Introduction
There are various predictions by the World Bank and the World Health Organization that, by 2025, 66% of the world’s population will be without fresh water for drinking. The obvious reaction to this crisis would be to make efforts in conserving existing water supplies, increasing conservation endeavors, assisting vulnerable groups, controlling the population and increasing awareness to the public of the impeding consequences.
Nonetheless, this is not the way of thinking of corporations. Instead, corporations are of the opinion of maximizing profits. To imply that these corporations should be left to run this precious resource is an understatement. These natural resources are better left in the hands of the public in order to ensure good use. This paper seeks to look at the various disadvantages of privatizing water.
Disadvantages Water Privatization in St Louis
Rise in Water Costs
It is important to understand that corporations are run solely for profit making. It would therefore be naĂŻve to expect the prices of water to come down. In fact, dividends and income taxes add up to 25% of the operational costs; which is therefore transferred to the consumer. In Missouri, most of the cities have had to drop privatization of water to save money. Similarly, Webb city had to drop privatization after discovering that it was more expensive than public operation (Hausmann 22).
Worsening of Water Services
The aim of most private companies is to make money. With this in mind it, it is only logical to expect these companies to try cutting down the running costs by either: reducing the work force, using cheap material and causing unnecessary delays in maintenance work. In 1995, the state of Liberty Mo discovered that the private contractor had been exceeding the levels of trihalomethanes an element known to cause cancer.
Loss of Jobs
In reference to other cities, a private contractor in St Louis is expected to reduce the number of workers or fail to replace those who leave. Typically, privatization results in loss of one in every three workers in the water department (David 15).
Veolia’s Poor Record
In recent years, Veolia, which is the largest water company, has come under huge public criticism. This is because of its numerous setbacks with the recent one being in its backyard in France. In 2009, Paris ended its contract with Veolia citing poor service delivery and high rates. A similar case occurred in the state of Indianapolis when the state decided to pay off the company $29 million to terminate the contract. The problems with Veolia in Indianapolis were pervasive ranging from: massive cuts of benefits for non-union members to high costs of services (Hausmann 22).
Ethical Reasons
The Utilitarian theory argues that people ought to act in a certain way because it gives them more happiness than anything else would. In essence, it is moral for one take action only when he/she is sure that the action maximizes utility (Happiness and well-being) of everyone. In the case of St Louis, it is immoral to privatize water, as it will lead to an increase in price, low quality services and poor sanitation. For people to be happy, public operation of water will have to continue.
Kant theory affirms that any action taken should treat man as an end, and not as a means to an end. It is therefore immoral to transfer the mandate to run water to a few individuals. Water should be left under public control as way to achieve utility (O’Farell 2011).
Privatization is Hard to Reverse
Once a deal is signed, it becomes very hard for the municipality to withdrawl. In case of breach of contract by the water company, it is very difficult to prove breach of contract in a court of law. It is possible for a multinational company to use NAFTA tribunals to contend the reversal of a deal. Under GATS as soon as a pact is made, WHO extends special protection to international companies. In fact, most deals that are brokered by the World Bank are accompanied with guaranteed cash payment in case the government decides to renege on the contract. The state town of Chattanooga, for example, tried to have its water control back from a private company named Tennessee-America.
This was because of the high rates the company was charging for fire hydrants. What followed was a fierce court battle that would eventually see the two parties resolve their case outside court. The company agreed to reduce its fire hydrant rates but refused to hand back the water control to the city (Roland 94).
Conclusion
Water is a precious natural resource for human consumption. Actually, most cultures consider water as a basic human right. If rights to control water are given to corporations, whose sole aim is to maximize profits, million and billion of people will be left without access to water. Corporations are quick to claim that market variations will eventually bring sanity in the water consumption. Nonetheless, it is a fact that water resources need public control to ensure the people’s needs come first and not money.
Works Cited
David, Hunn. “St. Louis to Sell Water Division? Not Now, Say City Staff.” St. Louis Post-Dispatch. 2.1(2010): 14-28. Print
Hausmann, William. “The Relative Economic Efficiency of Private versus Municipal Waterworks in the 1890s.”Business and Economic History 34.2 (1996): 22. Print.
O’Farell, Rahul 2011. Utilitarianism, Kantian Ethics, Natural Rights Theories, and Religious Ethics. Web.
Roland, Eutsler.“Public and Private Ownership of Water Supply Utilitie.” Annals of the American Academy of Political and Social Science 201 (2011): 93–94. Print.