Privatising Water

Cities around the world are rebelling against water privatisation. Not in India. Packaged drinking water is invading even rural households. Rivers are being mortgaged to private companies to deprive people of their basic right to water. The World Bank makes it mandatory for developing countries to privatise water while disbursing loans in certain cases. In truth privatisation of water resources has a long history.

Private companies have been working to make a profit from water since the 1600s, when the first water companies were established in England and Wales. The first wave of water privatisation occurred in the 1800s, and by the mid- to late-19th century, privately owned water utilities were common in Europe, the United States and Latin America, and began to appear in Africa and Asia.

But the privatisation flurry faded, and throughout much of the 20th century water was largely a publicly controlled resource. In the US, for example, just 30% of piped water systems were privately owned in 1924, dropping from 60% in 1850.

It wasn't until the late 1980s that the idea of private companies managing water re-emerged on a large scale. Under Margaret Thatcher, the UK government privatised all water companies in England and Wales in 1989—making it the first country to do so. Coupled with the global emphasis on free market capitalism after the fall of communism, it began the second wave of water privatisation that continues today.

Privatising water was, and still is, encouraged by the International Monetary Fund (IMF) and the World Bank, which make public-to-private takeovers a condition of lending. As a result, the early 1990s saw a rush of cities and countries around the world signing over their nations' water resources to private companies.

Problems with water privatisation often begin to occur soon after the initial wave of enthusiasm—from lack of infrastructure investment to environmental neglect. A 2005 study by the World Bank said that overall evidence suggests "there is no statistically significant difference between the efficiency performance of public and private operators in this sector." The most common complaint about water privatisation concerned tariff increases, which occur in the vast majority of cases, making safe water inaccessible for many.

Despite these issues, aid agencies, water companies and many governments around the world continue to pursue privatisation of water in the name of profit. In 2011, economist Willem Buiter described water as "an asset class that will, in my view, become eventually the single most important physical-commodity-based asset class, dwarfing oil, copper, agricultural commodities and precious metals."

But opposition to this ideology is mounting. Known as remunicipalisation, more and more communities and governments are choosing to resist and reverse private water contracts. According to a 2014 report by the Transnational Institute, around 180 cities in 35 countries have returned control of their water supply to municipalities in the past 15 years.

Political parties in India do hardly bother about privatisation of water and switching over to the culture of packaged and bottled drinking water. Even Left Parties don’t realise the gravity of the problem—putting water in private hands. With profit the main objective, the idea of water a human right becomes a secondary concern.


Vol. 48, No. 37, Mar 20 - 26, 2016