Corruption in Water Sector kills Millions

THE taking over by City Water Company of the supply of water in Dar es Salaam (Tanzania) in 2003 was regarded by many as a sigh of relief after decades of neglect and underinvestment in the city’s water infrastructure.

This was actually expected to be a turning point as far as reliable water supply was concerned in a city where fewer than a hundred thousand households out of the population of about four million have access to running water.

City Water consortium, which was part of the British Water Supply Company-Biwater, entered into a contract with the Dar es Salaam Water and Sewage Authority (Dawasa) whereby the latter was to continue owning the infrastructure, while the former would operate the system.

The company was tasked to collect revenue from customers, make new connections, and conduct routine maintenance during the ten-year contract, and it had a six-year tax holiday.

However, it took less than two years for all these expectations to go down the drain. Not only was the company unable to meet revenue collection targets agreed in the contract, which were crucial to attain if it was to make a profit, the company was collecting less money than its state-run predecessor (Dawasa). Besides, city dwellers started seeing their water bills rising!

City Water’s defense was that its bid was based on flawed information supplied by Dawasa and stopped paying its monthly fee for leasing Dawasa’s piping and other infrastructure from July 2004, less than a year after the entering into the contract. It also insisted that its operating fee be raised.

But all these complaints were rejected by auditors from PricewaterhouseCoopers and the British engineering consultants-Howard Humphreys and several reports by World Bank and other development partners admitted that City Water had failed its duty.

These failures left the Tanzanian government with no other option other than just terminating the contract on May 13, 2005 the decision which led to legal battles that have been settled in favour of the government.

It’s still unexplainable how did such a company manage to win the contract despite its inexperience in handling such deals.

Writing for The Guardian newspaper (UK) Xan Rice, who closely followed the tendering exercise, raised concerns over Biwater’s experience in undertaking such assignments.

In an article tilted ‘Water Margin’ which was published on August 16, 2007, the Guardian’s East

Africa correspondent said that it’s true that Biwater had really made its name and helped earn its founder Adrian White his fortune during Margaret Thatcher’s (former British Premier) push for privatisation in Britain.

However, he had reservations. “Within the industry the company had a decent reputation for building and running water treatment plants, but had never taken charge of such a huge management operation before,” Rice said.

Despite the flaws in the execution of the contract, Rice wonders as to why did the World Bank’s quality assurance in Washington award the project a ‘highly satisfactory’ ranking-the top score.

“Biwater said later in a statement to the Guardian (UK) that the World Bank approved (City Water’s) bid after an exhaustive financial and technical assessment process lasting several months and also rejected any notion of gaps in its experience,” he said in the article.

The writer also raised some issues of concern over the manner in which the deal, which was competed by three firms (two from France, City Water and a Tanzanian investor-Superdoll), was concluded.

“When the French companies declined to submit a final tender, Biwater’s consortium won the day,” Rice said and quoted a British water consultant, who followed the bid process, as saying that City Water submitted its bid at a rock-bottom price.

“Even if it performed well, making money would be a huge challenge. It was in the crap from day one,” the consultant is quoted to have said.

Rice wondered why the World Bank and International Monetary Fund still thought that the arrangement was the best way forward for the water supply problem in Dar es Salaam.

Actually, they had long made the privatisation of Dawasa’s assets a condition for Tanzania receiving massive debt relief including a USD 143.5m loan package for upgrading the city’s water infrastructure.

No one knows what transpired behind the curtains though possibilities of corruption and undue influence cannot be over ruled in such a scenario.

Try to imagine the fate of millions of people in the city who spend everyday of their lives without reliable supply of safe water as such ‘funny’ games are being played on and on.

It’s worth-noting that the four million plus Dar es Salaam residents’ number is just a fraction of the total number of people going without reliable supply of safe and quality water globally due to similar dubious contracts and poor water governance.

Worldwide the water sector has been tainted by corruption and other forms of mismanagement both of which deny access to safe water to billions of lives.

The 2008 Global Corruption Report by Transparency International (TI) argues that the crisis of water is a crisis of water governance, with corruption as one root cause.

“Corruption in water sector is widespread and makes water undrinkable, inaccessible and unaffordable,” TI says.

The report, which was recently launched in Stockholm Sweden during the World Water Week, demonstrates that corruption is a cause and catalyst for the global water crisis, which is likely to be further exacerbated by climate change.

“Corruption in the water sector puts the lives and livelihoods of billions of people at risk.

Corruption affects all aspects of the water sector, from water resources management to drinking water services, irrigation and hydropower,” the global anti-corruption watchdog says.

According to TI, the onset of climate change and the increasing stress on water supply around the world make the fight against corruption in water more urgent than ever.

In her foreword to the report, the world renowned environmental activist, Prof. Wangari Maathai concluded that the global water crisis is nothing else other than a man-made crisis of governance with ignorance, greed and corruption at its core.

“But the worst of all is corruption. Corruption means power unbound. It gives the powerful the means to work against and around the rules that communities set themselves. This makes corruption in water particularly pernicious,” she says.

This is because, she adds, corruption allows the powerful to break the rules that preserve habitats and ecosystems, to plunder and pollute water resources that entire world regions depend upon and to steal the money that is meant to get water to the poor.
While noting that the problem is global in reach, Prof. Maathai admits that Africa is the hardest hit.

“Nowhere are the global water crises and the havoc that corruption inflicts on the sector more shockingly on display than in Africa,” she admits while suggesting a global approach was a prerequisite for tackling corruption in water sector worldwide.

As the TI report notes, the human consequences of the water crisis, exacerbated by corruption, are devastating and affect the poor and women most of all.

“In developing countries, about eighty percent of health problems can be linked back to inadequate water and sanitation, claiming lives of nearly 1.8 million children every year and leading to the loss of an estimated 443 million school days for the children who suffer from water related ailments,” the report reveals.

TI concludes by calling for increased advocacy to stop corruption in water so as to avoid the imminent high costs to economic and human development, the destruction of vital ecosystems, and the fuelling of social tension or even conflict over this essential resource.

As the 2000 UN Millennium Report pointed-out no single measure would do more to reduce disease and save lives in developing countries than bringing safe water and adequate sanitation.

Hence, there is a dire need of collectively fighting against corruption in the water sector short of which we’ll continue witnessing the loss of all these lives yet the solution is absolutely within our reach.