Privatisation sends water bills soaring in Tanzania

Posted: 19 October 2004

The British Government, and to a lesser extent the World Bank, are having second thoughts about the impact of the privatisation of water supplies in poor countries, and aid 'conditionality' which forces such countries to tailor their development policies to meet donor pressures. The issue was raised at this month's World Bank/IMF meeting in Washington and is highlighted by an ActionAid dossier on the plight of city dwellers in Dar es Salaam, Tanzania. John Rowley reports.

City-dwellers in one of Africa's poorest countries have faced soaring bills and mass disconnections since an international consortium was put in charge of their water supply, a UK development charity reports.

According to the report by ActionAid, water privatisation in the Tanzanian city of Dar es Salaam has neglected the needs of poor people, despite the World Bank's assurances that access to water for poor residents would be improved. It says the Bank used the promise of a $143 million loan to push through an inappropriate project in the face of public opposition.

Water bills have risen sharply - by 40 per cent according to one estimate - since the Dar es Salaam Water and Sanitation Authority was leased to a consortium called City Water, in 2003. The World Bank expects prices to double eventually. ActionAid found that poor families are turning to unsafe water supplies rather than pay the increased bills.

High prices

It claims that City Water, which is part-owned by the UK-based company Biwater, disconnects whole areas in an attempt to get people with illegal connections to pay up. In poor districts there is anger at the high prices and poor service. ActionAid was told of water bill collectors being chased away with dogs and knives.

"Donors have been pushing through a project in which 98 per cent of the investment will go to the areas where the richest 20 per cent of the population live," said Billy Abimbilla, director of ActionAid Tanzania. "This is a project that was supposed to help the poor. The figures tell a different story."

The charity believes it is time for donors to stop tying aid and debt relief to risky and unproven economic reforms such as privatisation.

The report's main author Romilly Greenhill said: "The World Bank is still lending money to developing country governments on condition that they adopt specific economic policies such as privatisation. They make it look as if the countries are privatising of their own free will, but these are poor governments which can hardly walk away from a cheque for $100 million. The UK's Department For International Development is rethinking the conditions it attaches to aid. As the list of failed privatisations gets longer, the World Bank also needs to ask why its lending policies are not working for the poor."

British doubts

Earlier this month, the UK International Development Secretary, Hillary Benn, called for a review of "conditionality" including the practice of making aid dependent on countries privatising public utilities. In a document presented to the World Bank/IMF annual meetings, he expressed the British Governments doubts about the use of aid to buy policy change. The consultation paper, prepared with the Treasury and the Foreign and Commonwealth Office, heralds a potential rethink of the British aid policies under which DFID spent £9.5 million supporting privatisation in Tanzania.

The World Bank also went some way to address the issue by announcing that it is to undertake an internal review of conditionality.

Related link:

www.actionaid.org.uk

See also:Turning off the Taps: Donor conditionality and water privatisation in Dar es Salaam,Tanzania

Money Talks: How aid conditions continue to drive utility privatisation in poor countries (April 2004)