by Tim Holt
Published by Tom Paine
Water has been called the oil of the 21st century. The
World Bank predicts that by 2025, two-thirds of the world's
population will not have enough drinking water. With scarcity
making water an increasingly valuable commodity, private
companies are tempted to corner water supplies and delivery.
"We think there'll be world wars fought about water
in the future," predicts the aptly named Peter Spillett
of RWE/Thames Water, one of the three largest water companies
in the world.
Even in the United States, long a bastion of publicly
owned water systems, water is increasingly viewed as something
to be bought and sold. Private companies have started
taking over municipal and suburban water systems, which
gives them monopoly control over water rates. Water "privatization,"
and, most notably, the dramatic entry of the three largest
water companies in the world to the U.S. market, threatens
local control over this precious resource.
With 85 percent of U.S. consumers still receiving their
water from public systems, the Big Three water companies,
all based in Europe, see this as a tremendous opportunity
for growth. RWE/Thames of Germany and Vivendi and Suez
of France have made an aggressive entry into this country
with the purchase of American Water Works, U.S. Filter
and United Water, respectively. They are now the three
leading U.S. water companies.
Although the Big Three's holdings are spread out across
the United States, much of their future growth will likely
occur in the arid Southwest, where water scarcity, fueled
by suburban growth, can be expected to drive up water
rates. Paris-based Vivendi has already purchased 45,000
acres in California's Imperial Valley, giving it highly
coveted rights to Colorado River water, and an amount
equal to 8 percent of the water used in San Diego County.
The push for privatization has spawned charges from customers
and public officials alike of inflated rates and poorly
maintained equipment as profits are siphoned into corporate
The differences between private and public water companies
are dramatically illustrated in the Los Angeles suburb
of Thousand Oaks. Two private companies and one city-run
operation coexist, each in a separate district that provides
water to 20,000 homes.
"We are a snapshot of the future," says Thousand
Oaks Assistant City Manager Scott Mitnick. He notes that
the private companies charge rates substantially higher
than those of the city operation, with one-an RWE/Thames
subsidiary-charging rates that are a whopping 33 percent
higher than the city's. RWE/Thames customers who have
complaints, he notes, end up talking to operators in Illinois.
A similar pattern prevails in the Monterey Bay area,
whose water system was recently acquired by RWE/Thames.
The system, run by private companies since the late 19th
century, is leaky and antiquated. As in Thousand Oaks,
customers with problems talk to operators in Illinois.
Alarmed over the prospect of increased rates and anonymous
service, citizen efforts have sprung up all over the country--from
Lawrence, Mass., to Stockton, Calif.--to thwart corporate
takeovers of municipal water systems.
A court case brought by a citizens' coalition in Stockton
resulted in the termination, last fall, of the most lucrative
water transfer agreement in the country. It was a 20-year,
$600 million contract between the city and a joint private
operation consisting of RWE/Thames and American partner
OMI of Denver.
In the coastal town of Montara, Calif., the state's Public
Utilities Commission ordered the transfer of a private
water company back to public ownership after the privately
owned system had experienced numerous breakdowns and several
changes of ownership coupled with rate increases. RWE/Thames
was the last private operator of the system.
"Every time it changed hands, rates went up,"
notes Scott Boyd, president of the now publicly owned
Montara Water and Sanitary District. Faced with mounting
water bills, Montara's citizens expressed their clear
preference for the return to a public operation, with
80 percent voting for the bonds needed to purchase the
water system. The new public system has begun funneling
money into the repair of what Boyd calls a "uniquely
There is an inherent contradiction in the notion of reaping
profits from the delivery of a life-giving resource. The
huge size of the companies now moving into the U.S. market
only exacerbates the disconnect between water provider
and water consumer. Governments or public water districts
are typically involved in the delivery of water because
we literally can't live without water. Letting it fall
under the control of companies based in Germany or France
may be a boon to their shareholders, but not to those
who depend on their water.
Tim Holt is contributor to Writers on the Range, a service
of High Country News. He is an environmental writer who
lives in the Mount Shasta region of California.