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The Failure of Suez in Santa Fe

Alberto Muñoz, Asemblea Provincial por el agua, Argentina

After 10 years of contractual noncompliance, perpetual re-negotiation, unjustified rate increases, poor quality service and products, bad administration, and excessive debt, the governor of the province of Santa Fe and the concessionaire of Suez Lyonnaise des Eaux recognized the failure of the privatization.  In 1995, Suez signed a predatory contract that it never intended to fulfill. Instead it began to raise tariffs and negotiate to obtain foreign credits to undertake work projects for our province without ever complying with the four objectives that were presented as the basis of the privatization project: universal access to water and sanitation, implementation of water meters, and treatment of primary and secondary sewage.

The company was not unaware when it made the decision to flee that there was furious opposition from the thousands of consumers that had received abysmal service in the 15 cities of Santa Fe province.   The opposition came from the most diverse sectors of society -- from the marginalized neighborhoods far from the city center that lacked water pressure to the small businesses with one faucet that were overcharged.

The cut-offs in service were especially irritating to the population. Cut-offs rose to 50,000 a year between 2002 and 2003 – almost 10% of the 630,000 accounts that the company had in the province.   It was a terrible error that the government chose to ignore the situation.   Now we not only have numerous neighborhoods without water and sanitation services, but during the period that the government did not invest in installing in water pipes they had to invest in antibiotics, medicines, diseases, and beds in the public hospital.  This relationship is confirmed when a map of water-borne diseases is superimposed over the neighborhoods that lack water and sanitation services in the municipality of Rosario.

The government authorities were late to recognize the opinion of the 256,000 citizens of Santa Fe that voted in the plebiscite [public referendum] of September 2002 to terminate the contract with Suez.   Yet, now that the government is terminating the contract it only wants to replace one water mafia for another.  Using the excuse that it will now be a national company, the government is trying to maintain the privatization model by passing the business to Emgasud, a private company from Patagonia, Argentina – a company with no experience in water and sanitation, but with longstanding connections to the current president.  Julio De Vido, Secretary of National Planning, who held a previous position as lobbyist for Suez, is now promoting a change of collar for the same dog.  Today, behind the backs of the citizenry the government is trying to close the sale of shares of this local company.  The company, Emgasud, makes the same promises that Suez did, but now the government will have to finance the work.  So, why have a private company manage the water if the investment is going to have to continue coming from the government? 

Now more than ever the people of Santa Fe are saying “no” to the privatization model.   Now, as in the past, we affirm our commitment not to stop until Suez has left.  We reaffirm our conviction to the second part of the plebiscite that was voted in 2002: We will not stop until we achieve a model of public management with social participation and democracy.  If we were able to achieve the expulsion of Suez, the second largest transnational company in the world, we will be able to remove any other private company that attempts to replace them.  Because water is a right – not a commodity.

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