Guerra de Agua en Cochabamba, Bolivia

Background
This case study takes place in Conchabamba, Bolivia, the third largest city at the time
this water conflict took place in 1999. Conchabamba is located in central Bolivia
between La Paz and Santa Cruz in a valley with an elevation of 2,558 meters. The climate
is semi-arid with and average annual rainfall of 518 mm and temperature of 17 C
(climate-data.org). The valley was originally settled by indigenous groups because of its
fertile soil and temperate climate. Water conflicts have been a part of the regions
history dating back to when Spain colonized Bolivia. More recently, Conchabamba has
been experiencing water scarcity in the form of droughts which has lead to water
shortages and many people that struggle to have access to clean and affordable water.
The problem
The Servicio Municipal de Agua Potable y Alcantarillado (SEMAPA) was formed in
1967 to provide drinking water and sewer services to Cochabamba. To ensure people had
good water quality the quality standards for drinking water by the World Health
Organization and the Panmerican Health Organization were adopted by the Bolivian
government and its water utilities in 1985 (Nickson & Vargas, 2002). Sadly, ten years
after adopting these standards the three largest cities in Bolivia, La Paz, Santa Cruz, and
Cochabamba were all failing to meet these standards (Repblica, 1996). In Cochabamba
SEMPAPA was having problems with efficiency and coverage due to its aging
infrastructure and lack of investment. Taxes collected by water utilities only covered
operational costs so there was no money to invest in expanding water coverage and
repairing the aging infrastructure (Nickson & Vargas, 2002). The National Institute of
Statistics reported that in 1997 only 66% had a piped water connection. Water shortages
were always a problem due to insufficient supply of water and water lost from leaking
pipes.
It has been recognized since the sixties that Cochabamba must find alternative sources of
water to keep up with its growing water demand due to its growing population and use of
water for irrigation. To meet this growing demand a long-term project called the Misicuni
Multipurpose Project (MMP) was proposed. This project envisioned building a 120 m
dam for energy generation and reservoir for water storage to be used for irrigation and
drinking water. This large-scale project would require a 19.4 km tunnel and a
hydroelectric power plant to be built, and would service five municipalities in the valley.
In 1987, the Empresa Misicuni was formed by the national and departmental government,
the municipality, and SEMAPA to bring about the MMP. In spite of Empresa Misicunis
efforts several feasibility studies were conducted by the World Bank, which concluded
the MMP project was too costly.

During the 1980s the World Bank, International Monetary Fund and other international
financial institutions (IFIs) promoted Private Sector Participation (PSP) because it was
thought that privatization would do a better job at providing good quality water and
expanding service than the state-owned water utilities (Alurralde, 2006; Coleman, 2012;
Nickson & Vargas, 2002). PSPs would also allow national governments to invest in areas
other than rural areas (Partnership). It was also believed that cost-recovery should be the
basis for financing urban water services where taxes will cover operational,
improvements and expansion costs (Nickson, 1997). Based on this new framework and
the support of IFIs the Bolivian government started a bidding process for companies to
bid on providing water services to Cochabamba in 1997. This initial bidding process was
abruptly stopped because the owner of the water infrastructure assets, the municipality
was not involved in the bidding process. The bidding process started again in 1999 where
companies were also required to submit a plan for the MMP option. After a year the only
one consortium, Aguas del Tunari (AdT) submitted a bid, but because Bolivia law
requires that there be a minimum of three bids the bid was not considered.
Not to be deterred by this setback an inter-institutional commission was formed by the
Bolivian government to negotiate with the consortium. The commission was made up of
the general manager of Empresa Misicuni, executive director of SEMAPA, the water and
electricity superintendents, the regional government representative and the Vice Ministry
of Investment and Privatization. In the end the commission recommended awarding a
contract to AdT since it was believed to be in the best interest of Cochabamba and
Bolivia as a whole (Partnership). The contract gave AdT exclusive water rights to the
water resources and any future sources of water in an area called Cercado, the region
where Cochabamba is located (Nickson & Vargas, 2002; Partnership). The exclusive
right to be the sole provider of water and sanitation services was part of the contract and
required potential costumers connect to their system. This meant that privately drilled
wells would have to have water meters installed on them and for the users to pay AdT for
the cost of water (Assies, 2003). In addition, the water rights of irrigators and small
communal services were affected by this contract. A minimum rate of return of 15% and
a maximum of 17% was agreed upon and lead to tax increases in order to achieve a return
on their investment (Partnership). Initially the average tax increase was 35% but went as
high as 150% at times according to Global Water Partnership.
In order to make the contract and all of its agreements with AdT legal the Bolivian
government passed Act No. 2029 in November 1999, which contained language granting
large companies exclusive rights to water, sources for water and sanitation services for
forty years. This act also prohibited people from making new extraction points such as
wells and alternative systems for water services requiring all costumers to be connected
to the system. This act allowed monopolies to be formed and did not contain any
regulation protect costumers from being overcharged. With all this language granting
exclusive rights to AdT it was only a matter of time before the public had something to
say.

Attempts to resolve the problem

Less than two months after AdT took control of water services there was a large social
outcry from the citizens of Cochabamba to protest the tax increases and the fairness of
the contract. In response to Act No. 2029 and AdT an organization called Corrdinadora
Departmental en Defensa del Agua y de la Vida was formed. This organization brought
many different groups from rural and urban areas around Cochabamba together to
demand the termination of the contract with AdT. In early January the Corrdinadora
selected representatives from its different constituents to take part in negotiations with the
government. The negotiations between the Corrdinadora and the government proved to
be unsuccessful which lead the Corrodiandora to result to social pressure through public
demonstrations, civil strikes, and marches. The social unrest escalated in February when
protesters clashed with police and the negotiations did not go anywhere. In March an
estimated 90,000 people voters answer a survey where 96% of voters said that they
believe the contract with AdT should be canceled and 97% said that they disagreed with
the privatization of water resources in Act No. 2029 (Partnership). However, this was not
enough to cancel the contract. Thus, began the Guerra de Agua in April where a group
calling themselves Guerreros del Agua had violent demonstarations with the police
which lead to a state of emergency in Bolivia lasting thirteen days (Nickson & Vargas,
2002). The illegal arrest of some members of the Corrodinadora only fueled the flames of
the protesters. Finally on April 10, 2000 the Coordinadora signed an agreement with the
government to remove the blockades after the revisions to Act No. 2029 were made and
to reinstate SEMAPA as the water and sanitation utility. The next day President Hugo
Banzer passes Act No. 2066 which made 36 revisions to Act No. 2029. In the end of all
the riots 6 people were killed and 38 people injured with many being arrested by the
police.
Outcome
After the dust had settled from all the social protest there were three main outcomes: the
revision of Act No. 2029 in the form of Act No. 2066, more open dialogue between the
government and its citizens, and the reinstatement of SEMAPA at the water and
sanitation utility. Among the things that were changes are guarantees to: recognize the
rights of indigenous populations and campesinos and their water sources and drinking
water systems, review of tariffs to ensure they are socially just, and respect small systems
for drinking water supply (Partnership). Alurralde wrote in Crisis in Cochabamba that
many Indigenous peoples have a long history of using water wisely. By incorporating
their views into the policy-making process, existing policies are strengthened (Alurralde,
2006). Indeed, in 2004 Bolivia passed a new irrigation law that gave the indigenous
populations a legal right to water and the right to distribute it using traditional methods.
The majority of Bolivias population falls under indigenous and campesino communities.
However, these communities which are also the poorest had no institution to speak up for
them (Alurralde, 2006). It was one of the key errors in the recommendation by the
commission to award a contract to AdT without talking to all the key stakeholders. The
government has now agreed to be more transparent and have open dialogue with these

communities when it drafts new laws regarding water. The first example of this is the
formulation of Act No. 2066 which revised Act No. 2029 to consider indigenous and
campesinos rights to water.
While SEMAPA has been reestablished at the water utility it still faces the same
challenges that it faced before the water conflict. Since 2000 Bolivia has recognized
water as a human right thanks in part to the work by current president Evo Morales
(People). In spite of this milestone many people still lack access to water in Cochabamba.
According to Hailu, Osorio, and Tsukada 74% of the poorest quintile in Cochabamba do
not have access to municipal water service (Hailu, Osorio, & Tsukada, 2012). Many of
these people live in the south side of Cochabamba in squatter settlements. This part of the
city is more water scarce and the surface water is very polluted. In a study by Wutich and
Ragsdale the authors found that in one community in south Cochababma 72% of
residents survived on less than 50 L of water per person daily, the minimum human
requirement (Wutich & Ragsdale, 2008). For those who do not have a piped water
connection the must rely on getting their water from water venders who distribute water
in water trucks where the water is usually low quality and five to ten times more
expensive than what SEMAPA customer pay (Achtenberg, 2013; Mehta, Allouche,
Nicol, & Walnycki, 2014; Wutich, Beresford, & Carvajal, 2016). The service for
SEMAPA customers experiences interruptions due to water shortages. Much remains to
be done to reach 100% coverage.
Under the leadership of president Evo Morales Bolivia created a new Water Ministry
which combines water supply and sanitation, water resource management, and
environmental protection (Achtenberg, 2013). One goal of the Water Ministry is to
eliminate water privatization. Even though the idea to have one department that oversees
all the water related sectors in Bolivia it has been a challenge to oversee and manage all
the water and sanitation providers. Bolivia must create a stable framework that will allow
the Water Ministry to work in union with all of the stakeholders that it oversees. This
framework must also be coupled with a sound economic plan to pay for all of these
services at a rate that is acceptable to the public but will still enable investment in
expanding and maintaining water networks.
Stakeholders
National government
Municipal government
Coordinadora Departamental en Defensa del Agua y de la Vida
Aguas del Tunari
Irrigation farmers
Indigenous and campesino communities


References

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