News from the Ground

Burst pipe-dreams: Why privatisation hasn’t improved the supply of our water

Last year Thames Water was hit with a £20m fine for polluting the waterways of Oxfordshire and Buckinghamshire with a billion and a half litres of raw sewage between 2012 and 2014.

The judge cited a “failure to report incidents” and a “history of non-compliance” by the company. Equipment was unmaintained. Warnings from employees went unheeded by management. Thames’s conduct was branded “disgraceful”, justifying the largest financial penalty for pollution in UK corporate history.

While all that was going on Thames’s boss, the aptly named Martin Baggs, received a 60 per cent pay rise, taking his total annual remuneration to above £2m.

Now Thames (along with three other private water companies) has let down its customers again, leaving them high and uncomfortably dry after pipes burst in last week’s big freeze. And, once again, it’s apparently corporate incompetence at work rather than just bad luck.

“Water companies have been warned time and again that they need to be better at planning ahead to deal with these sorts of situations,” fumed Rachel Fletcher, the head of the regulator, Ofwat, today.

So presumably, if history is a guide, Thames’s current chief executive can look forward to a bumper payday.

Owning a water company isn’t a licence to print money. But the cash does flow extraordinarily freely in this sector. In the financial year ending in 2017, according to data collected by Ofwat, the private water companies raked in total revenues from households and businesses of £11.7bn. Their profits before tax were just under £2bn.

Read more on the website of The Independant

202.000 signatures to the Bundestag

We demand from the Bundestag and the coming government: Germany should no longer perform as the disciplinarian of Europe, taking Greek water into private ownership must be stopped !

This was the demand on November 13th 2017 in front of the Brandenburg Gate. The petition was addressed to the EU and the (former) minister of finance, Wolfgang Schäuble. Schäuble (at the time still minister of finance) refused to accept the signatures personally. Therefore we asked members of the Bundestag to hand them over the signatures. 202.000 signatures were handed over to M.P. Sevim Dagdelen who promised to transmit the message to the Bundestag. Meanwhile more than 205.000 people signed the petition.

The EP Water Group

Another MEP-industry forum in need of investigation

"The Water Group's political expertise has always ensured a strategic approach. Whether on the link between water and biodiversity, the monitoring of the Water Framework Directive, or on the role of the private sector, your group has always been to the fore."

And with this quote the European commissioner for Environment, Maritime affairs, and Fisheries, Karmenu Vella, began his speech to the EP Water Group dinner on 18 November 2015. This group is no longer an officially-recognised intergroup (it was during the 2009-2014 legislature) but appears to now be an informal MEP-industry forum and it brings together MEPs, other decision-makers, industry and other 'stakeholders' to discuss matters relating to EU water policy. CEO has recently profiled – and criticised – such forums for the cosy relations between MEPs and big business that they can ferment.

However, more than in many other sectors, big business' involvement in water management is contentious because of the terrible track record of private companies in managing municipal water services and water resources. The 2013 European citizen's initiative (coordinated by EPSU, the European Federation of Public Services Unions) on the right to water attracted the support of nearly two million EU citizens to recognise water as a public good, not a commodity; to promote the provision of water and sanitation as essential public services for all; to ensure that water supply and management of water resources not be subject to ‘internal market rules’; and that water services are excluded from liberalisation.

So by bringing together MEPs and multinational water companies to discuss water issues, the EP Water Group is already on controversial territory.

Feedback on the Fitness Check of the Water Framework Directive and the Floods Directive

Fitness check roadmap

All feedback sent to the European Commission will be summarized and presented to the European Parliament and Council, with the aim of feeding into the legislative debate.

Feedback by the European Water Movement

The coordination of water, agriculture and energy policies has so far been very weakly implemented at European and national level, thus preventing a return to a good ecological status of water bodies, while aggravating conflicts of use. This failure of policies coordination is attributable to the predominant influence of business lobbies within European and national institutions.

After the Blueprint to safeguard Europe’s water resources, the fitness check of the WFD and associated directives will look at the «effectiveness, efficiency, coherence» of these directives, especially regarding policies coordination, as part of the WFD review. This is the right step but what does the European Commission intend to do to prevent business lobbies sabotaging the whole process to their unique advantage as they have always done so far? We have examples of this when transposing these directives in almost all Member States. We are particularly concerned when we see that a «quantitative assessment of actual costs and benefits including impacts on business» with a «regulatory simplification and burden reduction» is put forward. Business lobbies are in favor of a regulatory simplification because they hope that it will allow them to more easily circumvent a certain number of constraints including environmental ones.

Struggling for Public Water Services in Bucharest

In September 2015 Romanian Anti-Corruption Prosecutors opened a criminal investigation against intermediaries acting on behalf of the private company ApaNova/Veolia, the provider of water services in Bucharest. Bucharest local councillors had allegedly taken bribes in order to approve tariff increases. The documents presented by the prosecutors showed how water prices doubled between 2008 and 2015 (a 125% increase). Further investigation in October and November 2015 led to the direct indictment of the company itself for an alleged tax evasion worth 5 million euro, among other accusations.

Bucharest privatised its water services in 2000 after a 2-year buffer period during which the concession procedure took place. The World Bank and the International Financial Corporation, a member of the World Bank Group, acted as consultants. The decision to outsource the sewage and water services occurred in the context of poor water quality and sewage services provided by the then public company, Regie Autonome. This Company required investments of over 1 billion dollars, which the municipality claimed it could not afford to make.

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