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dam-l Editorial on LHWP/LS
This is from Business Day (SA).
17 November 1999
Wolfensohn will lose face if
he gives nod to dirty dozen
World Bank meets today on Lesotho water project, write
Patrick Bond and David Letsie
TODAY in Pretoria the World Bank meets on the
corruption-plagued
Lesotho Highlands Water Project. Bank president James
Wolfensohn,
who is said to have a strong interest in the case, has a
chance to put his
money where his good-governance mouth is. After his
speech to last
month's Transparency International conference in Durban,
expectations
are high.
But they have been high in relation to third-world debt
cancellation, too,
because of the worldwide Jubilee 2000 movement. Wolfensohn has
disappointed the Jubilee campaign by providing stingy
relief tied to
onerous conditions, such as his demand last year that
Mozambican
public health fees for impoverished clients be
quintupled, in exchange
for a meagre 9% annual payment reduction.
The Jubilee 2000 South-South Summit is being held later
this week in
Midrand. More than 200 representatives of debt groups
from across the
third world are demanding that Wolfensohn fulfil his
historic duty on the
eve of the millennium, or face calls for a boycott and
disinvestment
campaign against World Bank bonds.
The simpler issue on the agenda of today's meeting is
corruption,
specifically the padding of Katse Dam construction costs
by a "dirty
dozen" of multinational corporations to fatten at least
one official's
Swiss bank account by at least R12m. The bank played a
crucial role in
the water scheme. It project-managed many core
components, lent
Lesotho $150m (which it should now cancel), and
established a secret
London trust as a way of circumventing mid-1980s,
anti-apartheid
financial sanctions.
It was revealed in September that the bank gave official
support to the
corrupt project head, Masupha Sole. In 1994, six years
after Sole's
reign of bribery and corruption began, a senior bank
official sent a
strongly worded letter to the Lesotho government
insisting no action be
taken against Sole because it would "seriously jeopardise
the progress of
the project".
Dubiously, the bank claimed it was unaware Sole was about
to be fired
for corruption. A closely related background issue evokes
corruption of
a different type: the role the bank plays behind the
scenes in persuading
SA officials to adopt its controversial views on water
pricing and
privatisation.
The bank's SA Country Assistance Strategy of March this
year claims
Lesotho task manager John Roome's "power-point
presentation (was)
instrumental in facilitating" a revision in SA's approach
to bulk water
management.
In stingy bank style, Roome advised then water and
forestry minister
Kader Asmal in October 1995 to drop proposals for a free
lifeline tariff
and rising block tariffs because municipal "private
concessions (would
be) much harder to establish"; to establish a "credible
threat of cutting
service" to nonpaying consumers; and to be "very careful about
irrigation for 'previously disadvantaged'" South
Africans". Moreover, a
proposed $750m World Bank loan for infrastructure,
apparently now
under consideration would, if deputy resident
representative Junaid
Ahmad has his way, promotes municipal services privatisation,
including Johannesburg's controversial Igoli 2002
corporatisation plan.
The plan envisages a mass transition of low-income
Johannesburg
residents into pit-latrine ghettos. This followed the
argument by Ahmad
in a 1994 plan for urban infrastructure - adopted in
revised form in 1997
- that government should not provide water-borne sewage to
low-income households.
Ahmad offered this advice with no reference to the public
health and
environmental implications of dumping excrement directly
through
porous dolomitic soils into a high water table. In 1991,
when such a
strategy was applied by apartheid bureaucrats in
Winterveld, cholera
broke out. No wonder Johannesburg's policy has been nicknamed
"eColi 2002". The city now faces a spectacular
contradiction associated
with World Bank advice: the waste of money associated
with the first
two Lesotho highlands project dams.
The main reason why Vaal water, which until 1995 cost 30c
a cubic
metre, is being augmented by Lesotho water that is five
times more
expensive, is that the bank overestimated the expected
demand for water
from Lesotho in Gauteng by 40%.
A threefold threat is therefore emerging for the World
Bank: firstly, that
when more bank loans for Lesotho dams are pushed upon
unwilling
Gauteng water consumers, they will be increasingly
unwilling to pay;
secondly, that bank ideas about water infrastructure
policy will be
rejected by the "beneficiaries"; and thirdly, that
municipal worker,
community and political protest will derail the
privatisation of
Johannesburg.
These errors of technical and political judgment are
coming to a head just
as Wolfensohn addresses the Lesotho corruption crisis.
A wide range of social, community and labour movements
has united in
protest, including the SA Municipal Workers' Union,
Jubilee 2000 and
township civic groups.
Not only Ahmad, Roome and other staff have erred in
policy and project
work. Wolfensohn probably overstated his institution's
commitment to
fighting corruption at the Transparency International
conference in
Durban last month.
After the hype about how corruption causes poverty,
expectations are
high that he will debar the corporations implicated in
Lesotho bribery
from further World Bank work. Many of the companies -
which include
ABB of Switzerland, Impregilio of Italy, Dumez of France
and SA's
Concor - are still active in bank projects.
Will Wolfensohn have sufficient will to blacklist the big
firms? It is the
firms' big northern governments which ultimately pay his
salary. An SA
minister was right to label northern reluctance
"criminal" at a recent
World Economic Forum meeting. Anger will emerge today if
Wolfensohn and the bank wink and nod at the dirty dozen.
* Bond is a Wits University political economist and
Letsie is an
Alexandra activist. They gave invited testimony to the World
Commission on Dams Southern Africa hearings last week.
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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