Water Crisis: A Ploy for Country-Wide Water Privatization?
Group vows to step up opposition vs Arroyo plan

People are rising up in renewed struggle to reverse prior and oppose further water privatization schemes the government is planning with multilateral funding institutions for the benefit of foreign water transnationals and local business interests on water.

By Felicisimo H. Manalansan
Bulatlat.com

Just as the Macapagal-Arroyo government is harping about a water crisis on account of the lowering of Angat dam’s level, a group of people last Friday vowed anew to oppose the government’s policy of water privatization. The group noted that when the former Ramos government talked about a water crisis, the then state-run Metropolitan Waterworks and Sewerage System (MWSS) was privatized, signaling the world’s largest water privatization project.

This time, warns the group, the Macapagal-Arroyo government, in collaboration with the World Bank and the Asian Development Bank (ADB), is targeting a country-wide water privatization program that will see the abolition of some 500 water districts across the country to be replaced by World Bank and ADB-funded private water companies in supposed partnerships with local government units in the provinces.

They also expressed apprehension that speculations about a possible water shortage in the coming months may be used to justify more water tariff hikes as well as to push government Official Development Assistance (ODA) projects that are being opposed by the people for displacing peasants and indigenous communities.

Water for All Network

In a “soft launch” of the Water For All Network, the participants vowed that along with opposing water privatization, they would initiate as well a national campaign that will spearhead the people’s urgent call for “clean, safe and affordable” water.  This as the group scored the alleged failure of the MWSS privatization in 1997 which it said has only resulted in perennial rate hikes amid deteriorating services from the two private concessionaires: Manila Water with its American and Japanese partners Bechtel, United Utilities and Mitsubishi Corp. and Maynilad Water with its French Lyonnaise des Esaux partner. 

On top of last year’s P5 average rate hike implemented by Manila Water, the Ayala-owned firm is set to further increase its rates this month by an average of P0.02 per cubic meter on account of the peso’s depreciation, putting current rates it is collecting from consumers at P13.99 per cubic meter.

Maynilad which bills its customers at P19.92 per cubic meter, on the other hand, is expected to raise further its rates from P8 to P10 or more depending on the results of an ongoing top level negotiation between the Macapagal-Arroyo government and the Lopez’s Benpres Holdings Corporation, majority owner of Maynilad Water, as a result of the latter’s dispute with MWSS. 

Organizers of the network, which include the Bagong Alyansang Makabayan (Bayan), Ibon Foundation, Confederation for the Unity Recognition and Advancement of Government Employees (Courage), Center for Environmental Concerns (CEC) and the Kalikasan People’s Network for the Environment, also plan to further expose water-related infrastructure projects of the World Bank, ADB and Japanese ODA.

Speaking for the network, Bayan’s Renato Reyes said such projects, which mostly include dams, has resulted in widespread dislocation of farmers and indigenous peoples and their lands. He likewise decried what he says is a renewed interest by World Bank, ADB and transnational power corporations to gain control of the country’s vast water resources.

Reyes said water resources naturally form part of the country’s patrimony, a public resource, he added, that should remain under government control to benefit the people.

Reyes said the network will also support the development of sustainable water supply and delivery systems, but maintained that these should remain under government’s hands. He also derided the government’s “GMA Patubig Program” with Manila Water as a cheap political gimmick which does not really solve the water woes of the urban poor in the metropolis.

Privatization failed

“Privatization as a policy has proven to be a gross failure,” states the network’s statement of unity read by Bayan Secretary General Teddy Casiño.

“It has reaped immense profits for a very few foreign and local corporate interests while increasing the burdens of consumers,” Casiño said, adding that privatization “has failed to deliver on its promises of cheaper rates, greater access and better services.”

On other hand, independent think tank Ibon Foundation demanded a comprehensive review of the government’s water privatization policy, noting that the current tiff between Maynilad and the MWSS demonstrates the essential contradiction between water as a service and the profit interests of the concessionaires, including Manila Water.

Ibon likewise called for a review and reopening “with public participation” of the international arbitration panel that intervened in the case between Maynilad and the MWSS. The international arbitration panel is a creation of the concession agreement between Maynilad and MWSS. It is composed of representatives of Maynilad, MWSS and the International Chamber of Commerce, which acted as arbitrator.

Ending four months of closed door hearings last November, the panel ordered Maynilad to pay P6.7 billion in concession fees the latter owes to the MWSS since 2001. It also ruled that Maynilad should continue serving its concession area.

Ibon’s senior researcher Arnold Padilla said that the arbitration panel should have taken note of the widespread clamor, including from the MWSS itself, to return Maynilad’s concession area to the government.

At the same time, Padilla said that an appeal should be made of a Quezon City trial court decision disallowing MWSS to take hold of Maynilad’s $120 million performance bond after the latter failed to pay its concession fees. He argued that it is only rightful for MWSS to claim Maynilad’s performance bond as this represents a guaranty fund against Maynilad’s breach of its contract agreements.

Despite these calls, however, participants at the forum launching of the Water for All Network expressed anxiety over government plans that target to nationalize the privatization of water services throughout the country. Participants likewise expressed alarm over recent trends that show private local and transnational companies laying claim over some of the country’s water resources through dam projects like the San Roque Dam project in Pangasinan and parts of the Cordillera region. 

Nationalizing water privatization

Courage president Ferdinand Gaite explained at the forum that the privatization of the MWSS in 1997 was only the initial in a series of privatization moves by the government that now aim the abolition of the water districts in cities and municipalities around the country. Thus, he said, after the MWSS, the next big government agency to be soon privatized would be the Local Water Utilities Administration (LWUA) and the local water districts under it.

Gaite said Republic Act 8041 or President Ramos’ Water Crisis Act of 1995 brought this about even as he added that a draft executive order (EO) that will bring a national scope to the government’s water privatization program is now being studied by Malacañang presidential palace.

The draft EO, Gaite also said, was the product of an ADB study that was drafted by the USAID-funded Accelerating Growth through Investments and Liberalization with Equity (AGILE).

To facilitate this, the Courage leader said, the government is supporting so-called private public partnership agreements that transnational water companies like Ondeo-Suez (Lyonaisse de Esaux partners) have resorted to in other countries in order to soften opposition from the people. He said the case of Magdalena, Laguna, where a failed water project was availed of by the local government using a World Bank loan that was coursed through the Department of Interior and Local Government (DILG). The project failed because it was not able to produce potable water for the people who are nonetheless paying for an expensive but worthless loan, he elaborated.

Gaite noted, however, in countries where similar agreements have been put in place, like in Argentina and Bolivia, massive protest actions by the people have taken place. Some of these protest actions, he added, have taken a violent turn, citing two deaths in Bolivia during a demonstration against the privatization of water in that country. Bulatlat.com

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