A brief on PSI & their favorite anti privatization story, Paris Water
Socialism in sheep’s clothing
Despite the decline of communism in much of the world, the forces of socialism remain dangerous & have simply morphed. They live on in mainstream NGOs, Unions & environmental groups. Visciously anti business, such groups are emboldened & fighting hard to grow their rent seeking abilities.
PSI
History
One such group is public sector workers unions like Public Services International (PSI) who fight against utility privatizations. PSI was established in 1907 & has grown to now represent 20m health, power, water, educator & transport workers. They are based in Ferney Voltaire, a commune on the outskirts of Geneva.
Membership
PSI claims to represent 700 affiliated unions from 150 countries around the world. Those affiliates supposedly represent a total of 20 million individual members. PSI takes an annual fees of 0.96€ per individual represented, so about €20m a year which is 80% of their revenue.
Actors
PSI has 3 main characters. Rosa Pavanelli is General Secretary & was elected for a second term last December. Her platform is anti privatization. Deputy General Secretary is David Boys who s the main operational & on the ground actor. PSI President is Dave Prentis, head of the largest U.K. public sector workers union.
Policies
Public not private
The main policy of PSI is to fight against the privatization or public private partnership of public services. Their reference is always to the United Nations 2030 Sustainable Development Goals SDGs which includes access to clean water. PSI says the goals (like water) cannot be achieved by private companies.
Tax justice & social justice
They talk a lot about Social Justice & Tax justice. Social justice would be that everyone has equal access to the same thing, like equal health care, power service & water access. Tax justice means only the rich pay for it & pay enough for the government to provide everything to poor people.
Rights based funding
One key argument is rights based funding. This means poor people don’t pay. It also means private companies which require returns on investment are not allowed. Dividends are especially bad because the money could instead be invested. They claim private projects are more expensive than public.
Despite the decline of communism in much of the world, the forces of socialism remain dangerous & have simply morphed. They live on in mainstream NGOs, Unions & environmental groups. Visciously anti business, such groups are emboldened & fighting hard to grow their rent seeking abilities.
PSI
History
One such group is public sector workers unions like Public Services International (PSI) who fight against utility privatizations. PSI was established in 1907 & has grown to now represent 20m health, power, water, educator & transport workers. They are based in Ferney Voltaire, a commune on the outskirts of Geneva.
Membership
PSI claims to represent 700 affiliated unions from 150 countries around the world. Those affiliates supposedly represent a total of 20 million individual members. PSI takes an annual fees of 0.96€ per individual represented, so about €20m a year which is 80% of their revenue.
Actors
PSI has 3 main characters. Rosa Pavanelli is General Secretary & was elected for a second term last December. Her platform is anti privatization. Deputy General Secretary is David Boys who s the main operational & on the ground actor. PSI President is Dave Prentis, head of the largest U.K. public sector workers union.
Policies
Public not private
The main policy of PSI is to fight against the privatization or public private partnership of public services. Their reference is always to the United Nations 2030 Sustainable Development Goals SDGs which includes access to clean water. PSI says the goals (like water) cannot be achieved by private companies.
Tax justice & social justice
They talk a lot about Social Justice & Tax justice. Social justice would be that everyone has equal access to the same thing, like equal health care, power service & water access. Tax justice means only the rich pay for it & pay enough for the government to provide everything to poor people.
Rights based funding
One key argument is rights based funding. This means poor people don’t pay. It also means private companies which require returns on investment are not allowed. Dividends are especially bad because the money could instead be invested. They claim private projects are more expensive than public.
Watch David Boys discuss the fight for energy democracy in Nigeria
Paris Water
History
Paris Water is a favorite success story of PSI, particularly because the utility was taken back from private to public ownership in 2009. Paris gets a lot of it’s water from the Seine & has a 19th century water system which ingeniously uses aqueducts & gravity to move water around without using power.
The story
One of the main stories promoted from the remunicipalization of Paris Water is that the previous ‘greedy’ owners pushed prices up much faster than inflation in order to enrich themselves. When it was taken public, they cut the price by 8% apparently showing Public is better & cheaper.
The reality
In a recent interview in La Tribune with new CEO Benjamin Gestin, a different story emerges. When prices were cut they ‘struggled to pay bills’ & prices are now rising again. At €3.5/m3 the price is not cheap. They claim a 2016 profit of €44m, but plan to invest €75m a year, begging the question, how?
How to respond? Financially
The best way to attack NGOs like PSI is the logic of the finances. For example, prices at Paris Water are high, not low. Public utilities profits cannot cover Capex so they have to borrow money & pay interest which is more expensive than dividends. They are increasing costs & margins are low.
History
Paris Water is a favorite success story of PSI, particularly because the utility was taken back from private to public ownership in 2009. Paris gets a lot of it’s water from the Seine & has a 19th century water system which ingeniously uses aqueducts & gravity to move water around without using power.
The story
One of the main stories promoted from the remunicipalization of Paris Water is that the previous ‘greedy’ owners pushed prices up much faster than inflation in order to enrich themselves. When it was taken public, they cut the price by 8% apparently showing Public is better & cheaper.
The reality
In a recent interview in La Tribune with new CEO Benjamin Gestin, a different story emerges. When prices were cut they ‘struggled to pay bills’ & prices are now rising again. At €3.5/m3 the price is not cheap. They claim a 2016 profit of €44m, but plan to invest €75m a year, begging the question, how?
How to respond? Financially
The best way to attack NGOs like PSI is the logic of the finances. For example, prices at Paris Water are high, not low. Public utilities profits cannot cover Capex so they have to borrow money & pay interest which is more expensive than dividends. They are increasing costs & margins are low.
7 key points from the La Tribune Eau de Paris interview, July 2017
- Paris water has an ingenious 19th century aqueduct infrastructure which reduces energy use.
- After remunicipalisation & the 8% price cut 2010-13 was difficult & they couldn’t pay bills.
- Then they started raising prices again.
- 2016 with 150,000 liters per day they made revenue of €167m & ‘profit’ of €44m.
- NRW is 10% & they want to reduce to 8%.
- They will invest €75m a year 2015-2020.
- Paris water is increasing jobs (costs).
