- The Dar es Salaam Water and Sewerage Authority (DAWASA), which is being privatised, again will receive over US$ 60 million in public funds to improve infrastructure. The Tanzanian government had to borrow the funds from the World Bank.
The World Bank today announced it had granted a "new loan" to the Tanzanian government, providing only an absolute minimum of data. The benevolent of the credit, however, again was to be the Dar es Salaam Water and Sewerage Authority (DAWASA), which the Bank and IMF have urged must be privatised. Before privatisation, however, vast public funds have had to be invested in the company to make it attractive - probably much more than the expected sales revenues.
The World Bank reports it has agreed to borrow US$ 61.50 million to a so-called "Dar Es Salaam Water Supply And Sanitation Project" on favourable terms. The "project" is to improve the capacity of DAWASA to make it possible to sell off the city's water provider.
The official project description says the "development objective of the project is to provide a reliable, affordable and sustainable water supply service and improve the sewerage and sanitation services in area served by the Dar es Salaam Water and Sewerage Authority (DAWASA) that includes Dar es Salaam and part of the Coast region ."
This, according to the World Bank, would "help improve public health and well being in a city prone to cholera outbreaks or other water borne diseases and support productive activities of the country's main economic centre."
Critical voices however point out that experiences from South Africa show that privatisation of public water suppliers - which is the background for DAWASA's modernisation - mostly lead to the opposite. With a commercialised water supply, increased prices make clean water out of reach for the poor majority and thus increase the risks for "cholera outbreaks or other water borne diseases."
Meanwhile, the privatisation of DAWASA has led to a significant increase in Tanzania's public debt. Only last year, the Tanzanian government raised an international credit to fund a US$ 145 million upgrade of DAWASA. With today's World Bank credit, the modernisation of DAWASA has cost Tanzania more than US$ 200 million in just one year.
The International Monetary Fund (IMF) has insisted on privatising DAWASA for around five years, as one of the conditions to include Tanzania in the enhanced Heavily Indebted Poor Countries (HIPC) initiative. HIPC inclusion provides Tanzania with a significant debt service relief, theoretically worth billions of dollars. Meanwhile, the privatisation process only has increased Tanzania's foreign debt.
While DAWASA has been and is being upgraded through these borrowed funds - a necessary step given the city's poor water supply - Dar es Salaam residents however have had to pay the lion's share of these costs. During DAWASA's commercialisation process, water fares have hiked. The modernisation of DAWASA also principally has provided the entity with modern control and billing systems, enabling it to cut water supply to non-paying customers.
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