Privatisation of water

John Biggs

So no thank you, Damon Thomas, we do not want our water in Tasmania privatised.
IN A RECENT article Damon Thomas (Mercury, January 18) said in relation to water management that ‘short-sighted self-interest must be set aside for the sake of community’.

He is absolutely right about that, but then went on to make the extraordinary non sequitur that privatisation of water is the way to go.

At a recent seminar on water in Hobart, an Australian expert on these issues, Dr Pat Ranald, presented strong evidence revealing that privatising water has been an unmitigated disaster.

In Adelaide, United Water (a joint venture between Veolia, Thames Water and a local firm Kinhill) successfully tendered for the Adelaide system (despite submitting four hours after official closure time). Water prices rose by as much as 59 per cent.

Fifteen months after the award to United by the then State Liberal Government, Adelaide was engulfed with the stench of sewage. United couldn’t solve the problem and the government had to hire an independent investigator who could (he was an ex-employee of the previous public system).

In Sydney, after Australian Water Services took over, in 1998 residents had to boil their water to kill parasites. The cause of the problems in both Adelaide and Sydney was downsizing staff to the extent that maintenance of equipment and monitoring was quite inadequate. An enquiry into the Sydney case concluded that providing water of the quality required for public health ‘may be inconsistent with the profit motive.’

Internationally, the record is even worse. In 2000, Forbes magazine claimed that water is ‘the oil of the twenty-first century’, after global water companies lobbied governments for privatisation.

The World Bank and the International Monetary Fund developed policies to make privatization of water services a condition of aid to developing countries. Eighty per cent of the water privatization projects in Africa were terminated over disputes over prices and investment levels.

In Latin America, water privatisation occurred in several countries, leading to massive price increases of up to 150 per cent and ensuing public riots. Many companies have withdrawn from there, too, as predicted profits levels were not achieved.

In 2006, Argentina, Bolivia, Brazil, Uruguay and Venezuela made a joint declaration against the privatisation of water. Also in 2006, the World Development Movement recommended that the World Bank should stop privatisation and use best practice models of public water utilities. The World Bank, normally all for privatisation, had to agree.

There is now a general consensus that private companies cannot or will not provide the infrastructure and workforce needed to maintain water quality at the standard demanded for public health.

So no thank you, Damon Thomas, we do not want our water in Tasmania privatised.

It is true that there are many problems in have so many local councils providing water, but that is a matter of structuring a better and accountable public delivery system, not turning the problem over to the private sector to solve. It won’t work.

And thank you Patrica Dasic for your warning about restructuring by using Labor mates in senior executive positions – that too is a real danger: Labor mates