Water is traditionally seen as a basic necessity along with food and shelter. Even in the three, it is finite resource, which makes it even more precious. However, in the 1980s and 1990s a wave of privatisation took over and many countries following neo-liberal policies privatised their water. This changed the outlook towards water from a basic public need to a public commodity to be freely traded in and profiteered from.
It is only in the 21th Century that people have realised that a resource like this should be managed by the public sector due to the reasons given said below:
1. Water as a commodity, rather than a basic need:
The very premise of water privatisation is that water could be sold and bought, just like any other commodity, makes privatisation problematic. When it is seen through the ambit of being a commodity, and not a need of the people, the discussion shifts from can the access to water be improved for the people and how quality water can be provided to even the lowest of the socio-economic classes. Water when viewed as a need, restricts the discussion to issues that actually affect the people; development and infrastructure.
In contrast, when water is deemed as a commodity, it gives rise to the question of affordability. And when it is a question of affordability it is unfair to the underprivileged. And that’s why this precious resource suits better in the hands of a public enterprise rather than a private enterprise.
2. Pricey and significant amount of price hikes:
In Guayaquil, Ecuador, the price of water went up by 180% after privatisation of water. In Jakarta, Indonesia, the price went up 258%, without high quality of water supplied. In La Paz and El Alto, 80,000 families could not afford the setting up of a pipeline and the tariffs levied.
These statistics show that the privatisation of water is not in the interests of the poor and unprivileged, but these are the people who are in dire need of access to quality, affordable water. This is because of the very nature of water as a pressing necessity that hiking prices do not seem unjustified because people would still be willing to pay for it. And with such a money-minting business in town, it is no wonder that private entities want to covet it. Even in U.K., the statistics show that the people about 2.3 billion pounds more than what they would if the water there was a public utility. This shows that water privatisation from the financial angle is a no-no.
3. Lack of commitment to upgrading infrastructure or the quality of water supplied:
Privatisation projects are mammoth encompassing whole cities, regions and even sometimes even countries. And hence they are signed for long decades. These long-term contracts with the private entities make them complacent about the services provided. Plus, these contracts also include heft reversal prices as a clause for early termination of the contract which if unheeded are followed by lengthy and quite costly lawsuits on Governments.
This security makes the private corporations neglect to invest in the existing infrastructure. And neither is any attention paid to the quality of services provided which is especially important here since it involves water and health. There are no efforts made to efficiently treat water and sewage, to install a better pipeline system, better treatment plants etc. Because reinvesting the money earned back in the business seems like a waste when it could be pocketed by the wealthy stakeholders.
4. Lack of Accountability:
When it is a public enterprise, it is answerable to the people for the service provided because resolving public grievance is one of the duties of the Government. People representatives can pressure the government to address and reconcile their problems through various means.
However, when it concerns the private enterprises, they are not at all accountable to the population. They are only answerable to their stakeholders and directors. This lack of accountability to the common public creates a gap between the both where both of them pursue two different goals; safe and affordable water for the common man, and profits for the private corporation.
Loss of Jobs
It has been seen statistically that after water companies are privatised, they have more often than not led to job losses. And not just that but, low wages, service problems, dissatisfactory work environment follows. We can see this through the following example.
10 Surveys in the U.S.A. showed that one in three workers lose their Jobs after a private takeover. Plus, if the Job cuts don’t take place, there is a reduction in the financial benefits offered, to avoid cutting into private player’s profits, but if job cuts do take place, the remaining employees have to see their workload mushrooms into unmanageable proportions. Even the people who get laid are generally the veterans who demand a high pay due to their expertise. This leads to loss of experience within the corporation and in their stead newbies with less experience with less financial demands are brought. All this impacts the quality of service provided to the people due to lack of manpower in the first place and the remaining personnel being incompetent.
Privatisation might seem like a good idea in terms of other businesses, but it has been seen that when it concerns a highly finite and extremely important basic need, it is best left in the hands of the Government. The private sector with its greed cannot do justice to the job in place of responsible and committed public enterprise.
The only reason why the water privatisation is being shoved down the throat of countries, especially the developing and the poor ones in exchange of loans and bailouts, is due to the ideological commitment of the IMF and the World Bank to neo-liberalism and through that to privatisation. Otherwise, why would countries opt for such an obviously flawed and a proved misstep?
Also, read about India’s various water disputes.