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Solar power, clean water... and a tidy profit.
Alex Steffen, 18 Jan 04

Like many areas the Philippines, the town of Ronda (on the island of Cebu) lacked clean drinking water. When they wanted to pour their kids a glass of water that wouldn't make them sick, cripple them or kill them, they had to pay a private water-seller for the privilage.

Enter WorldWater, Inc. Their solution? A system which uses two innovative technologies: solar power to run a new safe municipal water system...

...and WorldWater’s "proprietary AquaCard™ (Smart Card) debit card system, which operates directly with WorldWater’s AquaMeter™ solar pumping stations throughout the community..." That's right, pay-as-you-drink privatized water.

Now, in fairness, I have to say that I'm not sure that this isn't, in fact, a good deal for the fine people of Ronda. But given the history of corruption and exploitation that has benighted corporate infrastructure projects in the developing world one flinches to read this. Certainly this could have been done as a community venture?

On the other hand, WorldWater seems on the up-andup, and folks there have water now[PDF]:

"On a recent Saturday in Ronda, customers line up with plastic tubs to collect water from the digital standpipes dotted around the neighbourhood. Yolanda Macatangay slots her card into the blue and white meter and keys in the number of litres she needs before placing her orange bucket below the tap. Clear water starts pumping out almost instantly. "It's a big help," says Macatangay."

Hard to know. What do you think, worldchangers? Thumbs up or thumbs down, and why? Do we know of a better model?
(thanks to Ken)

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Is it really a debit card? Do the folks in Ronda all have bank accounts? Is it a prepay card? Or an insidious form of credit: go into debt today so your child can be healthy enough to inherit the debt you ran up! If this is really a debit card, then there are interesting possibilities for creating a "water bank": micro loans, a local currency backed by clean water, etc.

What is WorldWater's business model? If they just want to come in and make a profit on the setup (and maybe ongoing maintenance) that is one thing. But if they intend to keep ownership of the whole system and profit off of every liter of water forever, then that's pretty evil.

Posted by: David Flanagan on 18 Jan 04

Huge thumbs down. Privitization of natural monopolies is a bad idea. To give a company without effective competition control of a vital resource is insanity.

Worse, privization of a natural monopoly which people's lives depend on is a recipy for, frankly, corporate fascism: political power flows from the control of that which people depend on, in many cases....

In general I'm in favor of service provision through markets, but monopolies are a different kettle of fish.

Posted by: Vinay on 18 Jan 04

Of course... if they don't have a monopoly, it's much, much less black and white.

(from the article)

Funds collected by the community bank from customers are turned over to the local government, which then repays the loans used to purchase the equipment and installation from WorldWater. The local municipality also receives a percentage of the funds for other infrastructure improvements. WorldWater keeps an operations and maintenance contract with the municipality for at least the life of the 10-year loan.

Anybody know what their competition is?

Posted by: Vinay on 18 Jan 04

Ouch ouch. I don't like it at all. High demand means more profits right? So it's then in the interests of a company that there isn't a market surplus of water - that is - droughts are good, not having enough pumps is good and so on. I think it's a big no no for me too. It's a recipe for disaster. Take a look at Mike Davies' book "Late Victorian Holocausts" which argues that most famines occurred not because of a shortage of food but because of market mechanisms that prevented the distribution of food.

Posted by: Zaid on 19 Jan 04

It would be an improvement in Trinidad and Tobago; the 'Water and Sewage Authority' (WASA) can't seem to produce clean drinking water. One quote was "Yes, it smells funny, and it's not clear, but it is potable".

I can't make this stuff up.

Posted by: Taran on 19 Jan 04

It smells horrible, it's true (the company, not the water), but nobody seems to have come up with a better model. Expensive clean drinking water >= no clean drinking water.

Posted by: Ben on 20 Jan 04

I could be naive, but from the (admittedly PR-itized) press release, it looks like the municipal government is retaining control of the system. Basically, WorldWater gets to take a profit for at least ten years, and Ronda gets the capital it can't get on its own to build out a reliable water system. We don't know the details of the deal, but on the surface it seems like a reasonable compromise...

Posted by: Jeremy Lyon on 20 Jan 04

I don't think it's fair to assume that WorldWater is more evil that a government-run clean water program just because it's a for-profit. It seems to me that WorldWater is trying to do right by the people of the region without giving them charity, while also remaing economically viable. Of course it can become corrupted, but we can hope that the shareholders of WorldWater are do-gooders, rather than small-time petty thieves who would steal moeny from a tiny town.

Posted by: Anca Mosoiu on 20 Jan 04

A utility company that is publically owned is not a charity.

A private corporation -- whose executives are beholden to shareholders are not necessarily small time thieves -- but the fact is that they are beholden to their shareholders and that drives their actions (and possible actions.)

It's interesting - what have we learnt from the California energy crisis? More privatisation of public utilities or less?

Posted by: Zaid on 21 Jan 04



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