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privatization

The Greek Government Is Sabotaging Its People With a Water Privatization Scheme

By Maria Paradia - Occupy.com, June 25, 2017

The "fire sale" privatization of Greece started in 2015, following the infamous Syriza referendum in which more than three-fifths of the Greek people voted to reject Troika-imposed bailout conditions -- and yet their government, led by Alexis Tsipras, chose to accept the deal anyway.

The privatization process reached its peak the next year, when the Greek government sold the public transport giant TrainOSE to the Italian company Ferrovie dello Stato Italiane S.p.A for 45 million euros. This happened after a very brief bidding period and despite considerable employee pushback, including a 24-hour strike that paralyzed the country.

Now, a second round of fire sales is taking place ahead of the upcoming third bailout negotiations for Greece, whose current bailout package will expire in August 2018. Since last year, the sale of the country's roads, rights to the use of its ports, and other public sector resources have only yielded around 4 billion euros -- a far cry from the projected 50 billion euros that were promised when the privatization plan was put in motion. At best, it will result in a 6 billion euro profit, nowhere near enough to cover the ailing Greek economy's massive overhead spending.

The reversal of privatization and an urban coming of age

By staff - Rabble.Ca, June 23, 2017

A gentle revolution is underway in Barcelona, Spain. Until recently, prevailing wisdom has been that efficient, quality and cheap services are best provided by handing everything over to the private sector. These days are gone. From energy supply to kindergartens to funeral services, the municipality is providing more and more of the basic needs of its citizens at affordable and transparent prices. Following a city council motion in December 2016, Barcelona is now aiming to municipalize its water service. Since the progressive coalition Barcelona en Comú gained power in the Catalan capital, the city has introduced a wide-ranging policy of remunicipalizing outsourced public services and creating new ones.

Barcelona is not unique in this respect. Thousands of public officials, workers, unions and social movements are working to create effective public services that address the basic needs of people and respond to social, environmental and climate challenges. They do this most often at the local level. Reclaiming Public Services, a new report, found that there have been at least 835 examples of (re)municipalization of public services worldwide in recent years, involving more than 1,600 cities in 45 countries.

Cities and towns around the world are following different models of public ownership, with citizens and workers involved in a variety of ways. People are moving away from private options and developing new, public ways to deliver services. Far from being an anomaly, bringing services like transport, health care and energy back under public control is a worldwide trend -- and one that makes sense.

Privatization has been given ample chance to succeed and has come up short. The persistent myth that public services are by nature more expensive, inefficient and outdated, and that we, as citizens and users, should resign ourselves to paying ever higher tariffs for ever lower standards has not yet abated. Nor has the idea that service workers have no choice but to accept ever more degraded conditions. Because everything is seen to have a price, many politicians have lost sight of the common good, while "taxpayers" are sometimes only interested in their own individual pursuits.

The remunicipalization movement tells a very different story. While it is still in its infancy in Canada, the remunicipalization movement in Europe can be seen as a response to austerity policies and is being carried forward by an increasingly diverse array of politicians. Successful (re)municipalization experiences inspire and empower other local authorities to follow suit. We see it in the way municipalities and citizens have joined forces in Germany to push for energy democracy. In France and Catalonia, networks of public water operators pool resources and expertise, working together to deal with the challenges of remunicipalization.

There are many examples from outside Europe too. In India, the city of Delhi began the process of delivering affordable primary public health care in 2015 by setting up 1,000 Mohalla (community) clinics in 2015. Since then more than 2.6 million of its poorest residents have received free quality services.

These locally rooted changes are providing improved services as well as savings for local authorities and the public. The Nottingham City Council in the U.K., for example, decided to set up a new energy supply company in 2015 after finding that many low-income families in the city were struggling to pay their gas and electricity bills. Robin Hood Energy offers a cheaper service than private providers because it neither extracts profits nor confuses customers with complicated pricing schemes. The company, which offers the lowest energy prices in the country, has the motto: "No private shareholders. No director bonuses. Just clear transparent pricing." They have also formed partnerships with other major cities. In 2016, the city of Leeds set up the White Rose Energy municipal company to promote simple no-profit tariffs throughout the Yorkshire and Humberside regions. In 2017, the cities of Bradford and Doncaster agreed to join the White Rose/Robin Hood partnership. Meanwhile, campaigners with Switched on London are pushing their city to set up a not-for-profit energy company with genuine citizen participation. The motivations in these diverse cities are similar: young municipal companies can simultaneously beat energy poverty and play a key role in achieving a just and renewable energy transition.

Scuttle the Shuttle: Lyft, strikes and blockades

By staff - LibCom.Org, June 22, 2017

Saying "It's just a bus but without the regulation/without unions/only for people with smartphones" is very incomplete as well, and it's worth unpacking why.

Firstly, regulations and working conditions are all the eventual product of years of struggle and strike action: from the ‘Great Upheaval’ of 1877 and the 1894 Pullman railway strikes all the way to the transit strikes which hit Philly last year, strikes in the transportation of goods and people have been a staple of US labour relations.

Yet to say "That’s because workers organised into unions" also doesn't explain why transport is so prone to strike action. There are a few reasons why strikes (and unions) are so much more common in transport than they are in other sectors in the American labour market.

The first reason is this: stop mass transit and tens of thousands of other workplaces are disrupted when their employees turn up late (if they turn up at all) or their customers decide not to come out and spend money to avoid transport hassle. This creates an extra pressure on bosses to keep the service running.

The second reason: transit is mostly immune from spatial fixes. While bosses can move a car or garment factory to China, doing the same with a bus or train route obviously isn't viable. Thus, while factory workers in the US were mostly decimated in the 1970s, transit/distribution have kept going to some extent until now.

For the genesis of Lyft Shuttle, a good place to start would be the 2009 deregulation of the UK post service. This followed the massive 2006-7 strike wave in the postal service, where staggered official strikes were backed up by work-to-rules and the refusal of other postal workers to cross picket lines, leading to disciplinary action which then led to further wildcat strikes. Post just did not get delivered for weeks at a time in some cases.

The response was to allow private companies to handle some deliveries, piggy-backing off Royal Mail's central infrastructure. Firms were then able to shift postal provider if affected by strike action, weakening leverage of workers: disruption was disrupted.

Fast-forward ten years and the gig economy starts to see industrial strife as Deliveroo workers go on wildcat strike in London. The atomisation of the workforce is clearly still not entirely successful as collection points still afford places for riders to meet and discuss issues, swap contacts and organise their strike via WhatsApp. Still harder than it used to be at Royal Mail depots though.

Ten Reasons Why Transit Privatization is Bad for the District:

By staff - ATU Local 689, May 30, 2017

1. Privatization does not guarantee savings.  Proponents of privatizing transit often make lofty claims about savings through private sector efficiencies. But frequently these claims couldn’t be farther from the truth. Public agencies are often more efficient because no profit margin gets siphoned off to shareholders.

• In Phoenix, Veolia demanded an additional $27.5 million on top of its existing $386 million contract. Veolia threatened to leave on short notice during contract negotiations if the city did not meet its demands. 1

• Officials canceled a management contract with First Transit in Green Bay, Wisconsin. The public agency experienced a cost savings by managing the system in-house.

• Veolia was dropped after 3 years by Chatham Area Transit (CAT) in Savannah, GA after the CAT chairman concluded that the private operator “was becoming too expensive.”

2. Service issues may rise: any savings often come from cutbacks.

Contractor claims about service should be taken with a grain of salt. Up-front savings are often coupled with cutbacks, hurting the most vulnerable users like the disabled and children.

• In San Diego, First Transit promised $10 million in annual savings by taking over the North County Transit District. Modest cost declines were primarily due to service cutbacks. First Transit operated 14,000 fewer service hours while other costs shot up by $1.4 million primarily due to administrative fees. 

• Between 2008 and 2010, MV Transportation was fined 295 times for bad service in the city of Fairfield, CA, which had turned to the private operator as a solution to budget shortfalls. Officials concluded that the private operator “exhibited mostly negative trends in all areas” related to performance and efficiency.

• In Nassau County, NY Veolia slashed service to close a $7.3 million budget gap. More than 30 routes saw cutbacks, in all 60% of the system experienced service declines. 

• After 19 years of privatized service in the Toledo, OH area, paratransit riders complaints

were so numerous that the agency fired First Transit. 

How the Energy Boys F#@*%d Over California

By David Macaray - CounterPunch, March 8, 2017

In 2000 and 2001, one of the biggest, filthiest, most audacious and wide-scale con jobs ever perpetrated on a state population occurred in California. And even though many citizens chose, reflexively, to blame the “government,” the entire fiasco (other than the state assembly stupidly laying the groundwork for it) was invented and put into play by the private sector.

And once the smoke cleared, and people realized what just happened, California had lost roughly $40-$45 billion, its first governor in history had been recalled, the state’s second-largest energy company PG&E (Pacific Gas & Electric) had gone bankrupt, and Austrian steroid hound Arnold Schwarzenegger was now governor.

It all began in 1996, with Republican Governor Pete Wilson. He and the state assembly, seeking to stimulate competition, pushed through a law (AB 1890) calling for the “partial deregulation” of the energy market. Not to point fingers, but if there were any justice in the world, Wilson would’ve been taken out and shot with a rusty bullet.

Basically, what happened in the wake of AB 1890, was that the energy companies, seeing the opportunity for astronomical profits, began manipulating the market in ways that no one had ever witnessed or even imagined. They did it by creating shortages where none existed. Before this began, California had a generating capacity of 45 gigawatts (GW). Demand was still only 28GW. Things were good. There hadn’t been “blackouts” for 40 years.

But energy suppliers (notably Enron, a Texas company) had devised a plan. With deregulation of wholesale pricing now in effect, the hoary, time-honored “supply and demand” formula raised its ugly head. Inevitably, the energy suppliers began taking steps to diminish supply and increase demand, albeit artificially.

In order to depress supply and raise the price, they began messing with the grid. They illegally shut down pipelines and intentionally took power plants off-line during periods of peak demand by pretending that these facilities needed “maintenance.” Of course, it was all a lie. Anything to create a shortage.

They exploited loopholes. Because California law allowed energy companies to charge higher fees when the energy they sold was produced out-of-state, they engaged in a form of “megawatt laundering” (analogous to “money laundering”), where they disguised the source—disguised it to make California-produced energy appear to have been produced out-of-state.

They also ran “overscheduling” scams. Essentially, this consisted of purposely overscheduling the transportation of electricity along power lines in order to get the state to pay them a lucrative “congestion fee” for willingly alleviating the congestion (even when they had no intention of using them). The state had no choice. People need electricity. You do everything you can to provide it.

Protests in Mexico Push Country to Brink of Revolution and Nobody’s Talking About It

By Nick Bernabe - AntiMedia, January 10, 2017

San Diego, CA — Long-simmering social tensions in Mexico are threatening to boil over as failing neoliberal reforms to the country’s formerly nationalized gas sector are compounded by open corruption, stagnant standards of living, and rampant inflation.

The U.S. media has remained mostly mute on the situation in Mexico, even as the unfolding civil unrest has closed the U.S.-Mexico border in San Diego, California, several times in the past week. Ongoing “gasolinazo” protests in Mexico over a 20 percent rise in gas prices have led to over 400 arrests, 250 looted stores, and six deaths. Roads are being blockaded, borders closed, and government buildings are being sacked. Protests have remained relatively peaceful overall, except for several isolated violent acts, which activists have blamed on government infiltrators.

The few mainstream news reports that have covered the situation blame rising gas prices but fail to examine several other factors that are pushing Mexico to the brink of revolution.

Cooling the Planet: Frontline Communities lead the struggle

By staff - La Via Campesina, November 22, 2016

A new Hands on the Land publication highlights how communities of small scale food producers are increasingly confronted by the grabbing of natural resources and systematic violations of human rights. Download the Publication (English

Also available in Spanish and French 

Small-scale food producers and consumers, including peasants, indigenous peoples, hunters and gatherers, family farmers, rural workers, herders and pastoralists, fisherfolk and urban people – the frontline communities – are increasingly confronted by the grabbing of natural resources and systematic violations of human rights. Already pushed to the fringe, frontline communities additionally face the increasingly frequent natural disasters and impacts of climate destruction that are caused by the climate change – and the inability of governments to agree to real solutions.

Land, water and ocean grabbing, as well as food and climate injustices are not stand-alone issues but deeply intertwined and find common expression through the current dominant economic approach for the use, extraction, conservation and governance of natural resources. Powerful actors, driven by narrow economic interests rather than long-term sustainability are concentrating the political power to determine how resources are to be used, by whom, and for what purposes. In this process, natural resources are wrested away from their social and ecological dimensions of protecting the millions of people whose way of life, culture and traditions are tied to the access and control over their territories.

The Global Convergence of Land and Water Struggles is a response to these injustices by frontline communities from all over the world. During a public event held in Paris in December 2015 at the time of the COP21, representatives of frontline communities discussed and denounced the false solutions to the climate crisis, and promoted the real solutions that are rooted in peoples’ knowledge and experiences. They stressed how converging provides hope, opportunities and solidarity and, importantly, advances the struggle for systemic change.

The purpose of this report is to amplify the voices of frontline communities and to share the political messages of the 16 social movement leaders – who spoke at the meeting – with the masses who form the base of social movements all over the world. The report is meant to trigger deepened political consciousness and to support mass based movements in their resistance against the privatisation agendas promoted by the political and economic elites.

The report itself is a product of collaboration between many social movements and allied organisations from all over the world. More than twenty groups have contributed to the writing of the report and many more assisted with preparations and the implementation of the public event in Paris. A list of all the groups is provided on the back cover.

NUMSA statement on Eskom CEO’s resignation

By Irvin Jim and Patrick Craven - NUMSA, November 16, 2016

The National Union of Metalworkers of South Africa welcomes the resignations of Eskom CEO Brian Molefe and Board member Mark Pamensky, and calls for the resignation of the entire board and divisional executives who are all implicated in the many serious allegations against Eskom in the former Public Protector’s report, the State of Capture, which include:

1. Irregularities in an Eskom deal with a Gupta-0wned mining company, Tegeta, which won a R2-billion profit from a transaction involving Glencor’s sale of Optimum Coal Mine and its holding company to Tegeta.

2. Eskom letting Tegeta sell off part of Optimum Coal Terminal — a deal which Ajay Gupta told the public protector had netted him a profit of R2-billion, which might constitute a contravention of the Public Finance Management Act (PFMA) as Eskom “acted solely for the benefit of one company”.

3. Eskom’s authorisation of a R660-million coal prepayment to Tegeta at a special board meeting, hours after the Gupta company informed Glencor they were R600-million short of the money to buy the mine and that banks had refused to come up with the cash. This could violate the PFMA and amount to fraud as the money was not used to fund the mine but to buy the shares of the holding company — contrary to what Tegeta said publicly.

4. A 10-year contract with Tegeta to supply 1.35 million tons of coal a year to Majuba power station at roughly R284 per ton from their Brakfontein mine, despite evidence that Eskom’s technical team were concerned about the coal’s quality. Eskom paid R134-million to Tegeta for substandard coal it knew it could not use in its power stations.

Eskom has even victimised two Numsa members whom they are trying to make scapegoats for this Brakfontein deal. One has been dismissed and the other suspended for over a year and Numsa will continuously fight for justice for these members.

5. Molefe’s “cosy” relationship with the Guptas which are substantiated by cell phone records which show that he phoned Ajay Gupta 44 times, and Ajay Gupta called him 14 times, between August last year and March this year. Between August 5 and November 17 2015, he was placed in Saxonwold on 19 occasions.  Atul Gupta admitted to Madonsela that Molefe was a “very good friend”, yet Molefe had not declared his relationship with the Gupta family.

All these are allegations which the proposed Commission of Enquiry must investigate, but they are sufficiently serious to make it impossible for Molefe and the Eskom Board to continue with business as usual and they must stand down.

This however raises the question of who should replace them, and also who should be on the boards of other state-owned entities about several of which the State of Capture report also expresses concern, including Transnet, Denel, SAA and the SABC.

Numsa has consistently opposed privatisation of public entities, called for the renationalisation of Arcelor Mittal SA and Sasol and the nationalisation of other strategic industries. But it is now clear that SOEs all need to be run in a far more democratic and socially responsible way.

Public utilities should have an entirely different set of objectives from private companies – to produce commodities and deliver services which people need, as efficiently, safely and economically as possible and to protect the environment and the economic prospects for future generations.

This is impossible however when SOEs are run as they are today, as if they are private businesses, motivated exclusively by the pursuit of maximum short-term profits, regardless of the impact their activities have on local communities, the environment, their workers and the long-term future of the economy, and also as auxiliary service providers to the dominant private capitalist system.

The underlying problem at the heart of all Madonsela’s allegations is that SOEs have become entangled with the corrupt private sector through outsourcing of ancillary activities and thus been infected with the disease of corruption, which is inherent in the capitalist system.

While Eskom itself remains state-owned, it has done huge deals with private companies, in particular those in the coal mining industry, many of which feature in the former Public Protector’s allegations.

This leads to a particularly blatant form of corruption arising from the SOE directors’ close relations with the state, corrupt politicians and private companies, which creates the crony capitalism which Madonsela has exposed.

When challenged by Numsa about Eskom’s outsourcing of coal mining, Molefe argued that he was not interested in owning the bakery but only in the delivery of the bread.  But coal mining and electricity generation are inextricably linked together.

If public ownership is to achieve the social objectives as defined above it will have to embrace all the key sectors of the economy so that they can be integrated into a coherent development plan of production.

This will however be impossible if their boards are full of profit-motivated business men and women. The new Eskom Board must reverse this trend and comprise of democratically elected representatives of the workers, communities and civil society, so that they are run in the interests of South Africa as a whole and not their selfish interests and those of corrupt cronies.

This should then set the pattern for all SOEs and other industries which need to be nationalised so that we can create a socialist South Africa based on the Freedom Charter in which the wealth of the country is really transferred to the people.

Cities and civic workers: The union role in building better cities

By Jim Silver - Rabble.Ca, October 5, 2016

Although Carlo Fanelli's book Megacity Malaise: Neoliberalism, Public Services and Labour in Toronto is not about Winnipeg, it offers many insights applicable to Winnipeg and to other Canadian cities. Fanelli is a former Toronto civic employee who looks at civic issues from the point of view of city employees and their unions. His central argument is that the fiscal problems confronting Toronto and all major Canadian cities are not caused by over-spending on civic services nor by excessive union wage demands, although this is what is typically claimed.

The basis of Canadian cities' fiscal problems is in Canada's Constitution, which does not give cities the taxing powers to generate sufficient revenue to do all of the things for which they have responsibility. Cities are forced to over-rely on property taxes, which "is unsustainable in the long run." Property taxes are regressive, and don't grow with the economy, leaving cities in a constant state of fiscal crisis. This is made worse by the fact that federal commitments to civic issues have been sporadic and insufficient to meet cities' needs.

This has been worsened further by the ideological dominance in Canada of neoliberalism. This ideology has driven massive cuts in taxation and in public spending -- by 1999 Ontario's Mike Harris government, for example, had made 99 different tax cuts; by 2013 Stephen Harper's government had cut federal taxes to the lowest rate in 70 years -- followed by the downloading of responsibilities from senior to lower level governments. Cities have borne the brunt of this offloading, and have not had the capacity to generate the revenues needed to deal with it.

Toronto and Winnipeg have responded with a host of policy measures that do not get at the real root of the problem. Like Winnipeg, Toronto has allowed suburban sprawl to grow, on the grounds that more suburban housing will mean more property tax revenue. But this doesn't get at the underlying structural problems, and in fact generates more costs in the longer run. Selling off valuable public assets to the private sector creates profits for private interests, but produces a one-time only injection of cash that is no solution to the underlying problem and that diminishes future revenue flows. The same is the case with privatization and contracting out and the use of public-private partnerships (PPPs).

There is a great deal of evidence that PPPs, to take that example, do not generate the savings that cities claim. Ontario's auditor-general produced a major report on 74 PPPs completed between 2003 and 2014 and found that these cost Ontario some $8 billion more than traditional public financing. Contractors benefit, cities' budgets do not, yet Toronto and Winnipeg continue to make use of PPPs on the largely false grounds that they save public money. The contracting out of city work continues unabated, and any "savings" it produces are typically the result of non-union contractors exploiting vulnerable workers. This is the case with the privatization of Winnipeg's garbage collection service in 2012. The hard work of lifting garbage cans and dumping them into trucks is done by temporary day labourers -- many of them young Aboriginal men -- hired on a day-by-day basis at minimum wage with no benefits. Described in an expose by Aboriginal Peoples Television Network as "Winnipeg's dirty little garbage secret," this exploitative process is how Winnipeg "saves" money via privatization and contracting out

Spending on valuable public services continues to be cut on the largely false grounds that cities have a "spending problem," while the already massive infrastructure deficit balloons ever further. Roads, bridges, underground pipelines and transit services continue to deteriorate, while parks and recreation facilities, libraries and other essential civic services remain underfunded. The urban fiscal crisis grows unabated.

City governments, desperate for solutions and driven by their ideological orientation, point the finger at out-of-control spending and excessive wage demands by civic unions. Many in the right-wing media promote this simplistic and largely false explanation.

Fanelli points to data showing that incomes have stagnated over the past three decades of neoliberal governance. "In Canada's three largest cities the bottom 90 per cent of income-earners made less in 2013 than they did in 1983." Toronto's 2007 Independent Fiscal Review Panel found that the average wage of City of Toronto workers, including overtime, was "less than $40,000 in 2007." Toronto's unionized workers and their unions are not the cause of the city's fiscal problems.

Yet one of the great "successes" of neoliberalism and its adherents has been to redirect the anger of many modest-income earners at civic employees and their unions. Civic employees are seen as being paid too generously, despite their relatively modest earnings. As Fanelli points out, "the vitriol directed at them is intense, often as if they live lavish lives at the expense of non-unionized workers."

This October, All Hands On Deck to Stop the TPP

By Steve Brown - Labor Notes, September 30, 2016

The White House is hell-bent on forcing the Trans-Pacific Partnership through Congress during the lame-duck session immediately after the election, when political accountability to constituents is at its lowest.

That’s why it’s critical that workers and unions demand that waffling members of Congress state their opposition to the TPP this October, before the election—while we still have some leverage.

TPP is like a giant version of NAFTA, covering 12 countries around the Pacific. This multinational treaty poses an urgent threat to our democracy, jobs, health, environment, drug prices, and the Internet.

Communications Workers (CWA) Local 3611 member Grant Welch hadn’t even heard of the TPP until he attended a union training in June. Now he’s helping his local to phonebank, asking every member to call their Congressperson. CWA held a national call-in day September 14.

“People are eager and willing to learn,” says Welch, a telecom worker in Raleigh, North Carolina. “We have a group of very passionate young workers who have visited every work center and every yard to tell workers about the TPP.” He and fellow activists have also passed out flyers at Moral Monday rallies, and they’re spreading the word to family and friends.

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