The Center for Public Integrity

BOGOTA, Colombia — Residents of the low-lying areas of Bogotá used to perform a rather strange ritual before going to work.

They would dress in old, ragged clothes and rubber boots and wade through the flooded and muddy streets of their neighborhoods until they reached friends' homes on dry land, where they would change into their suits and dresses for work.

The cause of this rush-hour costume change was too few drainage sewers. What few sewers existed in those neighborhoods often backed up because the pipes were below the level of the Bogotá River.

"Many times I could not go to work because I had to stay home and help my family dry the flooded house," said Hernando Contreras, a member of the Local Administration Board of Bosa, a neighborhood close to the river. "In the last year, we have not seen this problem anymore."

Many who lived in mountaintop communities surrounding the city did not fare much better. They had no access to tap water and had to collect rainwater in buckets and pans.

Bogotá is a fast-growing city of 7 million people spread across a broad plateau, the Sabana de Bogotá, which sweeps up the forested slopes of the Andes, 2,600 meters (8,500 feet) above sea level. High forest-green mountains, covered in part by native woods, frame the Sabana. The Colombian capital gets most of its water from tropical highlands about 4,000 meters (13,000 feet) above sea level, which act as a natural sponge, sucking moisture out of the clouds and mists — a unique ecosystem called a páramo. The water drains to rivers and lakes and from these is channeled down into the city.

JAKARTA, Indonesia — When Indonesian dictator Suharto resigned on May 21, 1998, the city of Jakarta was a war zone. More than 2,500 people had died in clashes with Suharto's soldiers and in fires that swept the riot-torn city.

Among the thousands of foreigners who fled the chaos were about 30 executives and family members of two multinational utility companies, Thames Water and Suez Lyonnaise des Eaux. Just four months earlier, the companies had taken control of Jakarta's waterworks by forming partnerships with Suharto's children and cronies.

Both Thames and Suez executives abandoned their posh offices in the central business district, whose streets were strewn with broken glass and cloaked with fire and smoke, and boarded chartered jets for Singapore.

Indonesian water officials said they left no clear chain of command and only three days worth of chemicals required to clean the city's drinking water. (The companies said their executives left for only several days and that there were enough treatment chemicals for 20 days.)

Djoni Heryanto, who ran Jakarta's largest water treatment plant, said the riots had halted delivery of crucial chemicals, such as chlorine and aluminum sulphate, from a plant 500 miles away. The threat of waterborne illness suddenly posed a danger for the teetering city of 7.5 million people. The government officials who had managed the waterworks before privatization were, de facto, back in charge.

Heryanto placed a series of panicked calls to Rama Boedi, then-president of the public water authority, Perusahaan Air Minum Jakarta Raya (PAM Jaya), which was nominally responsible for overseeing the privatized system.

"Should I stop the water supply?" Heryanto asked.

MANILA, Philippines — In thousands of poor homes in this sprawling tropical city that is as hot as it is Catholic, the privatization of the waterworks by two major foreign companies in 1997 at first seemed as miraculous as the loaves and the fishes.

The private companies quickly moved to expand service around the capital, and before long taps that had been mostly dry suddenly ran with cool water. Residents like Mely Gagalonia, 50, a housewife living in a Manila slum, had clean water for the first time.

No more fights in the water line, no more spending long hours waiting in line to buy water from vendors who charged her more than a third of the family's income, said Gagalonia.

"Life has become easier for all of us," she said, "since Manila Water came to our place."

That was not the case for everyone. Still, there's no denying that the pre-privatization water situation was grim.

Cora Concepción, 60, a former cleaning supervisor at a hotel who lives in a middle-class neighborhood connected to the public water utility, often went without water because the pressure would drop to such a low level her tap would run dry.

Water shortages were widespread. At the National Hydraulic Research Center in Diliman, Manila's university suburb, leading water experts had to suffer right alongside the poor souls whose problems they studied. "It was ironic," said Angel Alejandrino, a founder of the center. "We also had no water for our toilets."

BUENOS AIRES, Argentina — Mario Parravicino, who lives with his family in the dusty city of La Matanza, gets up each morning praying silently that it won't rain.

"When it rains it often floods and the sewage gets into everything," says the 60-year-old factory worker. "You can't use the toilet because it backs up. It's disgusting."

La Matanza is among the poorest districts in the Buenos Aires metropolitan area, a maze of tiny cinder-block homes wedged together along dirt roads. There are no sewers, so the rains flood its houses and septic tanks, which often overflow into wells. Boiling is the only form of water treatment, and not everyone can afford the gas to boil the water. Nitrate levels, caused by sewage contamination, are dangerously high and waterborne diseases common. In Argentina, agonizing intestinal bugs cause 20 percent of infant deaths.

Across town in Laferrere, the Rusman family has the same problem. Their well is only two meters from the septic tank, and the water is often suspiciously murky after a rainfall.

"Whenever we can we boil it before drinking," Alejandra Rusman explained. "But we don't often have money to pay for gas." The local church provides drinking water to those who can't pay for gas, but the Rusmans don't wish to be beggars. Alejandra worries constantly about her two sons Pablo and Martin, aged 7 and 4. "This situation is dangerous because we forget and the boys drink this cloudy water and it makes them sick," she said.

JOHANNESBURG, South Africa — Every morning, as the sun rises over the Indian Ocean and paints the sky a brilliant yellow, David Radebe crosses the N2 freeway into another world.

Winding like a black snake through green sugar cane fields and over rolling hills, the freeway divides two very different communities along KwaZulu-Natal's spectacular Dolphin Coast.

Thirty miles (50 kilometers) north of the harbor city of Durban, the turnoff to the right leads to the resort towns of Ballito Bay, Salt Rock and Tinley Manor, where holiday homes of the upwardly mobile and absentee landlords perch on rocky cliffs overlooking brilliant white beaches. Radebe comes here to look for work.

On the other side of the freeway, heading toward the interior and scattered between sugar cane estates, lie the houses and dwellings of small ethnic Indian communities and three black township settlements that are home to about 12,000 people. This is Nkobongo, where Radebe lives.

Rows of new government housing line the tidy township streets. Roads and curbs are well maintained. Electrical cables crisscross the landscape above the tin roofs, and township kids, dressed neatly in blue uniforms, make their way to "Indian schools" that now have been integrated.

But the air of progress and order belies a quiet desperation. Eighty percent of township residents live in dire poverty, well below the minimum living standard of R800 ($80) per household a month. The mobile clinic that serves the townships reports an alarming increase in cases of HIV/AIDS, tuberculosis and malnourished children. Six in 10 residents say their children went hungry in the last year.

Their biggest problem, however, is water. Not because of a shortage, but because they can't afford it.

PARIS — "You don't send God to prison," goes the bitter joke that circulated among citizens of the alpine city of Grenoble. Jérôme Monod must be God, they said — otherwise, how did the world's leading water executive manage to avoid prison? Only God, after all, can walk on water.

While serving as CEO of the largest water utility, Suez Lyonnaise des Eaux, from 1987 to 2000, Monod helped plan the privatization of Grenoble's water, a process that was enabled by bribes and resulted in the price gouging of customers. The city's mayor and three water company officials were convicted of corruption in 1995, and the water concession was canceled. Monod, a close adviser to French President Jacques Chirac, was accused in testimony during the trials of having instigated the corruption, but he denied those accusations and was never charged.

Chirac and Monod, both Gaullist conservatives, have been close allies for most of Chirac's four-decade political career, in which he has served as cabinet minister, Paris mayor, French prime minister and president. Yet despite evidence that Chirac's party's finances owe a debt to illegal payments from multinational French water companies, Chirac, too, has managed to float above the scandal.

PARIS — While peddling the benefits of free-market privatization abroad, France carefully guards its own borders against foreign companies, claiming water is too important to be controlled by outsiders.

In late 2002, when debt-ridden Vivendi Universal announced it would sell its shares in its water division, Vivendi Environnement, the French government was not enthusiastic about the prospect of foreigners gaining control of it. "Water supply is very much a public service, and we should pay attention that Vivendi doesn't fall into bad hands," said President Jacques Chirac, who was in the middle of his successful re-election campaign.

The finance ministry assembled a group of investors to consider taking over Vivendi Environnement. They included the state-owned power company, Electricité de France (EdF), which took 4 percent, with an option to buy another 4 percent, and the 186-year-old state bank, the Caisse des Depots et Consignations, which bought 3.2 percent with an option on another 5.6 percent.

No one seemed to be particularly put out by the arrangement. Unions and consumer groups were in accord with the wary government. "We have to be extremely vigilant about...foreign participation in French water supply," the water union of the Ile-de-France, the province surrounding Paris, warned in September 2002.

Vivendi's leading competitor seemed to agree.

"Because water is highly symbolic, water markets are always xenophobic," explained Jean-Luc Trancart, director general at Suez.

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.