Argentina re-nationalizes EIB funded project
Mexico, 22nd March — An unprecedented decision came yesterday, a day before the World Water Day, from the Argentinean government which decided to re-nationalize water utilities in Buenos Aires and take it out from the hands of the European companies Suez and Aguas Barcelona, partners in the consortium Aguas Argentinas.

CEE Bankwatch Network
Friends of the Earth International

The consortium, which received 70 million euros financial support from the European Investment Bank (EIB) in 1995, was not delivering on the expected agreed investments and on measures to deal with the high level of nitrate in the water that affected the health of local people. Failing on water quality the consortium still demanded increase of tariffs and Suez even sued Argentinean government for 1.4 billion USD lawsuit for not allowing of the raise. As a result finally the government decided to get out of the contract and put the utilities in public hands by creating state company Aguas y Saneamiento Argentino.

Magda Stoczkiewicz from the CEE Bankwatch Network, monitoring the EIB, comments: “This is not the only project with the EIB support for private sector to run water utilities in the South. We have documented similar cases in the Philippines and Indonesia for ex. The pattern seems to be the same, big water company backed up by public money from the EIB takes over public utilities, fails to deliver on quality of the service but still raises tariffs at the expense of the local people.”

In Argentina the EIB is also involved in two more cases of water privatization during the last ten years. In the Cordoba city and Province of Misiones with two loans respectively in 1998 and 2000 with overall more than 56 million Euro.

Jaroslava Colajacomo, the author of the recently published report “European Investment Bank in the South. In whose interest?” comments:
“Backed by EIB loans Suez has been already involved in another cases of suing the governments: in Argentina for the Cordoba water management and in the Philippines in 2003. The case of Philippines resulted in raising of tariffs by 500%.

“The Ministerial declaration issued today at the Fourth World Water Forum does not recognize once again the failure of water public-private partnership (PPP) models that the EIB has been financing in the South and the detrimental impacts on the government.s sovereignty to decide on national water policy”

Jaroslava Colajacomo: , Ph in Mexico: +52 55 33 14 38 97 (Spanish, English, Italian)
Magda Stoczkiewicz, CEE Bankwatch Network: Ph. in Mexico: +52 55 29 95 15 91 (English, Polish)
Longgena Ginting Friends of the Earth International Phone in Mexico +52 55 29 95 15 33 (English)