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Article

27 Jul 2006

Author:
Susan Spronk, ZNet

Another Hole in the Boat: Suez's "Private Corruption" in Bolivia

...several governments in heavily indebted countries...transferred control over public water and sanitation works to multinational corporations. Fifteen years later, many of these contracts once heralded as models of "pro-poor" policy-making are sinking into the mud...As the authors of the report, "Pipe Dreams" argue, in Buenos Aires, Suez only achieved 54% of the promised connections between 1993 and 1998...In 1997, the public utility was transferred [in La Paz and El Alto] in a 30-year concession to the only bidder, Aguas del Illimani (Illimani), a company...controlled by...Suez...In late 2005, the FEJUVE brought media attention to two basic problems...over 200,000 residents were excluded from the "served area"...Another 70,000 were excluded from service because they could not afford a connection...Second, the company outsmarted other companies in the region by raising fees for new connections rather than tariffs for existing customers...In late 2004...Thousands of residents of El Alto hit the streets to pressure the government to return the water company to public control and kick Suez out of Bolivia...FEJUVE argues that Suez´s practices in La Paz-El Alto represent a form of "private corruption", highlighting the fact that privatizing publicly-owned companies does not make the problem of corruption go away; instead, it is transferred to the private sector where less public scrutiny is possible.