Introduction For some academic’s neoliberalismis the idea that promotes privatisation while prescribing reforms and process suchas deregulation, regulation and marketization which decreases governmentparticipation and increases the role of private sectors and communities in theprocess. Privatisation started in the 1990 in the global south and these globalreforms were spread to the global south via international financialinstitutions such as the world bank by reforming institutions. Secondly byreforming governments via marketization and commercialisation and using newactors such as the NGO’s. Equity is a big problem in privatisation as itis said that you manage the resources effectively, that will be enough totackle the problem but that does not seem to be the case from the literature Another case study Need to provide water to informalsettlements via water kiosks. Implemented by water aid- water utility wereabout to shut down the kiosk as they weren’t getting enough paymentsso wantedto disconnect all ther users – water aid established a system of and assistance= empowerment of local people as they get to participate in service delivery,making jobs in the community. The NGO participates as a donor capacitydeveloper In Lilongwe some members benefittedmore than others such as chiefs and religious leaders Case study 1: In the Philippines water was only availablefor a few hours a day and the pressure was not enough to take it up to thesecond floor in the 1990’s.
At that time, the service coverage was only 67%, and15% of the water was lost due to the poor infrastructure. It was suggested thatthat the government was very insufficient and that the private sector can do abetter job. The literature shows that privatisation is always introduced aftera crisis.
In Philippines, there was a power crisis which was followed by awater crisis making the perfect conditions for privatisation to occur. The build-operate-transferlaw came into effect in the 1990’s to allow the privatisation of water in the Philippines.The water has now been privatised for the last 20 years in Manila Philippines. Ithas been able to provide affordable water for the last 20 years.
When water inManila was originally privatised, they split the city into east and west side. Thecoverage of the east side increased by 94% in less than a decade. Another reason for east sides success was the grassroots, communitybased schemes which offered large subsides to low income residents who werethen responsible for their own infrastructure and management (Inocencio and David, 2001). Whereasthe Mayniland company on the west side were penalising people who were stealingwater, often the poor who could not afford to pay for the water.
The East sideworked but the west side failed in the first part. The west side also failed dueto the bad governance as it was controlled by a foreign French company but leftafter the financial crisis in 1997 whereas manila water stayed so it’ssuggested that when the privatised sector is run by local companies with a long-termplan it will work. In the case of Manila who were a 200-year-old business in thePhilippines with an excellent reputation in the property business, they had afinancing model and used local currency so when the 1997 crisis hit the French companywere having to pay double their foreign borrowing.
West side company Mayniland also changed 3 ceo’sin a quick succession whereas manila has the same ceo for 20 years. Manila werealso offering the lowest priced service in the world and they gradually increasedthe price over many years rather than having a big hike like the French ownedcompany. The Manila success has to be attributed to reducing non-revenue waterfrom 63% to 11% which saved them a lot of money.
They also replaced all theleaking pipes and the net effect of all of these changes was an affordablewater service after 20 years. This neoliberal reform of privatisation has hadmany positives such as improving business opportunities for low income householdsas the local fishing industry is increasing as people are spending less timeand money for their water and using that money instead to purchase higherquantities of nutritious food like fish. The water quality before 1996 was notup safe standardns but after the privatisation the quality of the waterincreased. The way is run rather than who is running it. fromgreater NRW or water loss due to (1) much older water-main and pipe connectionsand, thus, greater extent of leakage due to wear-and-tear, and (2) greaterextent of water theft, illegal connections and free public water outlets due toheavy concentrations of squatter communities Case study Cochabamba is the third largestcity in Bolivia in 1999 they privatised their water supply. Before privatisationthe government only covered 57% of the population and had 50% losses through unaccountedfor water which mostly came from leakages. There were also problems with waterpressure, rationing and water availability.
Large amount of people depended onprivate wells and private vendors. In 2 months after the water was privatisedthe price increased by 35% even though the water quality had not imporved. Thisled to a huge conflict in the area which first included a roadblock, strikes andthe shutdown of the city.
This led to police brutality which injured a lot ofthe people. Their were many riots in Cochabamba which lead to many deaths andinjuries. It was regarded as the battle between indigenous peasans and privatecorporations. The private company was given the right to provide all waterservices within Cochabamba which gave the water company rights to the storage tanks,wells and tanker based vendor Case study 2: Another way to introduce privatisationis through the introduction of structural adjustment programmes which in 1985the IMF forced Argentina to adapt to in order to apply for new loans. In BuenosAires before privatisation only 70% of the population had access to a safewater supply pre-1992 and only 58% of the people in city were connected to thesewage system and the poor who were the least likely to be connected. There wasserioud water shortages in the summer.
Before privatisation there was a lack ofinvestment and maintaince, poor customer service, service interruption and lowpressure, overstaffing, high unaccounted-for water and had low collectionrates. Only 1% of the connections were metered which meant if people misusedtheir water they would not have to pay. Some environmental problems were that sincepeople did not have sewerage connections they would use septic tanks to putwaste water inside which ended up contaminating ground water sources. Like wesaid water privatisation always comes in after a crisis so after this crisisthe water was privatised. In Bueno Aires there was a concession with a group offoreign firms and with the city there was a 30 year contract that water wouldbe provided and the system would be maintained for 30 years. The price wasstill regulated and the consortium was overseen by a governmental agency. The benefitsof the privatisation were that child mortality fell by 8% in privatised areasand 26% in the poorest areas (galiani, gertler water for life) Other positives included connectionsincreasing from 70% to 83% in 6 years after the privatisation. There was a lotof investment in the water supply system, there was less unaccounted-for water.
Productivity increased and the response time to complaints dropped and waterpressure improved (The Buenos Aires water consession” alcazar, Abdala Shirley). This only shows one part of thestory as privatisation had very negative impacts as well. The connection feewent up by 84%. Most of these connections were not affordable for manyfamilies. The price for the first 2 years of connection equated to 18% of theirincome.
The connections fee went up by 46%. The prices for already connectedusers went up less and these people tended to be higher income families so theybenefitted from these reforms. The main burden fell largely on the poor. The waterconnections which were metered went up from 1% to about 12% which meant 88%could use excess water and not pay. The private company were trying to get thepoor families to pay for the cost of the meter which was $200 which they couldnot afford. This led to the contract being renegotiated in 1997 and thenrenegotiated again after the Argentine crisis of 2001.
By 2002, water rates inBuenos Aires had increased 177% since the start of the private concession. Asduring the crisis, the value of peso fell and the water company raised pricesto cut its losses short and there was a lot of conflict between the company andthe government which led to the private water company decreasing the waterquality and investing less. The 30 year old contract was terminated in 2006 andthe government took control of the water supply for Buenos Aires. Although wecan say this neoliberal reform of privatising the water in Buenos Aires bought manyadvantages but had 2 fatal flaws, a lot of the burden of the distribution fellin the city’s poor Conclusion References