Nepali Times
London Eye
High and dry in Kathmandu


Cochabamba, Buenos Aires and Manila resonate loudly in the ears of opponents of water privatisation.

Transnationals have retreated from these cities in the middle of their contracts, making them 'best practice' examples of how not to privatise public water companies in the South. In their heydays, the World Bank and a handful of transnationals were joint partners in liberalising the annual $200 billion global water industry.

There is now a paradigm shift in the strategies of the water sector's key actors. The World Bank's privatisation jihadis and pro-poor crusaders, under pressure from key stakeholders, have moved the goal post from their dogmatic mantra of privatisation to a non-ideological position.

A harsher economic climate and debt restructuring have also forced water companies to retrench from their globalising spree. Water companies are also starting to appreciate that many customers in the South view water as a common good and therefore generating revenue by providing services of this packaged commodity is not commercially viable.

Large contractual losses in the developing world have turned the utilities' future investment strategy towards less volatile markets in north America and eastern Europe. But there is a risk in this strategy as well. The market does not have inherent social responsibility and cannot be relied to improve or deliver water services to the world's poor. Clearly, a refocus is required.

There are 1.2 billion people without access to safe drinking water and double that without adequate sanitation. The UN's Millennium Development Goal target is to halve these by 2015. How do we bridge this water divide and funding gap?

The battle for Kathmandu's water supply can be won. Private involvment in the Valley's water sector is being primed to go live early next year with the appointment of a management contractor. This public-private partnership would be a perfect opportunity to showcase the capability of an organic Made in Nepal solution to a thirsty world.

Even if it is only a management contract, why would a private water operator want to risk its brand name in the unstable murky political waters of Kathmandu? Grandiose mission statements such as "water partner to the world" is no longer de rigueur. Is this part of a genuine corporate social responsibility strategy?

There are important lessons for Kathmandu from Puerto Rico to the west Manila Maynilad (which was initially hailed as a privatisation success). The winners practiced 'dive bidding', and promises of cheaper water and improved services for the poor were never delivered leading to the renegotiation of terms of conditions with the new regulators who did not have sufficient teeth for enforcement. Prices went up without services being improved.

When corruption is endemic, and no tradition of a regulatory system, the key challange is the creation of a strong and independent regulator in Kathmandu. Another challenge is the bidding and contract process. The winning bid should not be decided only on lowest user tariff or best operating margins. Other intangibles should be considered.

Next week (14-22 March) is World Water Week. The same old leaders will be dusting off the same old script and parrot the same old rhetoric. But where is the political will? Kathmandu water privatisation must learn from history. Rulers must facilitate a successful project implementation. Otherwise histroy will judge them harshly, providing violence instead of water.

(11 JAN 2013 - 17 JAN 2013)