WATER IN THE XXIth CENTURY: THE BLUE GOLD

A product or a right? Luis del Romero Renau

EGEA – ValenciaEuromediterranean Regional

Congress Pohorje, 24-28th april 2006

PRELUDE

“Water will be to the 21st century what oil was to the 20th. Who owns water and how much they are able to charge for it will become the question of the century”.

Fortune Magazine, 2000

Let’s take a look to the water management panorama to see how things are going on!

ACT 1: EL PALO

>>EL PALO SUBURB,

LA PAZ, BOLIVIA

>>ELYSEE PALACE,

PARIS, FRANCE

03/05/05

ACT 1: EL PALO

Situation of water in El Palo suburb, after more than 8 years of privatised management: 200.000 persons with no access to water, inversions for water infraestructures were reduced or cancelled, but prices increased continuely from an average of 30 cent to 2 $. As a result big demos and a hunger strike in 2005 claimed for the end of privatised water manegement.

ACT 1: EL PALOThe company that bought water management in El Palo, SUEZ, was owned by G. Mestrallet, personal friend of Mr. Chirac, who phoned personally the former president of Bolivia C. Mesa, “worried by the security of the french invests in Bolivia” after the protests in El Palo against Suez.A few days later as a result of the water crisis in El Palo, the president C. Mesa resigned.

ACT 1: EL PALOFinally the company left El Palo the 8th march, but Bolivia will have to pay 11’6 million $, after the pressure of WB and french government.The privatiastion of water in El Palo had been forced by the IMF in the 90’s. The company had promised access to clean water in a few years for everybody.During the visit of the new president Evo Morales in Europe, he was theratened in Brussels of freezing European invests in the country in case new conflicts against European companies arise.

>>JAKARTA, INDONESIA, 1998

>>FOREIGN AFFAIRS OFFICE, LONDON, UK.

ACT 2: JAKARTA

UK-german Thames Water – RWE corporation formed an alliance with the Sigit Group, controlled by dictator Suharto’s eldest son, Sugit Harjojudanto to acquire PAM Jaya, the municipal water supplier of Jakarta.The contracts required the new companies to not only manage the system, but in the first five years to expand the existing pipeline, invest $318 million, add 1.5 million customers, service 70% ofthe population, The aims were never reached.In 1998, the Asian financial crisis and the downfall of Suharto changed the political landscape. Thames Water fled to the safety of Singapore. Faced with an immediate water crisis, Jakarta’s new governor ordered PAM Jaya to take back the operation.

ACT 2: JAKARTA

ACT 2: JAKARTA

After the pressure of the British government (“breaching of the contract would weaken confidence in Indonesia as a place to invest,”) the agreement was made to let Thames Water return.Water services in Jakarta’s rich, middle-class and industrial areas improved. However, most poor communities remain without piped water due to unaffordable connection charges.

According to PAM Jaya engineer Feri Watna, “the companies…just came in and robbed everything that we had. We already had the distribution networks, all those pipes, the water installations, the consumers and everything else.”

ACT 2: JAKARTA

ACT 3: MOUNDOU

>>MOUNDOU, CHAD,

2005.

ACT 3: MOUNDOUIn 2000 Veolia - Vivendi received a 30-year operation and management contract for Tchadienne d’Electricite et de l’Eau (STEE), the company in charge of water and electricity provision in the country.International Development Institutions granted Vivendi with more than US$ 13 millions for the operation.Vivendi agreed to freeze electricity prices but quickly complained that the infrastructure was insufficient and increased the cost of supplying the government from the Farcha oil refinery.

ACT 3: MOUNDOU

In 2004 a cholera epidemic broke in the city of Moundou. At least 9 persons died.The cause was the water consumption from the polluted river Logone.

The Panafrican news agency reported that the city had experienced water shortage and quality problems for weeks.

The first world-wide water company, Veolia, was not able to repair an urban pumping station. It was expensive. For a month many houses did not have access to any kind of water in a semi-arid country, therefore many people got water from the Logone river, provoking the collera epidemic.

ACT 3: MOUNDOU

In August 2005 Veolia, dropped out of the country, five years after its arrival. Neither the US$13 million financing nor the Cholera case has been further investigated.

ACT 4: MY TOWN

>>PICANYA RAVINE,

700 M. FROM MY PARENTS’ HOME. 10/31/2004

ACT 4: MY TOWN

The 31st october 2004 a great amount of sewage “appeared” misteriously in the ravine of Picanya. Someone had leaked it the previous night.The Picanya ravine is one of the fluvial courses that flow into the marsh of Albufera, the most important natural park in Valencia.

At least 2 km of the course were flooded with the sewage, polluting fauna and flora. One of the causes of the spill was the sewage works of the city of Torrent. They had spilled wastewater the previous night.This sewage works is managed by a enterprise of the SUEZ group, the same that was expelled from El Palo in 2005. It was privatised at the beginning of the 90’sThough incidents like this, privatisation of water systems has increased sharply in Valencia province during the 90’s.

ACT 4: MY TOWN

ACT 4: MY TOWN

G rup A igües d e V a lènciaP úb lic

L A SITU A C IÓ A L 1992

Sea saA vsaEm iva sa

O m nium Ib éricoA igües d el’ho rtaH id raA igües d e C u llera

P úb licEgeva sa

Sa gunt

V a lència

Cu llera

G a nd iaO liva

SA U RA G B A R - SU E ZM IX TA A JU N T - SU E ZP Ú B L IC

SUEZ, VEOLIA & RWE, THE LORDS OF THE WATER

Suez is a multinational corporation on water and waste management and gas and electricity services based in France.It’s the leader in private water management sector in Argentina, Brazil, Chile and China, with expansion plans all over Latin America.Apart from the case of Bolivia, it has been reported cases of general corruption, briberies, unaffordable tariff increases, misappropiation of public founds and water pollution in countries like Great Britain, Brazil or France.

ACT 5: WHO ARE THEY?

Veolia, apart from the case of Chad, has been accused of illegal purchasing, cases of environmental degradation and violations of environmental regulations, briberies, deficiencies in management (3181 in Puerto Rico), in over 14 countries.The first world-wide water managemernt company, has a net revenue of $ 3596 milion and until 2003 had this empire:

ACT 5: WHO ARE THEY?

German-owned RWE AG made its name in the energy sector, but through acquisitions, it’s now a leader in the water industry and has a revenue of $5090 million.Thames Water, (RWE in England), has repeatedly been found to have committed environmental and public health violations and paid over $1 million in fines. Almost 1 hm3 of water are lost daily in Thames Water’s operations in London –enough to supply 500,000 homes.August 2004: 600,000 cubic meters of untreated sewage leaked into River Thames after a rainstorm.

ACT 5: WHO ARE THEY?

ACT 5: WHO ARE THEY?Water management privatisation is not always the solution for water quality and availability problems. Public sector exists!They increase benefit reducing costs, but workers and public health are the victims.They make business with a natural resource, that should be a right, not a business.A local council that manage water can be voted and controlled, but a private company with a 30-year contract, not.Though hundreds of crimes and legal violations, WB, IMF and especially EU keep in silence.

MEXICO D.F.03/22/2006

FINAL ACT: The World Water Forum

Final act: The show of the WWF

“All human beings have the right to water in sufficient quantity and quality to meet their basic needs,as well as for sanitation, a key factor for human health and the preservation of ecosystems.”

Final declaration of the 4th World Water Forum, México DF, 22nd march 2006, supported from representatives of more than 140 countries, including Blair government.

“The success of water policy will not be measured in billions of dollars, but in millions of lives saved or kept from disease, in hundreds of millions of people for whom access to water and sanitation will no longer be a daily fight”

Jacques Chirac, friend of SUEZ chairman

Final act: The show of the WWF

Any of the 22 documents approved, mentioned any case of corruption or malfunction of private companies.

P. Wolfowitz, WB chairman, leader from Bush administration, expressed that the country that refuse to privatise its water management, will suffer a reduction in WB investments for development.

Meanwhile, water wars and injustices Keep up... Show must go on...

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Israel Palästina

Water consumtion in m3/person in Israel and Palestine

Gracias por vuestra atención!!Thank you for your attention!!