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Tanzania wins legal battle against British water company
11 January 2008
City Water Services, a subsidiary of British-based water company Biwater, has lost an international legal case for breaching its contract to deliver water and sanitation services in Dar es Salaam, Tanzania between 2003 and 2005. The contract with City Water was issued following a controversial water privatisation, supported by the UK government.
The outcome vindicates the Tanzanian government’s decision to terminate the contract due to its dissatisfaction with the standard of service delivered by the water company. Tanzania has been awarded over £3 million in damages and over £500,000 in legal costs.
Vicky Cann, policy officer at the World Development Movement, said: “The evidence clearly shows that water privatisation has been a disastrous policy for poor people around the world, but the World Bank insisted on imposing water privatisation in Tanzania in return for much needed debt relief. Ultimately, privatisation led to a fall in the standard of service and City Water Services failed to meet targets set out in the contract.”
“Biwater now has a moral duty to ensure that, despite City Water Services being in liquidation, this money is paid promptly and in full so that the government of Tanzania can focus on making essential improvements to water and sanitation.”
In a separate legal case following the collapse of this water privatisation project, Biwater has lodged a case at the International Centre for the Settlement of Investment Disputes (ICSID) against the government of Tanzania. The case is being held in secrecy at The Hague and is thought to involve a claim for approximately US$20 million. The ruling is expected during 2008.
The World Development Movement campaigns against the imposition of water privatisation on countries around the world by the World Bank, and against the use of UK government aid to fund such projects. The World Development Movement has shown that the negative experience in Tanzania is not an isolated case. In many poor countries, for example, Bolivia, Mali and The Gambia, water privatisation has consistently failed to deliver clean, affordable water to the poor. The organisation is calling for investment in the public sector and progressive reforms to help tackle the global water crisis.
ENDS
To organise an interview or for background information to the Biwater – Tanzania case, please call
Kate Blagojevic
Press officer, World Development Movement
0207 820 4900/4913, 07711 875 345, Email:
Notes to Editors
- This international legal case was brought under the rules of the United Nations Commission on International Trade Law or UNCITRAL and was heard in London. The case was brought by the Dar es Salaam Water and Sewerage Authority against City Water Services. City Water Services is owned by Biwater Gauff (Tanzania) Ltd (51 per cent) and a Tanzanian partner, Superdoll Trailer Manufacturing.
- The legal case at ICSID is being brought by Biwater Gauff (Tanzania) Ltd against the Government of Tanzania.
- The World Development Movement has been campaigning against water privatisation policies pushed upon poor countries by donors, international financial institutions and companies for several years, including in Tanzania. For more information see http://www.wdm.org.uk/campaigns/water/private/tanzania.htm
- The World Development Movement campaigns to tackle the root causes of poverty. WDM believes that charity is not enough and aims to change
the policies that keep the developing world poor. It is a democratic and politically independent organisation with 15,000 supporters and 70 local groups across the UK. For more information, go to www.wdm.org.uk
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