Corporate Takeover of Water Resources

SINCE antiquity it has been assumed that water is a common resource that canand should be shared according to the needs of people. This assumption isbeing challenged across the world, as water becomes a scarce resource.Already 160 km3 of water is pumped out each year from groundwater sourcesthat are not replenished. In Africa and parts of Asia women spend an averageof 3 hours every day to collect water. The global demand for water hasincreased more than six fold over the past century — more than double therate of population growth, and 1.1 billion people in the world do not haveaccess to safe water

The answer to the huge challenge of managing water resources could have beensought in a framework of equity and pledging of greater public resources.Instead it is sought to be located in a framework that advocatesprivatisation of a resource that was long considered a key public resource.WORLD FORUM


The World Forum on Water (in which all major countries of the worldparticipated and which came out with a Ministerial Declaration), that tookplace in the Dutch city of The Hague in March 2000, and organised by theWorld Water Council (WWC), overtly proposed the commercialisation of waterthrough a world wide private oligopoly. It is a proposal that has beenechoed by multilateral agencies such as the World Bank. The World Bank haseven advanced the increase of water prices to force a reduction of demand.Interestingly the World Water Council includes two French Companies – Suezand Vivendi – which are the largest water Multinationals in the world!Vivendi Water calls itself “the world’s leading provider of outsourced andprivatised water and waste water treatment services and systems”, acharacterisation that Suez Lyonnaise des Eaux also applies for itself. WhileVivendi claims to have 110 million customers in more than 100 countries allover the world, Suez claims to supply water to 115 million people in 130countries in five continents.

The global oligopoly on water that exists today is formed by Suez andVivendi, along with eight other private British and U.S. companies,including Thames Water, Biwater, and others. Thus the internationalcommittee that studies the global problem of water is at the same timepartially controlled by the companies that eventually would profit from thesolutions the committee proposes. It is hence not surprising that the”integrated water resources management” proposed by the WWC stronglyadvocates “handling water as just another merchandise, whose just price canonly be set by the market.”

The World Water Forum in its Hague document defined access to water as a”universal need” as opposed to a “human right”. This was consciously done asdefining the access to water as a human right would have restricted thefreedom of private institutions involved in water management.WORLD WATER


Subsequent to the Hague Declaration on Water Security in March, 2000, theWorld Water Commission, Global Water Partnership, World Water Council andthe World Bank, in their own ways, have been advocating global watermanagement as a response towards the water crises around the world. Thelynchpin of the vision of multilateral financial institutions like the WorldBank, as articulated in the World Water Vision, is that: Water is now more acommodity than a natural resource. To understand the underlying principlesof the new approach one has to look carefully at the “word Water Vision”that was issued after the Hague Conference.

The World Water Vision while not addressing the issue of water qualitydegradation through urban and industrial use, blithely advocates thatefficiency is achieved through pricing and privatization. It explicitlystates that pricing water will lead to equity, efficiency andsustainability. It states: “Because of its scarcity, water must be treatedas an economic good. To give this concept meaning, this Report recommendsthat consumers be charged the full cost of providing water services”.Clearly opening the way for entry of the private sectored, the Visionstatement argues that: “More investments are needed in water infrastructure- from current levels of $70-80 billion a year to about 180 billion, with$90 billion coming mainly from the local private sector and communities…”.Such an argument has a familiar ring – we have heard it when projects likethe Dhabol project by Enron were justified on the plea that they would bringin private investments in public utilities.

A further push towards privatisation of water is going to come soon throughdiscussions under the General Agreement on Trade in Services (GATS). Whileno WTO member has made a commitment under GATS on services related to waterdistribution, it is an area that is likely to see intense lobbying soon.THE BOLIVIAN


Let us turn to the record of one recent example of water privatisation. In1999, the Bolivian government, under heavy pressure from the World Bank,sold Cochabamba’s public water system to Bechtel’s Aguas del Tunan. Detailsof the deal still remain secret, with Bechtel claiming the numbersconstitute “intellectual property”!

That Bechtel’s subsidiary was intent on obtaining maximum returns on itsinvestment, as quickly as possible, is clear. Within weeks of hoisting theircorporate flag over local water facilities, Aguas del Tunari slammedwater-users with rate hikes of double or more. Protests against the movebecame so sustained that President Hugo Banzer was forced to clamp martiallaw in response to weeks of protests, general strikes and transportationblockages. While ninety percent of Cochabamba’s citizens believed it wastime to return the water system to public control, the government insistedotherwise. Ultimately the government had to give in and Bechtel was thrownout of Bolivia.

Bechtel is a global giant, with more than $12.6 billion in revenue in 1998.IWL is its subsidiary through which it pursues water-privatisation schemes.Bechtel claims that IWL “with its partners, is presently providing water andwastewater services to nearly six million customers in the Philippines,Australia, Scotland, and Bolivia and completing negotiations on agreementsin India, Poland, and Scotland for facilities that will serve an additionalone million customers.”

The World Bank’s role in the Bolivian fiasco is worth recounting. A Bankspokesperson argued that giving public services away leads inevitably towaste, and said that countries like Bolivia need to have a “a proper systemof charging.”

Bechtel, seeking to pin the blame on anything but its own irresponsiblecorporate venality, released a statement claiming that “a number of otherwater, social and political issues are the root causes of this civilunrest.” Moving to shift the blame, Bolivian government it said the”subversive” protest was “absolutely politically financed bynarcotraffickers. But the uprising had nothing to do with drugs: It was allabout water. And the real culprits were not narcotraffickers but thewell-groomed executives of the Bechtel Corporation sitting smugly in theirSan Francisco Financial District offices a hemisphere away.



The newly formed Chhattisgarh State has privatised water supply from asemi-perennial river Sheonath. This is the first case of a river water beinghanded over to private interest in India. Called the Rasmada scheme, it isowned by a local entrepreneur called Kailash Soni. The scheme, commissioned18 months ago, supplies water to the Chhattisgarh State IndustriesDevelopment Corporation, which has bulk buyers in distilleries, sponge ironunits and thermal power plants (for instance, the Bhilwara group’s HindustanElectro-Graphite Industries or HEG). Currently, the Rasmada scheme cansupply 30 million litres/day to the CSIDC.

Prime Minister Atal Bihari Vajpayee in his speech to the National WaterResources Council said that “the cornerstone of the new National WaterPolicy should be an explicit recognition that water is a national resourceand …the policy should also recognise that the community is the rightfulcustodian of water.” But with his government attempting to outdo “bananarepublics” in their blatant attempts to sellout to corporate interests,Bolivia may well be repeated in this country.