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.