Editorial: The costs of corporatisation
On July 30, nine days after the parasites giardia and cryptosporidium were first detected in Sydney's water supply, all the city's residents were informed that their tap water was unsafe to drink.
Despite a 1992 consultant's report warning that water treatment plants would have to reduce levels of cryptosporidium by 99.9%, Sydney Water Corporation let contracts for four new privately run water treatment plants without specifying any targets for giardia and cryptosporidium. These plants will cost taxpayers $3 billion over 25 years.
While the Sydney Water Corporation is still government owned, it is run as a profit-making corporation rather than a public service. Sydney Water's profits — $250 million last financial year — are now being directed to other areas, not reinvested to ensure adequate monitoring and maintenance of the water supply.
The problems with the corporatised Sydney Water are the same as those besetting the privatised electricity industry in Victoria and New Zealand, privatised bus and rail services, privatised health services, and the corporatised Telstra: when transformed into profit-driven businesses, all possible costs are cut, even in essential maintenance.
Overseas and Australian experience shows that production for profit by privatised or corporatised services results in public health and safety risks, the reduction or removal of services and increased prices.
The fact that all Sydney residents weren't warned immediately that the water supply was not safe (many people unknowingly drank unsafe water) highlights the question: should a wide range of services — water, electricity, transport, food and communications — be produced for a profit or because they are essential to guaranteeing a quality of life which all human beings have a right to?
Sydney's water crisis is a warning — the only way that we can regain and be sure of a safe water supply is if we stop any further corporatisation (or privatisation) of the service and return it to one which is committed to quality service provision rather than maximising revenue.