[stop-imf] World Bank APPROVES Ghana Water Privatization Loan

[robert weissman]

NEWS  UPDATE   NEWS   UPDATE   NEWS   UPDATE
(From Public Citizen's Water for All Campaign)

In an unprecedented slippery move, the World Bank approved a $103
million dollar loan for the privatization of Ghana's urban water system,
2 months before the projected Board date.  Despite three years of active
civil society opposition to the water privatization scheme, the World
Bank has continued to push forward with the plan.  At least four major
multinational companies have expressed interest in bidding for the
contract: Biwater, Suez, Vivendi (now called Veolia) and Saur.  While
the World Bank has approved the loan, the Ghanaian government has still
not formally opened the bidding process.  The Ghana National Coalition
Against the Privatisation of Water says that resistance to the
privatization of water will continue and the ultimate objective is
clear: we must ensure that access to potable water is available to all
and guaranteed as a human right.

The World Bank's Project Appraisal Document includes the following
information about the privatization plan:

**$6.5 million of the loan will go directly to pay the private sector
company that wins the bid. $2.5 million will go to technical assisance
largely contracted to foreign private consultant firms.

**$11 million will go toward the severance payment program that will be
needed to serve the thousands of Ghana Water Company employees who will
lose their jobs.

**Water tariffs (rates) will be increased 20% in real USD terms, first
time in 2005 and secondly in 2013.

**Automatic quarterly water tariff adjustments will be made to cover
fluctuations in the cedi-to-dollar exchange rate.  This is to cover
outstanding debts that must be paid back in dollars.

**Water tariff increases of approximately 30% to 40% will be necessary
to service loan project debts.

For the full World Bank Project Appraisal Document see:
http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/07/12/000090341_20040712101848/Rendered/INDEX/285570GH.txt

Sara Grusky
Water for All Campaign
Public Citizen
Phone: (202) 454-5133
Website: www.wateractivist.org