A US official is criticizing the World Bank and its lending arm, the International Finance Corporation (IFC), over its involvement in privatizing the water and sewer systems in Manila, the capital of the Philippines.  The deal creating private companies that provide water to most of the Manila area, but also wound up tripling the water bills of its poorest residents.

And often, people in the capital's shantytowns complain of weak or erratic water pressure and occasional shutdowns.  "Even at night, very little water flows from the tap," said rice trader Michael Eleazar of Manila's San Andres district.  He works for a few hundred dollars per month, AU$25 of which goes to Manila Water Co.  The rest goes for shelter, food, and the other staples of life - including bottled water when the tap is dry.  "No matter how we try to save water, the bill is still high," he said.

The 1997 deal that privatized Manila's water system created the Manila Water Co., which became profitable after just two years.  But the IFC also purchased US$6.2 Million equity stake in Manila Water, which US Representative Gwen Moore of the state of Wisconsin says is a conflict of interest.  She alleges the partnership "is leading to warped incentives that negatively influence the institution's ability to focus on expanding water access". 

Rep. Moore is the ranking member of the US Congressional Committee that oversees the international development bank.  Her letter to the World Bank also says privatization is in conflict with the bank's stated goal to eliminate poverty: "I am increasingly uneasy with water resource privatization in developing countries, and do not believe that the current ring-fencing policies separating the investment and advising functions of the IFC are adequate."

In 2014, the Philippines ordered Manila Water to cut its rates, and that decision was backed by the International Chamber of Commerce after the two sides took it to arbitration.

"Ironically, the World Bank - an institution with a poverty alleviation mission - has aligned its own financial interests more closely with large private corporations than with the millions of people who desperately need clean, safe drinking water," said Nathaniel Meyer of the Boston-based watchdog Corporate Accountability International.

While some cash-strapped countries turn to privatization as a way to fill public service gaps, others that can afford to break the grip of corporatism are seeking to do so:  In 2010, Paris took control over its supply back from the water giants Suez Environment and Veolia Environment;  A year later, Italian voters opted against privatizing control of water in a national referendum.