Water privatisation has begun, starting in Sligo

sligo | consumer issues | opinion/analysis Tuesday November 14, 2006 09:51 by Jim O'Sullivan - Community Alliance-Sligo josullivan849 at hotmail dot com

Learn from the experience of others

Water is in the process of being privatised by stealth. Citizens must inform themselves regarding the ongoing process to hand our water over to a private multi-national company to make profit and learn from the experiences in other jurisdicitons where privatisation has brought hardship to communities and particulatly to the most vulnerable members. Voters should seek to have this placed on the issues list for the upcoming general election.

COMMUNITY ALLIANCE-SLIGO

The involvement of private companies in water services is a recent phenomenon. In Sligo the introduction of water metering and charging saw for the first time in the States history, a private company placed between the citizen and a fresh clean water supply. For the first time a private company will make profit from water. Water has always been regarded as a common good and not a commodity from which to profit and accordingly the vast majority of citizens receive their water through a publicly owned and managed system. In general, the citizen has come to trust the quality of the water that is coming from their tap. After all, in all probability, up to now it was a close neighbour who checked the system and tested the water quality and who was also an end user. The object was to deliver water in the best condition possible and this aim was not fettered by a need to satisfy the profit requirements of far flung Directors and Shareholders. In this context, this represents a fundamental change in how we as a community conduct our affairs. In order to access basic vital services, the citizen must deal with a private company and of course, have the necessary cash to hand. A for-profit entity could deny access to these vital services.

While it appears that Veolia’s involvement in water supply in Sligo at present is confined to meter reading and billing, there is of course a great danger that this role will grow over time and will lead to the total privatisation of water in the future. The function of meter reading and billing could after all be just as well carried out by any of the local accountancy firms here in Sligo. This job does not require the skills of a multi-national water company to carry out and so the suspicion that the intention is to broaden their involvement is well founded. And is there anyone out there who does not believe that under the present government policy and ideology, that domestic water will also be charged for in the same way as the commercial supply currently is.
So it would be prudent to inform ourselves as to what is happening and try to learn from others experiences. Fortunately, we can look to experiences elsewhere to learn of the consequences of privatisation of water and by familiarising ourselves with the facts, we can seek to influence future policy on the matter.

The internet is the best place to start as it is full of stories regarding the antics of private water companies world wide. A cursory look at the UK experience ought to be enough to prompt each citizen here to make this an issue in the upcoming general election. Water must remain under the total control of local authorities and to ensure that all citizens, regardless of circumstances can access it, it must be free at the point of delivery.

The UK experience should not go unheeded. In 1988, the Thatcher government stood down the Regional Water Authorities and replaced them with for-profit companies. These companies were then offered for sale. While the initial cost to the British taxpayer was substantial, worse was to come.

In the first 5 years of privatisation, prices rose by over 50%. This averaged out over the first 10 years at 45%. Very soon, stories began to filter out regarding massive profit taking and huge payouts to Directors. Profits rose by 150% on the first 10 year period

The sharp increase in water charges placed strains on the most vulnerable households and as a consequence, the private operators began to disconnect supplies. In the first 5 years of private control over water 18,636 households were disconnected. The policy of disconnection raised concerns and health professionals in particular raised their worries for the health implications involved. As the policy became more controversial, the companies introduced “pre-payment meters” for customers unable to pay their bills. These meters only supplied water when customers had accounts in credit. When the account was empty, the meters cut-off water supple. The companies called this “self-disconnection” This extraordinary verbal gymnastics demonstrates the length to which private companies will go to preserve profit making. Individual hardship and suffering are not allowed to enter the equation.

Aside from the direct negative impact on peoples lives, there were serious consequences for the environment. In 1998, companies operating in the UK were ranked as the second, third and fourth worst polluters. The 10 water companies were prosecuted 260 times between 1989 and 1997. Lack of proper maintenance of the supply infrastructure led to waste and poor drinking water quality. The Drinking Water Inspectorate identified a serious lack of compliance in over 20% of the areas tested. This is hardly surprising as there is no incentive for private companies to invest in infrastructure. In the UK it was found that capitol programmes submitted rarely materialised but were used to push for rate increases. This lack of investment is best demonstrated by the fact that hose pipe bans are now in force more often than not.

The British government has intervened although the contracts that they are locked into greatly limit their immediate options. In the face of growing public outrage, the cutting off of water supply was outlawed as was the “pre-payment meters”. Sligo citizens should note that under our water legislation there is provision to allow for disconnection and this must be removed in order to protect the most vulnerable.

Some years after water privatisation in Britain, The Daily Mail, not an enemy of capitalism, gave the following assessment of the situation:

“…the water industry has become the biggest rip-off in Britain. Water bills, both to households and industry, have soared. And the directors and shareholders of Britain’s top ten water companies have been able to use their position as monopoly suppliers to pull off the greatest act of licensed robbery in our history”

We have been warned.

Jim O’Sullivan
Community Alliance-Sligo