Green Action wants to ensure Croatian waters don’t end up in private hands
The Croatian Concession Act has been a subject of discussion for over a decade, and now that the new proposal is out, interested parties are sending in their comments. Members of Green Action (Zelena Akcija) sent in their comments after the public discussion on February 19, 2016. According to their press release, their aim is not to criticize the regulation that is in dire need of improvements, they only want to point out several critical points. These are their two main concerns:
“The draft of this new Act removes some of the previous obstacles in terms of the privatization of water services. Water Act clearly states that “Water is not a commercial product; it is a legacy which has to be cherished, protected and used wisely and rationally”. New draft states that its provisions do not relate to water services. This can be interpreted in a way that water service concessions could possibly be managed with future special Acts. We would like to remind everyone that all political parties, during the campaign, were very against any possible water privatization. This same opinion was voiced by the current ruling parties. The question of water privatization is very closely connected to the answer to the question: Who provides the service? Water distribution can be organized both publicly and privately, in various combinations and private / public ratios. Privatization of our waters is a public policy which organizes water distribution and drainage with the participation of the private sector. Their involvement can be organized in various ways – from long-term concessions and public- private partnerships, through the sale of majority shares in water distribution companies or through the sale of actual water distribution infrastructure. In practice, water is most often privatized with water service concessions. Experiences from countries that have privatized their water services show very clearly that this did not create necessary investments or the increase in the quality of services, but it did increase the price for end consumers whose money was now directly turned into the profit of big water corporations. Service availability, quality, and coverage, especially for low-income users, did not increase and it some cases it even decreased. After 20 years of privatization euphoria, an increasing number of European, African and Asian countries, as well as many states in the US, are now coming to a conclusion that all water services should be organized without the participation of the private sector. In the last few years, we can see a trend of termination of concession contracts with private companies or re-municipalisation of water distribution and sewage services” Green Action states.
“Second problem relates to the fact that this Act, in our opinion, does not adequately take into account the cumulative effect of any changes in the concession relations after the concessionaire is selected. We believe some freedom to intervene in the concession relations is necessary, even after the contract is signed. Protection from having those interventions turn into an independent legal procedure that will not have to go through the adequate public tender is most often ensured by defining the scope of allowed interventions. However, we should also foresee mechanisms to prevent a string of small changes from going around protective mechanisms. The cumulative effect of several small changes can be significant and in the end it can result with a completely different legal transaction from the one that passed the public tender and controls that were related to it” Green Action commented.
Given that this particular Act is of great public interest and if we know Croatia has one of the largest and cleanest freshwater supplies in Europe, it will be interesting to see whether other organizations will also comment on the proposed draft and whether changes will be made to ensure this natural treasure does not end up in private hands.
