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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  companies.


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