stop ghana's water privatisation

ACTION ALERT - CLOSING DATE NOVEMBER 27, 2002.

CLEAN WATER FOR GHANA
STOP THE SALE OF THE WORLD'S WATER!

CALL YOUR MEMBER OF CONGRESS IMMEDIATELY TO URGE THEM TO SIGN THE LETTER
BELOW.
CLOSING DATE NOVEMBER 27, 2002.

Ghana: In the U.S. Congress, Representative Schakowsky (D-IL09) is
circulating
a letter to U.S. Treasury Secretary O'Neill urging that he instruct the
U.S. Executive Directors of the World Bank and the IMF to oppose the
water privatization project in Ghana. The full text of the letter can
be found below.

Please Call Your Member of Congress today [U.S. Capitol Switchboard
-202-224-3121] and ask them to sign the letter from Representative
Schakowsky on stopping water privatization.

For more on water privatization in Ghana, visit Public
Citizen's Water for All campaign at www.citizen.org/cmep/water

Below is a copy of Rep. Schakowsky's letter to Secretary O'Neill.
__________________________

November 26, 2002

The Honorable Paul O'Neill
Secretary
United States Department of Treasury
1500 Pennsylvania Ave., N.W.
Washington D.C. 20220

Dear Secretary O'Neill:

We are writing to urge you to instruct the U.S. Executive Directors of
the IMF and World Bank to oppose the current "Private Sector
Participation" proposal being promoted for the urban water sector in
Ghana. The plan is opposed by a broad coalition of Ghanaians because it
would increase the cost of water for the people of Ghana. We also urge
you to instruct the U.S. Executive Directors to oppose loan conditions
in Ghana mandating increased cost recovery for water. These conditions
have already raised the price of water for the poor in Ghana. Ghana
should receive loans that do not have onerous conditions.

Mr. Secretary, on October 8 at the Global Millennium Water Initiative
Symposium you stated that "water is life. Nothing is as essential- or
as fundamental to us-as water." You went onto state it is a goal of
yours to ensure that all people have clean water. We share your goal
and we commend your efforts to increase access to clean and affordable
water around the world. Unfortunately we believe that IMF and World
Banks policies in Ghana have in fact, been counter productive to that
goal. Clean and affordable water is becoming less accessible for the
vast majority of Ghanaians.

Increased cost recovery is often part of the regulatory reform
imposed by the World Bank prior to water privatization. Most Ghanaians
earn less than $2 a day and the rising cost of water forces families to
make impossible trade-offs between purchasing food, clothing, medicine,
paying school fees, or buying a bucket of water. Conditions attached to
IMF and World Bank loans in May 2001 required a 95 percent increase in
water tariffs in Ghana. Another 40 percent tariff increase was imposed
in August 2002 and other tariff increases are likely before and after
the privatization proposal is implemented.

Tariff increases are borne unequally by poor population because their
relatively smaller incomes already go disproportionately to pay for
water and because they are often outside the piped system. For those
without piped water, tariff increases are magnified as they are passed
on by the tanker truck operators and other intermediary buyers and
sellers. Purchasing three buckets of water a day in Ghana can cost
between 10% and 20% of the average daily income. World Bank policies of
increased cost recovery for water are removing much-needed income from
the pockets of the poor. This contradicts the poverty reduction mandate
of the institution.

A broad coalition of Ghanaian organizations, including teachers,
doctors, nurses, trade unions, women's and human rights organizations,
NGOs, students and others have stated their opposition to the World
Bank-backed "private sector participation" proposal and delivered a
memorandum to this effect to their government. Eminent individuals from
renowned organizations in Ghana -- the Christian Council, the Trade
Union Congress, the Civil Society Council of Ghana, the Ghana Catholic
Bishop's Council and the African Association of Universities -- invited
an international delegation to study the proposal for privatization or
private sector participation (PSP) in the restructuring of the water
sector. The report of the International Fact-Finding Mission on Water
Sector Reform in Ghana found serious shortcomings in the privatization
proposal and concluded that other options should be sought. The key
shortcomings identified are:

* increased cost recovery will reduce access by low-income consumers;
* proposed investment priorities and lack of capital are likely to make
significant expansion to low-income and unserved areas unlikely;
* the separation of water and sanitation services reduces opportunities
to address public health problems;
* there is no attempt to address the excessive prices borne by those
dependent on tanker trucks;
* there is no plan for ensuring access to low-income consumers;
* the lease formula may encourage transfer pricing which could lead to
higher consumer prices;
* IMF loan conditions, in particular the recommended implementation of
an automatic tariff adjustment mechanism, interfere with an independent
regulatory function; and
* the great majority of citizens and civil society organizations, who
will be directly affected by the PSP proposal, were unaware of its basic
components and were not involved in the decision-making process.

Again, we urge you to take immediate action to instruct U.S. Executive
Directors to oppose the World Bank's water privatization proposal in
Ghana and to oppose loan conditions promoting increased cost recovery
for water. Access to water is a basic human right and should not be
denied to people simply because they are poor.
__________________________

Larry J. Goodwin
Africa Faith & Justice Network
3035 Fourth Street, NE
Washington, DC 20017
ph. 202 832 3412
fx. 202 832 9051
http://afjn.cua.edu