A group, Renevlyn Development Initiative (RDI), has urged Lagos and other state governments to learn from failed water privatisation in the United Kingdom (UK) and adopt public sector solutions to the water crisis.
RDI made the call, yesterday, in reaction to the just-released study by the Public Services International Research Unit (PSIRU) of the University of Greenwich, which showed that investors in England and Wales’ water sector (largely driven by profits) withdrew over £85.2 billion from 10 water and sewerage firms in England and Wales since the industry was privatised more than 30 years ago.
The new research comes amid growing public fury towards water firms over the recent Brixham poisoning scandal and rising bills. The report shows there is under-investment in the UK’s infrastructure, which many believe has led to sewage spills and water leaks.
The research, published by the British Broadcasting Service (BBC), revealed that shareholders in some of the UK’s largest water firms withdrew tens of billions of pounds but failed to invest, with firms planning to raise household bills to fund future spending. Between 1989 and 2023, money invested by shareholders in the largest firms shrunk by £5.5 billion when adjusted for inflation.
A spokesperson for Ofwat, the industry regulator, said it “strongly refuted” the figures, even as it wholeheartedly agreed with demands for companies to change.
Water UK, which represents the industry, said investment in the sector was “double the yearly levels seen before privatisation,” but a visiting professor at PSIRU, David Hall, insisted that water companies had invested “less than nothing of their own money” and “treating their customers like a cash cow”.
In reaction to the findings, RDI Project Officer, Ifeoluwa Adediran, said: “The study has justified the argument of RDI and other water justice groups that water privatisation is a mirage packaged by the World Bank and the International Finance Corporation (IFC) to fool developing nations to bug them down in debts. We hope the Lagos government and states across Nigeria can learn from this.”
“Researches in the last 10 years have shown a trend towards remunicipalisation in countries that have adopted water privatisation. We do not need to tread that path.”
