Top Congresswoman Questions Public-Private Water Deals

A key congressional leader is sounding alarm bells about the repercussions of public-private partnerships in the water sector.

Rep. Gwen Moore, D-WI, the top Democrat on the House monetary policy subcommittee, is concerned with the World Bank’s endorsement of public-private partnerships in water service.

In particular, she is questioning a 1997 deal that privatized water and sewer delivery in Manila, the capital city of the Philippines. Water rates have subsequently hiked upwards, according to The Associated Press. The subcommittee oversees the World Bank.

In an April letter, Moore wrote the head of the World Bank, urging the organization "to cease promoting and funding privatization of water resources, including so-called ‘public-private partnerships’ in the water sector, until there has been a robust outside evaluation of the [World Bank's] conflicts policy and practices and an opportunity for additional congressional hearings on the subject.”

“I am increasingly uneasy with water resource privatization in developing countries and do not believe that the current ring-­fencing policies separating the investment and advising functions of the [World Bank] are adequate,” she wrote.

The bigger question here is the role of private money in water service, not just in Manila, but all over the world. Moore is urging caution about what she calls “corporate control of water.”

“Water access is a fundamental human right no matter where you live,” Moore said in a statement. “This institution must take that responsibility much more seriously, especially when it comes to water, or it will fail the very people it is supposed to be serving.”

The World Bank’s lending arm, the International Financial Corp. (IFC), responded, per the AP:

The IFC welcomed Moore's letter as a chance to discuss the issues, saying ‘the World Bank Group takes real or perceived conflicts of interests very seriously,’ according to the IFC's chief communications officer, Geoffrey Keele. In an email to The Associated Press, he noted that the IFC's role in advising the privatization deal was done several years before it invested in the company, and that ‘the risk of perceived conflicts of interest was examined at each stage of the Manila Water investment approval.’

Moore is taking inspiration from issues close to home.

The ongoing problems in Flint and other U.S. cities, Moore said, per The Huffington Post, “begs of us in positions of influence to take a broader look at the world around us to help identify similar problems.”

“Yes, we’ve just now started shedding light on this local and national issue in the United States, but there are global implications to think about as well,” Moore said. “It has become clear that there are those in positions of great power who are all too willing to prioritize profits over public safety.”

Public-private partnerships in the water industry have many supporters. Richard Anderson, senior adviser to the U.S. Conference of Mayors’ water council, argued that sometimes public-private partnerships are necessary because of cost pressures.

“We allow water to be operated as a monopoly by local governments,” Anderson said, Stateline recently reported. “People go to rate meetings and the nun gets up and says: ‘Rain is free. Why are we paying so much?’ Well, go out and catch it. You’re not in Ethiopia! You’re not going to take a bucket down to the river and get dirty water. It’s very hard for the public to understand why you have to pay so much for clean water.”

For more public-private partnership coverage visit Water Online’s Funding Solutions Center.