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Too precious to privatise

Roslyn Ross is a regular contributor to Webdiary. Her last piece was The drugs of choice and the choice of drugs.

by Roslyn Ross

Are some things too precious to privatise? Water for instance? It’s an even bigger question as water restrictions are put in place across the country and we find ourselves in the grip of the worst drought on record.

Next to oxygen, water is the most important factor for survival and while we can live for weeks without food, we will die in days without water. That’s because every cell in our body contains water and the average adult is 60 to 70 percent water and thus dependent upon supplies of clean water for a long and healthy life.

So, given that water is the next most important factor in our survival after air, does it make sense to put it into private hands? Should something which is in essence a life-saving ‘gift’ be turned into a commodity sold for profit? Would we allow the air we breathe to be privatized? No doubt, if it could be it would be.

But water certainly can and has been to a large degree with varying degrees of ‘success’ it would seem. I’ve been in the UK for the past couple of months and water, or rather the lack of it and the waste of it, has been front page material for most of that time.

Surprising as it sounds, southern England, like many other places in the world is in the grip of drought. And because of that people face the likelihood of water being ‘rationed’. The talk is of communal stand-pipes in the streets, something which happened once before in the 70’s.

More than that, the good, if thirsty citizens, face increased charges for the water they use because it has been privatised and scarcity affects profit margins. Perhaps not so surprisingly, it seems that the corporate ‘water-owners’ have been less than careful and charges have been laid that countless gallons of this precious liquid have been sloshing down drains because of lack of maintenance on broken pipes.

The columnist, Polly Toynbee, was one among many to lash out when she wrote in the Guardian earlier this year that "privatisation will always stand out as an unequivocal scandal."

Toynbee, not one to mince her words at the best of times, said the privatisation of water, UK style, is a classic example of ‘what not to do.’

"Making millions out of an element that falls freely from the skies, profiteering from rivers, rain and clouds affronted most citizens," she said. "It gifted shareholders an absolute monopoly over a necessity no one could do without. There was no chance to choose from another supplier (unless perhaps bathing in Perrier)," she added.

The price of water, said Toynbee, doubled after privatisation and saw great profits made while the public got nothing. Thames Water took hefty profits, up another 6.1 percent this year, while letting a third of its clean water leak from broken pipes. The water regulator, Ofwat, has also failed the people by standing meekly by as the Thames Water chief executive was paid nearly $A2million a year in salary and the public saw water bills rise by 21 percent in recent months.

There are billions of litres of water gushing out of Britain’s crumbling mains network every day as the country faces its worst drought for 100 years. Australians are only too well aware of what drought means but it’s a whole new experience for the Brits and not one they are relishing given that figures from Ofwat, the water regulator, show the privatised water companies are losing 3.6billion litres a day, up to 500 pints per home per day.

And the Brits are not alone in terms of their water woes. In California, in the small farmworker’s co-operative of San Jerardo, the residents have been drinking bottled water for nearly five years because the tap water they buy from a private company is unsafe.

In a neighbouring town, Chualar, the families are trying to come to terms with exploding monthly water charges … some have gone up by more than 1,000 percent.

But the people are not taking it lying down. There are moves afoot to fight for reliable supplies of clean water, reasonably priced. In Felton, in the Santa Cruz mountains, the people voted last year to tax each household up to $700 a year in order to take control of the local private water system after the new owner proposed a series of rate increases.

While some may argue that government-run water systems do not need to pay taxes or produce a profit, and others will counter that big companies can operate with less overheads, the core issue in the dispute is whether or not such an indispensable resource should be in private hands, at the mercy of market forces.

And not just market forces, but political forces as well. The ten largest investor-owned water utilities in California spent more than $1million from 2000 to 2005 on state and local political races and ballots.

For all those who think ‘it couldn’t happen here,’ think again. It was little old Adelaide which handed over the entire management and operation of its drinking and waste water systems to a consortium called United Water International, led by Thames Water…. the same lot who are creaming off huge profits while British water runs down the drain. The Government still has some control over what happens … for the moment anyway.

But there was something of a ‘reality fix’ 18 months after the sale, when people began to complain about the smell of the water and say that it was making them ill. An investigation eventually found the cause and the smell was eliminated through the use of chemicals. The problem had originated in the first place because UWI had neglected maintenance of the treatment plant’s lagoon systems.

Independent MP, Selwyn Johnston, said in a statement in February, that water was the sleeping element in the privatization debate.

Adelaide, it seems, was just the beginning. But is it a ‘beginning’ with an end we won’t like? Selwyn Johnston is one of many who think it is.

Johnston says the potential $70 billion to be realised through the sale of water assets is just too tempting for State treasurers to ignore and at least three have commissioned reports to evaluate the impact of privatisation.

"In Australia," said Johnston, " investment bankers are salivating at the prospect of water privatisation. Many have hired specialists from the public sector to prepare them for when the lobbying intensifies."

Australian Governments are studying the British model of privatisation closely, says Johnston.

Let’s hope they take note of all those leaking pipes or it will not just be Adelaide where every time someone turns on the tap, the cash registers ring on the other side of the world.

Interestingly, just three companies now control 75 percent of the world water business. United Water, which owns Adelaide’s water supply, is a joint venture between three water multinationals based in France, Britain and the US. The big three who take a cut at every turn of the tap are Veolia Water at 47 percent, Thames Water at 47.5 percent and that finger-in–every pie ‘yankee’, our old friend Halliburton KBR at five percent.

It seems that all sides of the water-privatisation debate agree that the value in water assets lies in the fact they have a captive customer base. Since without water we die quickly and with not enough of it we get dirty and die sooner, then it is not surprising that they have us, so to speak, by the ‘short and curlies.’

And of course, in a world where profit comes first it’s going to be very important to have adequate regulation or the end result is excessively high prices, poor service, or both. What it comes down to is how much do you trust your Government to get the regulatory structure right? They haven’t managed to do it in the UK and nor have they achieved it in the US it seems, but maybe that Digger ‘can-do’ spirit will see us through.

The reality is that, for the moment, it has not been put to the test. So far Australian states still have control over their water systems and we have simpler ownership structures. Not only that, we can learn from the mistakes made in the UK and elsewhere. Well, we hope we can.

Perhaps even more troubling are the indications that water has become the ‘oil’ of the 21st century. Yes, we all need oil but we can live with less of it, or even none of it if we had to in a way that we cannot live without water.

The director-general of the United Nations Environment Programme, Klaus Toepfer, said earlier this year that a future war over water is a distinct possibility. He was quoted in an interview which appeared in the scientific journal, Environment Science & Technology.

Toepfer, like former UN Secretary-General Boutros-Ghali, is ‘completely convinced’ there will be a conflict over natural resources, particularly water.

"Everybody knows that we have an increase in population, but we do not have a corresponding increase in drinking water, so the result in the regional dimension is conflict," he says.

What Toepfer would like to see is monitoring of worldwide reserves of drinking water and the establishment of co-operative agreements for the use of bodies of water, including groundwater.

He also calls for ‘economic instruments to stimulate use of new technologies’ to promote water conservation.

The Adelaide Thinker in Residence, 2004, Peter Cullen, spoke on the topic of Water Challenges for Adelaide in the 21st Century.

The prediction, he said, was that within 25 years around one half of the world’s population, some 4 billion people will be living with water scarcity.

"Water wars are likely," he said.

Cullen went on to say that Australia was reasonably well endowed with water in comparison to the many parts of the world that are experiencing real water scarcity right now, but even in Australia there were great tensions as to who should have access to water.

A general breakdown of water usage shows 50 percent goes on gardens and outdoors; 15 percent in the bathroom; 13 percent in the laundry; 10 percent in the kitchen and 13 percent in the toilet. Some 40 percent of mains water is used to water gardens in public and private open space.

"If we can sort out how to manage our scarce and valuable water resources, the world will beat a path to our door to learn how to do it," Cullen said.

The vulnerability of the River Murray system, salinity and the challenge of climate change are factors which will impact on our water future.

"South Australia," said Cullen, "has the capacity to become the test bed for world’s best practice in water management."

We need the commitment of the community and Government to show the world how to live sustainably in a dry country. The opportunities and challenges ahead are to protect the existing sources of water, to reduce demand through demand management and to develop alternative sources of water including recycling, using stormwater and the desalination of saline water.

Water scarcity is a function of supply and demand and is affected through population growth and increased per capita use. It is also affected by deteriorating water quality and here, agriculture is the biggest polluter. It is clear, for all of these reasons, that water scarcity will be a problem in some regions in the future. Add to that the impact of Global warming which is likely to alter rainfall patterns, as it seems to have done in the UK, and it is clear that long-term planning is needed.

There will need to be improvements of water efficiency and perhaps a restructuring of economies away from water-intensive sectors. Given that irrigation accounts for almost 70 percent of water use worldwide we are going to have to be more careful not just about what we grow but where we grow it and how we grow it.

In a world where water can only become rarer and more precious, it seems foolish in the extreme to allow it to become a commodity; something to be bought and sold where the only motive is profit. In this instance it is not so much a case of ‘selling our souls’ but of ‘selling our lives’ and watching our future drain away through those ‘golden’ corporate ‘fingers’.


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Once the water has gone, that's it

'"Once the water has gone, that's it."

This stating the obvious from River Murray Water acting general manager Tony Morse as quoted by Riccarda Burley in her article of 24 October in The Border Morning Mail entitled No Dam Idea.

Burley declares that "the Hume and Dartmouth dams are expected to be bone dry by April and the Murray Darling Basin Commission still has no back-up plan for preserving water".

So one reads that Albury, which draws its water from the Hume, is only on Level 1 Water restrictions, which still allow the watering of lawns and gardens during certain hours, and the hand held hose rinsing of cars. Unbelievable. Clearly level 4 if not 5 Restrictions are called for right now.

The Hume and the Dartmouth normally hold 3 million megalitres each and are the main dams in the Murray system. The Hume is down to 11% and the Dartmouth, which is now feeding the Hume is on 45%. Flows from the Dartmouth are to be increased to the maximum to meet releases from the Hume for irrigators downstream, not forgetting those waiting at the mouth in the hope of a drink. 

Burley quotes Morse: "With no significant change in weather patterns and run off, the Hume, the Dartmouth and Lake Victoria will be empty by April. Once we run out of stored water, that's it. It's certainly not a comfortable postion to be in." The inflow to the Hume in September was the lowest on record. No doubt due to poor snow melts as well as record low rainfall.

So John Howard now calls for a meeting with State Ministers to discuss the national water crisis. Forget the horse and stable. There is nothing to equal trying to turn off the tap after the water has gone down the sink. I said a year ago there should be an urgent national audit of water and measures put in place to deal with a potential water shortage disaster. Goulburn and Toowoomba have been flashing a warning beacon for the past three years telling us that something serious was happening. I cannot believe that it has all got to this.

The failure of leadership, both State and Federal on this matter is mind boggling. Is there such a thing as criminal neglect of the national interest. If so it is time we locked them all up and started running the show ourselves.

Well, hello to you too,

Well, hello to you too, Malcolm.  Well, Malcolm B, as I remember, not to be confused with Malcolm C Duncan, Malcolm D Duncan, etc.

Yes, I am a dill(etante), who still doesn't understand why you didn't sum up Roslyn Ross's post into a paragraph, as you said it could be, rather than bothering, by whatever means, to attack her on a word count.

Do it, Malcolm. 

And then, I would be interested to hear your reactions to this issue, rather than your reactions to the poster.

He has F Kendall

F KendallMalcolm rose to the challenge further down in this.

I see in "the Land" this week that Cubbie station values its assets at 400 million. So I doubt either the Qld State or the Federal Government will be taking up any options there.

The place is still sitting high and dry anyway.


If anyone running for a State legislative body, anywhere, doubts that water is a commodity that can be extorted, stolen, ripped off, and then sold (or not) to the very people it has been stolen from, and this enabled or perpetrated by corrupt & callous state legisltures, let him read: Cadillac Desert: The American West and Its Disappearing Water, by Marc Reisner, Power Politics, by Arundhati Roy. Or, at the very least, go and watch Chinatown, again.

He giveth, and he taketh away

It is a pretty silly system to me. First, over-allocate water to irrigators, charge them for it, don't deliver because it is not there, but charge them for it as if they got it anyway. Witness the bloke who got a cheque for $100 000 in interest rate subsidy drought assistance (God he must have some debt!) from the Feds and at the same time a bill for $60 000 from the State Government for water he did not get. Talk about give with the one hand and take away with the other. Takes some beating.

Now what should be done about all this over-allocation? I assume the Government will have (and they are trying) to buy some of it back since the irrigators have been paying for it all these years, whether received or not. But at what price? If you have an irrigation licensed farm and you sell your irrigation allocation permanently, then the value of your farm will crash. Farmers may be pressed but they are not on the whole stupid.

And a point I raised elsewhere. If the NSW Planning Minister wants to put his bib in and limit rural subdivisions as he is doing right now, thus reducing a landholder's possible return when he is forced to sell his land for less, then why would a farmer sell back any irrigation license that goes with that now unsubdividable land? There are a lot of small farms in the Sydney catchment south of Sydney that will be in that situation. They may not currently use their water allocation, but they are sure as hell not going to sell it now all this nonsense has come up.

A lot of farms in the catchment are simply unviable as they are already only a few hundred or less acres. But now they are being told they can only subdivide down to 100ha, or around 250 acres. What makes the Minister think anyone can make a living off 250 acres anyway? The man is a fool. If those on the rivers have any sense they will now hang onto any water allocation, and if necessary gear up and use that water. Get back into small dairy farming again maybe? Is that what the Premier wants, because Sydney is going to get a whole lot drier if that happens.

And what about Cubbie Station and those two places next door to it, set up to divert one and a half times the water in Sydney Harbour? How the hell did they get to be allowed to take that much in the first place? But currently those places are sitting high and dry, and some of the owners want out. Here is a chance for Howard's water king to step in and buy at least some of that back. But no way, it seems. That might be thinking ahead too far. And I would agree with Peter Costello here when he says just because it is dry this year does not mean it is going to rain next year, and there may be up to ten dry years, with only five behind us.

Well if no one can see what that will mean if it does turn out that way, then heaven help us all. Surely it is that very possibility that we should be planning for and securing as much water as possible for the cities and the environment. But it won't happen and the remaining water will well and truly be gone before ten years are up. Scary. Perhaps we better sign up Bob Geldof now to hold a benefit concert for us all.

We are spared

Roger,  it's not surprising that if this is best Malcolm can do we are, in the main, spared his efforts.

Malcolm, like some others, has a knee-jerk adolescent response to anything I write. He cannot bear to treat it seriously and so indulges in insults, name-calling and derision. All of which reflects upon him, not me.

Many of his posts are time-wasting excercises so let's not waste any more time on it.

Richard, thanks for the links. I think the climate will push people toward greater awareness. That is if the 'unusual' weather conditions continue. If the place is drenched next year everyone will forget about it again.

OK but..

Malcolm B Duncan: how long do you think it will take to get it all back out again?


F Kendall, cut'n'paste and word count.

Ooooh - challenges, challenges

First, Roger Fedyk, if I wanted to be an editor rather than a member of the WD community, I’d put in an application.   Secondly, don’t challenge unless you send your second to deliver it.    Thirdly, Word ranks this at 160 words (and I got some Latin in):

Is there a justification for privatising such essential nutrients as water?   Countries like Britain have tried with varying success given wastage levels and concern solely for profit.   Polly Toynbee [insert Toynbee link] doesn’t think it justified and others agree [insert San Jerado link]. Some US locals are advocating increased taxation as a curative.   Against this, others argue that water is a basic necessity for all and should be freely available  - not regulated by artificial markets or political concerns (read contributors to party funds).  Locally we have the Adelaide experience [insert non-existent link here followed by link to loony Selwyn Johnston and Peter Cullen].   It is asserted that three companies control 75% of water outside of Australia [insert non-existent link here] - control of water means control of the populace [insert Toepfer link here].    Yet, in a dry continent we need to find a viable modus vivendi both now and into the future given the possibility of an increasing population.

As to your arcane reference to my wordiness, does that relate to my succinct, witty posts or are you misunderstanding what we in the pre-post-modernist world used to call literary style?

Never The Twain Shall Meet

Malcolm, the venerable Mark was a humorist, commentator and novelist of the first order. 

Not sure what sort of "literary style" your musings represent but they find a home in the overall WD scheme of things. Perhaps that is enough.

On your initial statement, I have not been an editor since the switch from Fairfax. My contributions, except for some infrequent technical forays, are as you read them.

Just wondering?

Malcolm B Duncan, but what happens when all the H2O ends up in the ocean?

Malcolm Duncan..."Rosalyn

Malcolm B Duncan..."Rosalyn Ross has said in 2970 words what could have been said in a paragraph."

Lord, I love this.  Did you actually count every word?

And, if so, was there really no more enjoyable or productive way that you might have spent this time?

Carp - dreadful things in the water

No, F Kendall, you dill.   I cut and pasted it and then used "properties".   I did have to skip-read it first though and secondly for my post in response to Roger Fedyk's "challenge".   While I enjoyed neither, I thought logic required the use of the time.

As to Phil Moffat: we take it back out.    After all, that's how we got an atmosphere.

Carp idea? Hmm.

Malcolm B Duncan   "... that's how we got an atmosphere"

Now I'm wondering what we do the ecosystem if we get too carried away with evaporation reclamation.. a la the Twin Lakes concept.   What doesn't go up, after all, won't come down.   Carried out on a large enough scale you could bypass the biosphere altogether.

Moments like this I think I need to get a life. 

Carpe Aqua seems to be the order of the day, these days.  How much of global liquid consumption does the Coca-Cola corporation control?  I heard 10% the other day.  I'll have a look in the morning.

I'm working on a way t0

I'm working on a way to privatise air:  but, although I'm trying hard, realistically I know that the smarter guys are way in front of me.

Forgot to mention, Roslyn

Thames bowed out of United Water last year, leaving Veolia at 95 % and KBR at 5%. I can' t find the original bulletin of this change but you'll notice here that Thames are no longer listed as a parent company.

KBR's Malcolm Kinnaird, who was reportedly the major instigator of the deal, is still on the board .

I agree that knowing what’s going on is important. This also applies for property developers as well, Wouldn't it be great if you could acquire otherwise unsustainable property before the announcement of a water supply? I'm not saying that this is what's occurring on Hindmarsh Island, but the possibility exists.

Pertaining to all of this, why the hell are Halliburton trying to set up a nut farm on the Murray? What's wrong with Canberra? Seriously, what other business ventures are the company setting up with knowledge of future water plans in mind?


The Hazelnut farm (which was presented to overseas investors) and the Lake Alexandrina project are both being organised by the same KBR engineer, Mr Tony Reid.

I know I have an overly suspicious mind, but when an engineer creating water projects is creating real estate investment oppurtunies that may rely on his works for viability, and then sells the projects to offshore interests, wouldn't  this level of corporate nepotism (be considerable as the ultimate in insider trading?  Extrapolating numbers of engineers and projects within one company infers the possibility of large tracts of arid land being made available for international profit taking before the locals have a clue what's going on.

You'd like to think that Premier Rann, when endorsing the water projects is making sure that at at least some of the profits from the water work is remaining within the country if not the state.  I doubt it.

At least the Aboriginal community around Overland Corner appear to have had the sense to see through the smokescreen.

F Kendall, all you have to do is acquire patents to the technology that modififies air into a form that the powers that be desire, and you'll be as good as the owner of the resource.  Wind farms are a good example.  You catch my drift?

I'm buggered if I know,

I'm buggered if I know, Roslyn. It looks to me that nothing's going to be done unless my Halliburton mates can make a buck out of it. Every time I hear an "expert" propose desalination I look to see who his last paymaster was, and haven't been surprised.

David Suzuki said on local ABC Radio recently that desalination was what you did when there is nothing else left to try, yet the owners of the technology are avidly pushing its use. The same with stormwater management, on which KBR carried out the Adelaide study. Ditto the Twin Lakes project for Lake Alexandrina... hundreds of reclaimed gigalitres and land space for townhouses to boot.

The water business here has been shonky for years, ever since the winning KBR -led United Water proposal was put in after the submission deadline. Accusations that Premier Olsen let Cheney's men have a look at the other bids to improve their paperwork have never quite gone away

Okay we need the water. I'd just like to know how much we're going to pay for it in the long run. If all our water flows through KBR plants and pipes, there's going to be a cost. It would be nice to know how high it will be.

Perhaps other corporations have alternative approaches? It would be nice to hear of possible solutions from at least one other company.

What I can see happening for the next few years is every KBR water option being approved paid for in tax dollars. Premier Olsen ended up as Consul General to New York, and I wonder what Premier Rann's kickback will be.

It seemed like a good idea at the time

Richard: I think one of the difficulties is that privatization seems to fall into the category: 'it seemed like a good idea at the time.' It also fitted the 'greed is good' mentality of the era and was and is a godsend for cash strapped governments, whether State or Federal.

The average person probably does not think too deeply about the ramifications and is only likely to focus on the issue when the bills get truly nasty.

I suppose my view is that some things should not be privatized simply because they are facilities or services which citizens should have in a developed and civilized society. Power, water, care of the physically and mentally disabled, and prisons, are all things which society needs and which should not be seen merely as a revenue source.

The basis of privatization is that the service must make a profit no matter what. I always found it ironic when applied to prisons because logically that meant the 'business' would always require more prisoners to make more profit and there could be no interest at all in rehabilitation. Unconsciously or not, the goal had to be for released prisoners to re-offend in order to sustain and increase the profit margin.

And I think there is something tasteless about seeking to profit from those who are most vulnerable in our society. My mother spent 15 years in a high care facility, Julia Farr, and I saw what happened there when it became privatized. These places take the seriously brain damaged, of all ages, the completely bedridden, and those with the worst neurological diseases. And now it is all in the name of profit.

But I digress. I don't have any particular answers to water but I do think that people need to be more aware of how our water is collected, distributed and sold.

The current drought is no doubt worse because our water resources, having been bought and sold in some cases, are being over-used. There are some crops which a semi-arid country like Australia should simply not grow and some areas which should not be farmed, or at least not farmed as they have been.

There are also simple steps which individuals can take to lower their water use although from what I read water use in the cities is not our biggest problem. Every Australian home used to have a rainwater tank and should do so again. That's a start anyway.

But these are small things. The big picture in terms of water may well need something akin to the Snowy Scheme. The Ord River scheme has collected massive amounts of water ...... many times larger than Sydney Harbour ..... and only a portion of it is being used.

But awareness, to my mind, is the crucial thing.

Being greatful for small mercies

As usual, Roslyn Ross has said in 2,070 words what could have been said in a paragraph.

I suppose we should be grateful that she hasn't blamed it on Israel - yet. 

The logical problem (and the essential flaw in the argument) is that water has an unusual property not shared by most  "commodities": it evaporates then it moves around and precipitates (I flew through quite a lot of it last week).   Also, there is so much of the bloody stuff you couldn't bottle it all if you wanted to.

Drought is caused by water not precipitating in the right place.   Yet, like mercy, water droppeth from heaven and is twice blessed, blessing both him who takes and him who gives.

While rational people might take the view that there is a better distribution system than the current loony water licence system operating in this country, there's still going to be the same amount of water on the planet.

Thank The Lawyers For Brevity

Malcolm, your comment could be applied to every piece of investigative journalism or even your own wordy speciality in WD.

Let's just break everything down to 10 second "sound-bites" so that we don't overtax our every-shrinking capacity to come to grips with complexity.

 Anyway, here's the challenge. Let's have the paragraph from you covering all the aspects of Roslyn's piece. Should be a literary gem!

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