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The people strike back against privatization

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United States: Water, water, everywhere

It may come as a surprise but water supply in the US is mainly in public hands, with 86 per cent of the population served by public providers. Nonetheless, between 2000 and 2015, private water companies lost 169 contracts to municipal take-back.

One of the largest was the 20-year $428 million contract that United Water, a subsidiary of French giant Suez, was awarded in 1999 to manage Atlanta’s water. The result? Job losses, rising bills and general disrepair, with the city losing billions to inefficient metering and billing.

In 2003 the City Council took the tough job of managing this resource in a water-scarce area into municipal hands. There have been ups and downs but the public service now manages to treat

70 per cent of all waste water for re-use and has brought down water withdrawals by more than 10 per cent (despite a population increase of a million new residents). Progressive billing means those who use more pay more, while those on low incomes get reduced tariffs.

A subsidy programme has resulted in 125,000 water-wasting toilets being swapped for high-efficiency units.

Bolivia: striking oil

After holding a referendum which showed that 92 per cent of the Bolivian people supported renationalizing the country’s hydrocarbons sector, president Evo Morales did just that in 2006. The oil and gas fields became national property. Private companies could still operate but they had a minority stake and could extract much lower profits.

The results? Ten years on, the state had collected $31.5 billion in revenue, compared to $3.5bn in the prior decade. GDP tripled as a result and public spending increased by 750 per cent. Subsequently, electricity, pensions and telecommunications were also brought back to public ownership.

Argentina: You’ve got mail

When Argentina handed over its postal service to investment firm Grupo Macri in 1997, things went pear-shaped – service provision plummeted, prices shot up and royalty payments to the government weren’t made. In 2003, the government took back this loss-making service, and costs, reliability and accountability all improved. Rural routes that had fallen into neglect got connected up again.

However, the saga of the failed privatization’s debts trundles on. Grupo Macri is the family firm of current president Mauricio Macri, though he passed on his shares to his children before being elected. In June 2016, his government agreed to forgive $296 million of debt run up by the firm. The president denies any conflict of interest.

With the failures of privatization all too evident when it comes to public resources and services, there is a global upsurge of interest in running things differently.

France: Vive l’eau!

French water multinationals have got embroiled in controversy with their dealings across the world, and the level of privatization of water services within France remains high. Yet the remunicipalization trend has been gathering pace since the mid-2000s, and two major cities – Grenoble and Paris – are now models of democratic public ownership. A third of Grenoble’s water board directors are civil society representatives, while Paris has staff, users and civic associations represented on the board with full voting rights.

Efforts are being made to guarantee a right to water with free public water fountains and rebates for the poorest residents, while issues of sustainability and conservation are taken seriously. All the while delivering on price and quality. In Paris savings of $46 million per year were made after the take-back in 2010 – which also brought lower prices for customers. In Grenoble, investment in infrastructure has increased threefold without raising bills.

Nigeria: Privatization in hot water

A popular grassroots campaign against the government’s plan to enter into a public-private partnership for water provision in Lagos has kept privatization at bay since 2014. While the Our Water Our Rights campaign spearheaded by Environmental Rights Action has not yet made the government change its mind about the proposed privatization, it has succeeded in getting it to allocate $185 million towards easing the city’s water crisis. Links have been made with other anti-privatization struggles around the world and the demand is for public provision with democratic oversight.

Germany: Full of energy

Since 2005, there have been a remarkable 248 energy sector remunicipalizations in Germany. A firestorm of dissatisfaction with big energy companies has played a major role: their failure to meet the public demand for renewable energy, the feeling that municipalities had lost control over energy provision and, in many instances, rising bills.

In 2009, the city of Hamburg formed an autonomous energy utility with the aim of providing ‘climate-friendly electricity (non-nuclear and coal-free)’ and municipal-run infrastructure. Their solar initiative involved citizens and local businesses as co-investors. Over a 100,000 clients signed up for locally produced renewable energy. In 2013 a referendum was held to push the government to reclaim the entire energy grid (electricity, heating and gas). The electricity network was bought back in 2015, with the gas network to follow in 2018-19.

India: A bill of good health

With the election of the Aam Aadmi Party (Common Man Party) in Delhi three years ago came a sorely needed health intervention. The Party set a target of opening 1,000 Mohalla (community or locality) clinics across the city to provide free primary healthcare; 164 had come into being by March 2018. These are no-nonsense portacabins staffed by a doctor, nurse, pharmacist and lab technician. They operate as the first stop for common ailments and offer 110 essential drugs and 212 diagnostic tests. Over five million consultations had taken place by the end of 2017. There are also plans to open 100 dental clinics.

Whereas most Indians have to rely on expensive private care or face long queues at government hospitals, the poorest citizens of Delhi at least now have an option suited to their needs.

This piece was corrected on 31 May 2018.  It originally stated: ‘In Paris effective co-ordination has led to savings of $36 million per year ever since the take-back in 2010 – and lower prices for customers.‘ In fact, total cost savings from the re-municipalization amounted to $46 million annually.

Sources: S Kishimoto, E Lobina, O Petitjean (eds), Our public water future, 2015, nin.tl/PublicWater; remunicipalisation.org; The Atlanta Journal-Constitution; transformativecities.org; enca.com; TNI, Reclaiming Public Services, 2017, nin.tl/TNI-reclaiming; thebetterindia.com; Hindustan Times; The Hindu; erafoen.org

New Internationalist issue 512 magazine cover This article is from the May 2018 issue of New Internationalist.
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