'More than £250,000 of that sum was spent by Adam Smith International on a video which included the words: "Our old industries are dry like crops and privatisation brings the rain."'

A major privatisation scheme supported by UK Govt Money has collapsed leaving millions without decent water.

A question? what is the uk govt doing giving milions of pounds to a partisan right wing think tank and why is privatisation the only option this disgusting govt will consider?

actually its a rhetorical question?,



Flagship water privatisation fails in Tanzania

UK firm's contract cancelled amid row over supply

John Vidal in Dar es Salaam
Wednesday May 25, 2005
The Guardian

A flagship water privatisation scheme for Africa has collapsed amid claims that the British company involved has failed to improve the supply for millions of people.

Tanzania's government yesterday confirmed it had cancelled its deal with Biwater, which was contracted two years ago to bring clean water to the capital, Dar es Salaam, and the surrounding region within five years by installing new pipes.

The $140m (£76.5m) World Bank-funded privatisation scheme - which was supported by the UK government - was one of the most ambitious in Africa and was intended to be a model for how the world's poorest communities could be lifted out of poverty and countries could meet their millennium development goal targets.

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Tanzania has made a series of allegations against Biwater, which is working in Dar es Salaam with the German engineering firm Gauff under the name City Water.

It claims that no new domestic pipework has been installed, the company has not spent the money it had promised, water quality has declined, and that revenue has decreased.

"The company has failed to produce the goods," Tanzania's water minister, Edward Lowassa, said.

Yesterday Cliff Stone, the British chief executive of City Water, denied the accusations and said a case had been filed against the Tanzanian government for alleged breach of contract.

"It looks as if we are being confrontational, but we are not. We had a contract" he said.

He accepted that the project was well behind schedule and that no pipes had been installed but he claimed water quality and quantity had improved and that 10,000 new customers had been signed up in the last two months.

He said: "We have been trying to renegotiate the terms with a view to continuing." Mr Stone claimed the Tanzanian government had given the company wrong data about water supplies and the delays were not of City Water's making.

"We accept there is a serious problem but we proposed on May 9 that we put in a further $5m over the next year and borrow a further $6m. We said 'Let's talk about it' but the government announced the contract had terminated to the press." He said the Tanzanian government owed the company $3m.

The privatisation scheme was facilitated by British aid money. The Department for International Development paid Adam Smith International, sister organisation of the free market UK thinktank Adam Smith Institute, more than £500,000 to provide advice to the Tanzanian government.

More than £250,000 of that sum was spent by Adam Smith International on a video which included the words: "Our old industries are dry like crops and privatisation brings the rain."

According to the World Development Movement in London yesterday, Tanzania was forced to privatise its water as a condition of international debt forgiveness. "The Inter national Monetary Fund forced water privatisation on one of the poorest countries in the world in order to benefit western water companies," said Dave Timms of WDM.

The collapse of the contract throws into question other water privatisations planned around the world, and the British government's involvement in them.

Resentment against private water monopolies is growing, and there have been demonstrations in South America, Africa, the Caribbean, and Asia.

Many western companies are accused of profiting from the poor and raising prices above what they can afford.

But City Water claimed that it stood to make little money out of the scheme.

"Our declared profit was to be just 10%. There is no way we can make super-profits in Dar es Salaam" said Mr Stone.

"We have been losing money. Profits always come at the end of a contract. The plan was to use this as a model for other projects and recoup money later on."

The DfID has said it has paid more than £36m in the past seven years to Adam Smith International and PricewaterhouseCoopers to advise countries on privatising utilities.

Yesterday the international development group ActionAid condemned the World Bank and the British government.

"The British government and public should not support this kind of tied aid from the IMF and the World Bank. The Tanzanian government's decision to revoke the contract with Biwater is very welcome," said Rose Mushi, the director of ActionAid in Tanzania.

A spokesman for DfID said: "It is for the government of Tanzania to set its own policies and priorities.

"It was their decision to introduce private sector participation in the water sector in Dar es Salaam. It is not appropriate for us to comment on contractual issues."