Privatization has undermined consumers’ access to safe, sufficient and affordable water, spurring resistance here and abroad. The public clamor for democratic control over essential resources has already driven successful de-privatization of water in other countries.
Cases piling up
In the Philippines, there is a growing clamor from communities for clean, 24/7 water.
More and more water joint venture agreements (JVAs) between water districts and private oligarch firms are failing to improve water service delivery, expand infrastructure, and address funding limitations. Consumers are getting fed up with how these JVAs worsen water services while private firms sit back and reap profits with little accountability.
One of the most notorious cases with mounting consumer complaints nationwide is Villar-owned PrimeWater Infrastructure Corporation, which holds about 80 of some 118 water JVAs, per the Public Private Partnership Center. Consumers in PrimeWater service areas report murky water, low supply limited to just 2-4 hours a night, increasing rates, and growing financial losses for local water districts. Yet even as services deteriorate, PrimeWater’s profits have soared from Php196 million in 2017 to Php1.18 billion in 2023.
These complaints are especially stark in local water districts such as in San Jose Del Monte (Bulacan province), Dasmarinas (Cavite), and Lucena (Quezon), all of which have pre-terminated their JVAs with PrimeWater. Many others are moving towards termination as well, such as the water districts in Calumpit, Malolos, and Marilao (Bulacan), Subic (Zambales), San Fernando, Angeles, and Mabalacat (Pampanga), Dasmarinas, Trece Martires, Silang and Tagaytay (Cavite), Daet, Mercedes, and Basud (Camarines Norte), Bacolod (Negros Occidental), and others in Pangasinan, Bohol, Leyte and Bukidnon.
La Union’s Metro San Fernando Water District has already terminated its JVA with PrimeWater and resumed public operations, though as of this writing, the Regional Trial Court has issued a temporary restraining order per Prime Water appeal. The supposed termination followed 120 days of non-response from PrimeWater after receiving the board’s pre-termination notice early this year, which cited the company’s failure to fulfill contract obligations after nine (9) years. At the time of termination, 22 of 63 villages the water district used to serve had no water at all under the JVA.
Remunicipalization trend
Globally, previously privatized water systems have been remunicipalized after failing to effectively serve the public. Civil society has played a key role in exposing water privatization issues such as poor service quality, disputes over costs and water tariffs, lack of transparency, weak regulation, and job cuts.
As of 2024, there have been at least 333 documented cases of water remunicipalization around the world since the wave of water privatizations in the 1990s. Below are a few examples, including a glimpse at measures adopted after reclaiming public control.
In 1984, the Veolia and Suez water corporations were awarded 25-year water supply lease contracts in Paris, France. By 2000, audits revealed financial irregularities including a lack of transparency and excessive charges – 25% to 30% higher than reasonable costs – alongside huge gaps between costs of operation and output. The companies also subcontracted operations to their own subsidiaries to further increase their profits. When the contracts expired in 2010, Paris remunicipalized its water system.
The new municipal operator, Eau de Paris, achieved €35 million in efficiency savings, allowing an 8% reduction in tariffs. Despite some technical difficulties, water and sanitation prices in the city remained well below the national average. The public firm also engaged in solidarity actions such as increasing its contribution to the housing solidarity fund, providing water allowances to 44,000 poor households, and launching a water conservation campaign. Citizen engagement was promoted through the setting-up of a City Water Observatory.
In Buenos Aires, Argentina, French company Suez-Lyonnaise des Eaux took over water supply and sanitation operations in 1993. Tariffs increased sharply after a few years, but the concession still failed to deliver 58% of originally agreed investments. The government cancelled the concession contract in 2002 and created Agua y Saneamientos Argentinos S. A. (AySA) – 90% owned by the state and 10% owned by the workers’ union – to take responsibility for providing water and sanitation services. AySA improved infrastructure for universal access, workers’ capacity-building and working conditions.
Suez launched a compensation claim, but individual citizens, civil society organizations and local authorities countered with lawsuits against Suez for poor services.
In Cochabamba, Bolivia, the government sold water rights in 1999 to Aguas del Tunari, a private company owned by US-based International Water supposedly to improve water and sanitary services. Tariffs doubled but the city continued to suffer water shortages. This sparked mass protests that came to be known as the “Water War”. The government canceled the concession and reclaimed control in 2000. Ensuring equitable access to water remains a key challenge under public management. However, steps have been taken to increase public participation in water policymaking and services, and to resolve financial sustainability issues to improve water infrastructure.
Grenoble, France remunicipalized water services in in 2000 after contract renegotiations with a Suez subsidiary became controversial for corruption, lack of transparency and excessive pricing. The municipal operator Regie des Eaux de Grenoble (REG) increased investments in infrastructure and was able to lower tariffs to a more stable level. Public participation in decision making was also adopted by REG – a third of voting members of the Board of Directors were civil society representatives.
In Indianapolis, USA, French firm Veolia took over the city’s water services in 2002. Problems emerged after a few years and compelled a federal grand jury investigation re: the lack of proper safeguards led to a boil water alert for over a million people; non-unionized employees lost their pensions; and water quality reports were falsified. The firm demanded payment for profits it was losing and overbilled residents. At least 250,000 local residents filed a class lawsuit which forced local government to address the issue. The agreement with Veolia was pre-terminated a decade before end of contract.
Jakarta, Indonesia awarded two 25-year water concessions to the subsidiaries of multinationals Suez and UK-based Thames Water in 1997. The firms were controversial for lack of transparency and poor performance. Public counterpart Pam Jaya accumulated huge water charges paid to the private firms which even increased every six months. Water tariffs went up 1,000% since privatization and made Jakarta water rates among the highest in Southeast Asia.
In 2012, the Coalition of Jakarta Residents Opposing Water Privatization (KMMSAJ) led the filing of a citizen lawsuit that pressed for the termination of contracts. KMMSAJ was supported by experts, academics, human rights and anti-corruption activists, and lawyers. The lawsuit was preceded by a campaign using op-ed articles in newspapers, investigative reports on radio and television, research studies and leaflets, strikes, demonstrations, debates, media campaigns, petitions, and legal actions. In 2019, the Jakarta governor defied a Supreme Court ruling supporting the legality of water privatization, and announced that the provincial government would take over the city’s water supply management from private operators.
Reclaiming water
As seen in the Philippines and worldwide, private sector involvement in water services has only led to broken promises of better management, rising costs, and deteriorating services. In response, communities are reclaiming control through remunicipalization. The growing number of contract terminations and public takeovers shows growing resistance against profit-driven water management and highlights the need to prioritize people over profits. Restoring water services to accountable, transparent and participatory public management is a vital step to societies guaranteeing this vital resource for all.###
