Say no to water privatisation in Ghana

News from Public Citizen's Water For All Campaign
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*******PLEASE FORWARD******* PLEASE FORWARD*********
Dear Friends,

Below is an open letter that will be sent to the World Bank president
and the CEOs of the major transnational water companies that are bidding
for the Ghana water contract. In a last-ditch attempt to STOP the water
privatization process in Ghana, we will also seek to reprint the letter
in key Ghanaian and French (most of the bidding companies are French)
newspapers. Please add your organization's signature by sending the
following information:
1. Individual Name and Title
2. Organization Name
3. Country
Send to: [email protected] BEFORE September 12, 2004
Make sure the subject line includes the words: Ghana Water
We are especially interested in collecting organizational signatures
from countries that have suffered from major water privatization
failures such as Argentina, Bolivia, the Philippines and South Africa.
Copies of the letter are available in Spanish and French from
[email protected]
..................................................................................................................

OPEN LETTER FROM CONCERNED CITIZENS AROUND THE WORLD IN SUPPORT OF THE
GHANA NATIONAL COALITION AGAINST THE PRIVATISATION OF WATER

Dear Mr. James Wolfensohn, President of the World Bank
Dear Mr. Henri Proglio, CEO of Vivendi Environnement (Veolia)
Dear Mr. Mestrallet, CEO of Suez
Dear Mr. Larry Magor, CEO of Biwater,
Dear Mr. J.F. Talbot, CEO of SAUR

We, the undersigned, are writing as individuals and members of
organizations, many of whom know firsthand the tragic impacts of
corporate failures in the water sector from Bolivia to the Philippines
and from Argentina to South Africa. Given this history of failed water
privatization projects, many perpetrated by the very same corporations
that are now seeking contracts in Ghana, we ask that you listen to the
concerns of the Ghana National Coalition Against the Privatisation (CAP)
of Water. The Ghana National CAP of Water, made up of women's
organizations, student and youth groups, tenants, residents and
community associations, religious groups, trade unions, environmental
groups, and human rights groups has united around the goal of ensuring
access to water for all Ghanaians by 2008. The National CAP of Water
has concluded that the achievement of this goal is being undercut by
World Bank and government programs that promote (1) an international
market price for water, and (2) private sector contracts to foreign
multinational corporations for the management of the Ghanaian water
system. We ask that these programs cease and the Ghanaian people be
given a chance to develop alternative proposals.

The National CAP of Water calls for:

* A thorough examination of public sector options. Reform and
restructuring of the public sector water utility is a viable option,
requiring investments in capacity-building, infrastructure, greater
local management autonomy and local community accountability.
* Full participation of all sectors of civil society in
decision-making about reforms in the water sector.
* Full public disclosure of all documents, bids, proposals and
negotiations involving private sector contracting to foreign
multinational corporations for the management of the Ghana water
system.

The undersigned organizations and individuals are particularly
concerned about the proposed private sector water contract in Ghana
because many of us have experienced serious problems with private sector
water delivery in our own countries. A few examples are highlighted
below.

BOLIVIA: In 1999, the Bolivian government granted a 40-year contract
for the water services of Cochabamba to a subsidiary of the corporate
giant, Bechtel. The terms of the contract were so draconian that
citizens, unable to survive under the burden of the new water prices,
began to organize to drive the company out. Water rates increased
immediately - by 100 to 200 percent in some cases. Small farmers and
the unemployed were especially hard hit. In a country were the minimum
wage is less than $100 per month, many families were struggling to pay
water bills of $20 or more. In April 2000 after months of civil
disobediance and angry protest in the streets, the president of Bolivia
was forced to terminate the water privatization contract. Bechtel, in
retaliation, sued the government of Bolivia for $25 million. Bechtel
claimed it had lost investment and "potential profits" as the company
was expected to earn an annual income of $58 million.

PHILIPPINES: In 1997, the Filipino government granted a 25-year
contract to Maynilad Water (co-owned by Suez and the Lopez family) to
provide water services to part of Manila. Civil society groups
criticized the undemocratic and non-transparent nature of the
privatization process, rate hikes (which include an adjustment tied to
exchange rate fluctuations), unmet promises of rehabilitation and
expansion of water services (especially to the urban poor) and weak
regulatory and oversight practices. In a Christmas 2001 press release
the Asian Labor Network said, "In effect Maynilad Water has deprived the
Filipino family of three full meals or three kilos of rice. The
ordinary vendor will now have to surrender one full day of income to pay
for the cost of water." Following bad management and the Asian
financial crisis, Suez is now using various legal manuevers to try to
rid itself of responsibility for the debt. And, Maynilad Water is
negotiating with the Filipino government, attempting to pass its debt to
the public sector in a debt-equity swap. As is too often the case, the
people of the Philippines will pay the burden of this debt.

ARGENTINA: In 1993, the Argentine government granted a 30-year contract
to Aguas Argentinas (majority owner Suez) to provide water and sewerage
services to the city of Buenos Aires. During the first eight years the
company earned a 19% profit rate on its average net worth, but after
2002 the peso crisis left the company in debt. The contractual clause
that permitted Aguas Argentinas to link water prices to the U.S. dollar,
and ensure hefty profits, was overruled by an emergency decree of the
government. Linking consumer water prices to the peso exchange rate had
meant on-going price increases which were borne disproportionately by
the urban poor. Non-payment for water and sanitation services were as
high as 30%, service cut-offs were common, and women and children bore
the brunt of the health and safety consequences. Aguas Argentinas
reneged on its contractual obligation to build a sewerage treatment
plant and over 95% of the city's sewerage flows directly into the Rio
del Plata. Now Suez threatens legal action in the World Bank court,
claiming $180 million in damages, to force contract re-negotiations.

SOUTH AFRICA: In 1999, the British water multinational Biwater
developed a joint venture with a South African group and was awarded a
30-year contract to provide water in Nelspruit, South Africa. The
company has nearly tripled the consumer price of water and been quick to
cut-off service for those who cannot afford to pay. The price hikes and
persistent complaints that the company fails to provide service to poor
areas, have caused some consumers to boycott paying their bills.
Contractual commitments to expand access are being hampered, according
to Biwater officials, by the lack of revenue and lack of access to
credit. Conflict and social tension continue as citizens insist that
access to clean and affordable water is a human right.

These are just a few of the water privatization failures suffered by
people around the world. We call on you to listen to the concerns of
the Ghana National CAP of Water. There is significant opposition to
private transnational corporate involvement in the water sector. There
must be an end to the external pressure, including that of the World
Bank, that promotes private sector contracting to foreign transnational
corporations of vital natural resources such as water.

Sincerely,

Sara Grusky
Water for All Campaign
Public Citizen
Phone: (202) 454-5133
Website: www.wateractivist.org