RWE-THAMES WATER in Asia, Middle East

RWE-THAMES WATER in Asia, Middle East (News 2005-Jun 2007)

Jakarta water privatization & workers campaign

When first privatized in 1998, PDAM Jakarta (PAM JAYA) (a public water utility owned by the city government) has approximately 3.000 employees. Shortly after the privatization, 2800 of them were seconded to the private concessionaires, Suez and Thames water. Approximately 150 employees were still working for PDAM to supervise the service provided by the private sector. After a few months of working, seconded employees received a different treatment. Their compensation differs significantly from those working directly for PDAM. To secure their welfare, hundreds of employees (PDAM’s direct employee and those to the concessionaires) gathered and formed PDAM JAYA Worker’s Union. The organization has conducted many activities, but mainly are negotiations and protests. Hundreds of members were once fired because they were trying to fight for their welfare. In the court these workers are not proven guilty of doing anything illegal so the concessionaires are forced to take them back to work. But all of these employees are not allowed to work in the field, since it is feared they will influence other workers to fight for their welfare. Nine years of experiences and fight have crystallized in to one objective of giving back the water delivery service in Jakarta to PDAM JAYA, a company owned by the municipal government.

ASIA: Workers campaigns vs water privatization

ADB plays a lead role in water sector reforms in the Asia-Pacific region. Sri Lanka was among the first of ADB’s ’guinea pig’ as a prime candidate to lead South Asia into private sector participation/PSP in water supplies’; in 1997, ADB provided assistance to change Sri Lankan water law. In 2000, ADB helped prepare a PSP management contract in Nepal as precondition for its support to the controversial US$464-million Melamchi Water Supply Project, with co-financing from JBIC and other donors. In 2005, ADB organized a forum in Bangalore (India) to draw up PSP action plans in India's urban water supply for the states of Kerala, Karnataka, Madya Pradesh, Uttaranchal and Jammu-Kashmir; target participants are from State Water Utilities in India and overseas private water companies. In 2009, ADB will approve a new $50M loan in the Philippines for a Water District Development Sector Project that aims to promote a ‘bankable’ sector investment program and capacity development for government-owned and -controlled water districts. ADB has also provided technical assistance and other forms of support to the two private water concessionaires in Manila (privatized with WB-IFC financing in 1996). Last May 2007, PSI organized a forum on ADB’s Water Policy at ADB’s 40th Annual Meeting and People’s Forum on ADB in Kyoto (Japan) where PSI water affiliates from the Philippines, Indonesia, Nepal, Japan and Korea raised awareness of harmful impacts of water privatization and argued for public sector solutions. Below are highlights of their presentations.

Electricity takeovers

December 2008: EDF buys 50% of nuclear business of USA company Constellation
December 2008: EDF bid for British Energy cleared by EC
January 2009: RWE buys Netherlands electricity company Essent from municipalities for €9.3billion

The price paid for Essent is high and financed by debt, which most companies find very hard to raise The FT Lex column says all the deals are explicable as attempts by the big electricity companies to buy the few remaining opportunities for market shares - other markets eg France, Germany, Spain, Italy - are already 'consolidated'.

The Constellation deal is that EDF buys 49.99 per cent of Constellation's nuclear business - five reactors with 3,869MW - for $4.5billion; the rest of Constellation remains an independent company; but EDF already owns 9.51% of Constellation as a whole.

FT extracts below.

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