Water legislation paves way for privatisation
In the face of almost universal opposition the Government has pushed through the legalisation for the introduction of water charges and the creation of a new water company from April next year. Despite denials from the Government this legislation actually lays the basis for the full privatisation of the Water Service.
The new water company, to be known as Northern Ireland Water Ltd, will effectively operate as a private company, working under company law statues, and able to borrow money and dispose of assets. Vast tracks of land, which can be sold off at a later date, have been allocated the new water company. While the Government may initially be the sole shareholder, the legalisation allows for the complete or part sale of its shareholding. There is no obligation on the Government to consult before the water company is transferred into private hands.
During the week the water legislation was being debated by MPs it was revealed that there had already been discussions between the Treasury and the Department of Regional Development (DRD) on bringing in privatisation as early as 2008. The management of the Water Service have made no secret of their intention to steer the service towards privatisation. Water Service chief executive Katherine Bryan spelt this out in an interview with Business Eye magazine when she said that saying that the new service would “have to be lean and mean” and operate like any other company where “business disciplines apply." The new company would “be part of the wider business community - rather than part of Northern Ireland's supersize public sector."
Rather than providing an
essential service to the public the new water company will have as its
primary objective the generation of profits and executive salaries.
This process is already underway with the privatisation of water treatment
facilities and customer services. There has also been a review of executive
salaries. It is claimed that water charges are needed to improve
the infrastructure, but much of the money raised will not be invested in
the network. The legislation even allows for the Government to take
a dividend out of the water company! The money raised from water charges
will be used to build up a capital surplus in order to attract private
investors. This is why they are at such a high level. With
this income system, and its large property portfolio, the new water company
will be a tempting takeover target. The only beneficiaries of water
charges and the privatisation of the Water Service will be multi-national