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Tanzania awarded nearly $8 million in dispute over failed water privatization

Tribunal finds water services deteriorated following World Bank-backed initiative.

Women in Tanzania collecting water - BBC photo.by the Bank Information Center

January 18, 2008 — A UK tribunal ruled in favor of the government after finding that water services deteriorated following a controversial, non-competitive privatization process backed by the World Bank. A separate case brought by the company against Tanzania worth $20 million is being decided behind closed doors at a World Bank court.

The Guardian reports that an international tribunal threw out a claim by British water company Biwater against the Tanzanian government over a breach of its contract to provide water and sewage services in Tanzania's capital, Dar es Salaam.

According to The Guardian, a panel in London ordered Biwater to pay nearly $8 million in damages and fees Dawasa, the state water utility in Dar es Salaam. The case was brought under rules of arbitration established by the UN Commission on International Trade Law (UNCITRAL). The panel ruled in Tanzania's favor after it "found that water and sewerage services had deteriorated" since Biwater took control of the city's water supply in 2003 in a controversial, non-competitive privatization process backed by the UK government and the World Bank. In 2005, Tanzania cancelled its contract with Biwater after it failed to meet its obligations to provide water to the city.

In a press release produced by the World Development Movement (WDM), policy officer Vicky Conn asserts that "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.". . .

BIC is an independent, non-profit, non-governmental organization that advocates for the protection of rights, participation, transparency, and public accountability in the governance and operations of the World Bank.

Links and sources
  Tanzania is awarded nearly $8 million in dispute over failed water privatization, on the Bank Information Center (bicusa.org) website, January 18, 2008
  Tanzania wins �3m damages from Biwater subsidiary, by Ashley Seager, The Guardian, January 11, 2008
  Tanzania wins legal battle against British water company, World Development Movement, January 11, 2008
  Urban poor are neglected in World Bank project, posted on actionaid.org, September 27, 2007

Posted: May 22, 2008

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