The Center for Public Integrity

When cholera appeared on South Africa's Dolphin Coast in August 2000, officials first assumed it was just another of the sporadic outbreaks that have long stricken the country's eastern seaboard. But as the epidemic spread, it turned out to be a chronicle of death foretold by blind ideology.

In 1998, local councils had begun taking steps to commercialize their waterworks by forcing residents to pay the full cost of drinking water. But many of the millions of people living in the tin-roof slums of the region couldn't afford the rates. Cut off at the tap, they were forced to find water in streams, ponds and lakes polluted with manure and human waste. By January 2002, when the worst cholera epidemic in South Africa's history ended, it had infected more than 250,000 people and killed almost 300, spreading as far as Johannesburg, 300 miles away.

Making people pay the full cost of their water "was the direct cause of the cholera epidemic," David Hemson, a social scientist sent by the government to investigate the outbreak, said in an interview. "There is no doubt about that."

The seeds of the epidemic had been sown long before South Africa decided to take its deadly road to privatization. They were largely planted by an aggressive group of utility companies, primarily European, that are attempting to privatize the world's drinking water with the help of the World Bank and other international financial institutions.

The days of a free glass of water are over, in the view of these companies, which have a public relations campaign to accompany their sales pitch. On a global scale, and in many developing nations, water is a scarce and valuable and clearly marketable commodity. "People who don't pay don't treat water as a very precious resource," one executive said. "Of course, it is."

Despite World Bank contentions that it does not force privatization on the poor, research by ICIJ and the bank itself showed that privatization is playing an ever-increasing role in bank lending policies.

Using data available from the World Bank Web site, ICIJ analyzed 276 loans labeled "water supply" awarded by the bank between 1990 and November 2002. In about one third of the projects, the World Bank required the country to privatize its water operations in some form before it received funds.

The ICIJ analysis also showed that the number of loans with privatization as a condition tripled between the first and last half of that time period. Between 1990 and 1995, there were 21 loans with privatization as a condition. From 1996 to 2002, they increased in number to 61. Two are pending.

Privatization is an umbrella term that includes selling assets to a private company, tendering a water concession to a private company, or awarding management contracts to a private company. These projects received loans either from the World Bank or from its investment arm, the International Finance Corporation. The bank lends only to governments, but it can require government leaders to privatize state-owned assets, such as water utilities, before granting loans. The IFC can lend to businesses.

Because the World Bank often combines several of a country's projects under one omnibus loan, it is impossible to determine how many drinking water programs the bank supports around the world. Instead, the ICIJ investigation examined only those 276 projects from 1990 to 2002 which the bank itself identified as "water supply" loans. The bank has many other "combo" projects that include drinking water delivery but are not labeled as "water supply" loans.