Introduction

Cities, regions and countries worldwide are increasingly choosing to close the book on water privatisation and to “remunicipalise” services by taking back public control over water and sanitation management. In many cases, this is a response to the false promises of private operators and their failure to put the needs of communities before profit.

This paper looks at the growing remunicipalisation of water supply and sanitation services as an emerging global trend and presents the most complete overview of cases so far. Major cities that have remunicipalised include Accra (Ghana), Berlin (Germany), Buenos Aires (Argentina), Budapest (Hungary), Kuala Lumpur (Malaysia), La Paz (Bolivia), Maputo (Mozambique), and Paris (France). By contrast, in this same period there have been very few cases of privatisation in the world’s large cities: for example Nagpur (India), which has seen great opposition and criticism, and Jeddah (Saudi Arabia).

Despite more than three decades of relentless promotion of privatisation and public-private partnerships (PPPs) by international financial institutions and national governments,it now appears that water remunicipalisation is a policy option that is here to stay. Direct experience with common problems of private water management – from lack of infrastructure investments, to tariff hikes to environmental hazards – has persuaded communities and policy makers that the public sector is better placed to provide quality services to citizens and promote the human right to water.

Remunicipalisation refers to the return of previously privatised water supply and sanitation services to local authorities or to public control more broadly speaking. This typically occurs after the termination of private contracts by local governments or their non-renewal, but the process is not always (or only) on a municipal scale. Regional and national authorities have considerable influence over services funding and policy, and in some cases act directly as water operators, so the process unfolds within this broader context.

Whatever its form and scale, remunicipalisation is generally a collective reaction against the unsustainability of water privatisation and PPPs. Because of the unpopularity of privatisation, private water companies have used their marketing propaganda to encourage people to believe that concessions, lease contracts and other PPPs are quite distinct from privatisation; they are not. In fact, all these terms refer to the transfer of services management control to the private sector. Policy makers must be aware of the high costs and risks of water privatisation, and as such they have a lot to learn from the experiences of public authorities who have chosen remunicipalisation and are working to develop democratically accountable and effective public water operations.

Published by Public Services International Research Unit (PSIRU), Multinational Observatory and Transnational Institute (TNI).

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– Nice
In 2013, the city of Nice in southern France decided to end its contract with private provider Veolia and take over the management of its water service. This was significant and surprising because the city is headed by a conservative, business-friendly mayor. Remunicipalisation was identified as the best option to harmonise the level and price of the water service within the newly created inter-communal body for the greater Nice urban area.

– Rennes
In 2013, Rennes was one of many French cities that decided to remunicipalise its water service. In Rennes, the service had been managed by Veolia for more than 120 years and this decision was the result of a long battle by the local civil society, which had to overcome the strong political relationship between the private operator and local officials that had existed in spite of Veolia’s appalling record. Water remunicipalisation in Rennes was also marred by controversy over the legal form chosen for the new public water system. Many people see the current system as evidence of an insincere and incomplete de-privatisation.

– Maputo and the cities of Beira, Nampula, Quelimane and Pemba, Mozambique
In the late 1980s and throughout the 1990s, Mozambique privatized state-owned utilities and water management. In 1999, after competitive bidding, the government entered into a public-private partnership (PPP). It signed a hybrid lease/ management contract with Aguas de Mozambique (AdeM) for the water utilities of the capital, Maputo, and the four major provincial cities of Beira, Nampula, Quelimane and Pemba, which are spread throughout the country. This partnership was not a success. The four cities had a five-year management contract, which, after a four-year extension, expired in 2008. From then on, only Maputo was under private management. Yet Maputo’s 15-year contract came to an early end in 2010 when the government, through the asset holding company Fundo de investimento e Património do Abastecimento de Água (FIPAG), bought 73 per cent of AdeM shares, which, until then, had been owned by Aguas de Portugal (AdP). Because private investments in the water sector were problematic, Mozambique centralized the water management through FIPAG, thereby effectively ending the decade long PPP.

– White Rock
The municipality of White Rock has expressed interest in buying the water utility, which is owned by the Edmonton based corporation Epcor. The city council voted anonymously in favour of municipalisation, however a referendum will not be held before the end of 2014. If the referendum shows that citizens are in favour, the mayor has said the municipality will buy the water utility at the beginning of 2015.

(link to PSIRU publication)

The tables below list the cases of remunicipalisation occurred in the last 15 years in developed, transition and developing countries.These remunicipalisations occurred mainly for three reasons: the widespread problems affecting water privatisation irrespective of country and regulatory regime; the equal or greater efficiency of public water services, and the lower prices resulting from elimination of excessive profits; and,the comparative advantage of the public sector in realizing the human right to water and sanitation and achieving other social and environmental objectives.These three reasons have led major cities in the US (e.g. Atlanta, Milwaukee, Indianapolis) and Europe (e.g. Paris, Berlin) to remunicipalise their water services.The case of Paris is symbolically powerful as Paris hosts the headquarters of the two major water multinationals, and because these two multinationals were holding the private contracts that were terminated in 2009.Also, Paris and Berlin (which decided to remunicipalise in September 2013)are the capital cities of the two countries (France and Germany) that are regarded as leading the European Union project.

As of November 2013, the cases of remunicipalisation around the world total 86. All of these except three took place between 2000 and 2013. Of the 86 remunicipalitions, 51 are in high income countries and 35 in transition and developing countries. The cases in high income countries show a marked acceleration: 28 out of 51 took place in the five years between 2009 and 2013, while 14 occurred between 2004 and 2008. The pace of remunicipalisation has therefore doubled after 2009. This is due to the example of Paris which produced an even stronger acceleration in France. Of the 21 remunicipalisations that took place in France, occurred in the four years between 2010 (when Paris remunicipalised) and 2013, while the remaining six occurred in the 12 years between 1997 and 2009. It is also significant that such a high number of cases are concentrated in France, where the experience with water privatisation is more extensive and goes back decades. In middle and low income countries, remunicipalisation takes a slightly different pattern. However, even here there is a large number of remunicipalisations with high profile cases including Buenos Aires, La Paz, Johannesburg,Dar-es-Salaam, and Ghana. Also, the net trend since 2006 is in favor of remunicipalisation. Overall, there is a strong remunicipalisation trend both in the global North and South.

In the “neighborhood” countries outside of the EU, water privatization is still promoted by the European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC) – the private sector support division of the World Bank – despite the failures that have already happened under this policy.
EPSU is therefore publishing this booklet setting out the reasons for rejecting water privatization, in a number of languages. It has been prepared by the PSIRU at the University of Greenwich, based on empirical evidence, with references. It is intended not only to support campaigns against water privatization, but also as a reminder why the public sector is a much better way of providing water services.
The UN in 2010 declared water and sanitation as human right. It obliges governments to provide their citizens with accessible, affordable, safe and clean water and sanitation. The European public services unions will launch a “European Citizens’ Initiative” to promote the implementation of this human right and oppose the liberalization of water services at EU level.
Jan Willem Goudriaan
EPSU Deputy General Secretary

RESEARCH TEXT IN ENGLISH

[box] Groundwater use is unsustainable in many of the world’s major agricultural zones.

An article written by Amanda Mascarelli in Nature: International Weekly Journal of Science [/box]

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Almost one-quarter of the world’s population lives in regions where groundwater is being used up faster than it can be replenished, concludes a comprehensive global analysis of groundwater depletion, published this week in Nature ¹ .

Across the world, human civilizations depend largely on tapping vast reservoirs of water that have been stored for up to thousands of years in sand, clay and rock deep underground. These massive aquifers — which in some cases stretch across multiple states and country borders — provide water for drinking and crop irrigation, as well as to support ecosystems such as forests and fisheries.

Yet in most of the world’s major agricultural regions, including the Central Valley in California, the Nile delta region of Egypt, and the Upper Ganges in India and Pakistan, demand exceeds these reservoirs’ capacity for renewal.

“This overuse can lead to decreased groundwater availability for both drinking water and growing food,” says Tom Gleeson, a hydrogeologist at McGill University in Montreal, Quebec, and lead author of the study. Eventually, he adds, it “can lead to dried up streams and ecological impacts”.

Gleeson and his colleagues combined a global hydrological model and a data set of groundwater use to estimate how much groundwater is being extracted by countries around the world.They also estimated each aquifer’s rate of ‘recharge’ — the speed at which groundwater is being replenished. Using this approach, the researchers were able to determine the groundwater ‘footprint’ for nearly 800 aquifers worldwide (see map below).

In calculating how much stress each source of groundwater is under, Gleeson and colleagues also looked in detail at the water flows needed to sustain the health of ecosystems such as grasses, trees and streams.

“To my knowledge, this is the first water-stress index that actually accounts for preserving the health of the environment,” says Jay Famiglietti, a hydrologist at the University of California, Irvine, who was not involved in the study. “That’s a critical step.”

Overexploitation

The authors found that 20% of the world’s aquifers are being overexploited, some massively so. For example, the groundwater footprint for the Upper Ganges aquifer is more than 50 times the size of its aquifer, “so the rate of extraction is quite unsustainable there”, says Gleeson.

Yet Famiglietti notes that the study, which focuses on quantifying the rate of groundwater tapping versus recharging, underscores the lack of data we have on the amount of water currently in the world’s aquifers. “The only way to answer the sustainability question is to answer how much water we actually have,” he says.

He predicts that a comprehensive picture would reveal that many more of the world’s aquifers are being tapped unsustainably. As certain regions face more frequent droughts and population growth, full characterization of aquifers worldwide, although expensive, will be necessary, adds Famiglietti.

But Gleeson adds that there is at least one significant source of hope. As much as 99% of the fresh, unfrozen water on the planet is groundwater. “It’s this huge reservoir that we have the potential to manage sustainably,” he says. “If we choose to.”

References:

Gleeson, T., Wada, Y., Bierkens, M. F. P. & van Beek, L. P. H. Nature 488, 197–200 (2012)

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Degree to which aquifers important for farming are under stress.

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