Peter TORKLER, Germany,
Chamber of Local Authorities
Political Group: SOC
Preamble - Water is a vital resource
Drinking water is a natural product that cannot be manufactured or replaced by anything else. Like the air we breathe, water is vital to human life. No one can do without it and no one should be denied access to it. Only perfectly clean water guarantees good health and prevents diseases. As all human beings - regardless of the social conditions they live in - are entitled to drinking water, providing it has always been a task and a duty of basic public services. Access to adequate quantities of clean water is a precondition for the implementation of existing human rights. At the 2002 World Summit on Sustainable Development in Johannesburg, however, it proved impossible to achieve majority support for declaring unimpeded access to clean water at a reasonable cost a fundamental right. Are we unjustified in thinking that global operators from the energy and water supply sector are using the WTO in order to gain control of the lucrative global water market?
1. Global water crisis
Water is getting scarce
Water - a vital resource for all forms of life - is becoming increasingly scarce worldwide as a result of environmental degradation, pollution and wasteful use. Solving the global water crisis was a key issue at the World Summit on Sustainable Development in Johannesburg in September 2002.
Water definitely cannot be said to be in oversupply. Saltwater makes up by far the largest proportion of the Earth’s water.
Freshwater accounts for only 2.5% of water stocks, and only a tiny percentage of that figure is available as drinking water. At the same time, demand is growing rapidly; in fact, over twice as fast as the population. Agriculture is the largest user of water with 70%, followed by industry with approximately 20% and then private households. 1.1 billion people do not have adequate drinking water supplies and 2.4 billion have inadequate sanitation or none at all, as infrastructure development has not kept up with growth in demand.
Water supplies are very unevenly distributed in geographical terms: while most industrialised nations are in “water-rich” regions, many parts of the South are short of water.
Economic and technological differences also play a part in the often very uneven distribution of water resources, however. For instance, while per capita daily water consumption in southern California is over 3 000 litres, it is only around 300 litres in Central Europe and people living in the Sahel region have only 30 litres at their disposal on average.
Forecasts such as those presented at the Stockholm Water Symposium warn us that, by 2005, almost a third of the world’s population, or 2.7 billion people, will be living in regions with serious water shortages. Large areas of Asia and Africa are under particular threat. In some industrialised nations, especially in the United States, there are also, however, areas where the demand for water can now only be met with difficulty.
The water crisis is also an
- social and
- environmental crisis.
Threat to drinking water supplies
The growing shortage and unequal distribution of water resources mean there is a risk of conflict about water not only between different users such as agriculture and cities, but also between different states.
While agricultural scientists are predicting that water consumption in agriculture will have to be increased substantially in order to guarantee food supplies, environmentalists are calling for lasting reductions in water consumption.
The growing shortage threatens not only the long-term supply of clean water, but also the economic development of regions, sectors and countries, as well as the entire environment, if the water cycle and water stocks - as the basis for animal and plant life - are permanently and comprehensively upset or diminished, for instance, if rivers like the Yellow River in China, marshlands, and lakes like Lake Aral dry up.
Closely related factors are the supply of drinking water and disposal of wastewater - areas where infrastructure development and maintenance are not keeping up with population growth and the expansion of major cities.
The consequences are felt particularly severely by poorer population groups. Millions of people in rural areas therefore suffer from inadequate water supplies and sanitation conditions that are beneath human dignity. Sewage pollutes rivers and groundwater.
At the end of the 1980s, 1.7 billion people had inadequate sanitation facilities or none at all. And according to figures from the WHO and UNICEF, the total now stands at 2.4 billion, including 2 billion in rural areas.
Approximately 5 million people die every year of diseases that are partly caused by polluted drinking water.
The unresolved problem of wastewater disposal is closely tied up with that of securing proper water supplies.
2. The EU Water Framework Directive
As far back as 1991 (Hague Declaration), the need to avoid a long-term deterioration in the quality and quantity of freshwater resources was recognised and calls were made for a programme of measures that actually should have been carried out by 2000. In November 1995, the European Environment Agency presented an updated report on the state of the environment in the European Union and emphasised the need to protect the Community’s water resources in both qualitative and quantitative terms.
For instance, we can no longer afford:
Ø to poison rivers, lakes and seas with harmful substances from untreated domestic and industrial sewage;
Ø to pollute valuable groundwater and surface water with fertilisers and poisonous substances from agriculture or
Ø to waste valuable freshwater resources for manufacturing purposes.
In October 2000, the European Union finally adopted Directive 2000/60/EC establishing a framework for Community action in the field of water policy. In November 2001, the directive was supplemented with a list of priority (harmful) substances in Decision No 2455/2001/EC.
Water is not a commercial product like any other
The preamble to the EU Water Framework Directive of 22 December 2000 rightly provides that “Water is not a commercial product like any other but, rather, a heritage which must be protected, defended and treated as such.”
The supply of drinking water as a vital part of our diet is a crucial basic service. The success of the EU directive therefore depends on close co-operation and coherent measures at Community, national and local level. Informing, consulting and involving the public - ie users - are equally important factors, however. The directive lays down principles for:
Ø co-ordinating measures by the member states to improve the protection of water resources in the Community in both quantitative and qualitative terms;
Ø promoting the sustainable use of water;
Ø helping to solve cross-border water problems and
Ø maintaining and developing the potential for the use of the Community’s water resources.
Aims of the directive
The ultimate goal of the directive is the elimination of priority dangerous substances.
In catchment areas where water consumption may have cross-border implications, the requirements for achieving the environmental objectives of the directive and, in particular, all programmes of measures must be co-ordinated for the entire river basin.
In the case of catchment areas that extend beyond the boundaries of the EU, the member states must make sure that proper co-ordination takes place with the relevant non-member states.
The following key environmental objectives are set out in the directive:
a) All bodies of surface water and groundwater are to be protected, enhanced and restored. In the case of groundwater, a balance must be achieved between abstraction and recharge (by 2015).
b) Protected areas must be designated and the relevant objectives and standards implemented by 2015.
c) The condition of surface water, groundwater and protected areas must be monitored regularly.
d) Compliance with the quality standards for drinking water use must be regularly monitored.
EU member states are required to transpose the necessary legal and administrative provisions into domestic legislation so that the directive can apply from 22 December 2003.
3. GATS 2000
Negotiations at the WTO
At the World Trade Organisation (WTO) in Geneva, negotiations have been under way since the beginning of 2000 on the further development of the GATS (General Agreement on Trade in Services).
The GATS is a very wide-ranging agreement that covers every conceivable service. Its provisions are binding on all levels of decision-making bodies/government.
During the initial phase, which began in February 2000, the negotiations focused on working out a timetable and guidelines for further negotiations, which were finally agreed in March 2001. Among other points, no agreement has yet been reached in the controversial negotiations about “domestic regulations” and protective mechanisms for developing countries.
Moreover, the negotiations are now in the “market access phase”, in which states are beginning to apply to other member states requesting that they liberalise more of their services in accordance with the GATS. In spite of the potentially far-reaching consequences that the GATS could have, the negotiations are continuing with almost no national or European parliamentary scrutiny. In addition, at the summit in Nice (December 2000), the European Commission was granted extended negotiating powers for almost all service sectors.
Potential impact of the GATS on local and regional democracy
In Europe and elsewhere, there is growing concern that the WTO General Agreement on Trade in Services could pose a threat to democratic structures. European Commission negotiators are putting forward proposed extensions to the agreement that would significantly restrict people’s right to set their own social and environmental priorities for the future. They are also pushing proposals that would not only have consequences for trade in services in Europe, but would also put substantial pressure on developing countries.
The GATS is also a particular challenge to democracy because it leaves states only very few opportunities to go back on any liberalisation commitments they enter into. Any state that wishes to withdraw a GATS undertaking to open up a given sector must first wait three years from the date of the commitment and then offer the other WTO members acceptable compensation before the withdrawal can take effect.
The GATS therefore makes it practically impossible for municipal authorities to take over the delivery of basic public services again once they have been liberalised. In the event of undesirable developments, it also makes it impossible to take corrective action for social or environmental reasons if the service providers regard such action as “discriminatory”.
The GATS and public services
In view of their crucial importance to democratic and social integration, governments and local and regional decision-makers must be able to deliver basic public services in such a manner that all citizens can afford access to them.
There is a risk of the GATS significantly reducing their political leeway here or making the delivery of public services more difficult.
The GATS covers all services “except services supplied in the exercise of governmental authority.” The latter are defined as any services which are “supplied neither on a commercial basis, nor in competition with one or more service suppliers.”
The provision of public services often forms the necessary basis for democratic and open political processes. This is particularly clear in sectors such as education, health and water supply, access to which is frequently regarded as a human right.
Other public services are also, however, provided to make sure that certain basic needs of the population as a whole are satisfied.
From this point of view, one must ask whether, for social and environmental reasons, for instance, all basic public services really should be opened up either largely or even totally to market forces.
It is not only the actual delivery of public services, but also their quality and the charging of reasonable prices that are of crucial importance to the public.
4. The drinking water market as a public service
In many European countries, the supply of drinking water is a basic public service that is usually provided by local authorities. This applies both to abstraction and to delivery.
As the current GATS negotiations are taking place against a background of widely differing water industry models in Europe, the impact of the future regulations can only be assessed in relation to the relevant national situations.
The system is based on the privatisation of ten state water authorities. The resulting private monopolies have long-term concessions and are not exposed to competition. A regulatory authority (OFWAT) establishes a five-year pricing formula for each firm, according to which it may or must adjust its prices. At the end of each five-year period, the formula is recalculated in line with the costs and market conditions that then apply.
In the late 1990s, the Labour government decided not to renationalise the industry and opted instead to reform the regulatory framework with a view to giving greater weight to the interests of consumers and the environment. Like the situation in France, the achievement of greater transparency is a central goal of the reforms (Department of Trade and Industry, 1998).
Insofar as they have not anyway already become subsidiaries of global players (Thames Water/RWE Aqua), the water supply companies are likely to have few difficulties adapting to new regulations. However, the adaptation of the regulatory system through OFWAT may be more problematic. In this case, it may be necessary to find new ways of defending consumer and environmental interests.
In Austria, the collection and supply of drinking water has traditionally been regarded as a basic public service. In connection with the planned liberalisation of drinking water supplies aimed at in the negotiations between the WTO and the European Commission, the Association of Austrian Municipalities (together with the Association of German Towns and Municipalities) has issued a statement setting out its position on EU policy:
“Competition must not be the sole model for European policy. Basic public services must continue to be available for all citizens in future, with emphasis being placed on equality of access to the services, security of supplies, the public interest and the quality of the services. Where compliance with these criteria so requires, the necessary public support measures for these services must continue to be possible in the context of European competition law.
The trend towards changes in organisational arrangements must not lead to municipalities giving up their responsibility for drinking water supplies and thereby ultimately removing citizens’ ability to influence the management of these services in the general interest. Municipal authorities must therefore continue to be responsible for these tasks.
In a liberalised market, the Association of Austrian Municipalities fears that private suppliers would mainly focus on conurbations where large numbers of consumers can be reached in limited geographical areas. That is where the profits and the right cost/benefit ratio are to be found. The losers would be rural municipalities and their citizens. The Association of Austrian Municipalities is resolutely opposed to a scenario of that kind.”
In France, responsibility for drinking water distribution lies with municipalities, and has done so since the 19th century.
This responsibility is exercised either directly through municipal or inter-municipal water boards or indirectly through various types of management contracts awarded to firms that specialise in managing services for local authorities.
For 40 years (since the passing of the Act of 16 December 1964), central government has reasserted its role in protecting water resources by adopting a number of key measures:
- the management of water resources by catchment basin through public bodies (water agencies) and catchment basin committees made up of representatives of the various categories of water users;
- the introduction of the polluter-pays principle, placing higher charges on water users that pollute the resource (pollution charges);
- the extension of funding for waste-water treatment programmes spanning several years.
In addition, under a law passed on 29 January 1993 on preventing corruption and ensuring transparency in business and public procedures, the government introduced a more transparent and more suitable legal framework for drinking water distribution by private contractors.
The contracts between municipalities and private contractors are now governed by the public service contracting rules:
- the length of the contracts is limited depending on the contribution by the contractors to the funding of investments (longer contracts for concessions, shorter contracts in the case of leasing arrangements);
- competition between the firms is compulsory and all contracts are put out to tender again upon expiry without any possibility of tacit renewal.
France’s dual system of water distribution now includes three major firms that are developing the French model internationally and a number of major municipal water boards, principally in the country’s main cities (Nantes, Brest, Le Havre and Rouen, for example). There are a total of 15 000 water supply services, including 13 000 run directly by municipalities, mainly in rural areas.
The French model of contracted-out management is very popular among the advocates of liberalisation in Germany. However, the system remains closed to competition in the case of contracts predating 1993, some of which were originally concluded for 30-year periods. The average length of contracts is now around 15 years. Both with contracted-out management and with direct municipal management, water charges for consumers vary substantially for reasons often related to specific local circumstances, in particular in terms of infrastructure and treatment facilities. As with direct management, municipalities that contract out water supply services also need to develop new know-how to check compliance with the relevant contracts and analyse the annual technical and financial reports that the firms have to submit to them. Municipalities sometimes therefore turn to external auditors or to the “Public Service 2000” association set up by mayors themselves for the purpose of helping local and regional authorities with public service know-how, especially in the water sector.
The water act that was adopted on first reading in parliament in 2002 has been followed by ongoing work on the “reform of water policy”. At the same time, steps have been taken to strengthen the position of municipalities in the relevant negotiations.
In 1998, the Netherlands parliament voted against the privatisation and liberalisation of drinking water supplies on the grounds of potential threats to the security of supplies. The cabinet then decided to retain government control of the water supply industry, which had the effect of banning privatisation. The provincial governments subsequently initiated and supported a merger process aimed at merging the previously 200 supply companies in three or four powerful firms. These are now joint-stock companies owned by the municipalities and provincial governments. The largest is VITENS, which is based in Zwolle. It has an annual turnover of approximately €300 000 000 and around 4 million customers. It is unlikely that the ban on privatisation can be maintained, as it is contrary to the central requirements of the GATS. On the other hand, the industry has been restructured to such an extent that only three or four major water supply companies remain. As long as the municipalities and provincial governments retain their shares in the companies, they will continue to have a relatively strong competitive position that cannot be broken up that easily.
The economy in Germany is characterised by the co-existence of large numbers of large and small, for-profit and not-for-profit, private and public-sector firms. This particular system played a key part in the Federal Republic’s economic boom after World War II. It has since proven itself as a crucial factor in maintaining economic and social stability. Any development that solely benefits global players while undermining local players must therefore be prevented by all available means.
The Federal Water Resources Act provides for orderly management of water resources in the public interest and for the benefit of individuals. Water abstraction rights are subject to strict requirements for the protection of nature and other existing interests in terms of uninterrupted water supplies. There is no provision in the act for freely disposable excess capacity that could be offered on a liberalised water market.
The three largest suppliers in Lower Saxony in northern Germany (Hanover Municipal Utility, Harzwerke and OOWV) each supply drinking water to fewer than 1 million people. The fragmented supply structure in Lower Saxony with approximately 350 firms is typical of the situation throughout Germany, which has a total of around 6 500 water supply firms. It is obvious that such firms would have virtually no chance of survival at international level. Yet it has never been proved in any discussion or in any expert study that this system presents disadvantages for the country’s citizens. On the contrary, even by global standards, high-quality drinking water is supplied reliably and at reasonable cost in Germany.
In Germany, both the abstraction and the supply of drinking water as a vital resource have traditionally formed part of the tasks of basic public services. Germany is a world leader in terms of the quality of drinking water and universal supplies. Resistance to the WTO’s plans is growing in the country, where no need for change is perceived.
The decentralised, citizen-oriented and democratically supervised approach to service provision in the vital field of drinking water supplies should be retained.
There is a risk of the right to municipal self-government enshrined in the German constitution being undermined by restrictive GATS requirements.
The German Bundestag has voted against the liberalisation of drinking water supplies. Sustainability is to be retained as the core element of the “supply philosophy” (eg protection of resources through the prevention of water and groundwater pollution, sparing use of resources).
SERBIA AND MONTENEGRO
The supply of water for industry and private households in the Autonomous Province of Vojvodina is provided in the main by public utilities which include 14 water treatment plants. The existing plants, however, do not guarantee good quality drinking water. Only 15 per cent of the total treatment capacities work at a satisfying level, which is the consequence of serious pollution of underground and surface waters. In 38 out of the total of 45 municipalities, the quality of drinking water does not meet the prescribed standards.
Due to poor maintenance and insufficient investments into water supply and sewerage infrastructures over the last decade or so, a large number of water supply networks in Vojvodina are not capable of providing regular water supply, and the problem of poor water quality has become a major concern of the whole country. The situation is even worse in the rural areas were provision of basic services in the field of water supply and sewerage needs to be drastically improved.
It should be pointed out that out of 463 settlements in Vojvodina only 44 of them have got some kind of wastewater disposal systems. About 30% of the population are connected onto a sewerage system and only 14 settlements have wastewater treatment plants, a small number of which functions well.
In co-operation with a number of humanitarian organisations, some 20 projects were prepared and submitted for international funding, which concerned in particular the construction or reconstruction of water supply and sewerage systems, drinking water preparation plants and resolving problems related to wastewater. There is also an idea of bringing high quality water from the Carpathian Mountains to some districts of the province, but this requires significant investments.
A feasibility study will be needed to assess some new projects put forward in the province, such as building a regional water supply system designed to bring water to southern and central Banat from potential well field Kovin-Dubovac, in the closest vicinity. This well field would be recharged partly from the river and partly from the system of water-bearing layers. It is estimated that annual renewable reserves of this underground water well field are larger than the current capacity of almost all water supply structures in Vojvodina.
Summing up the current development trends in water supply and consumption patterns in the province and the entire country, a number of important features can be singled out:
- Gradual but intensive development in construction of water supply infrastructure;
- Uncontrolled development of industry in terms of water consumption;
- Non-observance of water quality standards;
- Technically deficient and inferior quality water supply systems (losses from 30-60%)
- Non-ecological approach to water resources management;
- Water tariffs bearing the imprint of social rather than economic approach (low prices stimulate excessive consumption)
- Non-economic character of utility companies’ business activities.
Regardless of the current arrangements, developments in all six four countries show that governments (in whatever form) cannot and must not shy away from their responsibility to guarantee the security of drinking water supplies. Even in those cases where liberalisation was furthest advanced, moves are now being made in the other direction in order to increase state or public involvement. This is of particular importance for those countries which have been for many years caught in the vicious circle of under-investment, low tariffs and poor services and which have now embarked on the way of large-scale democratic reforms.
5. Liberalisation of the drinking water market versus EU framework directive
As a result of the GATS negotiations, the EU is also seeking to liberalise the drinking water market. In the light of the experience of the ongoing liberalisation of the energy market (electricity and gas), privatisation in this case will also lead to monopolisation unless the opening up of the water market is accompanied by regulatory measures. At the same time, the provisions and responsibilities set out in the EU Water Framework Directive (2000/60/EEC) and the likely provisions on the liberalisation of the drinking water market would also appear to pursue different objectives.
The possible liberalisation (= privatisation = monopolisation?) of the drinking water market would conflict significantly not only with the existing basic principles of EU water policy but also with key provisions of European primary law. The EC Treaty in no way gives precedence to the market and competition, and gives equal weight to public policy objectives such as environmental protection and special responsibility for services of general interest (Articles 16, 86 (2) of the Treaty establishing the European Community).
EU Water Framework Directive
With a preamble that provides that “Water is not a commercial product like any other but, rather, a heritage which must be protected, defended and treated as such”, the EU Water Framework Directive lays down a timetable requiring member states to:
- co-ordinate measures to improve the protection of water resources in both quantitative and qualitative terms;
- promote the sustainable (sparing) use of water;
- help to solve cross-border water problems and
- maintain and develop the potential for the use of the Community’s water resources (groundwater, drinking water).
Responsibility for supplying sufficient quantities of drinking water of good quality therefore remains a task of EU member states, which may also be delegated to municipal authorities depending on the administrative structure of the relevant country. The same applies to the costs that arise in connection with the performance of the tasks in question.
The GATS regulations will have varying impacts on the water sectors in individual European countries. The clear winners will be the major French concerns, which already dominate the global market today and have divided up their domestic market very tidily. It is therefore understandable that VIVENDI became politically active in order to push through new global regulations for cross-border trade in services. VIVENDI is one of only very few multinational companies that are represented in the two powerful lobby groups, the US Coalition of Service Industries and the European Services Forum, which are attempting to exert direct influence on the GATS negotiations. At the same time, the French global players are realising to their disappointment that they cannot make the amount of money they originally expected to in developing countries. As their domestic market is already divided up, they are now trying to focus on neighbouring states in Europe and on North America, where national legislation is, unfortunately, hindering free access to the “water market”. From their point of view, the key therefore lies in the GATS negotiations.
Although the 2000 EU Water Framework Directive explicitly provides that “Water is not a commercial product like any other”, it is to be feared that, by the end of the GATS negotiations, the globally scarce resource of water – which is vital to our diet and hygiene – could well be subjected to the laws of the market like any other commercial product.
If French companies succeed in establishing in the French courts that protecting water resources is not one of the tasks of a supply company, then it is likely to be difficult in future, against the background of the GATS regulations, to invoke the need to minimise pollution levels from the point of view of sustainability and get companies operating in Germany (including French ones) to take precautionary protective measures. In the medium term, government water authorities will therefore have to reassume responsibility for such tasks and the related costs.
It is not only within the EU that the goals of the GATS negotiations pose problems. Europe’s nation states also have individual and joint responsibility for development in the countries of the South and the newly industrialising nations. In addition, we must continue in future to recognise the sovereign right and the responsibility of every nation to control freshwater resources as a public asset within its boundaries and to decide on how they should be managed, distributed and protected with appropriate regulations. However, the biggest danger of the GATS negotiations lies precisely in the ability to exercise such control being lost as part of a trend that benefits the interests of global players.
6. Conclusions for local authorities
Ensuring sustainable access to clean drinking water for all is a key challenge faced today by local and regional authorities throughout the world. Whilst the total quantity of water on the planet is vast, the quality and availability of fresh water is growing a problem in many parts of the world. This is largely the result of two-fold pressures. There are pressures of quantity which stem from excessive demand of local communities outstripping supply and extraction of this vital resource far exceeding the natural rate of replenishment. The pressures of quality come from growing pollution from agriculture, industry, untreated household affluent and stormwater, some of which results from climate disruptive patterns.
Access to water and sanitation has been identified as a key challenge of sustainable development in the 21st Century, as reflected in a number of recent world forums’ decisions. The goals of protecting our water sources and Earth’s ecosystems, environment at large and the improvement of livelihoods cannot be separated . With this in view, the search for sustainable water solutions requires pooling the efforts of all stakeholders at global, national, regional and locals. It should be noted, however, that some pending decisions with regard to the liberalisation of service provision that make the subject of the negotiations now underway at the World Trade Organisation could have far-reaching consequences for local and regional authorities’ activities in this area.
So with regard to co-operation with international organisations it is essential that local authorities seek to :
a) strengthen partnership on water supply and other issues related to Local Agenda 21 and Local Action 21;
b) support development targets related to water supply and sanitation set out in the UN Millennium Declaration and the Johannesburg World Summit Sustainable Declaration and Plan of Implementation.
c) ensure recognition of local government as an equal sphere of governance vital to the susses of sustainable development;
d) organise discussions on the impact of liberalisation on local public services, with a view to ensuring that key public services, notably provision of drinking water for all, are maintained, and that social and environmental factors are properly integrated into public decision-making.
Water is not just a commercial product like any other but, rather, a heritage which must be protected, defended and treated as such and that the supply of drinking water is a basic public service that is usually provided by local authorities in many European countries.
With this in view, it is crucial that:
a) access to water, particularly drinking water, be seen as a basic human right. As such it is unquestionably the responsibility of the governments, both at national and local level, to ensure that everyone has access to his or her minimum requirements;
b) awareness be raised on the value and vulnerability of water resources;
c) integrated sustainable water resource management approach be introduced which is seen as the best method of managing water resources in a holistic, effective and sustainable manner;
d) management needs to be empowered at the lowest appropriate level – the subsidiarity principle;
e) prevention of pollution, protection of environment and water resources be part and parcel of the integrated management approach;
f) water development and management be based on a participatory approach involving users, planners, policy-makers and all appropriate stakeholders at all levels;
g) proper account be taken of national, social and cultural diversity;
Efficient water use is essential and often an important ‘source in itself’. Improving water management is therefore a powerful tool that can be used by individuals, communities and household to protect their own health. Failure to manage water resources effectively leads to over-abstraction of surface and ground waters in many areas, disrupting aquatic and other ecosystems, the quality and quantity of water supplies and wider natural environment;
The search for efficiency facilitate the trend among economists and decision-makers to hand over the responsibility of delivering water to private companies. Efficiency alone, however, is not enough to justify handling over such a resource as drinking water to an outside agency, unless private companies are willing to:
a) take on a universal service obligation to ensure that all basic needs are met, on a transparent, accountable and permanent basis;
b) demonstrate that their businesses can be environmentally and socially responsible in regards to this ultimate natural resource;
c) to commit themselves to the long haul;
It is evident that no single sector of society can possibly afford to meet the basic human needs for water and wastewater services. While meeting these needs is a core responsibility of governments, they can draw on the technical, managerial and financial resources of private sector to help them. Private companies, working within a well-regulated, transparent and publicly accountable framework may well be able to do a better job than public utilities whose record is generally poor. But in the case of water and sanitation utilities, in particular, it is up to the government to guarantee that the risks of both investors and communities are reduced. This shows that the whole new public-private partnership is needed, far more complex than the simplistic solutions so far mooted – mostly by vested interests.
Recovering costs through user charges can make the difference between services that are sustained and expanded and services that fail. In most countries and communities, the poor are prepared to pay a significant share of the costs themselves. In fact, many millions of people in low-income communities are already paying more for water bought from vendors than the better-off are paying for government subsidised water piped into their homes. But ‘cost recovery’ is not a panacea. There will be always some who are too poor to pay. In such cases targeted direct or indirect subsidies will be needed. Adequate pricing policy is often the key to the unimpeded access of all users to clean water at a reasonable cost. The charging method must be appropriate for the local cultural and economic conditions, especially low-income groups;
Government water policies are most effective when they seek not to do the job themselves but to stimulate and support community-based initiatives. Water and sanitation services that people feel they are responsible for, and benefit from, are more likely to be well-used and well-managed. In this context, local communities have an important role to play in:
a) promoting increased water service capacities in private households, public buildings and industries;
b) preventing pollution by avoiding the use of harmful substances;
c) protecting surface and groundwater resources and catchments area;
Local communities are the launch platform for sustainable water supply efforts. But they cannot do the job on their own. Local authorities must take such tasks as setting prices and collecting revenues, negotiating with and regulating utilities, ensuring wastewater removal, protecting ground water resources, working with community associations and NGOs, and reconciling conflicting demands in order to prevent pollution of water resources
The success of sustainable water solutions rely on a variety of other factors, including the existence of adequate legislation, financing structures, technical equipment and operational expertise. The availability of national and international funding programmes and the involvement of non-governmental organisations and private sector can play an important role in improving water management.
In Europe, local authorities have shared responsibilities with regard to water supply, the disposal of waste water and the protection of surface and groundwater resources. In the EU, this sharing responsibility is becoming even more significant under the European Water Framework Directive.
In this connection it is important to stress that :
a) the role of government is becoming even more important, in particular in relation to the development and implementation of a sound legal framework that adequately protects the public interests, with due regard for openness and transparency;
b) decentralisation and devolution of authority must occur within a clear legislative framework that sets out the roles and responsibilities of local authorities with regard to water supply provision;
c) national governments ought to work with local authorities to strengthen local and regional governments’ capacities, competences and resources in meeting the challenges of ensuring access to drinking water for all.
It is essential to involve all stakeholders to ensure that water resources are developed and managed in an efficient and sustainable manner. Capacity building, education and skills development are crucial for achieving these goals. But to be successful, modern management solutions have also to include participatory approach that open the way to broad public support. Awareness raising efforts and development of a continuous dialogue with all stakeholders will be very helpful.