Manila water plan draws US rep's criticism for IFC role

In a bustling, densely populated corner of Manila, fruit vendor Coring Gutierrez reads USD 35 due from her latest water bill, more than triple what her family of six paid 15 years ago.
"As long as we get water," she sighs, reflecting the relief many of the Philippine capital region's nearly 12 million residents feel about having a steady and safe water supply.
Water was not supposed to become so expensive for Manila under a 1997 World Bank deal that privatized the seaside city's water and sewage management.
That arrangement is under fire by the US congressional committee that oversees the international development bank, which is now questioning whether the World Bank and its lending arm, the International Finance Corp., should join in such "public-private partnerships."

In a letter sent yesterday to the World Bank's president, the committee's ranking member accuses the IFC of conflict of interest for its equity stake in one of two companies set up under the 1997 Manila water deal.
The IFC's stake in Manila Water Co. Is "leading to warped incentives that negatively influence the institution's ability to focus on expanding water access," US Representative Gwen Moore, a Democrat from Wisconsin, says in the letter to World Bank President Jim Yong Kim.

Moore wants the World Bank and the IFC to "cease promoting and funding privatization of water resources," pending an evaluation of the IFC's conflicts policy and practices and congressional hearings on the subject.

The IFC yesterday welcomed Moore's letter as a chance to discuss the issues, saying "the World Bank Group takes real or perceived conflicts of interests very seriously," according to the IFC's chief communications officer, Geoffrey Keele.
In an email to The Associated Press, he noted that the IFC's role in advising the privatization deal was done several years before it invested in the company, and that "the risk of perceived conflicts of interest was examined at each stage of the Manila Water investment approval."
Privately owned water utilities have existed for centuries in Europe and the United States, but have recently ballooned into a huge industry.