[stop-imf] Tanzania: UK Water Company Kicked Out of Privatisation Contract

[Robert Weissman]

*UK Water Company Kicked Out of Privatisation Contract*

*Public Agenda* (Accra)
NEWS
May 22, 2005
Posted to the web May 23, 2005
Accra

UK water company Biwater, which was bidding to run Ghana's urban water
has been kicked out of a controversial water privatisation by the
Government of Tanzania just two years into a ten year contract. The
contract was canceled after Biwater made less than half the required
investment and failing to improve services in the commercial capital Dar
es Salaam.

Development campaigners, the World Development Movement (WDM), have
condemned support by the UK Government and the World Bank for the
privatisation. The UK Department for International Development (DFID)
spent =A3273,000 from the UK aid budget to pay British consultancy Adam
Smith International to produce public relations materials including a
pro-privatisation pop video and song to persuade a sceptical Tanzanian
public of the merits of the privatisation.

Initially part of an International Monetary Fund (IMF) Structural
Adjustment Programme, the privatisation was made a condition for
Tanzania receiving debt relief by the World Bank .

WDM today welcomed the decision by the Government of Tanzania to revoke
the contract and called on the UK Government to stop supporting water
privatisation in developing countries. Head of Policy, Peter Hardstaff
today said: "This is yet another example of water privatisation failing
to deliver clean water to poor communities. Rich country governments and
the IMF and World Bank must abandon their support for this disastrous
policy. It is a scandal that the UK aid budget, money that should go to
reduce poverty, was used to push water privatisation in Tanzania."

WDM warned Biwater not to attempt to pursue the Government of Tanzania
through international courts: "The people of Tanzania must not be
punished for being the victims of a failed policy which they did not ask
for in the first place. We will oppose any attempt by Biwater to sue the
Tanzanian Government," said Hardstaff.

Announcing the decision to cancel the contract on Friday (13 May), Water
Minister Edward Lowassa said: "The water supply services in Dar es
Salaam and in the neighbouring places have deteriorated rather than
improving since this firm took over some two years ago."

"The revocation was made following persistent complaints by city
residents over incompetence of the firm."

According to the Government of Tanzania, City Water (the joint venture
company involving Biwater) should have invested $8.5 million during the
first two years, but so far only $4.1 million had been invested.

Peter Hardstaff said: "This case provides yet another example that the
central claim made by supporters of water privatisation, that it is the
only way to get the necessary investment, is a myth."

"Biwater's involvement in the Dar es Salaam contract is covered by the
UK Export Credit Guarantee Department so the UK taxpayer could end up
footing the bill for the UK's disastrous policy of promoting water
privatisation in developing countries."