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An answer to Diane D’Arras

Senior Executive Vice President Water Western Europe

Suez Environnement

Dear Diane,

Let us please clarify that what follows is based on what you said and answered during your recent Press Conference in Thessaloniki, as it has been reported by the journalists and media that were present.

Despite the democratic traditions of your home country and in stark contrast to your saying that Suez will definitely take into account the citizens’ public feeling and vision, the fact that no invitation was provisioned for interested citizens and not all interested journalists were invited, can only be judged negatively. It also stood in contrast to your invitation, on behalf of Suez, to elected members of the city council to become Members in the company’s new BoD. One of those present could have asked a clarifying question as to what rights such a membership would mean apart from providing a false feeling of public participation and an implication of transparency. Unfortunately no such question was posed by the reporters in the room, some of which are in the payroll of your partner in the TAIPED (HRADF) tender for the acquisition of the 51% shares  of Thessaloniki water Company (EYATH).

Reading your resume we were informed that in 1993 you took a managerial position and then a promotion in the Aguas Argentinas (Buenos Aires) which was privatized in 1993 in the midst of the economic crisis in Argentina and remunicipallized in 2006. Argentina, as you note in your CV,  was for you “a great experience providing the opportunity to discover other ways of thinking, professionally and personally“.

You mentioned that the price of water shall be set by an independent regulatory authority. The Greek WRA is nothing more than the Special Secretariat for Water (an old service within the Ministry of Environment, Energy and Climate Change) that has hastily been upgraded to the status of an independent Authority just after the announcement of the imminent privatization of EYDAP (Athens water company) and EYATH. Such a service may remind you of its respective one in Argentina which as per the report of Alcázar, L.; Abdala, A.; Shirley, M Washington D.C.: The World Bank. Retrieved 2008-04-16 the local WRA “was lacking in experience as it was created during the privatization” and its “decisions were not taken into consideration”. The fact that AA was in 1997, while the crisis raged in the country, granted a concession contract with very generous terms that authorized it to demand dollars at the old 1:1 exchange rate after the peso devaluation, despite the abysmal international market value of the former (Solanes, Miguel (2006) only underlines the local WRA efficiency and abilities. “Efficiency, Equity, and Liberalisation of Water Services in Buenos Aires, Argentina”. Industry, Services & Trade (OECD).

On top, in 2010 ICSID awarded that the Argentina Government decision, disallowing raises in water prices when the value of the ARS was precipitating, wronged private water operators and ordered a compensation. The privates declared that they will go after a USD 1,2 billion compensation. Eventually,  are the decisions of the regulatory authorities concerning  the price of water but also the keeping of contractual obligations or other issues “respected“, as you stated in Thessaloniki, or can their existence, in several cases, become just a bureaucratic alibi  facilitating corruption and being useful for the legalization of private monopolies under the consent of international organizations such as those that demand privatization in the first place?(1)

You set as one of Suez’ s main priorities in Thessaloniki the protection of the environment and – among others – the “reintroduction of quality in the Thermaikos Bay”. We sincerely hope so, as in Chile, Suez has been forced to pay a compensation of USD 5 billion for the “unpleasant odors” emitted from its waste water treatment plants. (research by the PSIRU team of the University of Greenwich).

Your pleasant promise for annual investments of € 25 and up to € 50 million on infrastructure that will remain property of ΕΥΑΤΗ Infrastructure S.A. definitely sets Suez among the foremost non-profit charity organizations worldwide, as the net profits of ΕΥΑΤΗ amount to ca € 18 million. Unless, of course, the price for water is somehow going to be “readjusted” so as to cover for the investments and the reasonable profit of the shareholders-investors, in which case the investments will have been paid by the good and, you shall hope, overgenerous citizens of Thessaloniki.

As a report (2009 PSIRU of the University of Greenwich) stated, water infrastructure investments in France are subsidized mainly by the public sector whereas only 12% on the average is paid by private water companies. How come important investments that have not been realized in France will be realized in Greece?

Could this be the reason why Paris, Brest, Grenoble,  Cherbourg,  Varages, Durance-Luberon, Castres retook water services under municipal control and why others (Toulouse, Ile-de-France, Montbeliard, Bordeaux, Lille) are eager to follow in the same path?

But even if such investments are to be made how is Suez going to pay for them?

The SUEZ profile shows liabilities amounting to € 19.777 million with assets of € 6.859 million. As assets include € 3.264 of goodwill while another € 4.060 million amount to other intangibles, then SUEZ turns negative (€ -465 million). For the last four years SUEZ shows only losses: € 2.281 million on 2009, € 1.158 million on 2010, € 1.205 million on 2011 and € 1.314 million on 2012. (2)

On the other hand, “small” ΕΥΑΤΗ (whose share price is overrated, as you stated), showed in 2012: profits of € 24 million euro (€ 18 million net), ready cash of € 33 million (today € 50 million according to latest information), and equity capital € 135 million on an annual income of € 74 million. Its stock market value is 220 million euro (according to the annual financial report of 2012).

Perhaps one should leave the theories about better management by the private sector aside until at least this picture is reversed.

You stated that SUEZ acquiring the EYATH shares will lead to 4.000 (!) new job opportunities, in a work environment which, for the last three years, has been pulverizing job positions in a terrifying pace and which shows no sign of changing in the near future.  From the date EYATH stopped being a public service and turned to an S.A. (with SUEZ, later, obtaining in 2006 5,46% of its shares) its personnel has been reduced from ca 700 to 235 today as job positions were not replenished after retirement. By which viable investment plan and organization chart will recruitment of this order be needed to operate EYATH given the fixed number of “clients” and if you maintain the price per cubic meter at current levels? (In any case, the company at present, has only seven drivers for its 80 vehicles and employs only eleven plumbers on a network of some 2.330 km length and some 510.000 customers/hydrometers). As for prices, since 2001 there have been increases almost threefold. Still, you wondered whether the current water price of ΕΥAΤΗ can keep the company viable.

The referendum, you said, “may be important yet on the other hand, it is a political action”. Indeed. Such a referendum led to the citizens of Berlin being informed of the secret terms included in the concession contract by which their municipal water company had been given to Veolia and RWE and tariffs kept increasing; it was through this political action that these terms were made public and then the citizens started to struggle in order to reclaim the water service for the public sector. It was again such a referendum in Italy when 95,4% voted against the privatization of water services and the idea of profit out of water and as we say in Greece for our neighbors, since Greeks and Italians are “una faccia, una razza” it can definitely be such a referendum that will voice the will of the Greek people, the majority of whom are against the privatization of the monopoly of water. (3)

You talked about misunderstandings; you said that “water is not going to be privatized, we will just accomplish a public-private partnership”. We cannot feel at ease: it was such a partnership in Berlin that led to ever increasing water prices and loss of social control.

You said that “the worst thing for us is to be in a country that does not respect the law”. We agree. We would like therefore to inform you, in case you don’t know, that, according to Eleytherotypia mewspaper (4) , there is an ongoing investigation ordered by the Thessaloniki District Attorney for Corruption Argyris Demopoulos, concerning amounts of more than € 100 million,  part of which is coming from the EU Cohesion Fund, for projects that run till 2016 that, if are not to be paid for by the investor, are to be illegally spent for the profit of a private company (Greece has been penalized in the past for similar reasons), on the condition that  privatization occurs before that date. As per the report, an important parameter of the investigation is that HRADF is to produce the draft of the concession contract , to investigate exactly what is contained therein, in order to correlate the use of said infrastructure to the terms agreed.

Of course there is still pending the decision of the Council of State on the legality of the transfer of the ΕΥΑΤΗ shares to HRADF. What we as citizens (and presumably you as well) find absolutely unacceptable, is cases where the Constitution and the decisions of Supreme Courts  are not respected by all parts.

We assume that your personal presence in Thessaloniki despite your high position of Vice President, is indicative of the great interest of the company you represent to acquire EYATH as “springboard” for the Balkan market. This we definitely believe is so. Still we would advise you to keep in mind that the remunicipalization trend is already on the way even in the Balkan area.(5)

Sincerely,

SAVEGREEKWATER, The Initiative for the non privatization of water in Greece

and

SOSTE TO NERO, EYATH Employees Union, Movement 136, Water Warriors

P.S. Times have changed since then, but we’d like to remind you of a historical fact: During the fire that destroyed Thessaloniki in 1917, the water supply company, one of French interests at the time, refused to distribute water as it needed it to supply the Entente forces then stationed in the area. (Article in newspaper efsyn on 10/05/2013). By no means do we imply a similar behavior from the company you represent, to avoid misunderstandings.

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(1) OFWAT has repeatedly failed to prevent the private water corporations in the UK from making undue greater profit due to shortage of funds? And though it has managed to discover fraud committed by those same corporations, it has granted them a 25-year notification before the cancellation of their licenses – practically giving them eternal monopoly. Also according to 1997 report of the Cour des Comptes, the privatization system on which SUEZ and Veolia based their national dominance was suffering from systematic flaws. “The lack of supervising and control of the granted public organizations, worsened by the lack of transparency in this kind of administration, have led to abuse.” (excerpt from the research of the team PSIRU of the University of Greenwich).

(2) Information found in published financials of Suez Environment on Bloomberg:

https://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=SEV:FP

(3) As for the planned selling of ΕΥΑΘ, a 76% of the citizens is against. https://www.makthes.gr/news/reportage/115338/

(4) https://www.enet.gr/?i=issue.el.home&date=31/12/2013&id=407368

(5) The water in Sofia is in the process of being made public again via a local referendum. According to the vice president of the Committee for the commercial policy and the municipal property there are three reasons for which the contract with the company must be terminated: a) the conditions for the water leakages are not met, b) price of water is much higher than what was originally agreed upon and c) high expenditure of the corporation, i.e. for advisors ( 27 August 2013 | 08:14 | FOCUS News Agency)

In Hungary, the city of Peks made its water supply company public again in 2010, terminating the contract with a subsidiary of SUEZ; the city of Caposvar also made its water supply company public again. In Hungary, even in towns where the water supply has been privatized, the investments are funded by the central administration. (excerpt from the research of the team PSIRU of the University of Greenwich).

Chlorination of water sources in Pelion by DEYAMV (Volos Municipal Water Company)

Despite the wide pan-European acceptance of the citizens’ actions against the privatization of water services DEYAMV apparently prepares itself to be set under private control:

Chlorination of water sources forces citizens to stop using water from these and either use filters or buy (privately) bottled water (if they can suffer the cost). At the same time DEYAMV plans building a pipeline network, collecting water from everywhere in the area and restructuring the centuries old field watering system in the prefecture, without informing anyone or taking into account the consumers’ views on the issue. Such actions cause great concern that DEYAMV’s intentions lie far from respecting the consumers’ interests. Also a local store selling water filters started business right after the chlorination of the Mana source in Portaria, Pelion.

On the issue the Citizens’ Water Movement (which has been trying but without success long for obtaining a hearing with DEYAMV) called a general meeting for Sunday 8th Sep-tember. The Portaria Citizens’ Movement called the area municipal grandees to take part, but only one appeared (G. Siokos), as well as MP Mrs Chrysoveloni. Such General Meeting took into account previously taken decision of several village and town citizen meetings and proceeded with disconnecting the chlorination system. On Wednesday 11th September citizens of nearby villages, following a summons by the Portaria Citi-zens’ Movement, proceeded with cleaning the area around the Mana water source. (On these see https://watervolo.blogspot.gr/2013/09/blog-post_8.html also https://watervolo.blogspot.gr/2013/09/15.html)

The local media, having reported nothing on the above, came up almost a week after speaking of sabotage in the DEYAMV installations and announced that DEYAMV were going to take legal actions against the “unknown” saboteurs. Despite that the Citizens Movement actions, intentions and summons have been made public and were known by everyone in the area.

Chlorination has always been put forth as a means of protecting public health despite several studies having shown that it creates more problems than it solves (cancer and heart problems being quite common among the users). We can suffer the intermittent use of chlorine in order to overcome certain problems but its permanent use shall be avoided. Such problems always coming forth, however, only during the high vacation season, leads us to believe that the authorities are not willing to find a permanent citi-zen- and environment friendly solution to the issue, but are using the “emergency” to promote practices that lie far beyond their competence and their duty. Such practice also leads those uninformed to conclude that the water of the area is unsuitable for drinking. Mass media widely advertising such problems is another step leading to pri-vate prospectors coming to save the day.

Information about the chlorination of water and the effects of chlorine to people, ani-mals and plants can be found in https://watervolo.blogspot.gr/2013/09/blog-post_12.html and https://cleaningfed.gr/view.php?v=329 .

As is pointed out by the study “Water without chlorine from Pelion” of A. Grohman, (ex director of Berlin Water Service) there are other more healthy and human- and environ-ment-friendly ways to keep a water network clean and proper https://neroxorisxlorio.wordpress.com/%CE%BC%CE%B5%CE%BB%CE%AD%CF%84%CE%B7/

The Pelion and Volos Citizens Movements held a meeting (28th September) during which several locals reported that animals in the area refrain from drinking water, being repulsed by its odour, and that the amount of chlorine in it is no less than that in a public swimming pool. N. Psaros has recorded the meeting to include it in his upcoming documentary titled “Pelion: is there a Water War going on?” (https://unfollow.com.gr/home/item/301-unfollow-22.html ).

The above citizens meeting concluded that water issues are one only of the problems we in Greece are facing today: facing a government whose only concern is how to better serve certain private interests (as with the privatization of water companies in Thessaloniki and Athens) we citizens have to remain alert and united and ready to defend our inalienable rights.

[box] INKA, the oldest consumers union in Greece published a press release against the privatization of water services and the commercialization of our natural resource. We hope that soon other consumer unions will publish similar announcements .[/box]

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[box] With the occasion of the world water day, EDEYA (Federation of Municipal Water & Sewage Companies of Greece) released an announcement where it is states its actions, it refers to the remunicipalization trend that is strong in all Europe regarding water and sanitation services and takes a position for the public character of water management. [/box]

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Republication from Eleytheria Newspaper published in Larissa, city of EDEYA headquarters

Translation SAVEGREEKWATER team

“Procedures for the return of water management operations to public (state or municipal) control have been on the rise during the last years. Private management of water has both led to a substantial increase of its price as well as to a lowering of the quality of offered services.” So states the Union of Municipal Water and Sewage Companies (EDEYA) in an announcement, signed by its Chairman (George Marinakes, Mayor in Rethymnon), and made on the occasion of the International Day for Water.

Said announcement continues: “Since 1980 Water Supply, Sewage and Waste Management to almost half of the Greek Population have been run by some 130 municipal companies (DEYA). Such companies have managed to overcome their teething problems and already constitute a dynamic arm of the public sector as far as Water Management and Environmental Protection are concerned.”

According to EUREAU (European Federation of National Association of Water and Waste Water Services) through their 30 years of existence the DEYAs have evolved to effective and flexible organizations with competent staffs and employees and, through investments of some € 8,5 billion, created and operate several Water Supply and Sewage Networks and Plants for Waste Management similar to those operating in the most technologically advanced countries of the western world.

Everyone knows that the Water Companies of Athens (EYDAP) and Thessaloniki (EYATh) have been earmarked for privatization. So everyone shall ask themselves the question: do we really need privately owned Water and Sewage companies?

Strong arguments for keeping such companies public in Greece and elsewhere are:

1. Water Supply and Sewage services are directly connected and absolutely necessary for human survival as well as for human health. Keeping these under public control at least guarantees that issues such as public safety and environmental protection will not be overlooked.
2. In most of the world’s richest countries (USA, Germany, Japan, Norway, Sweden etc) Water Supply and Sewage are run by public companies
3. Even though water may have a financial and environmental value its value as a means of living shall not be left to be regularized by the markets. Water is obtained through natural sources in patterns unstable, uncontrolled and impossible to guarantee; the intricacies of its management for the common good can only be met by organizations not having as a target the increase of their profits.

The DEYAs operate having as their target the effective management of water resources, never aiming to higher profits obtained through an increase in water consumption. Especially during periods of draught public water supply companies (in stark contrast to private ones) aim rather to obtaining a decrease in consumption instead of increasing the prices of offered services.

Internationally the tendency is towards returning water management, previously granted to private companies, to public and municipal institutions as happened for example in Paris, France. Private water management has led to price increases and quality deterioration, which led the citizens in several countries to openly oppose continuation of such practices (plebiscites in Italy and Austria, European Citizens Initiative etc)

During the last 30 years the DEYAs have successfully responded to the task set to them, creating modern and functional water supply and sewage systems throughout the Greek countryside, which are comparable to those run by more advanced and richer countries in the European Union and Europe in general. Of course they have faced, and are still struggling against, economical and organizational issues not of their doing but rather due to the vagueness of the legal background they have been created on and must operate to, as well as the financial issues endemic to operations in the Greek State. Still they managed to operate independent of the central government and kept their original character as real public service institutions, while at the same time they effectively managed water supply and contributed to the protection of the public health and the environment without costing a single € to the State Treasury.

The financial crisis forced onto Greece shall not be an excuse for the transfer of water supply and sewage to private institutions as such cannot in any way offer any guarantee that public health and environmental protection will take first place versus their profits.

The financial strains Greece is forced to operate in shall instead constitute a chance for the modernization, the rationalization of the structure and the operations and the financial purging of public/municipal water and sewage companies. Such companies and the people working in them shall themselves strive to become more effective and increase the quality of services offered to the public.

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