What’s happening in Jackson, Miss., where residents remain under a boil-water advisory after having little to no access to safe water for all of last week, is horrifying. If it weren’t happening in a poor city with a majority Black population, it would be getting the 24/7 news coverage it deserves.
One part of the story that definitely hasn’t been getting enough coverage is the role a multi-billion-dollar corporation played in exacerbating the crisis.
As reported by Judd Legum, Jackson signed a contract in 2013 with a corporation called Siemens to upgrade the city’s water meters and billing system. The multinational conglomerate based in Germany promised there was “no risk” in the deal and that the upgrade would generate $120 million in “guaranteed savings” over the first 15 years.
According to an eventual lawsuit filed by the city, those savings never materialized. Siemens and its web of subcontractors allegedly did shoddy work installing the meters and implementing the new system. The lawsuit claims that “[m]ore than 20,000 water meters were installed incorrectly or were unable to transmit meter readings to the system.”
As Legum writes, “In the end, Jackson was stuck with a $7 million annual bond payment, a $2 million monthly shortfall in water fees, and a system of water meters that was not working.”
Now, if you’re a regular reader of our work, this should sound familiar. Corporations that are hired to deliver or support public services often cut corners in an effort to provide fewer resources while maximizing profits.
But it’s crucial that we don’t let the fact that privatization played a role in Jackson’s water crisis get lost in the mix.
Because, right now, the Mississippi state government is considering just that. “Privatization is on the table,” said Gov. Tate Reeves, a Republican, at a press conference earlier in the week. News recently broke that the state is in talks with an unnamed company to take over management of Jackson’s water system.
This would be a horrible move. Flat out horrible.
As Food & Water Watch has found, privatized systems typically charge 59 percent more for water service than public systems. Jackson is a poor city in the poorest state in the nation. Its residents don’t need to be paying higher water rates, especially with inflation at historical levels.
Every dollar that goes to water corporation profits is one less dollar that could be invested in fixing Jackson’s water system for good. (In the second quarter of this year, Siemens reported over $17 billion in revenue and over $2 billion in free cash flow.)
As the Siemens contract shows (yet again), privatization often leads to cutting corners that harm residents and public budgets. Food & Water Watch writes: “Poor performance is the primary reason that local governments reverse the decision to privatize and resume public operation of previously contracted services.”
As Bucks County in Pennsylvania just did after a corporation proposed taking over their water system, Jackson must say “no” to privatization.
Photo by The National Guard.