June 6th, 2006

Faulty Pipes

Executive Summary

From maintenance problems in Atlanta and sewage spills in Milwaukee, to corruption in New Orleans and political meddling in Lexington, the recent history of water privatization in the United States is marred by underachievement and failure. During the 1990s, corporations – many of them multi-billion-dollar conglomerates based overseas – persuaded communities throughout the nation to transfer control of their systems to the private sector.

Corporations offer themselves as the solution to financial, technical and organizational challenges faced by municipalities throughout the United States. They are grappling with stricter standards, diminishing federal funding and a citizenry not keen on rate increases. But these corporations – mainly European multinationals RWE, Suez and Veolia – ave produced mixed results at best. The privatization bubble is bursting.

As stories like those chronicled in this report have mounted in recent years, elected officials and citizens alike have viewed water privatization with increasing skepticism.

Instead, the answer to the water infrastructure crisis is a renewed commitment to public funding through enhancement of the State Revolving Funds and creation of a national water infrastructure trust fund. The federal government maintains trust funds for roads and airports, even the Capitol Rotunda‚ frescoes and wildlife in South Dakota – but not for water. It‚ time for the federal government to act and ensure the nation‚ aging water and wastewater systems will be able to provide communities with safe and affordable service.

Local elected officials and citizens also are taking matters into their own hands. Movements are afoot in a growing number of communities, including Lexington, Kentucky, and Champaign-Urbana, Illinois‚ to buy their water systems from corporations. The momentum for public control is only escalating after many recent public victories in communities like Stockton and Felton, California.

Of the 254 million Americans on a community water system, 86 percent receive their water from public utilities. Public utilities are accountable to the communities they serve and in most cases are extremely well managed. It is in the best interest of the country to ensure these systems are preserved and improved.

“Water links us to our neighbor in a way more profound and complex than any other.” , John Thorson