Berlin reverses privatisation

Submitted by Matthew on 19 November, 2013 - 5:38

On 3 November, 600,000 Berliners voted in a referendum to take back the local electricity production and supply into public ownership — 83% of those who voted.

This is only 150,000 less than the combined vote of the Social Democrat and conservative Christian Democrat parties (who run the federal state of Berlin) in the last regional elections. The referendum was held after around 230,000 signatures had been collected by the “Berliner Energietisch” campaign, calling for democratic control over and public ownership of the energy supply (and of other basic necessities), 100% green energy, any profits going into public services, and full transparency in the running of the new municipal utility and grid company.

Berlin’s regional government sold off their remaining 51% majority in the local electricity supplier and producer, Bewag, in 1997. Eventually the Swedish state-owned power company Vattenfall took over. Its name means ‘waterfall’ but mainly produces power from coal, as well as nuclear energy (and a not insignificant number of serious accidents, in Germany at least). Vattenfall had also bought the local electricity works in Hamburg, the HEW from the regional government.

Two years later, Berlin sold 49.9% of its water board, BWB, to Vivendi (today Veolia), power firm RWE and insurance company Allianz as part of a public-private-partnership deal. PPP was, as usual, to be particularly expensive for service users, and the citizens of Berlin got the most expensive water supply in Germany as a result. The PPP deal, however, which guaranteed profits to Vivendi & Co. was kept secret by the government and was only released after a long political campaign by the “Wassertisch” and a successful referendum (in the process of which the treaties were leaked to the media, and only then released by the government — before the vote was held, incidentally). By September this year, the government had bought back the 51.1% from Vivendi and RWE — at ‘market price’, meaning that the company will be run as before and that water and sewage charges are not expected to fall.

The campaign to take (or, as happened, to buy) back the water authority inspired a number of similar campaigns. The suburban rail service, the Berlin S-Bahn, is, since 1994, a division of the state-owned, though explicitly run according to the logic of profit, railway company Deutsche Bahn AG. Berlin’s suburban services are paid for by regional government, yet these subsidies have not been used to improve services or even to maintain them.

Instead they have been run down, with trains being scrapped and works being closed. In recent years, the money has been transferred directly to the main company to improve its books, as DB AG was expected to be sold off to the highest bidder.

Meanwhile any significant cold (or hot!) spell means that local transport comes to a standstill — in a city with the lowest personal car ownership in the country.

A campaign (the “S-Bahn-Tisch”) developed to take the firm back into public ownership (like the city’s underground, bus and tram services), but the city’s ruling politicians still seem to prefer to put sections of it out to tender. They have learned nothing from the experience of water or electricity privatisation. At the same time a referendum on public ownership of the local railways is bureaucratically being blocked through the courts.

Despite the clear result on the electricity referendum at the beginning of this month, similar tactics led to the quorum being narrowly missed. The city government refused to hold the vote on the same day as the general election in late September, which would have guaranteed a significantly higher turnout — and a binding result. Other tricks included — ten days before the referendum — the city government announcing it was to found a new city utility company (as part of the water board) anyway, in order to try and make the referendum seem pointless. At the same time, the government called for a ‘no’ vote.

It is likely that the city government, run by a ‘grand coalition’ of so-called Social- and Christian Democrats, will see the inquorate result as a confirmation of its course. The over 50 organisations who organised the referendum and political campaign for democratic control and common ownership of electricity and other utilities will continue their fight. They do not believe that the city government really intends to take back Berlin’s power grid from private companies or to run it transparently, ecologically, democratically and for the benefit of citizens as opposed to profit.

In a city where an estimated 19,000 people are cut off per year, this must remain on the political agenda.