"Citizens' Union for Water"
May 2, 2013
10 points of the Expression of Interest for the acquisition of 51% of Thessaloniki Water Supply & Sewerage SA (EYATH), submitted by "Citizens' Union for Water" to TAIPED.
The Union of Non-Profit Water Cooperatives of the Municipalities of the Thessaloniki area under the name “Citizens’ Union for Water”, created through the actions of "Initiative 136", which has been struggling for two years against the privatisation of EYATH and in favour of citizen´s control over Thessaloniki's water, presented at a press conference the 10 key points of the Expression of Interest for the acquisition of 51% of EYATH, submitted by the "Citizens' Union for Water" to Hellenic Republic Asset Development Fund (TAIPED).
The presentation was made by Lazaros Aggelou, spokesperson of the «Citizens’ Union for Water», Kostas Nikolaou, PhD, Chemical and Environmental Sciences, member of the Water Cooperative of the 5th Municipal Community of Thessaloniki and Kostas Marioglou, vice president of EYATH workers’ union, member of the " K136 Solidarity " cooperative.
The 10 points of the presentation are:
1. “Citizens’ Union for Water” is a Union of Social Cooperative Water and Sewerage Companies of Thessaloniki that has the aim of acquiring and managing EYATH and of providing water to households and businesses under the principles of high quality, low prices, environmental protection, democratic operation and social justice. Our proposal utilizes the successful experience of the largest and most successful citizen participation in share acquisition, that of British Telecom and British Gas, with a significant comparative advantage: the goal of non-profit management and operation.
2. Our program is summarized as follows:
i. Citizens who wish to become members of the primary municipal cooperatives of water will be able to make a simple application to these cooperatives.
ii. Some of the most important Social Responsibility Investors (SRIs) in the world, as well as microloan funds will be allowed to provide microloans, financing any prospective members in order to ensure equal opportunities to participate in the cooperatives, regardless of their financial situation.
iii. The SRIs will direct funding to members of the cooperatives rather than the cooperatives themselves or the Citizens’ Union for Water. In this way the Citizens’ Union for Water and the cooperatives will be completely free of debt.
iv. We will use a major provider of financial services to municipal organizations for water and sewerage, US Bank NA.
v. Citizens’ Union for Water will use its own methods for distribution of cooperative shares. These methods may include the distribution of shares over periods of time which may extend to ten years or more in duration.
3. We offer positive responses to concerns regarding the denationalisation of EYATH:
• To concerns that the sale of vital infrastructure such as water supply and sewerage services to multinational corporations will have a negative effect on the local community and the environment. Notable examples include Paris, Berlin, London and many other cities in Europe, USA, Canada and worldwide.
• To concerns that the current value of the 51% may be too low, as the financial crises in southern Europe have depressed market prices. However, if the beneficiaries of any future appreciation of the value of the company are the Greek citizens, acting as its owners, the profits from appreciation would not be lost to Greece and its citizens. Instead, they would be reinvested into the Greek economy.
• To concerns that a prospective foreign owner might wish to shed a lot of jobs, as they may have other employees who could fulfil roles within the business once acquired. If the company is acquired by the citizens this risk will not exist.
The idea of citizens’ acquisition of EYATH has been very well received by the vast majority of the population, as well as by local institutions across the political-ideological spectrum. Specifically,
a) the municipal councils of any and all municipalities that are provided with water by EYATH have issued unanimous resolutions against the privatization of EYATH, its sale to multinationals and foreign investors,
b) at the initiative of the EYATH Workers’ Trade Union, a Steering Committee of institutions and citizens of Thessaloniki who oppose the privatization of EYATH has been established with the participation of several local authorities, workers’ syndicates, citizens' movements, etc.
c) The Regional Union of Municipalities of Central Macedonia, at a meeting held specifically for discussing our proposal, has taken a unanimous decision to claim the management of EYATH from the Greek State and if this is not achieved, to cooperate with the Initiative 136 (the Citizens' Union for Water) for the acquisition of EYATH by the citizens, with the support and participation of the Municipalities of Thessaloniki.
In 2010, the United Nations recognized that the access to clean water and sanitation is a human right. Furthermore, the European Parliament recognized that water is a common resource of humanity and access to potable water is a fundamental human right. The cooperative management of water supply and sewerage is not an isolated local phenomenon but occurs in countries with different climatic, economic, social and political conditions. Examples of such cooperative management systems can be found in Finland, Denmark, Italy, USA, Canada, Argentina, Chile, Colombia, Bolivia, Philippines, etc.
4. The global experience and international research studies of the World Bank, the European Parliament, research centres, and U.S. universities, came to the same conclusion, namely, that everywhere in the world privatization has been accompanied by the degradation of water quality, increase in water loss, deterioration of infrastructure and increase in prices. Based on the above, a comparative evaluation between private management of water supply and sewerage and management by cooperatives of citizens-consumers shows that private management scores negatively on 15 evaluation criteria, while on the same 15 criteria, management by the citizens scores positively.
5. The first 6 cooperatives created so far, which participate in the Union of Cooperatives, are: 1st, 4th and 5th Municipal Community of Thessaloniki, Municipality of Pilea-Hortiatis, Municipality of Evosmos-Kordelio and Solidarity I136 (allowing participation of non-residents of Thessaloniki from Greece and the rest of Europe).
The cooperatives of the 3rd Municipal Community of Thessaloniki, Municipality of Kalamaria and Municipality of Ambelokipoi-Menemeni are now in a process of formalisation. More local water cooperatives are underway in all the remaining municipalities in the greater area of Thessaloniki.
Each new cooperative is integrated in the union, as established by the statute of both the Union and the cooperatives.
The aforementioned cooperatives correspond geographically to 55% of the population of Thessaloniki that is served by EYATH.
6. Citizens’ Union for Water is being assisted by the following team of specialist companies: Bondholder Communications Group (BondCom). (The initiative to support the goals of Citizens’ Union for Water is led by Robert Apfel, BondCom’s President and philhellene, with extensive experience in the securities market and banking sector. Recently, the company successfully completed the Hellenic Republic debt restructuring, which involved over €200 billion of debt securities and was the largest sovereign debt restructuring in history), John Redwood and Citigate Dewe Rogerson.
7. Simultaneous with the signing of the EAYTH Share Purchase Agreement (i.e., the settlement date), the ownership and stewardship of Citizens’ Union for Water will be structured in the following manner:
Potential cooperative shares are projected to be at least 520,000, corresponding to an equal number of water meters of EYATH. They will be acquired through the registration in the Union’s cooperatives of citizens-consumers, workers, households and businesses in Thessaloniki, of the citizens of Greece and the Greeks of the Diaspora, of all citizens of the world.
Two procedures of registration to the cooperatives will operate simultaneously: a) of the SRIs and b) of the water cooperatives according to the provisions of their statutes.
Direct funding of citizens will be provided by a group of 22 Socially Responsible Investors (SRIs) from France, Italy, England, Germany, Denmark, Norway and the USA. This group comprises ethical - non-profit - social cooperative banks with self-managed collectives that provide microcredit, social cooperatives, trade unions’ mutual funds, fair trade promotion funds, non-profit institutions, institutions operating within the framework of social and solidarity economy. Their activity involves financing, through microcredits, initiatives that promote access to water, hygiene, sanitation, environmental protection, tackling poverty etc. by the citizens.
The SRIs have affirmed that they do not, for themselves, express a desire to be long term owners of the shares of Citizens’ Union for Water. The total amount of funds available to these SRIs exceeds €30 billion.
8. Brief description of the strategic approach of Citizens’ Union for Water regarding the transaction.
We will rely on one of the most valuable elements of the water supply and sewerage system: its qualified personnel. We will rely on the personnel’s knowledge to promote the improvement of water supply in Thessaloniki.
We are being aided by Social Responsibility Investors. We will build on their investment, and carry forward their mission of improving the lives of the people of the Earth.
9. Steps we have taken to ensure the continuity of the existing management team and personnel.
Citizens’ Union for Water has communicated with the existing employees and senior management of EYATH. As a group, they are well trained and have produced commendable results, which are evident in the company’s Annual Reports and Financial Statements. This group should be retained. The management team consists of senior managers of EYATH and covers all critical managerial and operational areas in the organizational chart of the company.
10. Our proposal clearly outlines the objectives and the strategy to achieve them, regarding a) provision of water b) sewerage c) operational improvements c) new operational units, while special emphasis is given to addressing the issue of the increased rate of water leakage in the network of EYATH (currently 26%).