Wednesday, February 17, 2016

Don't privatise the water

"More and more cities and towns are seeing that water is more efficiently and affordably delivered when it is controlled by a not-for-profit entity. Without shareholders expecting profits, public systems are less likely to cut corners on service, and excess funds are invested back into systems, not sent out of communities as dividend checks," explained the executive director of Food & Water Watch (FWW), Wenonah Hauter. "From emergency management in Michigan to failed privatization experiments across the country, corporate influence has failed U.S. water systems," he said. It was a government-appointed emergency manager in Flint who made the decision to switch the city's water supply from a safe source to a polluted river in order to cut costs. "In a failed attempt to save a few bucks," one lawyer said last month, "state-appointed officials poisoned the drinking water of an important American city, causing permanent damage to an entire generation of its children. She added. "Rather than running water systems like businesses, or worse, handing them over to corporations, we need increased federal investment in municipal water. With this federal funding, we can help avoid future infrastructure-related catastrophes."

In a new survey (pdf), the largest of its kind, FWW documents how the dominant trend in the U.S. is toward public ownership of water and sewer systems, while showing that the alternative—large, for-profit, privately owned systems—are often more expensive and less reliable. The survey of water rates of the 500 largest U.S. community water systems also found that for-profit systems, which comprise about 10 percent of the national total, charged 58 percent more than large publicly owned systems. Private systems in New York and Illinois, for example, charge twice as much as not-for-profit systems, while in Pennsylvania, private systems charge 84 percent more than their public counterparts—$323 more a year, typically.

The report explains. "Most importantly, public entities normally collect only the revenue necessary to improve and run their water systems. Privately owned utilities, however, generate profit by increasing rates. Other factors that make private water more costly for customers include: executive compensation, corporate overhead, subsidies, financing costs, rights of way, and differences in rate-making and financing practices."

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