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Privatization may put potable water beyond reach of Lagosians

Panafrican News Agency (PANA) Daily Newswire
Nicholas Ibewuike, PANA Correspondent

Lagos, Nigeria (PANA) - The plan by Lagos State government to privatise water supply in Nigeria's overcrowded city of some 12 million inhabitants, could price the essential commodity beyond the reach of ordinary citizens.

At present, piped water is a near luxury in many cities in the populous nation, where rural dwellers still source drinking water from polluted springs/rivers or wells with the attendant health risks of contracting diseases such as guinea worm and cholera.

Like the plight of a villager who could not reconcile the paradox of having to wash his face with spittle, even when he resides on the bank of a river, illustrated by Nigerian renowned novelist Chinua Achebe in his best-seller "Things Fall Apart," Lagosians could soon realise that living on the Island does not necessarily guarantee regular supply of potable water.

Olumuyiwa Coker, Managing Director of Lagos State Water Corporation in a paper on "Private Sector Participation (PSP) in Lagos State water supply," which he delivered at the just-ended workshop in Lagos, revealed that government was negotiating with the World Bank to help fund the privatisation of water supply in the State.

"The State government has employed the services of the International Finance Corporation (IFC), a sister organisation to the World Bank to package the privatisation of water supply and sanitation and to restructure the Lagos State Water Corporation," Coker said.

According to him, "over the years, the notion of free social service attached to water has gradually changed (and) the reality of cost-implication of raw water abstraction, treatment, transmission, distribution and other administrative costs makes the change inevitable".

Presently the installed capacity of the State water Corporation serves about 50 percent of the population, Coker said, and "to meet the water demand, we decided on the privatisation of PSP".

State officials argue that the huge financial burden is too big for the State government alone to shoulder, hence the need to involve the private sector.

The State Water Corporation currently spends some 30 million Naira in monthly wage bill, 25 million Naira on electricity and another seven million Naira per month for diesel to power its stand-by generators because of irregular national power supply. (120 naira = 1USD).

Coker says the LSWC currently "charges 50 Naira per cubic metre of water, which means that a bucket costs 1.00 Naira," while the same bucket is going for 5.00 Naira at the informal sector, five times what the Water Corporation is charging.

According to him, the State government requires about 2.5 billion US dollars to meet its future financial commitment in the sector over the next 25 years, hence the need for private participation to inject funds into water expansion.

He said factors inhibiting efficient water supply in the State ranged from irregular power supply from the national power authority to water plants operating below capacity, water leakage from burst pipes, illegal connections and lack of storage facilities...".

But apart from the anticipated high tariff, there is also the fear that privatisation would involve retrenchment of workers although Coker assures there would be no layoffs "since activities should require new staff with an estimated 4,500-staff strength projected for the next 25 years.

He also explained that private participation "is not outright sale of government asset to the private sector," adding: "the asset is for hire for many years and will be handed back to the government at the expiration of the Concession/Contract".

The LSWC Chief Executive said prospective private sector operators would be expected to mobilise capital to improve the supply and operational efficiency of the system and collect revenue for about 20 years before transferring the assets to the government.

"Studies also reveal that consumers pay extremely high rates to water vendors."

"The efficiency that private operator will bring to the system is expected to reduce cost per cubic meter," Coker added.

But apparently anticipating strong public reaction, he said the Water Corporation "will undertake an awareness campaign to sensitise the grassroots to win their support for the (privatisation) programme".

While consumers may frown at the scheme, the IFC Resident Representative in Lagos, Akbar Husain, says "for the country to have adequate supply of clean and safe water, privatisation is the answer".

He said because of inadequate supply of water, a large portion of the population, with no access to pipe-borne water, pay more in buying water from bore-holes or wells, with associated health consequences.

For now, Lagosians are waiting anxiously to see if the planned privatisation

will ease or exacerbate their plight on the availability of the God-given

commodity.

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