Posted by: waterworks | January 26, 2008

17. Tanzania versus Biwater

The government of Tanzania has just won more than £3m from British water company Biwater as part of a dispute over the running of water services in Dar es-Salaam.  The Tanzanian government privatised its water system and handed control to Biwater subsidiary City Water Services (CWS) in 2003.  In an all-too-common story for poor “fourth world” nations like Tanzania, privatisation of vital infrastructure had become a non-negotiable pre-requisite for continued World Bank and International Monetary Fund investment.  But with dull predictability, the introduction of water charges rapidly resulted in those people who lacked money (a large part of Dar es-Salaam’s population) being left unable to pay for a vital commodity that they had previously received more or less for free from standpipes.  

So poorly did Tanzania’s water industry perform under its new ownership that in 2005 the Tanzanian government elected to wrestle control back.  Stung by such an unbridled act of hostility, Biwater CWS immediately sued Tanzania under the rules of the United Nations Commission on International Trade Law.  Fast forward to January 2008 and a London tribunal has now thrown out the case – after finding that water and sewerage services did indeed deteriorate under Biwater CWS management.   Undeterred, Biwater CWS has now lodged a further case against Tanzania at the International Centre for the Settlement of Investment Disputes.  Some might say that suing a desperately poor country is not an especially smart PR move for a firm that wants to consolidate it position as a respected global brand.  But while it is easy to criticise Biwater  – not to mention the Washington-led market hegemony that encourages ventures such as this in the first place – it seems less than easy to actually find a way of getting good clean water to the world’s poorest people.  Suggestions on a postcard please. 

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