Water privatization creates a world where people ‘have’ access to water and those whom ‘do not have’ access to fresh water. Water privatization schemes throughout the world have a track record of exceedingly high prices, creation of water monopolies, and deteriorating quality and service and this does support the global system that water privatization creates of have and have not’s. Water privatization can negatively impact low-income and underserved communities by unfair rate increases and poor service to these communities.
In Cochabamba, Bolivia, Bechtel, a private corporation promised to deliver water to all the residents of Cochabamba and they did. But there was a skyrocket in prices of water and this made the company less welcomed by the poorer population. Water pumps, local wells, and the public system infrastructure that was already in place were all taken over, and more was added to the existing infrastructure. The costs for these improvements and additions were passed on to customers, sometimes doubling the cost many people had previously been paying when water systems were controlled by the government.
This is one of the main causes for high prices, which as an implication of water privatization, creates a bold and bigger line between the people who can afford and the small amount of people who can. Bechtel was also working hand in hand with Suez, a multi-national corporation working mainly with water, gas and electricity. Bechtel is a company based in engineering hence the extra addition to infrastructure while Suez gained rights to all of the water in Cochabamba. The two companies merged to make Aguas del Tunari, which then took control and rights of all the water in Cochabamba, Bolivia.
Another culprit to the crisis was the World Bank. The World Bank officially declared that they would not renew a USD $25 million loan to Bolivia unless they privatized their water services. The government had no choice but to welcome Aguas del Tunari with open arms. In 2000, riots broke out on the streets, as people got increasingly upset that a private, foreign-owned conglomerate was raising water prices. Eventually, the partners were forced out of Cochabamba but that didn’t stop the ‘Water Giant’, Suez from seeking more cities to exploit. They picked up another contract to “provide” water for La Paz, the capital of Bolivia.
And like their fellow countrymen of Cochabamba, the residents of La Paz took to the streets and protested the high water rates, which forced the government to cancel the contract with Suez. When Suez signed contracts with Bolivia and many more countries, the affect made was increasing prices of water, which left the line between the people who can afford and those who cannot. The majority of the 600,000 people of Cochabamba couldn’t afford the water, and the little that could are on the other side of the line. There is a system that water privatization has made and it benefits some but can hurt many more.
Water monopoly is where water companies make deals with governments that include exclusive distribution rights for a certain period of time, most commonly 25-30 years. This deal entails the fact that there will only be one seller of water services therefore there can be no competition. This works in favor of company as they can increase and hike the price all they want but water is still a crucial part of life and it is not something that can be lived without. In Argentina, Buenos Aires, Suez and a water company from Spain called Aguas de Barcelona joint to formally make a partnership called Aguas Argentinas.
This partnership then led on to gain full rights and control to the water of Buenos Aires. This was known as the biggest transfer of water service in private control in the world, encompassing a region of 10 million inhabitants. The company promised to finance major improvements to the water service and to pay for the improvements; they are thrown back into the price of water. This then hiked the prices, in fact it was done twice and nobody could complain for water is a necessity. What’s more is that the no construction plans were implemented.
It was for this reason, the fact that they didn’t keep their promises, that the contract was cancelled. Aguas Argentinas faced a penalty of non-fulfillment of a contract for USD$700 million. The point of monopoly is key to all businesses but in water privatization, it has created once again a system where people do not have water as those who simply couldn’t afford it in Buenos Aires and the people on the other side of the globe where people who aren’t affected by water privatization and live in developed regions and don’t suffer high prices for a basic human right.
Water companies’ only interest is to make profit. During this process, to cut down prices on their behalf, corporations such as Veolia and Suez deteriorate and worsen the quality of the water. This is done more in countries like India where the water quality regulatory boards do not have the teeth to enforce their guidelines and standards. The National Association of Water Companies (NAWC), which represents the U. S. private water industry demand that the water quality standard should stay at the same mark if not lower and should refrain from adopting a higher norm.
Also, in Ghana, the efficiency of water service was unreliable. People would leave the communal taps on as water only ran once a week and they wouldn’t know when the water would start running. Moreover, they were charged for the air that came out of the tap when water wasn’t dripping out. The company that was in control of water services at that time was called Aqua Vitens Rand Limited (AVRL) and they were actually getting the population of Accra, the capital of Ghana, to pay for nothing.
People were getting angry and frustrated and an activist campaign against water privatization in Ghana was formed. The government agreed and even though AVRL is only handling the existing system and the government is working with improvements and expanding infrastructure, the situation is still bad and AVRL worsen the system. The system that came through though is the system of have and have not’s, which is shown how in Ghana people had to pay for the air out of taps let alone water. The people that do come out on top are those in these companies that gain profit from exploiting cities as such.
In summation, the people and citizens of the developing countries affected by water privatization are always not having easy access to water due to the constant water hikes, water quality and service etc. The people who do win and benefit are those who are part of such water privatization firms and line their pockets with profit from abuse and exploit to regions.
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