MARCH 13, 17:59 EST

Report: Water Should Cost More

By DAVID BRISCOE Associated Press Writer

WASHINGTON (AP)  Water is too cheap, and selling it should be a good business, says a commission trying to keep the world's depleted fresh water supplies from drying up.

``You will not get conservation, stoppage of waste, adoption of appropriate techniques and private-sector investment unless you can get the full cost back,'' said Ismail Serageldin, a World Bank vice president who heads the World Commission on Water for the 21st Century.

This would require subsidies for the estimated 1 billion poor people who do not have access to safe water or the 2 billion who lack water for proper sanitation, Serageldin said. But he said subsidies should no longer go to water utilities, which are often inefficient and corrupt.

With communications, oil and power generation offering far more lucrative investments for tapping into global needs, relatively few companies around the world are in the water business. Most people depend on governments that are not doing a very good job, says the report.

Less than 6 percent of the world's water is managed by private companies, Serageldin said, citing the limited cost recovery that can be expected from water businesses  about 25 percent, compared to 140 percent for telecommunications.

``Our attitudes on managing water must change,'' Serageldin said in an interview. ``In the name of the poor, we've been defending these absurd pricing policies that result in the poor not getting any access to water because they get rationed out.''

The commission, in a report last year, described systems in place around the world where the poorest people actually pay more than the rich for limited and often unsafe water.

The new report proposes full-cost pricing of water combined with subsidies for the poor, increased private investment in water development, regulation that gives people who need the water final say over its management, global sharing of successful practices, and strong environmental protection.

Serageldin said the commission believes annual investment in water development of up to $80 billion will have to be doubled, with most coming from private industry.

The commission sites successful community efforts at water development in Karachi, Pakistan, and in Brazil as examples of grassroots water development that is needed.

He suggested that governments explore creative ways of funding and managing water, including ``water stamps'' for the poor to be used to buy water the way Americans get foods stamps, or providing for a bidding to run water projects that would encourage efficiency.

``There are imaginative ways in which to do this,'' Serageldin said.

The commission is presenting its report to the Second World Water Forum starting this weekend in The Hague. The commission's 20 members come from

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-- Martin Thompson (mthom1927@aol.com), March 13, 2000