Case study: access to information on privatisation of water supply in Cochabamba (Bolivia)

So what happens when privatisation occurs without openness and freedom of information?

This case from Latin America shows why access to information and transparency are vital.

In 1999 the Bolivian government leased control of the water supply in the city of Cochabamba to a private company.

Why did it do this? It probably had something to do with the fact that the World Bank had told the mayor of Cochabamba that a US$14 million loan to upgrade the city's water supply was conditional on privatisation.

And that it had placed the same condition on a payment to the government of US$600 million in international debt relief.

The contract was awarded in a secret tender where there was only one bidder: a company called Aguas del Tunari. No one knew who they were or where they came from, but they now seemed to have control of the city water supply until 2039.

Within weeks of Aguas del Tunari taking over, it increased water rates by 200% or more. For local workers, living on wages of $60 a month, this meant paying up to a quarter of their income just on water.

Local people resisted the privatisation deal. After a popular struggle over several months they won. First the rate rises were reversed and then Aguas del Tunari was kicked out.

Click here to read an inspiring account of how they did it.

In the course of the struggle to get their water back, the people of Cochabamba uncovered some interesting information:

• Aguas del Tunari was a subsidiary of the giant United States corporation Bechtel
• Under the terms of the privatisation deal, the company was receiving a guaranteed annual profit of 16%
• The company had made almost no up-front investment in the city's water