Umbria: Hundreds of self-reduced water bills!

Two years after the referendum of 12 and 13 June 2011 in Italy, hundreds of water and sanitation service users from the Umbrian Region took the initiative to self-reduce their water bills, cutting out the abhorred Invested Capital Return (ICR), the private operator’s share of profits guaranteed by law but repealed by the referendum. The referendum victory in June 2011 gave the Comitato Umbro Acqua Pubblica an extra weapon to fight against the privatization of water!

The Comitato Umbro Acqua Pubblica was first created in 2006, to support the Comitato Tutela Rio Fergia of Boschetto^[1], a committee mobilized against Rochetta Spa, the multinational which bottles water from the Umbrian Apennines, exhausting groundwater, drying local torrents and jeopardizing a good part of regional water resources. If this was the starting point, mobilizing against the privatization of the SII^[2], has became a natural consequence.

Together with many other Italian committees, the Comitato Umbro Acqua Pubblica succeeded in collecting over 430000 signatures around the country, in order to submit a popular initiative draft bill to the Italian parliament. A draft bill that the members of parliament were careful not to discuss, leaving it to rot at the bottom of a drawer until the end of the legislature.

Meanwhile, the Regional Administrative Tribunal (TAR) of Umbria rejected a new water withdrawal concession which had just been granted by the region of Umbria to Rochetta Spa, ruling in favour of 11 appeals submitted by the Comitato Tutela Rio Fergia to have another water withdrawal rejected.

At the same time, the Comitato Umbro Acqua Pubblica presented to the city of Perugia a proposal for popular deliberation signed by over 1500 residents of the capital. Most members of the municipal council majority, (Democratic Party, center-left, Socialists) aligned with the Right-wing opposition and rejected the popular request to keep water out of the market.

Two months later, a movement to collect signatures in favour of a referendum on water started. In less than 3 months, over 1.4 million signatures were gathered for the referendum! Against the opinion of all the political parties of the time.

On June 12 and 13 in 2011, 28 million Italians (57 % of the voting population) went to the polls. 97% of them voted against the compulsory privatization of the water & sanitation service and rejected the Invested Capital Remuneration (ICR) whereby the State guaranteed 7% profit on the operators' investments. Actually, users in the province of Perugia were billed for even larger profits: 14.35% in 2011 and 15.82% in 2012, this being in addition to service management cost recovery charges.

After the referendum victory which repealed the application of the ICR quota on the pricing of water, water bills were to be reduced throughout Italy as of July 21, 2011 – the date of publication of referendum results in the Official Gazette of Italy.

However, the government and especially the mayors of municipalities carried on as if nothing had happened, as if there had been no referendum. The users have continued to pay for illegally established industrial benefits; the popular will expressed by the referendum has been completely ignored.

The reaction to this total lack of democracy was quick and the national campaign known as "Civil Obedience" was started by citizens/users who chose to abide to the outcome of the referendum by deliberately "self-reducing" their water bills.

The practice of self-reduction in Umbria started November 2011. Users recalculated their water bills by removing the ICR, a part that had become non-payable by the effect of the referendum. In compliance with the operator's "service contract", water bills were formally disputed by way of letter of complaint explaining that users were not paying for the non payable part.

After several threats by Umbra Acque Spa to interrupt the water supplies to defaulting users, the citizens of Umbria asked to meet with the Prefect and denounced the abuse of power by an operator who, with the backing of mayors, kept on collecting ICR on their water bills. At the end of January 2013, a notice by the Council of State confirmed that operators were going against the law by continuing to collect ICR despite the referendum. The operator was forced to recognize before the Prefect of Perugia that although the Committee was not right... it wasn't altogether wrong. It was therefore established that operators were not to interrupt the service.

60% of the Umbra Acque Spa company is owned by Municipalities within the ATI^[3] 1 and 2 districts. The remaining 40% is private and belongs to ACEA Spa which actually runs the entire service. 50% of ACEA Spa itself is owned by the city of Rome and another 49% belongs to Suez and Caltagirone, a famous and powerful contractor and realter in Rome! While the management of the service pursues maximum benefits, it charges all costs to the users and the communes.

The shift to private management in 2002 put all the infrastructures, water treatment stations and networks into the hands of Umbra Acque Spa. These were built by the municipalities with public funds and bank loans that still needed to be repaid. The water bills were designed to cover repayment installments for the entire period of the loan and up to the year 2027. Umbra Acque Spa was expected to transfer the corresponding amounts to the municipalities that contracted the loans. Since 2012, Umbra Acque Spa did not transfer these funds to the municipalities although it keeps collecting from the users who end up paying twice: once as users, through water bills and twice as citizens, through municipal taxes.

Sanitation is another source of profit for Umbra Acque Spa. A 2008 sentence of the Court has decreed that users without access to the collective sanitation service, or who provide for their own sanitation, should not be billed for sanitation services. In addition, a Ministerial Decree established that those who have not benefited from collective sanitation services can claim reimbursement of the sanitation portion collected by the operator over the last ten years. In 2009, the mayors provided Umbra Acque Spa with special resources to back the refunds; but because the procedure is not automatic, reimbursements will be granted exclusively to entitled users who file their application before October 15, 2013. Since the beginning of 2013 the Committee engaged in an information campaign to publicly denounce this situation. However, thousands of users will never get refunded and their money will cashed in by Umbra Acque Spa.

Investments are also a big issue. Umbra Acque Spa has never fully implemented the industrial plan, and scheduled operations are incomplete, including those funded by the public. The company is in great financial difficulty and is constantly looking for liquidity. For example, it increased the security deposit amount and went from quarterly to monthly billings; it also requires users of private wells to install meters at their own expense in order to charge them with fixed and sanitation costs, even if the water is meant for irrigation purposes.

Of course, a wide use of subcontracting is being made. Such operations as meter readings are entrusted to companies somehow connected to a member on the board of directors as well as to conspiring municipal councilors.

Umbra Acque Spa is a company interested in collecting bills, capitalizing and distributing dividends to shareholders but whose priority is not investing in development. During a regional commission hearing on resource conservation, the company disclaimed any responsibilities in relation to issues concerning a 45% water supply loss in the networks since infrastructural work needs to be financed by public funds and stated it should wait 10 years before attending to, with the aid of public funds of course, the development of missing treatment plants and to the enlarging those in need of extension.

The Monti governement asked the AEEG^[4] to change the pricing method in order to circumvent the will that the people had expressed in the referendum, and to continue fostering the lobby of private managers.

The AEEG heard operators throughout Italy and succeeded in introducing all their requests: previous losses accountability, replacement of the "Invested Capital Return" by the "Financial fees", introduction in the water bill of "Funds for new investment", without indicating its use, thus turning the status of water, whose access is a fundamental human right, into a mere "commodity sold in bulk".

Recourses before the TAR against the scam of the AEEG, which completely cancels the referendum and encourages the privatization of the SII, were filed by, among others, the Forum italiano dei movimenti per l'acqua and the town council of Aprilia.

Last April 30, as in the most part of Italy, the Assembly of mayors in half of the municipalities of northern Umbria voted a deliberation enforcing the new AEEG transitional pricing method. A 2.20 % Ə factor, effective retroactively starting from 2012, would be applied on all water bills and collected henceforth. For 2013, the Ə factor set at 7.83% is generating around 22%. The Comitato Umbro Acqua Pubblica said no to the mayors’ dictat and appealed to the TAR of Umbria to have this deliberation canceled. In the meantime, the citizens/users continue to self-reduce their water bills, ignoring the ongoing threats of water suspension issued by Umbra Acque Spa.

Water must be saved from the market, from capitalist enterprising; the SII must be a public service, free from the pursuit of profit, and managed to ensure sustainability for future generations. The SII must be managed with the participation of citizens/users and in agreement with the local communities.

[1] Committee for the Defense of the Fergia de Boschetto River (Comitato Tutela Rio Fergia de Boschetto). The hamlet of Boschetto is crossed by the river Fergia.

[2] Integrated Water Services (Servizio Idrico Integrato)

[3] L’ATI (Ambito Territoriale Integrato) is a district that encompasses a number of communes within a province.

[4] AEEG (Autorità per l'Energia Elettrica e il Gas) is the Regulatory Authority for Electricity and Gas responsible for supervising competition and pricing.