[casi] Bechtel - water (and all utilities) privatised?

["farbuthnot" <asceptic@DELETETHISfreenetname.co.uk>]

Prescription for getting hated: invade, intrude, have no knowledge of
language of cultre, or cultural sensitivites, sack virtually an entire
nation from their jobs, then privatise everything essential to sustain life
- which no one can afford to pay for. f.

  
 Published on Sunday, June 8, 2003 by the San Francisco Chronicle
Debate Rages Over Who Will Run Iraq's Utilities
Privatization vs. public control emerges as key issue in shaping future of
country

by David R. Baker
 
In Iraq, a country ringed by desert and often seared by 110-degree heat, no
commodity matters more than water.
Its delivery to homes, businesses and fields used to be the province of
Saddam Hussein's government. Now, as U.S. forces rebuild the country, debate
is growing over who should control the tap.
Should Iraq's water system remain in public hands as a state-run utility? Or
should private companies -- Iraqi or foreign -- run it?

If one were to define a core democratic decision a people could make, the
treatment of things like water and power and media would be it. It's a
pretty basic part of government.

Benjamin Barber, author of the impending book "Fear's Empire: War, Terrorism
and Democracy."The same questions hang over Iraq's other basic utilities --
its power grid and sewage system. Although San Francisco's Bechtel Corp. is
now working to repair them, all will need serious long-term investment for
the country to thrive. Some experts see private management as a way to pump
money into those utilities.
And yet the thought of privatizing such basic human needs raises fears that
the people of Iraq will lose control over their own resources. Much like the
debate over oil, arguments about utility privatization reflect fears that
Iraq's reconstruction will turn into a great grab -- with a few people or
corporations seizing the country's key assets.
Federal officials, aware of the emotions this issue stokes, say a decision
on Iraq's utilities must wait until an interim Iraqi government takes
charge.
"That question speaks to the very heart of how we deal with the Iraqi
people," said Ellen Yount, spokeswoman for the U.S. Agency for Overseas
Development. "Obviously, the goal with all of these things is not to have
top- down decisions, but decisions made by the Iraqi people."
Battered by war and stripped by looters, Iraq's utilities are in desperate
need of repair.
Power plants still in operation supply a fraction of the electricity the
country needs. A Bechtel spokesman who recently toured southern Iraq
described electrical systems kept running only through the skill of Iraqi
engineers forced to improvise without needed spare parts. Families have been
storing water in old barrels rather than rely on water systems that
sometimes don't work.
Bechtel's $680 million reconstruction contract covers repairs to the
country's electrical grid, water works and sewers. But what happens after
those immediate repairs?
Defense Secretary Donald Rumsfeld has already said he wants to see some of
Iraq's state-run businesses sold off, although he did not specifically
mention the utilities. Conservatives see privatization as a way to dismantle
the vestiges of Baath Party power in Iraq, because Hussein's government
controlled most every aspect of the economy before the war.
Planners also view private utility companies as a way to make water and
power systems more efficient and encourage investment in their repair.
"The point of privatization is it creates a strong incentive for the people
operating these systems to get it right," said David Dowall, a professor of
city and regional planning at UC Berkeley who has consulted with several
Middle Eastern governments on their utility systems.
"The downside," he said, "is that people don't like to pay higher prices."
State-run utility systems typically rely on heavy public subsidies, meaning
citizens don't directly pay the full cost of the water and power they use.
That is particularly true in the Middle East, where oil revenue long has
funded many government services. Switching to private utility systems often
means an increase in rates.
That can be a hardship for the poor. A recent report by the International
Consortium of Investigative Journalists, for example, claims efforts to
privatize water systems in South Africa during the late 1990s led to a
cholera outbreak, as people unable to pay higher rates started drinking from
polluted streams, ponds and lakes. The outbreak killed nearly 300 people.
Higher rates for water also led to a legal dispute for Bechtel in Bolivia.
Hired to run the water system in Cochabamba, Bolivia, a Bechtel joint
venture saw its contract canceled by the government after protests against
price increases turned violent. Bechtel says the hikes averaged 35 percent.
Some Cochabamba residents complained their bills doubled before the fee
increases were revoked.
Bechtel and the Bolivian government are now locked in arbitration
proceedings before an international financial panel, with the company
seeking compensation for the canceled contract.
That case has raised suspicions among activists about Bechtel's intentions
in Iraq.
"Their record depicts that trend -- they privatize the service, they raise
the price, and only those who can afford it get it," said Antonia Juhasz, a
project director at the International Forum on Globalization think tank in
San Francisco.
Bechtel insists it has no preference for whether Iraq's utilities stay
public or turn private. Company spokesman Jonathan Marshall said protesters
have oversimplified a complex situation in Bolivia, a situation he says has
nothing to do with Bechtel's job in Iraq.
"Iraqi children are swimming in and drinking raw sewage, and we're trying to
fix that," he said.
The debate about water privatization efforts even surfaced at last week's
summit of the Group of Eight major industrial nations in Evian, France.
Protesters urged government officials in attendance to back off water
privatization projects in developing countries.
Dowall noted, however, that the strict public and private models for water
and other utilities aren't the only choices. Governments can set up
competitions among private companies bidding to run utilities at the lowest
possible subsidy. They can hire companies to work with specific rates. They
can turn utilities into quasi-public organizations whose core assets are
still owned by the state.
"I don't think you have to lurch from one extreme to another," he said.
"There are models in the middle that work."
That choice, many observers insist, must be left to the Iraqis.
"If one were to define a core democratic decision a people could make, the
treatment of things like water and power and media would be it," said
Benjamin Barber, author of the impending book "Fear's Empire: War, Terrorism
and Democracy." "It's a pretty basic part of government."
###

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