Monday, February 13, 2012

Privatization of Water

This is in a sense a follow up to the
Dabur Lanka to export 3.36 million litres of Lankan water to India every month
and the
Climate Change, Food Security & Virtual Water an Asymmetric Threat to Sri Lanka

This post contains excerpts from a article in Truth-Out titled Public Utility, Private Profit: Privatization of Water Is as Benign as Lucifer
Beginning about 20 years ago, it dawned on the bankers and some major corporations that if oil was a lucrative commodity water would be even more so. Everyone had to have water, even if they rode bicycles to work or took public transit. The trick was how to take it away from the people and sell it back to them.

The first water privatization story I ever heard was out of Bolivia. Cochabamba, Bolivia, is a semi-desert region. Water is a scarce precious resource. In 1999, the World Bank told Bolivia that in order to obtain a much-needed $600 million in international debt relief, it would have to privatize Cochabamba’s public water system, giving the concession to a Bechtel subsidiary, International Water.
The Bolivian Congress caved in, passing the ‘Drinking Water and Sanitation Law’ in October of 1999, ending government subsidies to municipal utilities and authorizing privatization. International Water took over in Cochabamba. The minimum wage is less than $100 a month, but IW raised the price of water to an average of $20 per household.

One classic example would be in the Plachimada community in the state of Kerala. Coke opened a bottling plant there in 2000; the community immediately suffered from chronic drought and polluted water. The reasons are hardly in dispute.
Three years ago, the little patch of land in the green, picturesque rolling hills of Palakkad yielded 50 sacks of rice and 1,500 coconuts a year. It provided work for dozens of labourers. Then Coke arrived and built a 4-acre bottling plant nearby. In his last harvest, Shahul Hameed, owner of the small holding, could manage only five sacks of rice and just 200 coconuts. His irrigation wells have run dry because Coke draws up to 1.5 million litres of water daily through its deep wells... To make matters worse, the bottling plant was producing thousands of gallons of toxic sludge and, as the BBC reported, disposed of it by selling the carcinogenic material to local farmers as "fertilizer."

Coca-Cola is big in Mexico, very big. At the same time, and not coincidentally, 12 million people have no access to piped water and 32 million have no access to proper sewage. Coca-Cola’s resource monopoly simultaneously creates a scarce water supply and an abundant supply of Coke. The country is also the second largest consumer of bottled water, much of it sold by guess who. The process of making Coke requires at least two liters of water for each liter of the finished product; some estimates are as high as five-to-one. The business end is covered by dozens of water concessions from the Mexican government which handed the company the legal right to take water from, as of 2008, 19 aquifers and 15 rivers, many of these in indigenous territories. They have also picked up the right to dump toxic waste in at least eight different public water sources.

The process of privatization has nearly swallowed the entirety of the country’s water. Yet the country hasn’t received much in return from Coca-Cola. In 2003, the company paid $29,000 for water concessions in the entire nation; in 2004, their profits from the bottling plant in San Cristobal de las Casas, the largest in the country and second largest in the world, alone reached $40 million.

Please read the whole article at Public Utility, Private Profit: Privatization of Water Is as Benign as Lucifer

Other related articles
FrontLine: Kerala's plight

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