Its becoming a world wide problem France is really
having problems as well:
Resource 5
The Problems of Water in the UK and France
Water and sewerage authorities throughout Europe – and the rest of the world – face common problems in the need to repair, replace and extend ageing or inadequate systems. There is no strong evidence that private companies are any better than public ones at dealing with issues such as leakage, pollution or drought. Evidence from the UK and France, where privatised water companies dominate, suggests that private companies are at least as likely to experience problems.
In the UK:
* The dry conditions of 1995 resulted in widespread water shortages. In one region, Yorkshire, the water company had to employ a huge fleet of water lorries to transport water from a reservoir to households, for a period of nearly a year.
* Leakage rates are high in many parts of the UK. Thames Water, which covers London, has a leakage rate of over 38%. (This compares with a leakage rate of 40% in Prague, which is currently publicly managed. Yet this leakage rate is cited by the city council as one reason why they propose to privatise the management of their water system).
* Major pollution incidents in the UK are often actually caused by the actions of the water companies. Companies including Severn Trent, South West Water and Three Valleys (owned by Generale des Eaux) have been responsible for allowing serious chemical or bacterial pollution of their water supply.
In France, the countries water system was subject to heavy criticism in a report in January 1997 by the state audit office, the Cour des Comptes. Both the municipally run companies, and the privatised concessions were criticised, in a report which did nothing to suggest that privatisation was a solution to the technical or financial problems of the industry.
* The report criticised the inadequate competition when concessions are awarded, in particular the "repeated use of negotiated procedures", allowing operators privileged access to associated works contracts without competition, and "a tendency to roll forward existing arrangements" which results in "substantial profit margins". Generale des Eaux for example have held the concession for Ile-deFrance for 47 years.
* Unacceptable price rises have been associated with privatisation. For example, at St Etienne prices rose by 124% in 2 years following privatisation of the water concession.
* The system of "gestion deleguee" itself is heavily criticised by the report, which says that it suffers from "lack of contractual clarity", "supervision which is inadequate or non-existent" and "lack of information to consumers". It states that "delegated management has become an elaborate technique for financing municipal budgets at the expense of the consumer/taxpayer"
* Municipal companies too are criticised for being overstaffed, inexpert, and having poor financial management, inadequate invoicing, inadequate controls.
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