Water Privatization

Water is one of the most essential elements for life. Over 71 percent of the earth is covered with water but only 1 percent of that water is fresh water. The scarcity of fresh and clean water leads to the world to a situation where at least 1 billion of people lack access to clean water and over 2 billion of people lack access to the facilities of proper sanitation. This shortage of clean water creates problems like public health, pollution and widespread environment contamination. It has been estimated that the shortage of clean water kills almost 10,000 to 30,000 children everyday. The water consumption increases day by day and it has been estimated that it increases more rapidly than twice the rate of human population.

Corporate privatization of Water

The water has now become an economic resource managed by the market forces. The governments of such countries, who cannot afford to start and maintain the projects to overcome the difficulty of water scarcity, give the control of this resource to private interests, which in turn are capitalizing on the growing scarcity of water. According to the reports of World Bank’s Private Participation in Infrastructure (PPI), there were only 8 projects of water and sewerage in developing countries during 1984 to 1990, which increased up to 97 between the years 1990 to 1997. There are actually five financial concerns, which are associated with the privatization of water. These concerns are:

1. Water is a resource necessary for life; hence there is much at stake rather than only financial benefits while making decisions about water allocation. The corporate privatization of water to some organization give them control over the lives of millions of people, and they would exercise their monopoly to maximize their profits
2. The history of water industry has shown the allegations of bribery, misappropriation of funds, high consumer prices etc.
3. It is also to be noted that the privatization of an important resource like water means that the management of water is based on the scarcity and profit maximization rather than a long-term sustainability. It is possible that the organization puts their profit before the sustainable water management
4. The trend of privatization gradually reduces the democratic involvement of governments and the citizens in water industry’s water management decisions. Hence the government and the public of a country become unable to ensure that the resource of their country managed in an efficient manner. There is also a possibility that if monopoly of a private organization is established it is almost impossible for the government to reverse it.
5. According to the records, it can easily be said that the countries that have the worst water crisis have the lowest GDP and are the home of the poorest people of the world. If private organizations establish their monopoly over the resource of water there, it results the access of water only to those who can afford it.

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Desalinization of Sea Water

It has often been thought that desalination is only used for the removal of salt from seawater. This is a wrong concept. Desalination is actually the process of removing any material and most organic chemical compounds from the water. Desalination can be defined with the term “purification” of water, more appropriately.

There are two process or technologies, which are used to purify the seawater. These technologies are:

• Reverse Osmosis: In this process the Seawater is forced through a semi-permeable membrane, the function of this membrane is to restrict the salt and other minerals and allow water to pass through it.
• Distillation: In this process Seawater is heated to produce steam, this steam is then condensed to produce water without impurities

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It has been estimated that the distillation unit capable of producing 9 gallons of pure water per day cost around US $ 1500. The other expense is only the power consumed to purify the water. Thus a gallon of fresh water can be produced from seawater for about 25 cents. Desalination is considered to be a cheapest method for the purification of water. According to the Saline Water Conversion Corporation, there were 27 desalination plants in 1999, producing 745 million cubic meters of purified water per day, which is approximately equal to the 70 percent of the required drinking water.

Benefits of corporate Commercialization of water

The most important benefit of corporate commercialization of water is to solve the problem of the scarcity of water by converting the waste and seawater into fresh drinking water. The other direct socio-economic benefit is that, the organizations involved in the privatization of water have created the employment opportunities at a considerable extent in some of the poorest countries.

Role of World Bank in Commercialization Process

The financial success of most of the organizations of water industry is supported by the international financial organizations such as the World Bank, the I.M.F and the European Bank for Reconstruction and development. According to the database of the World Bank, the corporate commercialization of water supply is composed of 14 percent of its lending. The World Bank has invested more than $ 33 billion in water related projects during 1985 to 1998. This whole-hearted support from the World Bank allows the corporations to incur less risk while reaping the maximum profits of their water projects. For example, at one instance, Suez Lyonnaise invested only $ 30 million of the promised $1,000 million for improvements in a subsidiary’s project, the rest has been provided by the World Bank and the Argentine banks.

The World Bank and other international financial institutions have very biased and partial role towards the corporate commercialization of water. From the mid 1980s World Bank has been developing policies and strategies for the better management of water resources, but all of these policies are biased towards the privatization and the involvement of large corporations. This partiality explains the trend towards the multi-pronged structure of the large corporations and the joint venture approach taken in many occasions.

According to a report, the World Bank has believed that the water availability at low or at no cost is uneconomic and inefficient; the World Bank is of the opinion that even the poor have to pay for water. In the same report the Bank has stated that, the poor has been given a wide range of options so they can choose the level of water services for which they are willing to pay.

The World Bank has initiated water sector reforms whose direct aim is the privatization of water resources and commercialization of water management. Hence the World Bank has suggested a shift from “supply oriented” to a “demand oriented” approach. According to this logic, the economically powerful will override the needs of the poor.


In summary, it can be said that world is seriously facing the crisis of clean water, which is gradually increasing. Although the privatization of water resources helps to solve the difficulty of scarcity of water, it also gives the organization, the total controls over the water resources.

If the corporate commercialization is the only solution for the difficulty of water crisis, it is the duty of the respective government to ensure that this privatization would not aggravate the crisis.

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