Oct. 16, 2002

Consumer Groups Champion Defeat of New Orleans Privatization Bids

Statement of Wenonah Hauter, Director of Public Citizen’s Critical Mass Energy and Environment Program

In a landmark vote with repercussions that will ripple through the nation, the largest proposed municipal water privatization in the United States was rejected today by the New Orleans Water and Sewerage Board. Citizens fighting to keep water in the public trust have triumphed over a private company’s profit-seeking venture. Battling multinational companies is difficult when they wield their money and power. By rejecting the bids, the water board spoke for the people. This is truly a historic moment in our water battle.

Public Citizen, ACORN and the Service Employees International Union, Local 100, organized a coalition of 90 churches, civic organizations, seniors groups and environmental groups that opposed privatization. We are heartened that USFilter and United Water were defeated after their parent companies, Vivendi Environnement and Suez, engaged in a lengthy battle to gain control over the city’s water supply. As two of the world’s water giants, the French-owned companies have begun vying for control over city water infrastructures that are in desperate need of repair, investment and maintenance.

Water privatization can foster corruption and result in rate hikes, inadequate customer service and a loss of local control and accountability. Corporations have used rate hikes to maximize profits, which, by definition, is their reason for existing. Improved bottom lines often come at the expense of water quality and customer service, but not at the expense of inflated executive salaries. Because corporate agendas are driven by profits rather than the public good, privatization usually results in the compromising of environmental standards.

Privatization in cities like New Orleans also can lead to massive layoffs and reduced local control. Consider Atlanta, where United Water took over the water system in 1998. Atlanta’s residents have since struggled with bad customer service and backlogged maintenance requests while continuing to suffer from a low-quality water supply. New Orleans made the right choice by rejecting these potential problems.

The power of citizens’ voices should never be disregarded when they unite to fight against corporate influence. The people in New Orleans have spoken and have resoundingly said no to privatization. We hope Vivendi and Suez are listening to those voices today.

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