ARGENTINA: Another War Over Water

"Feelings were running
high in January this year, when water bills with up to 500 percent
tariff increases started arriving. That, in the context of the current
review of the wave of privatisations that took place in the 1990s, was
the origin of this movement," Luis Bazán, leader of the People's
Commission for the Recovery of Water in Córdoba, explained to IPS.

The association, made up of trade unions, neighbourhood
centres, social organisations and political parties, seeks to establish
the status of water as a public good - not subject to the vagaries of
the market û and to participate directly in the management of a state
sanitation company that would distribute water to 1.3 million people in
the city of Córdoba, the capital of Córdoba province, in north-central

According to Bazán, the present climate in Argentina and the
world is not only critical of the results of privatisations in the last
decade, but also reassesses positively the role of the state. However,
it was the tariff increases û cumulative hikes of between 100 and 500
percent û that prompted middle and upper middle class sectors to lend
their support, despite their traditional resistance to state ownership.

"From low income to middle class neighbourhoods, from human
rights organisations to trade unions and environmentalists, we all
joined together to unite our separate demands and to put pressure on
the company that held the water services concession in our province,"
Bazán said.

The commission has led the protests and awareness-raising campaigns, as well as public meetings and street barricades.

"What we want is a public company managed by workers, consumers and the
provincial government, and monitored by university experts to guarantee
water quality and prevent corruption," explained former water company
worker Bazán, who took on the leadership of the movement after refusing
to work for the French company Suez. "Water should be seen as an
essential public good, a basic human right," he argued.

The story began in 1997 when the government of Córdoba, 800
kilometres northwest of Buenos Aires, handed over water distribution
management in the provincial capital to a private consortium for 30
years. The consortium was headed by Suez, which had begun to
participate in other water business opportunities in Argentina.

Suez administered water distribution and sewers in and around
Buenos Aires through the Aguas Argentinas company, and did the same in
the province of Santa Fe, 300 kilometres northwest of Buenos Aires,
through the Aguas de Santa Fe company.

In the last six months, the national government and that of
Santa Fe cancelled their contracts with Suez due to non-fulfilment of
investments and poor service quality. President Néstor Kirchner
rescinded the contract in March, and announced the creation of a new
state company, Aguas y Saneamiento Argentinos (Argentine Water and
Sanitation). In Santa Fe, a new private company was created with
Argentine capital.

Córdoba was their last bastion, and Suez managed to
renegotiate the terms of the provincial government's concession to
Aguas Cordobesas. But the new contract was so favourable to the
company's interests and so contrary to the interests of consumers that
it triggered a vociferous public backlash.

Residents continued to oppose the water rate increases until the
government eventually backtracked. Governor José Manuel de la Sota
capped the tariff hikes at 18 percent and suspended implementation of
the new contract.

The commission accused Suez of failing to make the investments
needed to extend the water supply, non-payment - for seven years - of
the concession fee, equivalent to four million dollars a year, and
having deliberately raised the tariffs.

In spite of their non-compliance, the company demanded a new
contract from the Córdoba government in order to continue managing the
water. The government agreed, and in December 2005 approved a plan that
forgave the unpaid concession fees and waived them for a further seven
years. It also exempted the company from the investments they owed.

Furthermore, the commission questioned water quality. According to
Bazán, water from the polluted San Roque Lake has a high algae content,
treated by Suez with a chlorination system which is not recommended by
experts because of potential risks to human health.

Suez eventually announced it would withdraw from the province on Jun.
30. But the government of Córdoba is unwilling for water services to
revert to state hands, preferring rather to contract another private
firm, whether local or foreign. With respect to the technical expertise
required to operate the service, Bazán maintained that Suez only
brought in "managers and accountants" who "commercialised" the service.
"The operatives who ran the technical side of the service were
Argentine, and we propose they should all stay on in a new company."

In this scenario, where it has become a leading actor in the
conflict, the commission is demanding participation in forming a new
company. It is proposing for discussion a new framework for water
management, summed up in a draft law being presented by provincial
deputy Liliana Olivero.

In an interview with IPS, Olivero, of the United Left party,
explained that the draft law proposes to declare drinking water supply
"a public, social good and an essential human right not subject to the
laws of the market;" to cancel the Suez concession contract; and to
create a new "Provincial Sanitation Company".

It also recommends setting up an investigating committee to
look into breaches of contract by Suez and assess how much of the
responsibility was shared by the Córdoba government, as well as to
deliver a diagnosis on the present situation, and the measures that
must be taken to guarantee water services in the medium and long term.

But Olivero is not optimistic. She is the only deputy for her party,
and the parties that hold a majority in the provincial legislature do
not support her. "It's very difficult to get the draft law debated,
unless there is a big demonstration outside by local residents, as
occurred when the government was forced to backtrack on the rate
hikes," she said.

The legislator indicated that some deputies from allied
parties might support cancelling the present contract with Suez û which
has already announced that it is pulling out of Argentina û but said
they are less willing to back a plan to return the water services to
state hands, or to investigate what happened in the past.

Olivero said she believed that the people's movement might
weaken, now that an end has been put to the tariff increases.
"Participation has dropped off a little since the peak of the tension,
but concerns about the future certainly exist," she said.

In formulating the draft law, Olivero drew on the experiences
of social movements in Latin American countries and other Argentine

Voters in Uruguay, for instance, approved a constitutional
reform in 2004, declaring water resources a public good and prohibiting
the privatisation of water and sewage services.

And in Bolivia, control of drinking water services in El Alto and Cochabamba was wrested from the private sector.

It remains to be seen whether Córdoba will follow this trend,
supported by the United Nations, of declaring water to be a public
good, or whether the Córdoba government will frustrate the people's
initiative and turn water, once again, into a commodity.

AMP Section Name:Natural Resources
  • 187 Privatization

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