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Case #349

Bolivian Water Utilities Returned to the People


In the poorest neighborhoods of Cochabamba, Bolivia, there is no indoor plumbing. Residents draw from communally owned wells, while their rural counterparts save rainwater in tanks for the dry months. Two years ago, gathering water in these traditional ways became illegal without a permit. Under pressure from the World Bank, the Bolivian government privatized the water system of Cochabamba, a city of 600,000 people, and the outlying countryside. This move gave sole distribution rights to Aguas del Tunari, a consortium led by a subsidiary of San Francisco-based engineering and construction giant Bechtel Enterprises.

Cochabamba's water system had been badly mismanaged in the past, but activists see another motivation behind the sale, which followed the transfer of the national airline, railroad system, and electric utilities to corporate hands. "The government privatized water to benefit the interests of multinationals," says Gabriel Herbas, an economist and member of the Coalition in Defense of Water and Life (known locally as La Coordinadora), a broad-based group of Bolivians fighting for equitable water-delivery systems.

Corporations see opportunity in selling basic services. For developing nations like Bolivia, this is a calamity in the making. For corporations like Bechtel, it's a potential financial bonanza. For instance, once Aguas del Tunari took over Cochabamba's water system in November 1999, rates soared by as much as 300 percent. After a series of protests led by La Coordinadora, one of which shut down Cochabamba for a week, the Bolivian government canceled the Aguas del Tunari deal in April 2000, returning the water to local control.

"The coalition tried talking to politicians and going to the media, but it wasn't until we took to the streets by the thousands that the government began paying attention," Herbas says. (International groups took notice too: This April, Oscar Olivera, the leader of La Coordinadora, won the prestigious Goldman Environmental Prize, which honors grassroots activists around the world.)

Under the new public ownership, water distribution in Cochabamba has improved by about 10 percent and once common shortages have largely become a thing of the past. But further progress has been hampered by the huge debt incurred years before by corrupt government managers, which led the World Bank to promote privatization in the first place.


The World Bank began encouraging the privatization of water in 1993 and has been pushing developing countries to sell off their publicly owned systems, often by making its loans contingent on the transfer. The result has often been disastrous, as is the case in Bolivia. The action of the Coalition in Defense of Water and Life was broad based and tried a variety of tactics before actually organizing people to take to the streets by the thousands. Once transferred out of multinational ownership, service improved and the people again had control of their public utility. Organized non violent protests proved to be the key factor in the end. This tactic could be used in other developing world countries to reclaim water ownership. It would take local organization. The public relations generated by the Bolivian example should be helpful. Drawing in the support of international groups and media exposure might also be helpful.
Location: Bolivia
Action: Other
Setting: Third World
Extent of Action: National
Issues: Resources
Year(s): 2001
Outcome in progress
Source: Sierra, September/October, 2001, p.16


Water, Public Utilities, Private Utilities, World Bank, Bechtel, Bolivia, Cochabamba, Aguas del Tunari
Prepared By: sl 1/02
Rating: 1
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