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Who does water belong to?

When you wash your hands, in the kitchen or on the toilet, in Germany and in most western industrial nations, clean water gushes out of the tap everywhere. Unlike other raw materials, water is barely subject to fluctuations in demand. The top consumers are agriculture, industry and private households. Due to the steady growth in the world’s population, worldwide water consumption has increased sixfold in the last 100 years, in the past forty years alone it has risen by around one percent annually. In order to further expand the infrastructure, large investments are often required by councils, but they often lack the necessary financial resources.

In many countries, old or dilapidated pipe networks and nitrate-contaminated groundwater are increasingly responsible for the fact that the water is no longer clean enough for daily use. The water infrastructure is often dependent on extensive modernisation – an enormous financial constraint on cities and councils. To ensure a gradual expansion of the potable water network, pipe systems and water reservoirs have to be planned, built, continuously maintained and modernised. This costs the public authorities enormous sums. In order to get this dilemma under control to some extent, the water supply has been privatised in many parts of Europe over the past few decades, albeit less so in Germany. A welcome financial injection for the councils, especially in times of budget constraints.

Private companies operate more efficiently than state monopolies and achieve better quality as well as significant savings for the empty city coffers: that was the promise at least. The reality was that cities no longer had control over the water quality and the water price, and after the privatisation of water companies, consumer bills increased dramatically: in Berlin the water price rose by 30%, in France by 200% and in Portugal by as much as 400%. Many areas could no longer guarantee the supply of clean and affordable potable water. The private water suppliers simply lacked a recognisable long-term strategy, with returns seemingly more important than sustainable planning. In response to this, the supply of water was restored to council hands in many places.

Water consumption worldwide
Increasing amounts of water are being used, especially for food production: with almost 70%, agriculture is the world's largest consumer of water, with industry and private households lagging far behind.

Remunicipalisation of the water industry

In Germany, the supply of water and wastewater lies predominantly in public hands. The water price and quality standards are largely set by cities and councils. Nevertheless, the share of private investment is growing steadily, and especially in larger cities, the services are often outsourced. A number of councils took this route years ago in the form of cross-border leasing – the most prominent example being Berlin. Here, plants were rented to US investors.

After reunification, Berlin was faced with enormous financial challenges, and the aim was to resolve them by privatising municipal services. Besides the municipal energy suppliers and the Berlin housing association, the water companies were also affected by the wave of privatisation. There was a lack of financial resources to properly maintain and repair the pipeline network. The city hoped that privatisation would not only reduce debt, but also expand the city's water supply.

Water becomes an object of speculation for international corporations

However, if the water consumption and population growth forecasts fail to materialise and the profit for private investors turns out to be lower than assumed, the city undertakes to pay compensation to the private companies. With this profit guarantee, the companies were able to secure themselves contractually, and dictated the water price to the city of Berlin, which rose continuously. For the investor, billions could be made by speculating on water. After lengthy negotiations, the city of Berlin bought the water company back at great expense and at a huge loss.

We shouldn’t take for granted the fact that clean and affordable potable water is available from the tap in Germany around the clock and that we have a functioning sewage disposal system. In some European countries, tap water is partially undrinkable, but in large parts of the world the situation is even more dramatic: according to Unicef, 2.2 of the world’s approximately 7.8 billion people do not have regular access to clean water. This despite the fact that access to clean potable water has been recognised as a human right by the United Nations since 2010.

Trinkwasser ausgetrockneter See
Spooky atmosphere in the dried up lake: 50 years ago, the Aral Sea was the fourth largestlake in the world - until cotton was grown there and river water was no longer channelled into the Aral Sea, but to the cotton plantations instead. The lake is now less than a tenth of its original are

Pumping out until the wells run empty

Large international corporations have long recognised and utilised the lucrative profits that the supply of water offers: they buy water rights from state water authorities for low fees and pump water directly from the groundwater. This water is then purified and sold. The consequence for the local population is that the groundwater level drops constantly every year, the rivers dry up and the wells suddenly run dry. Water has meanwhile become a commercial and economic good worldwide, with supply and demand determining the price.

Examples from other countries show that the sale of council or state-run water companies to private companies can lead to massive problems – up to and including private water supplier monopolies. Monopolies create an enormous position of power vis-à-vis councils and consumers, with unforeseeable consequences for the building services industry and the trades. As well as enforcing higher water prices, large private corporations can also create the necessary infrastructure in their own production facilities or by subcontractors and have it installed and maintained on site by their own service providers instead of commercial operations.

That’s if they are still serviced at all, as the example of Great Britain shows: after privatisation, the pipeline network there was so dilapidated that not only part of the potable water got lost through leaks in the pipe system, but also dirt and pollutants were able to seep into the potable water unhindered. Consumers were advised to let tap water run out of the tap for a few minutes before consuming it in order to flush out the pollutants – despite the fact that clean water is our most important and valuable nutrient.