Another Water Revolt Begins in Bolivia By JIM SHULTZ Commentary

Pacific News Service
Tuesday December 21, 2004

COCHABAMBA, Bolivia—Five years ago the issue of water privatization exploded here when massive public protests forced out a consortium of firms led by the California engineering giant, Bechtel. Within weeks of taking over the city’s public water company, Bechtel hiked up rates by as much as 200 percent, far beyond what the city’s poor could afford to pay.  

Now, a new Bolivian water revolt is under way 200 miles north in the city of El Alto, a growing urban sprawl that sits 14,000 feet above sea level and is populated by waves of impoverished families arriving from the economically desperate countryside.  

As in Cochabamba, the public water system of El Alto and its neighbor La Paz, the nation’s capital, was privatized in 1997 when the World Bank made water privatization a condition of a loan to the Bolivian government. The private consortium that took control of the water, Aguas del Illimani, is owned jointly by the French water giant, Suez, and a set of minority shareholders that includes an arm of the World Bank.  

Community groups in El Alto charge that by pegging rates to the dollar, the company has raised water prices by 35 percent since it took over. The cost for new families to hook up their homes to water and sewage totals more than $445, an amount that exceeds more than six months of income at the national minimum wage.  

More seriously, organizers say, the company has left more than 200,000 people with no possibility of access to water at all, by failing to expand water infrastructure to the municipality’s growing outskirts. “Without water there is no life, so really it is life that the company is depriving the people of El Alto,” says Julian Perez, an advisor to the Federation of El Alto Neighborhoods.  

Lack of access to clean water is a chief cause of child illness in Bolivia, where nearly one in 10 children dies before age 5. Families living in El Alto’ s outskirts rely on water from wells that, advocates say, are contaminated with industrial waste.  

“Aguas de Illimani committed to cover all of the city of El Alto and they haven’ t done it,” Perez says. Community groups are now organizing for a massive public action in January to take back the water company by force, unless the Bolivian government initiates a process to cancel Suez’s contract and put the El Alto water company back in public hands.  

“Once the people begin to mobilize we will continue to the final battle,” warns Perez. “We will win or we will lose.”  

Bolivian government officials agree that the Suez contract has failed the people of El Alto. “The contract is unacceptable. It leaves 200,000 people without water,” says Jose Barragán, the Vice Minister of Basic Services who has been negotiating with the El Alto groups. “If the company is willing to expand service to 200,000 people then we can talk about it. If Aguas de Ilimani isn’t prepared to solve the problem I’ ll join with the people in El Alto and demand that the company leave.”  

Cochabamba’s experience five years ago casts a shadow over the new water revolt. Both the government and community leaders say they want to resolve the dispute without the kind of government repression and violence that left one 17-year-old dead and more than 100 others wounded. Cochabamba water leaders are also in active communication with their counterparts in El Alto.  

The Cochabamba revolt’s aftermath also holds a lesson for Suez and its co-owners. After Bechtel was forced to leave, it and its fellow shareholders filed a $25-million legal action against Bolivia, in a secretive trade court operated by the World Bank. That demand—which far exceeds all reasonable estimates of the company’s investment—has drawn a firestorm of international protest.  

Last week Barragán, who is also in charge of the Bechtel case, revealed that the company wants to drop its demand, in exchange for a token payment equal to 30 cents. According to Barragán, Bechtel’s exit is being held up by one its partners in the Cochabamba water company, the Abengoa corporation of Spain. Abengoa now finds itself in the sights of social justice groups worldwide.  

Regardless of whether the people of El Alto succeed in forcing Suez to leave, one question remains, as it does in Cochabamba: Where will the funds come from to provide poor families basic access to safe water? Providing water and sewage hookups to the homes that lack them in El Alto would cost at least $25 million, on top of the costs of expanding the basic water infrastructure to the city’s new neighborhoods.  

In cities like Cochabamba and El Alto it is clear that poor water users cannot pay the full costs of water at the market prices demanded by private companies. Cross-subsidies from wealthier water users to poor ones can help, but still don’t come close to covering the enormous costs of constructing water systems. Neither can a poor nation like Bolivia afford to cover water costs out of its national treasury, which already falls short of adequately funding other basics such as health and education.  

In 2002 the United Nations Committee on Economic, Social and Cultural Rights declared, “The human right to water is indispensable for leading a life in human dignity. Water, and water facilities and services, must be affordable for all.” In Bolivia and elsewhere the question remains: Who will help the poor pay the bill? 


Jim Shultz is executive director of The Democracy Center based in Cochabamba, Bolivia (www.democracyctr.org).