Commercialisation of the blue gold seems to be progressing ineluctably

Water develops more and more from common good to an object of trade. What kind of role do companies from the European Union and Germany play in the global commerce with water?

The global water market is dominated by very few multinationals. Undisputed market leaders are Veolia and Suez/Ondeo from France who dominate about half of the privatised water market. Yet, also the German companies RWE, Gelsenwater and E.On as well as diverse British and US American enterprises are part of the game. For a few years now, the expansion of European companies, however, has made little progress. On the one hand, many privatisations have turned out a disaster, and were partly taken back. On the other hand, a few companies withdrew from the business, when expensive investments into the network could no longer be postponed.

Thus, for instance, in 2006, RWE sold its shares in Thames Water to the financial investor Macquarie. Before, the British regulatory agency had asked RWE to finally invest into the improvement of London's drinking water and sewage water system; after all, the water losses in London due to rusty pipes had increased by 43% since 1999.

To what extent do nation-state framework legislation or laws in the EU or respectively the service agreement GATS in the context of the World Trade Organisation encourage the privatisation of water business?

The driving force as far as liberalisation and privatisation of water are concerned is the EU whopushes hard for the interests of the water companies. In foreign trade and development policy, the cooperation between the EU Commission and the European water multinationals is particularly close. This explains why the EU in the GATS negotiations in the context of WTO has adopted such an aggressive position. But also institutions such as the International Monetary Funds (IMF) and the World Bank have forced privatisations of water supply in developing countries. Thus, many credits were linked to the condition of liberalising the water market. Within the EU as well, the liberalisation is being pushed forward. Of course, the EU Commission has parted with the idea of a sectoral liberalisation guideline; instead it now intervenes more forcefully in the interest of the multinationals into the water economies of the member states by way of European competitive and allocation law.

What consequences follow for the South?

The South is confronted with the task to finally provide more than two billion people with a secure access to drinking water and sanitary installations. The attempt to transfer this task to private companies has failed. Whether one looks to Bolivia or to Indonesia, to Argentina or to South Africa - everywhere the privatisation of water supply had catastrophic consequences. Instead of improving access to water supply, water became unaffordable for many people. One literally had closed the tab precisely to the poorer ones.

How about water privatisation in Germany?

In Germany, water supply is still to a considerable extent in public hands. However, more and more city and specifically water works are being bought up by the biggies in the business (E.on and RWE). In East Germany, also French companies have gained a foothold. Under the label “Eurowater“, the Suez company for instance supplies the citizens of Rostock, Schwerin, Leuna and Cottbus. By contrast, water privatisation in Potsdam has failed: As Eurowater had doubled the fees in only two years, the city of Potsdam rescinded all contracts, and bought back the shares. Veolia Water is active in 450 German communities. Its greatest coup the company managed in the year 1999, when together with RWE it bought 49.9% of the shares of the Berlin Water Works. Exorbitant price increases were the consequence here as well.

What alternative approaches in water supply are conceivable? How much perspective does a recommunalisation have?

Following a survey by the dimap institute, more than 75 percent of people refuse a privatisation of the water economy. It has also become easier to mobilise people against the sell-out of their water works. For instance, it was possible to successfully avoid planned water privatisation in Hamburg by a successful citizens' petition. It is more difficult to retract privatisations once done. On the other hand, the examples of Potsdam, Fürstenwalde or Grenoble show that you may certainly successfully recommunalise the water economy. For this reason, also the Berlin citizens' petition for the disclosure of the water privatisation contracts is so important. Only if the contents of the contracts that guarantee the companies juicy profits by way of shameless ripping-off of the Berlin households, are opened up, will it be possible to challenge them. Here it holds as in so many other cases: Who does not fight has already lost.

Sahra Wagenknecht is coordinator forthe Left Group GUE/NGL in the committee on economic and monetary affairs in the European Parliament and deals among other things with the privatisation of services of general interest that increases in the EU and world-wide. On occasion of the World Water Day, Martin Ling talked with Wagenknecht about the global water market and possibilities for recommunalising water supply.