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By Alejandra Martínez
In the 1990s, privatization was seen as the only possibility to develop water services. This situation, in the long term (ten, fifteen years), has been unsustainable.
Interview with Emanuele Lobina *, researcher on water issues, who visited the city of Buenos Aires and Rosario, invited by the Ecologist Workshop, the Union of Users and Consumers and Friends of the Earth, within the framework of the Sustainable Argentina Program.
What's your take on Suez's departure in Santa Fe?
I think that what has happened with Aguas Provinciales de Santa Fe has a lot in common with what has happened in Argentina, in Latin America and internationally with the privatization of the water service. In the 1990s, privatization was seen as the only possibility to develop water services. This situation, in the long term (ten, fifteen years), has been unsustainable. Therefore, the Santa Fe case was similar to other cases. We are talking about global processes that are repeated on a local scale. Beyond the particularities of each one, the problems encountered have been the same: failure of international politics; that is, failure of the solution proposed by the World Bank to the lack of resources in the sector. In other words, the privatized water and sewerage service concessions, as a final solution supported by the World Bank, have died.
What is the teaching that should have remained after these processes?
The importance of the need for service reform policies to be more sustainable, based on a more realistic vision, on the reform of the public system and community participation, aspects that were not considered by the World Bank, was demonstrated. The focus of this body was very narrow, as if privatization were the only possible solution. On the contrary, we have many positive experiences of successful water and sewer service reforms, which kept 100% public ownership. Many of these cases have improved transparency and the decision-making system, for example, with the introduction of elements of citizen participation. All these policies, which have not been taken into account by the World Bank, must be revalued and considered, because 90% of the water and sewerage services are in public hands. It cannot be thought that the millennium goals will be surpassed by replacing these systems, when we have seen that privatization has unsustainable costs at an economic and social level.
So what would be the alternatives for building a sustainable system?
In the first place, it is a serious mistake to consider that from the public sector there is only one way of working. There are many alternatives within public management, the important thing is that the model is based on transparency, that it is responsible and includes the community; that is to say, that it is sustainable.
How do you get to those models?
Starting with the basics. First, the management of the company must be taken care of from the operational point of view, for example, improving the efficiency and effectiveness of the service. Take advantage of the possibility offered by public property to reinvest all the resources obtained (through tariffs, subsidies, financing, etc.) in the expansion and strengthening or improvement of the company's infrastructure. This reinvestment is not possible in the case of the private regime. This is a basic question, but not a sufficient one.
What other factors should be taken into account?
For example, if there is a conflict of interest within the government, it is possible that financial resources that should be directed to improving the water service will be diverted. So it is important to start improving the decision-making process. One possible mechanism to achieve this objective is that of citizen participation in its various forms: consultation, participation and involvement through representatives of civil society in councils, etc. There was citizen participation in cases such as Porto Alegre, Brazil, Córdoba, Spain, and Grenoble, France, which were successful. In other words, representatives of civil society participate in decision-making alongside company managers. In theory, this allows the varied interests of different sectors of civil society to be taken into account, in addition to the technical opinions and objectives of the government. When there is citizen participation, the service is more likely to be sustainable in the long term. Making difficult decisions is also easier, as in the case of a tariff increase, because civil society can have greater confidence since it is involved in the decision-making process and they have control tools over their execution. . If these aspects are met, our analysis says that good management is possible.
What problems do you think a management of this type can face?
In some cases, there are problems because it is said that there is citizen participation and in reality it is only a statement. Every solution has to be evaluated for its concrete effectiveness and not for the fulfillment of empty formulas. Other times, there are problems of lack of training in public companies or lack of access to capital.
How can these problems be addressed?
A public public partnership (association), without a commercial benefit, can go a long way towards creating a sustainable process. Beyond the type of partnership, the bases must be the same: no profit motive, political objectives of solidarity assistance, trust between participating actors. Partnerships should be developed as long-term projects, in a professional manner. A public public partnership should encourage reform in three areas: institutional, training, and access to capital. It is important that all three levels of reform are carried out at the same time. If you want to have good results, 100% of the human resource training costs, which are normally low and very successful, have to be covered without profit. The problem is that, many times, these costs are not covered and the partnerships are left without resources. In some cases, these costs can be met with the cooperation of international organizations. The lack of training and education of personnel can lead to many problems in management, which is why training is necessary at all levels of the company and, perhaps, in those in charge of decision-making.
What would this international cooperation look like and what would it serve for?
In some cases, it has allowed the strengthening and improvement of institutions, of finances within the company and of infrastructure. It is necessary to promote this type of interaction with international organizations, an interaction in which the loans are not conditioned to the privatization of the service, which has been something very conflictive. In the case of Latin America, the IDB did not always condition the loans to the privatization of the service, but to the proper management of operations under public management. An exemplary case was that of Porto Alegre in 1961, which was very successful because the public company was able to strengthen itself over time.
Could this be the way to go in Santa Fe?
I think there is no place where you cannot continue. It remains to be seen if there are political conditions. There is no fixed formula as long as the principles of which I was speaking are respected. I think that in the case of Santa Fe or Rosario (if the service were municipalized) it can be done. It is important that there is a reform process in decision-making. It is possible that the reform process begins with greater transparency and greater citizen participation and it is possible that later it can be further strengthened with public public partnerships.
* Specialist in water, since 1998 he has been a member of the team of researchers at the Public Services International Research Unit (PSIRU). His studies include access and price of water for the poor sectors, privatization and risk management, service financing, decision-making on reforms in water management, institutional development under public management, training and public public partnerships. Before joining the PSIRU, Lobina studied political science and international trade law at the universities of Florence and Turin, Italy. He has also collaborated with the Institute of Higher Studies in Public Administration (IDHEAP), of the University of Lausanne, Switzerland and the University of Siena, Italy.
PSIRU (www.psiru.org) was created in 1998 to develop empirical research on privatization, public services, and globalization, within the Business School of the University of Greenwich, UK. His research is based on maintaining an extensive database of information on economics, politics, financing, and social and technical experiences on public sector privatizations around the world. This base is funded by Public Services International (PSI), the global confederation of public service unions. The PSIRU reports are accessible at http://www.psiru.org/publicationsindex.asp