New Zealand water pressure builds

A dedicated group of New Zealanders is turning the tide of water commercialization and privatization. The Water Pressure group has come to the aid of families cut off from water service and prevented the spread of regressive water "reforms" in the country.

New Zealand's experience shows what happens when public services succumb to the siren call of commercialization. In 1997 the Auckland city council commercialized its water services creating Metrowater Ltd. In the fallout from this move, the water company’s main goal became cutting costs and increasing efficiencies — not providing the highest quality and most accessible service.

Metrowater remains the first and only Local Authority Trading Enterprise for retail water in New Zealand. Under the reforms implemented by Metrowater, user fees have increased substantially, hitting hardest at large families on low incomes. In the first six months of 1999, Metrowater cut off 516 households.

Water Pressure activists have responded with a mass boycott of sewage bills — backed up by "turn-on" squads that reconnect whenever Metrowater cuts a customer off. In some cases roadways have been excavated, pipes re-installed and concrete poured in just to re-enforce the "No More Disconnections" demand.

The Water Pressure group is calling on city council to abolish the company and re-establish non-profit, council-run water and wastewater services.

Other communities in New Zealand are learning from this experience. Recently, the Dunedin city council unanimously rejected a proposal to commercialize its water supply operation. The municipality of Waipa has also backed off from water reforms in the face of public opposition.

"A disaster": Vivendi in Puerto Rico

When Puerto Rico privatized administration of its water and wastewater authority (PRASA), a subsidiary of Vivendi won control over PRASA's administration.

Many supporters of the deal now admit that handing PRASA to this firm was a serious mistake. The Puerto Rico Office of the Comptroller issued an extremely critical report on the PRASA-Vivendi contract, listing numerous faults including deficiencies in the maintenance, repair, administration and operation of aqueducts and sewers as well as late or missing financial reports.

According to the Comptroller, the privatized PRASA's operating deficit reached US$241 million by 1999. The Government Development Bank had to step in to provide the agency with emergency funding. The Comptroller also found the Vivendi subsidiary owes US$36 million to the Electric Power Authority and US$1.7 million to the Puerto Rico Telephone Company.

"For the customers, it means uncertainty, confusion and doubt, and unfortunately a worsening of the already poor service," said economist and University of Puerto Rico professor Héctor RÌos-Maury, author of a recent book on privatization. He added that "the subsidy given to the private company is excessive."

"PRASA's deficit increased without any noticeable improvement in the service", notes economics professor Francisco Catala.

"Outsourcing has also been a disaster," said political commentator David Noriega. "There've been cases in which PRASA work brigades have had to redo work that private contractors didn't do right."