Why we should pay for water

Opinion: Privatising water appears to make it cleaner, but more expensive


unnamed‘The World Economic Forum estimates that by 2030 across every sector there will be a 40 per cent global shortfall between the forecasted demand of water and available supply.’ Photograph: Getty Images

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First published: Mon, May 12, 2014, 12:01

How to be unpopular: agree we should all pay for water. Water costs. It’s running out. Water security is going to be one of the biggest concerns over the next three decades. We should pay for water, as long as the money it generates goes back into building a decent, reliable, safe infrastructure that’s worth paying for, along with a clean supply that doesn’t have to be boiled within an inch of its life in order to annihilate cryptosporidium. In several pockets of the country, such unacceptable inconveniences are still the case.

A PR disaster coupled with an angry public and small local protests are distracting from the topic of water security. Of course, Irish Water and the Department of the Environment have done everything possible to put themselves into the public’s bad books by tossing the entire process around with butter fingers, fumbling it all the way to its conclusion. But the broader context is a global issue that is hugely worrying.

American in hot water
If you want to know about the future of water, the US is a good place to start. In the American southwest, the Colorado river, which supplies water to about 40 million people in arid spots such as LA, Vegas and Phoenix, is drying up.

The water source region has experienced 14 years of drought, a remarkable occurrence. The reservoir Lake Mead, created by the Hoover Dam in 1935, is the biggest problem. Some 90 per cent of Vegas’s water comes from the lake. Soon, one of the city’s two main intake pipes could actually be above water. Nevada is rushing to install another pipe, digging a three-mile tunnel 650ft underground.

The city of Las Vegas has paid homeowners $200 million to dig up their lawns to curb water usage. Parts of California are looking west for solutions, namely San Diego, banking on a desalination plant to be operational in 2016, converting Pacific ocean water into the city’s water supply.

Remarkably, 15 per cent of Americans supply themselves, taking water from their own wells. The more rural you get, the more likely a local co-operative will be the supplier. But 11 per cent now receive water from private companies. American Water, the largest private supplier, has 15 million customers. United Water, the second largest, has seven million. United Water is owned by the French company Suez Environment, a global giant in the privatisation of water, supplying and treating water in Spain, Slovenia, Canada, Mexico, China, Indonesia, Morocco and elsewhere. Bigger still is the other French behemoth of water supply, Veolia.

The World Economic Forum estimates that by 2030 across every sector there will be a 40 per cent global shortfall between the forecast demand of water and available supply. In the next 15 years or so, it’s possible this lack of water will create a global food crisis with a projected shortfall of up to 30 per cent in cereal production. Giant corporations have been putting their heads together to try and sort out this problem since 2008 when the 2030 Water Resources Group formed, featuring the World Bank, Coca-Cola, Standard Chartered, Nestlé, and our French friends, Veolia.

Considering the number of conflicting reports, figures and conclusions, it’s hard to discern what the real impact of water privatisation is. Given the budgetary constraints on local and national government in terms of sprucing up the water infrastructure effectively, privatisation does at least appear to make the supply safer and cleaner. Child mortality in Argentina fell 8 per cent in the 1990s in cities that privatised their water and sewer services. In the poorest areas, that reduction was 26 per cent.

On the flipside, privatisation of once public utilities has a habit of excluding the least well off. Usually, once you start charging the price of water only goes up. Analysis of 30 major US cities last year by Circle of Blue (an information resource on the water crisis worldwide) found that the price of water in 2013 was 7 per cent more than in 2012, and a staggering 25 per cent more than in 2010.

Cash flow
In the category of the lowest usage, (a family of four using 50 gallons per person per day), the average monthly bill varied dramatically: $11.49 in Memphis, $54.78 in Santa Fe, $27.12 in New York, $51.10 in Seattle. America’s water infrastructure is creaking too. A water main breaks every two minutes in the US. People dancing on the sidewalk in the mist of spraying fire hydrants isn’t a music video cliche for nothing.

In the UK, water charges went up 2 per cent this year, and 3.5 per cent last year, making the average annual bill €475. That’s nothing compared to the first decade of privatisation, from 1989, across England and Wales, when charges increased by nearly 50 per cent.

What we do know about charges here is that the annual average bill will come to €240, and will stay that way until 2016. After that, you can only assume that water charges will flow uphill. But, while the issue of charges here rubs everyone up the wrong way, we do need to get serious about the wider issue. Because our local misgivings are just a drop in the ocean.