By Kayode Ogunbunmi
ENVIRONMENTAL Rights Action (ERA) has reiterated its opposition against the plan by the Lagos State government to privatize the state water utility, Lagos Water, saying the plan is another attempt to violate the rights of the people access to portable water, as it won’t lead to improved service delivery.
Lagos State Government, under the current Governor, Akinwunmi Ambode, has expressed its inability to meet the shortfall of about 400million liters of potable water required daily to service the residents of the metropolis, attributing this to lack of sufficient resources to fund infrastructures and extensive overhaul needed to transform the sector.
The government says it believes the solution rests in the introduction of a Public Private Partnership initiative.
Around August this year, the State Government, through the Water Corporation announced that preparation has reached a final stage with three reputable international companies shortlisted to handle the PPP.
But the Environment Rights Action, an advocacy group, which has opposed the move, said this was simply an attempt to further milk an unsuspecting populace.
At a press conference held on Monday at its Ogba Office, ERA released a 10-page fact-finding document that highlighted the failures and subsequent indictments of the three multinational companies behind the PPP scheme —Violia, Abengoa and Metito.
According to ERA, the companies’ operations in other countries were blighted by bribery, poor service delivery and fraudulent attempts to deprive the people they are meant to service the essential commodity (water) they were paid for.
In the documents seen by CITY VOICE, Violia, a French multinational corporation and one of the world’s largest privates sector water operators, “has a global track record of abuse and mismanagement” in executing its contracts. The company is “currently under investigation in Romania, Morocco, France, and the United States of America for allegedly running a multi-million-euro bribery scheme in Budapest, all in an attempt to raise the price of water drastically.
“The city of Pittsburgh, Pennsylvania, US is in the midst of a lead crisis, following contracts that put Veolia in control of the Pittsburgh Water and Sewer Authority (PWSA). Under Veolia’s management, the water treatment chemical used to prevent lead contamination was switched to a cheaper alternative without the required approval, violating state regulations. As a result of the act, Pittsburgh’s lead levels are dangerously high. And while residents face the threat of lead poisoning and the city and PWSA faced with immense cost of replacing service lines, Veolia walked away with $11million,” the document reads in part.
Abengeo, the documents reads, is a labyrinthine corporation that is currently adjudged prone to bankruptcy, thereby making its an unviable partner in driving efficient water system.
“With sales having plummeted from a peak of 7.8bn pounds in 2012, to just 1.5bn pounds in 2016, workers of the company being cut from 26,000 to 16,000, many of its assets sold off, a loss of 7.6bn pounds in 2016 and a continued debt load of 5.6bn pounds, Abengeo is an unstable corporation, and not a good bet for Lagos.
“Abengeo’s former president, Felipe Benjamea, along with the former CEO and three other advisers are currently on trial in Spain for ‘unfair administration’ and facing lengthy prison sentences. The former advisers are accused of approving massive payments to the Executives, including 11.4million Euro for Benjamea while the corporation was preparing to deal with bankruptcy proceedings. The same company was behind the Bolivian privatization scheme that sparked widespread protests known as the ‘Cochabamba Water War’ and resulted in the eventual termination of the disastrous contract…” the document reads in part.
For Metito, a Dubai-based multinational, ERA references the ‘objectionable profile’ of its major shareholder, Mitsubishi, abuse of contract (in Kigali, Rwanda) and conflict of interests as espoused in the document.
“In 2015, Metito secured a 27-year concession to build and operate a 40,000 cubic meters/day System in Kigali, Rwanda. This deal was encouraged and brokered by the IFC, which advised the government on the development of this water project, even while being an active shareholder of Metito. This type of self-dealing is a conflict of interest.
“Metito’s largest shareholder, Mitsubishi, has a long track record of funding projects that harm people and the planet. Mitsubishi faced public opposition as early as 1993 for its role in destroying the world’s rainforests. More recently, it has been under fire for investing in Tar -Sands Infrastructure and the controversial Dakota Access Pipeline, which threatens indigenous communities in the United States of America,” the document reads, in part.
Deputy Executive Director of ERA, Akinbode Oluwafemi said the document was released in response to the Lagos government’s challenge to opponents of the privatization plan to bring up any contradictory facts against the companies it shortlisted for the job.
Oluwafemi noted that “corporations like VeoLia, Abengoa and Metito are, by their nature, going to put their interests above the interest of the people. Thus, it is essential that Lagos Water system remain public,” adding that “a democratically controlled and public-funded water system” would be more efficient that the one run by private investors.
“For me, the battle is between PPP and privatisation. And I can tell you that both are the same. In fact, PPP is actually a worse form of privatization. It’s the latest attempt to corruptly swindle the unsuspecting populace of their collective patrimony.
“For instance, it’s believed that under PPP, the investors would bring in money to fund infrastructure facelifts; but antecedents in the country have shown that they don’t come with money. They only come with briefcases and ended up getting the money from Nigerian banks, with the government standing as guarantors. So, who is fooling who? And when this contract is sealed, there is irrevocable consultancy fee that must be paid to the investor. And when there is the need to review or terminate the contract, the government would be made to pay the actual amount the investor is supposed to generate as profit. And these huge sums go to the investors’ pockets whether or not the service is delivered or improved,” he added.
Oluwafemi also noted that ERA is disposed to all options, including filing a litigation against the Lagos State Government, should it insists on going ahead with the project without recourse to the objections of stakeholders on the matter.
“Already, we have written a letter to President Muhammadu Buhari on the crisis in the water sector in the country, especially in Lagos. We submitted the letter last week and hope to get a quick response. Also, all options are on the table in our engagement with Lagos State Government. But we are currently on advocacy level,” Oluwafemi said.