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Secret Veolia details exposed in Berlin

Posted by Winnipeg Chapter on November 11, 2010 at 3:15 PM

The German newspaper TAZ has in its Saturday edition exposed details of the secret water privatization contract that has since 1999 secured Veolia excessively high, guaranteed profits from water supply in Berlin. Over 280,000 Berlin citizens recently signed a petition demanding the Veolia contract to be disclosed to the public.

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The Predatory Water Privatization


Article form TAZ (original in German) October 30, 2010

by: Von Sebastian Heiser

"Secret Treaties show: Berlin in the privatization of its water companies guaranteed high profits to the buyers - at the expense of consumers. The taz (German newspaper) puts the contracts on the web.




More than 280,000 Berliners have signed a petition to see these documents: contracts, in which the state privatized its water works ten years ago. Since then the rates increased significantly. But the contractual basis of price gains, the state of Berlin and the private buyers had kept it till this day under wraps.


Now taz has for the first time ever obtained these controversial documents. They show how the state government has given to private shareholders a profit guarantee, which not even the country's Constitutional Court could overturn. They show the basis on which RWE and the French group Veolia are earning in the capital every year hundreds of millions with water.


The case illustrates, where it can lead, when a monopoly on a vital element like water is privatized. About 40 percent of drinking water in Germany is now being sold by companies that are wholly or partly in private hands. These include the water works of Bremen, Essen, Höxter, Gelsenkirchen, Dresden, Schwerin, Goslar, Cottbus and Rostock. And so far nowhere all contracts to the lucrative business have been published.


In 1999, the State of Berlin had sold a share of 49.9 percent of the water companies for 3.3 billion marks. The state government predicted the water works a rosy future thereby. From a bureaucratic managed state-owned company should be a water service provider, who is also active in many other areas of business. CDU Senator Elmar Pieroth said in the Berlin House of Representatives about the Water Works, "Let it still more be an entrepreneur, then the workers in the Water Works will benefit from secure, advanced and better-paid jobs, but also others who are looking for work in Berlin. "The SPD parliamentary leader Klaus Boegersaid it was "unfair" by the opposition to "play with the ever-present fears and concerns and needs of people for jobs."


But the fears were more than justified: After the sale the water corporations [Veolia and RWE] sold off most of telecommunications (Berlikomm) and waste (black pump) and other parts of their business in which they were competing with other companies. They focused instead on its monopoly, the Berlin water. Instead of the promised new jobs, the number of employees has been reduced. Currently are working for the water companies - including the remaining subsidiaries - only 5283 people. In 1999 there were 6265 people.


The profits increased significantly in the same period - because the country had also promised the buyers in the secret treaties a profit guarantee for the monopoly business. The costs were included in the water tariffs, ie paid by the Berliners. But even in 1999 declared the country's Constitutional Court, the basis for the profit guarantee unconstitutional. The secret contracts says that the government of Berlin in this case must compensate the private companies. They could, therefore, first skim the profits of water companies - the country had to take what was left.


In 2004, the State of Berlin agreed with the corporations to change the secret treaties. It includes again the original formula, which forms the basis for the profit guarantee. The formula prohibited by the Constitutional Court will continue - it was simply moved from a publicly visible law into secret contracts. What happened in the 90’s arranging such conditions and what was then the responsible finance senator now says of the business check out the whole story in the current issue of sonntaz. And the water treaties themselves are from Saturday to download at www.taz.de/wasservertrag "

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For the original article (in German) click here

For the contract (in German)  click here


Special thanks to Jutta Schuetz from Aquattac, Satoko Kishimoto of Transnational Institute and Google Translator for the english translation.

Article via Dr. Mary LeMaître, Chair, Winnipeg Water Watch


Categories: Wastewater Treatment Plant Upgrades, What's the deal with VEOLIA?

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1 Comment

Reply Rudi Hedrich
2:51 PM on January 24, 2011 
After the fiasco in Berlin,Germany,how much more proof does Winnipeg need in order to see that Veolia is not the way to go. Water should never be privatized.