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Biwater, a British water corporation, was created in 1989 to cash in on Margaret Thatcher's controversial privatization of the United Kingdom's regional water authorities. The privatization plan - which led to extreme rate increases, massive cut-offs, and a public health crisis, while Biwater and other privateers reaped profit margins four to five times more than the industry norm - created corporate fiefdoms. These private monopolies were guaranteed the ability to raise rates without recourse, and from the huge government subsidies they received, to gain large profits despite poor performance. Since then, Biwater has applied the same profits-first, service-maybe philosophy to the water sectors in 27 other countries around the world, where sweetheart deals with governments and international lending institutions limited the corporation's liability.
In Dar es Salaam, Biwater felt no remorse in saddling the Tanzanian people with $145 million of debt, while investing only $6.5 million in standpipes and meters, two controversial technologies used to collect money. Four years into a 30-year concession contract in Nelspruit, South Africa, Biwater has been unable to raise sufficient capital (which was the original rational for privatization), has tripled rates and now refuses to expand access because they cannot guarantee cost-recovery and corporate profits. To cover up its failings, Biwater often resorts to threatening those who publish accounts critical of its operations with legal proceedings. There is a Biwater pattern: Write contracts to which they have no intention of complying. Saddle poor governments with infrastructure investment in order to limit their own risk. Gorge profits by raising rates within their monopoly and not reinvesting them into infrastructure. Threaten critics and squelch dissent. If it still does not result in corporate profits, take their money and run.
Biwater cooperates in many countries with the Dutch NUON Corporation through the joint venture company named Cascal.
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