New Water Bill in Senate Correctly Identifies Problem, But Offers Wrong Solution

March 3, 2005

New Water Bill in Senate Correctly Identifies Problem, But Offers Wrong Solution

Statement of Wenonah Hauter, Director of Public Citizen’s Water for All Campaign

A bill introduced Wednesday in the U.S. Senate, which seeks to address the global water crisis affecting billions of people in the developing world, has the right intent, but the wrong solution.  Disguised in “public-private partnership” lingo, the bill, S. 492, co-sponsored by Sens. Harry Reid (D-Nev.) and Bill Frist (R-Tenn.), promotes privatization of water services as the means to alleviate the burgeoning problems of providing safe, clean and affordable water to the estimated 1.1 billion people who lack access to water and the 2.4 billion people without sanitation services.

Governments should play a leadership role in providing water to citizens. That responsibility cannot be delegated to private companies that have identified water as the oil of the 21st century.  Around the world, the evidence is compelling that private water companies create problems rather than solve them. Rather than providing safe and affordable drinking water for the poor, multinational water companies have increased consumer water rates, failed to extend services to poor neighborhoods, caused public health crises, and have polluted and contributed to creating other environmental problems.

Examples abound across the globe. Backed by World Bank loan guarantees, private water companies such as Suez, RWE-Thames and Veolia have swept into countries to take over their water systems. In Ghana, citizens’ monthly water bills skyrocketed. When 50 percent of the population earns less than $1 a day and approximately 40 percent fall below the national poverty line, this increase in water prices means families must make difficult tradeoffs between food, clothing, medicine and school fees. A 2003   study by the Ghana-based Integrated Social Development Center showed that poor households in the capital of Accra spend between 18 and 25 percent of their household income on water alone. In comparison, the average American spends approximately 1 percent of household income on water bills.

In the United States, Atlanta cancelled its water contract in 2003 with United Water, a subsidiary of French-owned Suez, after discovering in a series of audits that the company repeatedly mismanaged the system, cutting staff to dangerously low levels and charging the city for services it never provided.

Most alarming are the developments in El Alto, Bolivia, where citizens have taken to the streets in recent days to protest the delayed departure of Suez. Despite having their water contract terminated by the Bolivian government after popular protest forced the situation to the forefront, Suez is continuing to wheel and deal its way back into a “public-private” partnership with Bolivia. In response, citizens have barricaded the streets, embarked on hunger strikes and are now facing the threat of police force. This is Bolivia’s second water war of the 21st century. El Alto comes on the heels of the disaster of Cochabamba, where massive protests over high water rates forced Bechtel, the San Francisco-based corporation that took over the water system in that city, to exit quickly.

We urge the Senate to pay close attention to the battles around the world being fought over water. They all have one thing in common: the presence of a private company that is seeking to profit from water. This bill will not bring justice to the global water crisis, it will only deepen it.

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