Argument: Case studies in water privatization failure

Bechtel in Cochabamba, Bolivia, 2000

  • “Water: to privatize or not to privatize”. The South Asian. February 27, 2004 – “Cochabamba: In 2000, after seven days of civil disobedience and angry protest in the streets, the president of Bolivia was forced to terminate the 40-year water privatization contract granted to Aguas del Tunari, subsidiary of Bechtel Corp. Water rates increased immediately after the contract signing – by 100 to 200 percent in some cases. In a country where the minimum wage is less than $100 per month, many families were paying water bills of $20 or higher. Bechtel and the British-led consortium of investors invested less than $20,000 of up-front capital for a water system worth millions.”

Water privatization failures in Asia

  • Implication of water Privatization in India”. December 26, 2006 – “A number of water supply build operate–transfer (BOT) projects have been abandoned or are causing serious problems in Vietnam, China, Malaysia and elsewhere, due to unaffordable levels of prices being built into take-or-pay contracts. Similar problems have been observed elsewhere in the world. There should be a serious reappraisal of the economics of existing water supply Bots, and a moratorium on further developments, while the lessons of this experience are explored. Otherwise long term economic liabilities may be accumulated which damage the ability of water utilities to function.
The performance of public utilities in Asia compares well with that of the privatized operations in Jakarta and Manila. This confirms other evidence, for example a comparison of public and private water operations in Latin America, which found that private operations despite all the financial and other support they have received, were no more likely to have extended services than cities without private operators. The ratings of the Asian cities call into question the continuing enthusiasm of the Asian development bank (ADB) and a number of governments for privatization in some form or other. Cities such as Osaka and Phnom Penh, run by effective public sector water operations can clearly provide lessons for other water undertakings in Asia.”

Hamilton, Ontario 1995

  • Chris Wood. “Is Water a Commodity or a Right?” The Tyee. March 22, 2006 – “This particular debate is one Canadians have stuck their toe into-only to recoil. The city of Hamilton, Ont. experimented in 1995 with turning its water supply and sanitation services over to private operators. Instead of the savings and improved services it expected, Hamilton got scores of basements flooded with sewage, raw feces in the city’s harbour and steep rate increases. The pungent debacle gave weight to-but obscured the self-interest of-Canadian Union of Public Employees President Judy Darcy’s assertion that “Privatizing our water is absolutely the wrong choice.”