Group Tasks Lagos, Others On UK Water Privatisation Research Outcomes

A non-governmental organisation, Renevlyn Development Initiative (RDI), has urged the Lagos State government and other state governments in Nigeria to learn from the failed water privatisation in the United Kingdom (UK) and adequately fund public sector solutions to water crisis.

The group made the call in a 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 £85.2bn 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 companies over the recent Brixham poisoning scandal and rising bill prices. The report shows underinvestment in the UK’s infrastructure, which many believed has led to sewage spills and water leaks.

The research published by the British Broadcasting Corporation (BBC), revealed that shareholders in some of the UK’s largest water companies 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 £5.5bn when adjusted for inflation.

A spokesperson of 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 annual levels seen before privatisation” but David Hall, visiting professor at the PSIRU at the University of Greenwich, insisted that water companies have invested “less than nothing of their own money” and are “treating their customers like a cash cow”.

Company accounts examined by the university include Thames Water, United Utilities, and Severn Trent.

However, in his 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 privatization is a mirage packaged by the World Bank and the International Finance Corporation (IFC) to fool developing nations to bug them down in debt. We hope the Lagos State Government and states across Nigeria can learn from this.

“Research in the last 10 years has shown a trend towards remunicipalization in countries that have adopted water privatization. We do not need to tread that path.”

Similarly, aside from the poor investment by the privateers in the water sector, there were 464,056 sewage spills in 2023, according to the Environment Agency, a 54% increase on the previous year. The spills came from the toilet, personal washing, or domestic cleaning such as from a washing machine or doing the dishes. It also includes run-off from roads.

The RDI spokesperson reiterated that the findings do not disappoint water justice groups, but instead confirm long-standing researches across the globe that show disappointing outcomes of privatization that have fueled a steady recourse to remunicipalizations.

“The UK example only adds to existing research that shows that the solution to the global water crisis is in the realm of a public democratically controlled and sustainably funded water sector. Privatisation in the water sector is a huge scam,” Adediran averred.