Cochabamba Water War

The Cochabamba Water War, also known as the Bolivian Water War, was a series of protests that took place in Cochabamba, Bolivia's fourth largest city, between December 1999 and April 2000 in response to the privatization of the city's municipal water supply company SEMAPA. The wave of demonstrations and police violence was described as a public uprising against water prices.

The tensions erupted when a new firm, Aguas del Tunari (a joint venture involving Bechtel), was required to invest in construction of a long-envisioned dam (a priority of mayor Manfred Reyes Villa), so they had drastically raised water rates. Protests, largely organized through the Coordinadora (Coalition in Defense of Water and Life), a community coalition, erupted in January, February, and April 2000, culminating in tens of thousands marching downtown and battling police. One civilian was killed. On 10 April 2000, the national government reached an agreement with the Coordinadora to reverse the privatization. A complaint filed by foreign investors was resolved by agreement in February 2001.^{[citation needed]}

The restoration of civilian rule to Bolivia in 1982 ended decades of military dictatorships, but did not bring economic stability. In 1985, with hyperinflation at an annual rate of 25000%, few foreign investors would do business in the country. The Bolivian government turned to the World Bank as a last resort against economic meltdown. For the next 20 years, successive governments followed the World Bank's provisions in order to qualify for continued loans from the organization.

The World Bank said that "poor governments are often too plagued by local corruption", similarly the World Bank stated that "no subsidies should be given to ameliorate the increase in water tariffs in Cochabamba". The New Yorker reported on the World Bank's motives, "Most of the poorest neighborhoods were not hooked up to the network, so the state subsidies and water utility went mainly to industries and middle-class neighborhoods; the poor paid far more for water of dubious purity from trucks and handcarts. In the World Bank's view, it was a city that was crying out for water privatization."

In a 2002 publication the World Bank acknowledges that one of its loans, the "Major Cities Water and Sewerage Rehabilitation Project", included a condition to privatize the La Paz and Cochabamba water utilities. The privatization was required to allow a two-year extension of the project that was due to close in 1995. The World Bank project that began in 1990 had covered three cities, leading to sharply diverging outcomes: Access increased and service quality improved in Santa Cruz de la Sierra where a successful cooperative provided services, which enjoyed, according to the World Bank, "the reputation as one of the best-managed utilities in South America." However, results were mixed in La Paz and poor in Cochabamba. In the latter, access to piped water had actually decreased from 70% to 60%, water losses had remained high at 40% and water supply had remained unreliable at about four hours a day despite the funds made available by the World Bank to support the public utility. The World Bank did not include a conditionality to privatize water in Santa Cruz where the local utility had been able to improve services, but only in the cities where the utilities had failed to improve services.

The World Bank acknowledges that it provided assistance to prepare a concession contract for Cochabamba in 1997. However, its involvement with water in Cochabamba ended in the same year. At that time the bidding process for the concession had been declared void by the Supreme Court in response to a legal challenge by the municipality of Cochabamba. In the same year the World Bank project in the three cities ended. The World Bank thus was not included any more in the subsequent phase of the privatization.

The Misicuni dam project was later pursued by Evo Morales when he became President of Bolivia nine years later. It was justified through its benefits for hydropower generation and irrigation in addition to potable water supply for Cochabamba. Construction began on the dam in June 2009 and was completed in September 2017.

Prior to privatization the water works of Cochabamba were controlled by the state agency SEMAPA. After pressure from the World Bank, Bolivia put SEMAPA up for auction for privatization but not capitalization. Only one party was willing to bid on the project. This was Aguas del Tunari, a consortium between the British firm International Waters (55 percent) - itself a subsidiary of the construction giant Bechtel (USA) and United Utilities (UK) - the engineering and construction firm Abengoa of Spain (25 percent) and four Bolivian companies including Befesa/Edison, Constructora Petricevic, Sociedad Boliviana de Cemento (SOBOCE), Compania Boliviana de Ingenieria and ICE Agua y Energia S.A., all involved with the construction and engineering industry. The water network that they envisioned was projected to provide drinking water to all the people of Cochabamba. This was set to double the existing coverage area and also introduce electrical production to more of the region.