Find solutions other than privatization: Activists

Elly Burhaini Faizal

States should play a bigger role in the realization of people’s rights to clean water by not only providing larger fund allocations for water but also considering solutions other than privatization, which has been proven ineffective, activists say.

Indonesia remains one of the Asian countries that suffers from water crises due to the government’s inability to manage water as a natural resource.

Hamong Santono, an activist from the People’s Coalition for the Rights to Water (KRuHA), said privatization had emerged as the way to reform water resources since the 1990s, but it had led to many problems instead of giving people greater access to clean water.

“Privatization has increased the price of water, hampering poor people’s access to water,” he said at a discussion titled “Navigating critical waters: issues, challenges and alternatives to the privatization and commercialization of water in Asia”.

Privatizing water, he said, had also undermined both the Indonesian government and communities in controlling their own water resources. Moreover, privatization had been unable to improve the quality of water and water services despite the continuing skyrocketing of water prices, the activists said.

About US$300 million was provided by the World Bank to support the government to reform water resources in the country under the Water Resources Sector Adjustment Loan.

Following the World Bank support, the 2004 Water Resources Law was enacted, giving water the status of an economic good. Under the law, the government green-lighted water privatization.

At least 30 water privatization efforts have been carried out, with the Jakarta and Batam projects the two biggest. Despite strong criticism, the government continues to privatize the country’s water such as in Jatigede (West Java), Pontianak (West Kalimantan) and Semarang (Central Java).

Water tariffs in Jakarta are the highest in Southeast Asia after Jakarta water utility PAM Jaya signed a cooperation agreement with two private operators for the period between 1997 and 2023.

“There were 10 tariff increases since the privatization,” said Irfan Zamzami from the Amerta Institute.

Instead of receiving benefits, PAM Jaya continues to suffer financial losses since it has to pay water charges to the two operators at higher amounts than the water tariff paid by consumers, he said.

In 2008, PAM Jaya suffered financial losses worth $190 million, while its debt amounted to $80 million.

Apart from Indonesia, water crises have affected several other countries in the world. Data from the World Health Organization (WHO) shows that in 2010 about 900 million people across the globe had no access to clean water, while 9.8 billion people didn’t have access to sanitation.

In the midst of water crises throughout the world, water as an economic good is treated as the panacea for water crises.

Problems arising and remaining following the adoption of privatization prompted policy makers and critics to find alternatives to cope with water crises.

“Promoting community-based water and community public partnerships may be a better alternative to cope with water crises instead of privatizing it,” Hamong said.

The Philippines has suffered the most from water privatization among Asian countries. Having been burdened by a total foreign debt of US$20.2 million, the Metropolitan Waterworks and Sewerage System (MWSS) was privatized.

The privatization caused water prices to sharply increase for water produced by Maynilad and Manila Water, the MWSS’s two concessionaires. In 2008, the price of water produced by Maynilad reached 32.032 pesos (US 70 cents) per cubic meter, increasing more than sixfold from 4.96 pesos in 1998. The water price for Manila Water reached 26.98 pesos in 2008 from 2.61 pesos in 1998. Despite soaring prices, the leakage level of the water supply remained high.

“People fought to stop water privatization in the Philippines,” said Milo Tanchuling, an activist from the Freedom from Debt Coalition in the Philippines, adding that some privatization was halted after a string of mass protests.

Hamong said the government should guarantee a sufficient amount of water to meet the basic needs for healthy lives for all people, without requiring the ability to pay.

“Stop privatization; don’t make water a commodity,” he said, adding that water should be excluded from any trade agreements.

Source: The Jakarta Post