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In Mozambique only 57% of the population has access to water service, and only 25% of people living in rural areas have access. Many households have to walk long distances to get water. According to UNICEF, the lack of clean water kills 55 children every day from diarrhea. Cholera in the country is endemic and other water-related diseases are rife, such as malaria. Out of every 1,000 children 246 die in the first five years. Two thirds of the population live below the government poverty line of 40 cents per day – and millions more live under the international standard of US$1 per day.

At the end of 1999, the government of Mozambique, backed by the Work Bank, signed a contract with the multinational water company Saur/ Bouygues partnering with Aguas de Portugal, to provide water to the largest cities in Mozambique (Maputo, Beira, Dondo, Matola, Quelimane, Nampula, and Pemba). Once the contract was signed with Saur, the World Bank and other donors provided a $117 million loan for rehabilitation of water system infrastructure. This loan came with demands of cost-recovery fees paid by the consumers. Such policies have been devastating to poor households, who are unable to pay for the infrastructure improvements, even less the full cost of water. Saur paid US$25.5 million in fees for the contract that will be charged to consumer bills in the coming years with interest.

In order to regulate the privatization, the government created a new national agency to regulate the companies involved in the contract. This agency transfers the power over the local water resources to a central agency in Maputo, the capital.

Prior to the privatization process a new tariff structure was approved to ensure recovery of all operation and maintenance costs and to provide automatic adjustment mechanisms tied to currency exchange rates. This policy disadvantages Mozambicans since the adjustment is pegged to the US dollar which historically has been stronger than the Mozambican Meticais. As a result, households can expect water rates to rise with the decline of the Meticais.

Citizens' groups have complained of rising water fees and declining service. A spontaneous protest took place at the headquarters of Aguas de Mocambique (the Mozambican subsidiary of Saur/Bouygues) following sporadic service and water cut-offs in March 2001.

In December 2001, Saur decided to pull out of the contract leaving a few investors with the contract.

Saur is also involved in the privatization of electricity and transportation infrastructure in Mozambique leaving Aguas de Portugal with the contract. It is unclear what the reason for the untimely exit was, but pressure from groups was mounting.

The Municipal Services Project, along with citizens' groups in Mozambique, monitors the impact of the privatization on public health, and access to safe, affordable water in Mozambique.

Current water privatization contracts in Mozambique:

In the News:
October: How Northern Donors Promote Corruption - Tales From the New Mozambique
August 11: Cholera crisis waning but not yet over
August 11: Cholera death toll rises
March 24: Cholera death toll rises
February 17: Cholera wave ebbs as countermeasures pay off
February 9: Feature on cholera outbreak

September 8: US$ 1 billion needed for water supply programme

September 30: Mozambique awards first water privatisation contract

    » cmep | Water | cmep Water | reports | safrica

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