30 June 2003

Africa: Private Water Dangerous - US Study

Nairobi — DEVELOPING countries keen to privatise national water systems could be walking into a morass of danger, a US-based international think-tank on development studies has warned.

Although certain types of privatisation can help water utilities to become more efficient or provide water to those in the developing world who currently lack basic services, there are a host of dangers, the Pacific Institute says in a new report, The New Economy of Water: The Risks and Benefits of Globalisation and Privatisation of Fresh Water.

Water privatisation efforts have been growing rapidly both in the United States and abroad, but public understanding and oversight of these deals lags far behind. Water privatisation must be subject to much stronger public scrutiny," emphasised Dr Peter H. Gleick, a lead author of the report and a director of the Pacific Institute.

"There is little doubt that the headlong rush to private markets has failed to address some of the most critical issues and concerns about water," stated Dr Gleick. "How can we protect the world's poorest people, how can we ensure that the environment gets a fair share, how can water quality be protected for future generations? All of these questions must be answered before we move forward with more privatisation."

The caution comes at a time when Kenya and Tanzania, at the behest of the World Bank, have stepped up efforts to privatise water services. While Eldoret, Nyeri and Malindi have established their own water companies in Kenya, Tanzania has enacted the Dar es Salaam Water and Sewerage Authority Act as part of its efforts to privatise provision of water.

Kenya's Water Development Minister Martha Karua says a Water Services Regulatory Board will soon be set up to reform the water and sewerage sector, with consumers complaining of inadequate, poor and unregulated water services. Private water service providers, including companies set up by municipal and local councils, will be appointed via a tendering system, since councils have proved to be incapable of providing clean and reliable water.

The report says privatisation may bypass under-represented communities and worsen inequities in the distribution of water, especially in the poorest nations. Privatisation agreements may discourage efficiency and conservation efforts and they may fail to protect important natural resources.

The complexity of water privatisation deals often means that many governments do not fully understand the consequences of turning over control of public water systems until it is too late.

"Governments must establish clear guidelines that ensure fair access to water regardless of income, protect the environment, ensure transparency and include affected parties in decision-making efforts. Water is far too important to human health and the health of our natural world to be placed entirely in the private sector," said Dr Gleick.

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