consumers or communities, and corporate monopolies provide poor customer
service. Privatisation fosters corruption. Accountability and transparency are
conspicuously missing from privatisation.
As if that weren’t bad enough, privatisation undermines local control and community
rights. Ominously, it causes big job losses. In England, the number of employees in
10 major water boards decreased by almost 10,000 over a 10-year period. Private
financing costs more than government financing. Comparisons between Sweden’s public
and Britain’s private water systems show that private costs and rates are twice as
high. Privatisation is difficult to reverse and will open the door to bulk water
exports across basins, countries and oceans—with disastrous consequences for an
already imperilled globe.
We in India must learn lessons from this experience. We once made the mistake of
privatising whole rivers like the Sheonath in Chhattisgarh and the Bhavani in Tamil
Nadu. Pressure for privatisation is growing in Karnataka, Orissa, Madhya Pradesh,
Tamil Nadu and Delhi too. We must resist it. Water is a basic human need. Everyone
must have access to adequate quantities of it. This cannot be done if water is
commodified and turned over to entities whose declared purpose is to maximise
profits, not serve the public good. We must reform the water boards and raise their
efficiency. We must of course encourage conservation. But privatisation is a
no-no.
Copyright 2005
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