Sue Kedgley

Water and democracy

by Sue Kedgley

Every New Zealander should be worried about Rodney Hide’s latest bill on local government — which will allow our water supplies [DOC] to be controlled and managed by private companies for 35 years, and will force Councils to focus only on ill-defined ‘core business’ [DOC] (which excludes, amongst other things, the environment).’

Multinational corporations are scouring the world, looking for water supplies they can take over and run for a profit. They know that water is going to the be the oil of the 21st century — a scarce resource that wars will be fought over — and they are keen to get their hands on as much of it as possible.

Now they have New Zealand in their sights, aided and abetted by Rodney Hide and the Key government.

This Bill will allow the management of our water resources to be transferred to private corporations, and will transform the provision of water services from a public good to a source of private profit. It will also transform water from something that is essential to human life, into a commodity to be traded for profit.

Once a Council has entered into one of the 35 year public private partnerships, the driving influence on all decisions relating to water will be the return to the shareholder, not the public interest.

Many of these sorts of public private partnerships or water privatisations, have proven disastrous overseas. They have resulted in soaring profits for shareholders — and soaring price rises for consumers. Instead of upgrading infrastructure, companies use the savings to maintain and increase their dividends, so they have resulted in widespread under-investment in water infrastructure (as happened to rail when Faye Richwhite took over its running).

There has also been, typically, a sharp rise in the number of households having their water supply disconnected or cut off, which endangers the health and well being of residents.

The contracts that are negotiated with the companies are invariably ‘commercial in confidence’ so you cant work out what’s in them or what the terms of the contract are. Some contracts have a guaranteed rate of return for the private operator built into them, for example.

And what happens when the companies (many of which are private equity companies) go bankrupt? Who takes over the contract then — their bank? What happens when a company passes the contract over to another subsidiary. The company that runs the local Wellington sewage and water treatment plant has changed hands three times in the last few years.

These are just a few of the reasons why we should never allow something that is basic for human life and survival — an asset that has been built up over generations — to pass into private hands.

We need as many people as possible to make submissions against this bill. Submissions will be called for shortly and I will post a submission guide on here.

To read Sue’s speech on the Local Government Act 2002 Amendment Bill, click here.

Published in Justice & Democracy | THE ISSUES by Sue Kedgley on Wed, May 5th, 2010   

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