|Promoting a sustainable energy future|
In Ghana, the mere prospect of water privatization has almost doubled tariffs, as the World Bank continues to condition the water “market” for international competition. Now, after a broad coalition of Ghanaian civil society successfully scuttled the first attempt at corporate water takeover, an entire country is waiting anxiously as the World Bank pushes its disproportionate weight into a second campaign to auction off Ghana’s water to the highest-bidding multinational corporation.
In May 2001 a broad cross-section of Ghanaian civil society, including women’s groups, teachers, trade unions, public health workers, environmental groups, disabled organizations and students, gathered under the banner of the Ghana National Coalition Against Privatization of Water (National CAP of Water) to oppose the World Bank-backed proposal to privatize the urban water supply. The major corporate bidders interested in Ghana include some of the largest water multinationals in the world – Suez, Vivendi (now Veolia), Saur and Biwater. The formation of the National CAP of Water responded to widespread concern that the privatization of water will have serious negative impacts on public health, women’s work, access to safe, affordable water, and local control and accountability.
The 2001 groundswell of water-related activism came as a reaction to IMF and World Bank loan conditions, which mandated a, now implemented, 95 percent hike in water fees. According to the free market philosophy of these institutions, increasing the “revenue flows” of the water utility will make it more lucrative on the international market. However, in Ghana more than 50 percent of the population earns less than US$1 a day and approximately 40 percent fall below the national poverty line. Currently about 35 percent of the Ghanaian population lacks access to safe water and 68 percent lack sanitation services. A recent survey by the Ghana-based Integrated Social Development Center (ISODEC) demonstrates that poor households in five communities in Accra – Madina, Sukura, Mamobi, Nima and Ashaiman – spend between 18 and 25 percent of their income on water alone. Given these realities, it is absolutely inhumane and irresponsible for the IMF and World Bank to promote “increased cost recovery” and “automatic tariff adjustment mechanisms” – the policies used by these two institutions to raise the consumer price of water, often as a prelude to privatization.
The persistent organizing of the National CAP of Water, and the surge of resistance that developed, led the government of Ghana, early in 2003, to suggest that the privatization project was suspended. This was partly due to the desire of the major corporate bidders to minimize risk in the face of resistance. In addition, the World Bank had “sold” the government of Ghana on the privatization scheme, in part, due to the claim that the private sector would bring significant investment capital to the project. However, the World Bank had to backtrack on this claim. Originally the private sector bidders agreed to bring a total of 140 million dollars to the project, but this was scaled back to 60 million dollars and then to zero in the most recent round of discussions. All of the sudden the World Bank was left holding a half empty bag of tricks. The government of Ghana stated that it was considering canceling the privatization project altogether.
After a reshuffle of the World Bank’s country team, the Bank has resorted to “re-imaging” the question of water privatization in Ghana. It claims that in response to the concerns of civil society they have a new proposal. The new proposal is for a 3-year service management contract (the previous proposal was for a 10-year lease). However, the service management contract could be worse than a lease. With a lease arrangement, the private sector’s reward is tied to performance and it faces the risk of lost invested capital and profits if it fails to perform. With the service management contract now being proposed the government of Ghana will bear all the risks while the private company enjoys guaranteed payments. It is also not unlikely that the 3-year contract will be followed by a 10-year lease or management contract. The National CAP of Water is not fooled by the World Bank’s new public relations schemes.
The resistance to the privatization of water will continue and the ultimate objective is clear: we must ensure that access to potable water is available to all and guaranteed as a human right.
The government of Ghana is being pressured to contract the water system to transnational water corporations in order to gain access to external assistance and soft loans. Civil society organizations are locked out of the decision-making process and alternatives to privatization have not been explored. There is concern that external pressures related to the Government of Ghana’s need for additional financial resources have prevented a thorough examination of alternative water management options. The Ghana National CAP of Water believes that a thorough reform and restructuring of the public sector water utility is a viable option, requiring investments in capacity-building, infrastructure, greater local management autonomy, decentralization, and local community accountability.
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