Nov 30 2010

Cities Tempted to Ease Budgets Find Out the True Cost of Water Privatization

Feature Stories | Published 30 Nov 2010, 10:53 am | Comments Off on Cities Tempted to Ease Budgets Find Out the True Cost of Water Privatization -

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waterFood and Water Watch released a landmark report on Monday titled “Trends in Water Privatization: The Post Recession Economy and the fight for Public Water in the United States”. Cash-strapped localities, from Coatesville, Pennsylvania to Hawthorne, California have been wooed into selling or leasing their water systems for a short-term payoff to relieve budget problems. However Food and Water Watch uncovers the true cost of privatization, and it adds up to hundreds of dollars for the average household. In Hawthorne, the average annual water bill increased from $323 to $738 after a private company took over. In Fairbanks Alaska, annual water bills jumped from $543 to almost $1,200. When a city privatizes its water system, it usually gets a big payment up front. However, the private company can then increase rates to turn a profit, costing residents much more in the long-term than any short-term gains. Cities also lose a source of steady revenue from water bills. In San Jose, California’s publicly owned water system has been a target of private interests since the 1960s. A series of economic impact studies by the city have consistently found that private ownership increases rates for residents. A 2002 review concluded that a 30-year lease with a $40 million up-front payment to San Jose would result in an average rate increase of 21% per household.

GUEST: Elanor Starmer, Western Region Director of Food and Water Watch

For more information visit www.foodandwaterwatch.org.

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