People with limited means consume less water – privatisations have increased corporate profits

Andreas Bieler

Photo:
Mika Federley

The privatisation of water resources management raises prices and may block sufficient access to water for the poorest. According to researcher Andreas Bieler, there are problems with access to clean water also in Europe.

Water is the most important natural resource for humans, one that is taken for granted to such a degree by most people that a lack of it never crosses their mind. However, ensuring a sufficient water supply is a severe global problem not alleviated by the privatisation attempts seen in many countries. Quite the contrary, says Andreas Bieler, a German researcher working at the Helsinki Collegium for Advanced Studies.

“Investors consider water as the oil of today. They maintain that, like oil before it, water is now a profitable investment opportunity due, in particular, to potential water shortages, but also to the fact that people cannot live without water. In Britain, for instance, prices went up by 40% in just a few years after privatisation,” Bieler notes.

Those justifying privatisation say that services will improve once they are no longer the responsibility of cities and municipalities. They believe that, unlike public services, businesses competing against each other simultaneously succeed in providing services efficiently and generating profits.

According to Bieler, nothing positive has come from the privatisation of water services anywhere in the world. Privatisation makes services worse, increases prices for consumers and results in a lack of investment in infrastructure, as everything is subordinated to the principle of profit maximisation.

Water is also a problem in the EU

At the moment, Bieler is investigating struggles against water privatisation in the European Union. Attempts at privatisation after the financial crisis have resulted in shortages of clean water in the EU as well. In Attica, the poorest region of Athens, Greece, illegal water pipes were found as recently as 2018, with which those without means tried to ensure their water supply.

“Everyone must have access to water, it’s not a luxury item,” Bieler says. “It absolutely should not be subject to competition.”

Importantly, people have not simply accepted privatisation. They have resisted treating water as a commodity. In Ireland, for example, an attempt was made to introduce water charges with apartment-specific water meters, even though the Irish already paid for their water through general taxation. In other words, consumers would have paid twice for the water they used. In the end, large demonstrations and a non-payment campaign in 2014 and 2015 succeeded in blocking the introduction of these water charges.

Bieler thinks water must be an unrestricted public utility, accessible by all. This was recognised in Naples where water privatised by Berlusconi was remunicipalised in 2013.

In Thessaloniki and Athens, Greece, water activists have been successful in resisting the privatisation of the profitable public companies. However, subsequently to the latest bailout agreement in 2015, Greece was forced to establish the Hellenic Corporation of Assets and Participation (HCAP), also referred to as the Superfund. Members of the management board are approved by the European Commission, the European Central Bank and the International Monetary Fund, with two of the members coming from outside Greece. The establishment of this Superfund, including also the two water companies and nominally still in Greek public hands, undermined Greece’s economic sovereignty, something which Bieler calls neocolonialism.

“Public utilities should be managed in a way that allows both employees and users to take part in decision-making.”

This was achieved in Paris in 2010 and in Berlin in 2013, as water services were remunicipalised following demands from consumers.

There are a lot of groups and organisations opposing water privatisation, ranging from environmental organisations and trade unions to development cooperation organisations and civic activists. They have succeeded in having an effect on both water production and distribution, while also highlighting, for example, environmental viewpoints.

Andreas Bieler is Professor of Political Economy and Fellow of the Centre for the Study of Social and Global Justice in the School of Politics and International Relations at Nottingham University. He is currently serving as research director at the Helsinki Collegium for Advanced Studies.

Bieler’s home page

Bieler’s blog

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