Montree Chantawong
Project for Ecological Recovery (PER)
Waterworks
The Metropolitan Waterworks Authority (MWA) and the Provincial
Waterworks Authority (PWA) state that enterprises governed
under their own law are responsible for waterworks production
throughout Thailand. However, as a result of an Asian Development
Bank(ADB)-funded study on privatisation of the waterworks
authorities in 1995, and loan conditions set by the International
Monetary Fund, World Bank and ADB in 1997, the MWA and the
PWA are being privitised with the waterworks being sold
to the business sector.
The claimed reasons underlying the privatisation
of the waterworks are to reduce government spending and
to maximise efficiency in providing clean water to the public.
At the moment, sources of raw water for waterworks production
comes from natural water sources, irrigation systems and
groundwater. The government gives priority to the waterworks
sector in using (processing and transporting) water.
In privatising the waterworks, the government
gives licences to private companies, with concessions being
allotted for each of the country's 75 provinces. Under the
Waterworks Enterprise Law, a company that receives a licence
would become a monopolistic enterprise with a concession
to provide waterworks services in a province.
Meanwhile, the government continues to subsidise
the privatisation of waterworks. For example, the government
sells raw water to the private sector for as low as 0.50
baht (US$0.0119) per cubic metre. And even with this very
low price, the companies do not have to bear the costs of
construction of irrigation and transportation infrastructure,
and are not liable for the social impacts that inevitably
emerge as a result of large-scale irrigation development
projects.
In the contracts between government and private
companies on water purchase, a minimum volume of water to
be purchased was guaranteed by the government. If total
water-use and purchases are below the volume guaranteed,
the government must pay compensation to the companies equal
in value to the difference between the volume actually purchased
and guaranteed volume. These payments are generally drawn
from the taxes paid by Thai citizens. Furthermore, according
to these contracts, the government must bear the investment
costs on expansions of waterworks infrastructure, despite
the fact that it is the licensed companies that are paid
for the water delivered to consumers. The costs of expansion
will become a part of Thailand's public debt. Moreover,
the government has proved its willingness to allow these
companies to increase the price of tap water.
All the governmental policies have been undertaken
under the marvelous term of "free trade"; but
water privatisation in Thailand is creating monopolies and
therefore eliminating real competition in the market-place.
Under such conditions, the public will not benefit from
privatising waterworks either in the short- or long-term.
State Irrigation System
The state's irrigation system includes dams, dikes and canals.
Despite being a man-made water system, much of the irrigation
system still depends on natural waterways for conveying
water to users. The Royal Irrigation Department, the Department
for Energy Promotion and Development, and the Electricity
Generating Authority of Thailand are major agencies that
are responsible for construction and maintenance of the
irrigation system.
In recent years, the management of irrigation
system has undergone a huge transformation. The perception
of the development of the irrigation system has changed
from "infrastructure that government must provide for
the benefit of farmers" to "investment in irrigation
services that guarantee most economic returns". As
policy based on this latter perception emerges, the farmers
are to pay for water used on their farms and thereby to
pay the 'recovery cost' of the irrigation system. With the
cost of purchasing water, farmers are driven to grow cash
crops that serve the demand of the globalised market, thus
reducing their own decision-making power about what food
they grow and for whom they grow it. Such changes have resulted
from loan conditions(*2) set by the ADB under its Agriculture
Sector Program Loan (ASPL) in 1999 and through the technical
assistance from the World Bank in preparing the Ninth National
Economic and Social Development Plan (2003-2008) in 1999
and 2000. These changes have been formulated under the logic
of decreasing governmental spending, maximising efficiency
of water usage and promoting free trade.
(*1) This article is excerpted from Chantawong,
Montree. Water Privatization in Thailand:Situation and Impact"by."
(*2) In the Development Policy Letter and Policy Matrix,
ADB required Thai government to reform water management
structure of the country as a condition for the loan. ADB
called for a formulation of National Water Resources Policy,an
issue of Water Law and an application of policy on cost
recovery in irrigation, an increase in National Water Resource
Committee
壮 authority in managing water resources nationwide, and
an appointment of river basin organizations in three pilot
river basins. It also required a privatization of irrigation
system by having private company take care of irrigation
operation system and having farmers in the irrigated share
the cost occurring from water management.
