Liquidity: Privatization and the Rise of Big Water - The Ripple Effect: The Fate of Freshwater in the Twenty-First Century - page 236

erage of 35 percent (and some reportedly as high as 200 percent), to about $20 a month.
But in Bolivia, where the minimum wage was only about $70 a month, most people
could not afford such a price hike. To make things worse, the company was largely run
by engineers who appeared indifferent to the societal impact of rate hikes, or what it
meant for people to go without water.
“ If people didn't pay their water bills, their water would be turned off,” an American
manager told the New Yorker.
The result was a massive protest. In January 2002, peasant farmers, factory workers,
and others took to the streets of Cochabamba, waving banners and barricading roads,
in a series of convulsive demonstrations. The homeless, as well as college students
and the middle class, joined in, denouncing Bechtel and the World Bank; even a few
upper-class business owners, who had been stripped of their water subsidies, joined the
protest. Cochabamba was shut down. In early February, thousands of protesters hurl-
ing rocks and Molotov cocktails clashed with police and federal troops armed with tear
gas, batons, and rubber bullets. In March and April, protest leaders were arrested, but
the demonstrations shut down highways and spread to other cities. President Banzer
declared the nation to be under a “state of siege,” suspended constitutional protections,
allowed police wide latitude, restricted travel, and imposed curfews.
Ater a Bolivian army captain was televised shooting his rifle at a crowd of chanting
demonstrators, wounding several and killing a seventeen-year-old boy, crowds erupted
in anger. Aguas del Tunari officials were forced to flee Cochabamba. Banzer used this
as a pretext to declare that the company had “abandoned” its lease and revoke its $200
million contract.
Bechtel responded by iling a $25 million lawsuit with the International Centre for
Settlement of Investment Disputes, an appellate arm of the World Bank, for “lost profits
under a bilateral investment treaty.”
In 2003, Banzer and other politicians who had brokered the deal resigned or were
thrown out of office. In 2006, a settlement was reached between the new government of
President Evo Morales (who as a congressman had supported the protesters) and Aguas
del Tunari: both sides agreed to drop claims against the other. Responsibility for the
city's water returned to the state utility, SEMAPA, which returned water rates to their
pre-2000 levels.
In 2007, half of the city's population of six hundred thousand remained unconnected
to the SEMAPA network, and even those who did have water received spotty service,
sometimes for only three hours a day. Graft, waste, and incompetence remained firmly
entrenched.
Speaking to the NewYorkTimesin 2007, Luis Camargo , the water utility's opera-
tions manager, said Cochabamba's aquifer was being drained. Its water-filtration system