A billion people lack clean water and 2.6 billion lack basic sanitation but the obstacles they face usually have more to do with ideology than practicality.
Even though private water services deliver clean and safe water to millions around the world, many politicians and NGOs oppose profit being made from “essential resources” like water. Oxfam says: “Rich country governments and international agencies such as the World Bank … hinder development by pushing private sector solutions that do not benefit the poor.”
In this vision, the private sector consists of large multinationals that serve only the wealthy and exploit the poor. But when public utilities refuse to recognize and connect slum-dwellers, it is the private sector--from water porters to larger companies--that serves the poor.
I recently visited the medium-sized Kenyan city of Kisumu where half the population has no domestic water connection--a consequence of ineffective public management and rapid urban growth, including slums. In the void left by the public utility, numerous actors, including local and internationally-funded NGOs, have sprung up to meet the demand for water.
One not-for-profit NGO served around 4,000 people through a number of kiosks. Water used to cost up to €0.12 per 20 litre jerry can--approximately four times the price of tap water in London --but their kiosks sold it for €0.01.
A community charity success story! But the management committee did not consider their service to be a business and service suffered as a result.
During daily electricity cuts, pumping stopped and the suburb went without water--even though a petrol generator could have been profitably used. Some of the kiosk operators went out of business because they could not keep going on the tiny profit allowed.
During power cuts, the price returned to its normal level of €0.06-0.12 as water was only available through water porters. Finally, the NGO decided that they would use the surpluses from water sales to finance other projects, rather than save for the eventual replacement of the pump.
In a neighbouring suburb, a local engineer (who would rather keep a low profile) decided to raise chickens and started taking water from a small river and producing drinking water in his backyard in a home-made treatment plant.
He quickly found that his neighbours were willing to buy his water. In no time, he had a doorstep water business, selling to neighbours, water porters and tanker-trucks.
He uses electric pumps but also has petrol pumps for when the power fails.
He employs five people full-time and his high quality chlorinated water supplies trucks serving big hotels and water porters serving the poor. He sells 70m³ per day but could provide enough for 10,000 people. He charges a fixed €0.015 for a jerry can, does not increase his price during shortages and never runs out of water.
These two operations are in a virtually identical setting, providing a comparable service. One is for profit, one is not. One sprung up due to the ingenuity and enterprising spirit of a local resident, the other at the instigation of a large, international NGO, backed by grants, finance and “capacity building.”
The private supplier might have a slightly higher retail price but the overall cost paid by the NGO’s consumers ended up being higher. The service was unreliable, with shortages and lengthy queues (“time is money” is a universal concept). The chicken farmer extracts a good income from his business--by ensuring that all his customers have water at a price they can afford, when they need it.
Before arguing that selling water for profit is unethical, ideologues should consider how many people like him are working to provide the poor with water, all over the world. Such entrepreneurship is crucial in countries like Rwanda where around 45% of the population relies on unprotected wells for water.
The World Bank estimates that “in most cities in developing countries more than half the population gets basic water service from suppliers other than the incumbent official utility.”
Without international backing or local political support, and in the face of many political and legal obstacles, many private entrepreneurs provide a better service than the public utility. Quite simply, if they didn’t, they would not stay in business for long--but in many countries it is illegal for private individuals or companies to extract or to sell water.
The poor deserve practical solutions to their basic needs from whoever can best supply those solutions: they do not deserve ideology that gives an unaccountable monopoly to local authorities, often corrupt or simply incompetent. There is no one size that fits all.
Alex Nash is a water engineer who has worked on private, public and NGO projects in a number of countries