BOLIVIA YIELDS ON WATER CONCESSION AFTER DEADLY PROTESTS

COCHABAMBA, 2000-04-10. — COCHABAMBA, April 10 — Bolivia’s Government has agreed to end the private water concession in this city after a confrontation that has brought crowds into the streets, paralysed commerce and left a seventeen-year-old boy dead. The agreement represents a substantial victory for the Coordinating Committee for the Defence of Water and Life, the alliance of workers, farmers and neighbourhood organisations directing the protests. Water service is to return to local public management. But the immediate task is less ceremonial than practical: restoring an ordinary supply of water, reopening the city and establishing whether the promises made under pressure will be carried out.

The concession at the centre of the dispute was awarded last September to Aguas del Tunari, a consortium involving the American engineering company Bechtel and other foreign and Bolivian investors. It took over the municipal water undertaking, SEMAPA, in a city where reliable service was already far from universal. Many poorer households lacked connections and depended upon alternative suppliers, while existing customers endured an inadequate system. The concession promised investment and expansion, including the costly Misicuni project. Its opponents contend that the arrangement required residents to finance an ambitious undertaking through charges they could not afford before receiving the improvements they had been promised.

The first bills under the new arrangements transformed a technical argument about infrastructure into a popular political cause. Increases varied, but numerous households reported sharply higher charges, and some faced bills that had doubled or more. Officials and the company have defended higher tariffs as necessary to repair and enlarge the service. For families balancing food, transport and rent against irregular earnings, however, the distinction between financing tomorrow’s improvements and paying today’s bill offers little comfort. The controversy has consequently drawn in people who might otherwise have had little reason to stand together: factory workers, market traders, professionals, irrigators and residents of districts still awaiting dependable pipes.

The campaign is led publicly by Oscar Olivera, a shoe-factory worker and trade union organiser. The Coordinadora, as the alliance is generally known, has insisted that the dispute concerns control as well as cost. Rural irrigators fear that the water legislation accompanying the concession threatens arrangements under which communities have long managed their own supplies. Urban residents question how an essential service could be transferred without their effective consent. Law 2029, enacted last year, has therefore become a second target beside the concession itself. The Government has now accepted that the legal framework must be changed, though an agreement to revise a law is not yet the same thing as a completed revision.

This week’s struggle follows earlier confrontations rather than a sudden eruption. Demonstrations and blockades in January forced negotiations over the tariffs. Further protests in February brought violent clashes with the police and deepened distrust of assurances from the authorities. A popular consultation organised by the Coordinadora in March produced an overwhelming vote against the concession among those participating. It was not an official national ballot, but it gave the campaign a powerful organising instrument. When renewed action began this month, the demand was no longer simply for an adjustment to particular bills. Protesters sought the departure of Aguas del Tunari and a different basis for governing the water supply.

President Hugo Banzer’s Government answered the widening unrest on April 8 by declaring a state of siege. The exceptional measure permits restrictions on ordinary liberties and was accompanied by arrests of protest leaders. Disorder has not been confined to Cochabamba: roadblocks and other disputes elsewhere have increased the pressure upon the administration. Here, the gravest casualty is Víctor Hugo Daza, seventeen, who was shot dead on April 8. His death has given the dispute a significance beyond account books and contracts. The concession’s withdrawal cannot answer the questions raised by the use of armed force, and the Government must now face demands for accountability as well as for affordable water.

The gulf between the company’s position and that of the protesters was starkly expressed before the settlement. Aguas del Tunari executive Geoffrey Thorpe was quoted as saying: “If people don’t pay their water bills, their water will be turned off.” To the operator, collection is indispensable to running and extending a service. To its opponents, the statement demonstrates the danger of treating access to water chiefly as a commercial obligation. Company representatives have left Cochabamba amid the violence. The authorities describe the concession as at an end; the circumstances of its termination, and the division of responsibility for that outcome, remain contentious.

The argument also reaches beyond Bolivia. International lenders have promoted changes intended to place water undertakings on a firmer financial footing and reduce reliance upon public subsidy. A World Bank report last year stated that “no subsidies should be given to ameliorate the increase in water tariffs in Cochabamba.” That prescription makes clear the financial discipline expected of the new arrangement. The streets have supplied an equally unmistakable political answer. Whatever the merits claimed for recovering investment through charges, a service cannot be insulated from the circumstances of the people expected to pay. The Government has discovered that a concession enforceable on paper may nevertheless prove ungovernable in practice.

For local business, the immediate concern is the reopening of roads, shops and markets after days of disruption. Blockades have obstructed the movement of people and goods, while street fighting has made normal trading hazardous. An end to the confrontation offers relief, but it does not settle the city’s underlying economic problem. Public management will inherit the same deficient network and the same need for investment that helped justify the concession. Nor does the company’s departure by itself connect an unserved household or make intermittent water reliable. The political victory will therefore be tested not merely by lower charges, but by the performance of the undertaking that replaces the concessionaire.

Tonight the balance of authority has plainly shifted towards the citizens’ alliance, but the terms of a durable settlement remain to be worked out. Protest leaders must judge whether the Government’s undertakings are sufficient to bring people home, while officials must turn concessions made in negotiation into administrative and legislative action. Questions of management, finance and representation cannot be postponed indefinitely. Cochabamba has demonstrated that water policy can mobilise a city and force a national retreat. Whether the resulting public service can command both trust and the resources needed to function is the question now confronting the victors as well as the Government.