Water privatization a dud

Water privatization, large corporations are finding, is a money-losing proposition. One of the biggest companies in the business is backing out. Good. May this signal an end to greedheads grabbing the water, jacking up prices, and lowering the quality. Because, more often then not, that’s what precisely happens when water is privatized.

To RWE AG, Germany’s biggest electric company, the water business a few years ago seemed to promise a gusher of profits. Governments in the U.S. and around the globe were eager to privatize their water systems.

Today, RWE is in the midst of dismantling an international water empire that cost more than $10 billion to assemble and spanned more than 40 countries at its height.

Water turns out to be less like electricity than RWE hoped. It’s heavy and hard to transport, making it difficult for a big company to build economies of scale. Regulation is never predictable. In the U.S., RWE found itself fighting in town referendums and state legislatures across the country, winning many battles but losing the war.

People want their water public, not controlled by distant entities concerned only with the bottom line.

The seminal battle against water privatization, the one that inspired activists everywhere, was in Cochabamba, Bolivia. The populace, seemingly against all odds, took back control of their water after privatization had quadrupled prices and dropped the quality.

  • This does not mean the end of water privatisation. It only delays the process until the local authorities spend huge amounts of tax payers money bring the various water systems up to date and then the corporate world will be eager to take them at a bargain basement price. It is a precious resource and they want it but they don’t want to spend money on the ifra-structure, that’s for us the tax payer to do, then they can do their usual rip off act.

  • James E.DeRuntz

    After being a privately owned water company employee, exsposed for 17 years to ratepayer overcharges and service degredation,maintenance neglect,engineering disasters,restructurings that have failed multiple times and on…,Americans had better be very afraid,19million of them had better get out a powerful microscope and look at every square inch of how their water treatment facilities are actually cared for. The not so great American Water Sellout to RWE/Thames crashed miserably only 3 years in,now RWE is throwing American back to the Investors via the NYSE,and those investors have as little clue as RWE had when they paid 3 times the value of American 2003. It is another Enron,as Hoover’s Stock Watch predicted,American cut American to-the-bone to profile,RWE was on a spending spree with regard to Water buy-ups,they bit hook,line and sinker,but never physically measured or assessed any of the Operations conditions,Restructured,cutting into the bones of what was left of the Company,Rasing Rates,and creating disfunction by neglect and short-staffing and on…it has been and still is my opinion that what I witnessed disserves to be seen,not heard by all American Communities and would make a whole series of 60 Minutes episodes. Any lack of due-diligence by any Public Water Supply in the United States of America,Privately or Publicly owned,has a very large Accountability attached with it.Americans had better find the way to Eliminate the Accountability disconnect,because they have paid dearly for infrastructure/capital improvements,hardware,software,technologies,facilities and much more,but will never reap any savings,only increases,while profits soar because the Ratepaid improvements only benefitted the stockholders.Now our infrastructure seems to all be in the toilet,and Americans also paid dearly for the Protections to avoid that very thing from happening.I call it Corporate/Political Terrorism from within.This country will fail if control keeps being sold.Water is the wrong gamble,the examples are increasing and if/when I find the writer or reporter to share this story with the American Public,they will be as terrified as I am about the Future of American and other Water Systems Nationwide. Bob,I thank you for showing and sharing my passion in this Most Important Reality Check. I wish I could have located your stories sooner.

  • DJ

    Where I live, all water is owned by the state and you have to purchase the right to use it. This treats water as a scarce resource– which, we are now learning, it is.

    Much of our water is delivered by locally-owned private water companies or cooperatives. The people I know who use them say they are more efficient and cheaper than city water. Occasionally one will fail and be taken over by a public entity (city or county). But on the whole, they seem to perform pretty well.

    OTOH, we’ve already established that there’s a significant difference between city and country. What works here, where everyone knows each other, would never work in Los Angeles– and what works in LA might get a person run out of town up here.

    There are two issues: one, water IS a scarce reource; the days of afailing to regulate its use are numbered. Two, use must be regulated by an entity accountable to the community in which it operates– e.g. a local company or government. Global corporatization works against both these goals.

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