No to the Bulk Water Supply Project!
No to the Privatization of the Baguio Water District

The Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE) - Cordillera strongly opposes the privatization of the Baguio Water District (BWD) through the Bulk Water Supply Project (BWSP) of Benguet Corporation (BC) because it violates our people’s right to potable, safe, adequate and affordable water as well as the public utility employees’ right to their jobs.

Based on the Benguet Corporaion’s bid price, BWD is obliged to pay P60m/mo for 50,000 cms./day of water supplied to it, whether it is able to sell this volume or not. This situation will result in the bankruptcy of the utility within 2 to 3 months as the collection capability of BWD is only P20m/mo. The Local Water Utilities Administration (LWUA), which is tasked to provide technical and financial support to water districts, can no longer help as it is now being dissolved under EO 279. With very little or no support from the government, privatization becomes an eventuality.

The privatization of water service worldwide is being pursued within the framework of globalization. It is one of the structural adjustment programs of the IMF-WB that aims to relieve the crises in ailing first world economies by allowing encroachment of transnational corporations in the public sector activities of indebted countries. This imposition should be able to give these transnational corporations (TNCs) wider markets and assured profits.

Aside from benefiting first world economies through their TNCs, privatization also benefits legislators who sponsor and vote in favor of laws to privatize government utilities, as well as local businesses who serve as their partners under the constitutional provision of 60:40 Filipino: foreign capital share.

Within this frame, the priorities and nature of public services are distracted. Actual water crises are often bloated to justify the need for privatization. In the case of BWD, we have to ask where the BWSP now figures with the successful drilling projects that have increased our monthly production from around 37,000 cms to 67,000 cms, along with other efforts to increase production.

It is of no wonder that after 2 decades of privatization worldwide, its promises of efficiency and effectivity are yet to be realized even as the harsh social cost is enormous.

Experiences of privatization of water in the Philippines and in the world show the following grim realities: frequent and very high rate hikes, deterioration of water quality and services, massive retrenchment of public workers, withdrawal of either the private corporations or the governments from the contracts due to unfulfilled terms and usually resulting in loan obligations being shouldered by the people. In Atlanta, Georgia, there were sewer rates hike every year at an average of 12%, adding up to $80m to the contract, improper billing for the work the private company did not do, and retrenchment of more than 50% of its workers. In Buenos Aires, Argentina, water rates increased by 20% instead of a promised reduction of 27%, service cut-offs were common and there was 50% staff reduction. In Manila, Philippines, Maynilad raised rates from P6.58 in 2001 to P15.46 in 2004, continuously sought contract renegotiations including postponement of targets to reduce unaccounted water and retrenched thousands of workers. In the Philippines, the retrenchment of workers is facilitated with Proclamation 50, which provides that private companies have the right to fire and hire once public agencies are privatized.

After the privatization of the MWSS, which was the biggest privatization project in the world when it took place in 1997, the privatization of the entire water service is now being pursued more aggressively with the dissolution of LWUA to be followed by the privatization of the more than 500 water districts nationwide.

The grim experiences of privatization are bound to happen for Baguio if we allow the Bulk Water Supply Project for the BWD. We therefore challenge the entire citizenry of Baguio as well as the public workers of BWD. We must bear in mind that we are the real owners of BWD whose mandate of providing service in terms of potable, safe, affordable and sufficient water we must pursue.

Before we spend a lot for water we cannot drink, before we pay a lot more for services we will not be able to avail of, before we contribute to the big number of our unemployed, let us make our voices be heard. Let us say:

No to the Bulk Water System Project!
No to the privatization of BWD!