You are here: Home / What we do / water / Latest news / 2007 / April



Apr 20, 2007

world bank water project in asia

by admin — last modified Apr 20, 2007 12:19 PM


world bank water projects in asia


Philippines : Asia's Largest Water Privatization

In January 1997, Manila opened the bidding for the privatization of the city's Metropolitan Waterworks and Sewerage System (MWSS), Asia's largest and, by some measures, the world's largest water sector privatization to date.

MWSS, responsible for delivering water and sewerage services to Manila's 11 million residents, invited private water groups to bid for two 25-year concessions, one for the city's west side, one for the east.

Manila Water Co., won the eastern concession by promising a huge 74% cut in water rates. On the other hand, the Maynilad Water Services Inc., won the western zone with a promise to lower rates by 44%.

Both concessions would run for 25 years with the pledge that no rate increases will be implemented in the first 10 years of operation. Consequently, people welcomed the prospects of better and cheaper services but some keen observers already warned of the entry of old oligarchs and foreign capital into vital public utilities of the country.

Six years after the privatization, water fees were increased five times without corresponding improvements on water services and existing infrastructure. Water charges tripled in 2001 and in 2003 has an 81% increase in the eastern zone and 36% in the western district. As services become more expensive and inefficient, poorer households suffered. Similarly, millions of Filipinos are still not connected to piped water and almost 50% of the water supply is lost due to leakage and theft.

Water Districts Outside Metro Manila

The Local Water Utility Administration (LWUA) is in charge of managing water systems outside Metro Manila. The same agency exercises an exclusive right to provide water and collect fees from around 500 water districts nationwide. LWUA funds the construction of all water facilities from fees collected from consumers, loans from ADB and the World Bank and official development assistance (ODA). Local government units either on the provincial, city or municipal level appoint LWUA Board Members for each water district. LWUA is not a profit-making agency but its mode of operation is commercialized in the sense that it is allowed to recover its investments at full cost. As a consequence, LWUA only operates in urban areas where the population is huge and whose residents can afford to pay water services.

The Freedom from Debt Coalition monitors the socio-economic impact of local water districts that have been privatized. Some of these districts suffer the fate of Metro Manila residents who are paying higher water fees in exchange of poorer service.

visit the website of the Philippine Friends of the Earth group, The Legal Rights & Natural Resources Center-Kasama sa Kalikasan

Indonesia: Privatization of Jakarta Water Utilities

image: WAHLI/FoE Indonesia
The World Bank's involvement in water privatization in Jakarta started in June 1991, with a $92 million loan. The loan was used to build a new water purification installation at Pulogadung, Jakarta . Both the World Bank and the Overseas Economic Co-operation Fund of Japan advised the government to privatize its water utilities in Jakarta .

The privatization of Jakarta's water is the story of powerful multinationals that deftly used the World Bank and a compliant dictatorship to grab control of a major city's waterworks. In alliance with the Suharto family and Suharto cronies, Thames and Suez won favorable concessions without public consultation or bidding. As riots spread, the companies' executives fled, according to Indonesian waterworks officials, exposing millions of Jakarta residents to a potential catastrophe. Eventually they returned and renegotiated their contracts under somewhat less generous terms. As for the ostensible reason for privatization — bringing water to the poor and improving the finances of the waterworks — the companies' record is mixed.

World Bank Loan to Reform Water Policy

In 1998, the World Bank approved a $300 million loan to the Indonesian government. The proposed loan would support a structural adjustment program of policy, institutional, regulatory, legal, and organizational reforms in the management of the water resources and irrigation sector.

The World Bank placed two key conditions on the payment of the loan:

  • A new Irrigation Policy, decentralizing the management of irrigation to farmers' organizations. Decentralization means farmers will bear the cost of management and maintenance.
  • A new Water Management Bill, which has caused widespread protest from NGOs, farmers, urban poor groups and academia. The main issues coming from the draft of the Bill are lack of protection of water rights of the community. Instead of giving a clear recognition and protection of water for people, it gives more access to private investment to have concession on water resources, from water surface and ground water.

visit the website of the Indonesian Friends of the Earth group, Wahana Lingkungan Hidup Indonesia (Indonesian Forum for the Environment)


Cambodia is remarkable for the number of private initiatives in water supply provision that have sprung up in urban and rural areas, encouraged by the weakness of public utilities and the absence of a regulatory regime. Outside Phnom Penh and Sihanoukville, almost all new investments in water supply networks have been made by local private investors, ranging from a few thousand dollars for villages of a few hundred families to $900,000 for the provincial town of Banteay Meanchey (population 100,000 in 2000). In 1997 and 1998, four private companies were granted concession rights for water supply in four large towns.

The concessions were granted without appropriate bidding, resulting in different privatization processes. The Government sees no need to add specific provisions to encourage service access for all because it assumes that the private sector automatically wants to sell water to the greatest number of people. Understandably, the private investors have established networks in the most densely populated urban and commercial neighborhoods, where the investment required is lowest and consumption is highest.

Households served by private utilities pay significantly more for piped water services, and some lower-income households that are not served by private utilities are partially limited by the high connection fees (as opposed to the regular monthly payments). Overall, while this recent effort to introduce private sector involvement in the water sector in Cambodia is encouraging, the full gains have not yet been realized.

read more about the world bank's involvement in natural resources

Source: P. Raja Siregar (2003) “World Bank and ADB’s role in privatizing water in Asia Region” presented at the Asia Pacific Conference on Debt and Privatization of Water and Power Service , held by Jubilee South/APMDD, in Bangkok 8-12 December. P. Raja Siregar is Coordinator of KAU/ Anti Debt Coalition-Indonesia. The author also works with WALHI (Friends of the Earth Indonesia) as Policy Campaigner. Any input, or suggestions can be sent to or . Information regarding KAU’s activity and issues available on: .

asian development bank water project

by admin — last modified Apr 20, 2007 12:19 PM


asian development bank water projects

sri lanka

Sri Lanka

image: FoE Sri Lanka
The Government of Sri Lanka is receiving a $10.7 million loan from the Asian Development Bank to improve the management of water resources. This is part of a scheme promoted by the World Bank and the Development Bank to stop farmers growing non-export food crops and to start charging farming families for irrigation water. Both farmers and the poor will be forced to sell their water rights to high value sectors such as export food crops, industrial sectors or modern economic sectors in urban areas.

In 2000 ministers approved a 'National Water Resources Policy'. Its major recommendation is that all the water resources should rest with the government. Once implemented every user of water will have to pay for their water entitlement. This is only one step towards transferring the ownership of water resources to international companies so they can make profits through distribution. Historically, water has always been regarded as the common property of the Sri Lankan people. The State is only a guardian. However, about 12 foreign companies have already visited Sri Lanka and held international workshops to explore business opportunities with water.

Paddy cultivation will be seriously affected if water is issued as a commodity on the market. The World Bank has advised the government that paddy cultivation in Sri Lanka is a non-profitable venture and recommended the diversification of agriculture into cash crops. Making water a commodity and fixing a market price amounts to taking away the livelihoods of the urban and rural poor, as well as farmers, animals and plants.

visit the website of the Sri Lankan Friends of the Earth group, Environmental Foundation Ltd


In Thailand, the Asian Development Bank's $600 million Agricultural Sector Program Loan demands fundamental reforms of national water policy, despite possibly contravening the Thai constitution.

The Asian Development Bank called for:

  • a National Water Resources Policy;
  • a Water Law;
  • a policy on cost recovery in irrigation;
  • an increase in National Water Resource Committee's authority in managing water resources nationwide;
  • river basin organizations in three pilot river basins;
  • the privatization of the irrigation system so that farmers pay for the costs of private water management.

The Thai government has been required to use the free market model. Groups who can make a high profit from water are given priority in access to water resources. Farmers, who do not generate much profit from water, are given the lowest priority.

In drafting National Water Resources policy, the National Water Resources Committee obtained technical assistance from consultant companies hired by the Asian Development Bank and some committee members had close relationships with consultant companies hired by the Asian Development Bank. The decision-making was processed behind closed doors. Put simply, the direction of National Policy on Water Resource was determined by the Asian Development Bank.


The Government of Pakistan, with the help of the Asian Development Bank, set up the Water Resources Strategy Study. It was undertaken by the Ministry of Water and Power, the Office of the Chief Engineering Advisor and the Chairman of the Federal Flood Commission. The Study's main objective was to prepare a road map for the future development of the water sector towards more efficient service delivery and the optimum utilization of resources to meet the competing demands of all water users in the future.

The Strategy and the Medium Term Investment Plan prioritize fairness in water allocation, improving and maintaining the quality of water, the conservation of the country's water resources and the need for efficiency and financial sustainability in water service delivery. These terms mean privatization and full-cost recovery – higher tariffs for the consumer.

The privatization of Karachi 's water supply

The government has pointed to the massive losses that the public sector makes; and the World Bank has stressed quite correctly that it is the poor who bear the burden of these public sector losses because Pakistan have a very regressive taxation system. However, the only thing that Government can do is to bring in the private sector and replace public corruption with private profit.

If the Government guaranteed similar profits and salaries to the public sector, it would do just as well. Pakistan 's main problem is a lack of public funding as an enormous share of the budget, over a third of it, goes to the military. Another third or more goes to debt servicing and the remainder is for running the government. So the only way the Pakistani government can get the money it needs is through the private sector.


The Asian Development Bank has approved $1.4 million technical assistance grant to support water and sanitation sector reform in Kathmandu Valley. It includes the establishment of the National Water Supply Regulatory Board and the Kathmandu Valley Water Authority, and a private sector participation scheme.

The Nepal Water Supply Corporation says the Asian Development Bank has failed to supply efficient and affordable services or significantly to expand its service coverage for residents of the Kathmandu Valley. The Asian Development Bank project in Nepal is pushing for implementation of cost recovery, water costs and charges, and privatization.

Private management of the Nepal Water Supply Corporation would increase the price of water five-fold by the time water starts flowing in the pipes of Kathmandu.

visit the website of the Nepali Friends of the Earth group, Pro Public

find out more about the asian development bank.

Source: P. Raja Siregar (2003) “World Bank and ADB’s role in privatizing water in Asia Region” presented at the Asia Pacific Conference on Debt and Privatization of Water and Power Service , held by Jubilee South/APMDD, in Bangkok 8-12 December. P. Raja Siregar is Coordinator of KAU/ Anti Debt Coalition-Indonesia. The author also works with WALHI (Friends of the Earth Indonesia) as Policy Campaigner. Any input, or suggestions can be sent to or . Information regarding KAU’s activity and issues available on: .

list of local stories about water and wetlands

by admin — last modified Apr 20, 2007 12:46 PM

Uruguay says Yes to Water Sovereignty

by admin — last modified Apr 20, 2007 12:50 PM
Filed Under:

referendum result - 60% reject water privatization

On the historical day October 31 st , 62,75% of the Uruguayan people supported the Constitutional Reform in Defense of Water, adding water as a human right to the Constitution and setting the basis for its exclusive public, participative and sustainable management.


This referendum resource was promoted by the National Commission in Defense of Water and Life (CNDAV) . The commission was created in 2002 as an answer to the signing of a Letter of Intent between the Uruguayan government and the International Monetary Fund (IMF), which committed to extend the privatization of potable water and sanitation services to the entire country.

Privatizations started in Maldonado department, firstly with the presence of French multinational company Suez Lyonnese Des Aux followed by Spanish company Aguas de Bilbao.

As in most of water privatizations performed last year, these processes have had negative consequences.

From the social point of view, wide sectors were prevented access to potable water for not being able to afford the cost of the service, which considerably decreased its quality with respect to the services granted by water state company OSE.

The conditions of the service were of such low quality that quality control bodies in that matter recommended not to consume water because it didn't comply with minimum quality standards.

From an economic point of view, the “business” was really bad for the Uruguayan state. Not only did the companies failed to comply with the chronograms provided in the contracts, but they didn't pay what was established as well. Having to file for contractual reconsiderations before the state, which assumed the losses caused in each of the cases.

From an environmental point of view, Aguas de la Costa company (subsidiary of Suez) was responsible for drying Blanca Lagoon, which used to be used as potablilization source. Precisely for this cause, neighbors of Maldonado department filed a law suit against the company for environmental damages.

Water against everything

The victory of the water plebiscite was actually a social one. CNDAV is a wide group of social and political organizations which oppose a merchandising conception of water.

Among their founders are neighbors' organizations, FFOSE (water state company's trade union) and REDES-FOE (Friends of the Earth Uruguay). After its foundation, the commission became greater, including the majority left wing political party (Frente Amplio, winner of October 31st elections) and one nationalist party's sectors.

However, despite its political support, the water plebiscite was secondary within the politic and media agenda. In addition to this, privatizing companies, of water and other sectors (as bottling companies) as well as conservative business sectors (large estate owners, forestal and rice) carried out a strong politic and media lobby against the reform.

During the nine months previous to the campaign, the International Monetary Fund (IMF) started a public debate with the CNDAV, denying any imposition to the Uruguayan government and refusing the responsibility attributed to the content of 2002 Intentions Letter.


The work, which enabled the triumph of the Constitutional Reform , was based on the grassroots, which transmitted the spirit and content of the proposed articles.

The auspicious result of the plebiscite opens the doors for a water policy designed from a vision of this resource as a common good, to be publicly managed on social participation and sustainability criteria.

read about the background