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There are two problems here. First of all, water in its natural state, that is, just lying around, isn’t much good to anyonecertainly not anyone living in a city, which is most of us, and increasingly not to anyone living in the country, where groundwater is more and more polluted with herbicides, pesticides, fertilizer, and great huge leaking piles of dung. I mean, feel free to drink out of a puddle or a gutter if you like, but if you do this for long, your future babies will not have enough working eyeballs. So the water of value, the liquid you can charge for, comes out of the tap or the pipethe stuff that is going to be controlled by Suez. Secondly, when a government, under pressure to cut its budget from the IMF and the World Bank, contracts out the provision of any service for a period of 10 to 30 years, as water contracts usually run, it quickly loses the ability to monitor the contract. Over a relatively short period of time, the expertise and technical ability to operate the water system pass to the contractor. At the end of a decade or so, the municipal government can barely tell hot from cold. And since, according to the World Bank, the government couldn’t run the system efficiently in the first place, how is it possibly going to keep tabs on Suez or ONDEO or whatever it’s calling itself 15 years from now? And unfortunately, the government will need to be able to monitor. For example, in March 1999, Aguas Argentinas, a subsidiary of Suez, was detected providing nitrate-laden water to more than three million inhabitants in seven poor districts in Greater Buenos Aires. High levels of nitrate in water can cause death in infants and cardiovascular problems in adults. The company’s strategy: Create an Emergency Committee to “relativize the problem,” i.e. make it seem like it’s less awful than it is. To accomplish this worthy goal, the Emergency Committee bought bottled water products and infants’ food to show that nitrates were present in these substances, too. \(Oh, okay, so the levels really only a PR issue anyway because Aguas Argentinas had negotiated a contract with the government of Buenos Aires that exempted the company from responsibility for nitrate levels. The contract did say that the public should be notified about dangerous levels, but it didn’t say by whom, so Aguas didn’t do it. Mr. Mestrallet’s ‘Water Truce’ does not address these depressing details, and the CEO himself wishes that his critics would stop being so negative and so very detrimental to the interests of the underprivileged around the world. He has really thought this out. Rather than privatizing water systems, Suez will only operate them by contract or concession or lease or something, and that way, the risk for damage to infrastructure due to natural or political events stays with the government, which is also often responsible for much of the investment in equipment and connections. Meanwhile the right to collect money accrues to the private company. This is rather like having a job that consists of going to collect your paycheck. The role of the government in PPPs will be limited, and although Mr. Mestrallet, in his efforts to serve the poor, did not discuss the matter openly, he is anxious to get the World Bank to subsidize Suez directly. That’s right. He tells us that he is calling upon the World Bank to “optimize the use of public funds by building financing models which leverage private investment.” The World Bank should ensure the “proper allocation of risk between public and private sectors.” If the PPP is working efficiently, we assume, then the proper allocation of risk would be: public/all, private/none. The Bank would perform this function by ensuring that partners to the PPPs live up to their commitments and by guaranteeing private companies against loss due to currency devaluation. Or, most attractively, by investing in the enterprise, too, as the World Bank did with Aguas de Illimani, the Bolivian sub sidiary of Suez. This one supplies water to El Alto, up the hill from La Paz. The International Finance Corporation percent of the capital for the El Alto project of Suez, using the taxpayers’ money of developed countries to fleece the taxpayers of underdeveloped ones. This is what Mr. Mestrallet means by a Public-Private Partnership. The IFC invested in the subsidiary directly to provide stability and guarantees to private investors, after a major political uprising effectively stopped the privatization of water in Cochabamba. So, when the public makes clear that it opposes privatization through concession, sale, or contract, the World Bank will step in to reassure private investors and encourage their continued participation, if the enterprise is profitable. But wait. If I remember my economic principles correctly, I thought that capital justified its right to a profit by its willingness to take risks. But under this particular Truce, the public sector will guarantee the profitability of the enterprise, the World Bank will put up public money, and the government assumes responsibility for the assets. The private company maintains the infrastructure, keeps track of the meters and collects the money. Imagine that. Or… Imagine there’s no water, It’s easy if you try. No wells or standpipes With Suez standing by. Imagine all the PEO-ple, Living high and dry. Oo Hoo Oo Oo 00 Imagine no possessions, It isn’t hard to do, After all the Bankers Have their way with you. You may think that they’re greedy, They don’t care what you believe, They hope someday they can charge you, For the oxygen you breathe. Frequent contributor and sometime lyricist Gabriela Bocagrande lives in Washington, D.C. 7/5/02 THE TEXAS OBSERVER 13