Water for Chevron and a Lesson for the Government

A U.S oil multinational, Chevron, recently kick-started a new venture in Luanda’s most affluent residential area, Talatona:  a water well for the consumption of its employees.

The first well for the rich, privileged and expats, in a luxury gated community, is about to pump water to the 100 houses of Condomínio Monte Belo (Beautiful Heights), where most of Chevron’s expat employees live.  Since the August 31 elections, the Angolan capital, Luanda, a sprawling urban chaos with more than five million people, has been plagued by severe water and electricity shortages.

Monte Belo is one of the extravagantly expensive gated communities that have mushroomed south of Luanda and it is worth over US $250 million. Chevron commissioned the real estate project to the Brazilian construction multinational Odebrecht, in a joint-venture with a local private company Sakus Empreendimentos e Participações, set up by Sonangol oil executives. Sakus is currently fronted by Mirco Martins, the stepson of the previous Sonangol CEO and current vice-president, Manuel Vicente.

In Angola, it is not unusual for such a luxury-tailored project to resort to rudimentary approaches to overcome the lack of basic infrastructures, such as running water.

As Maka Angola has gathered, U.S. expats have been demanding regular tests on the water provided daily to their buildings’ underground tanks by cisterns. There is no trust on the source of the water brought in by the truck cisterns, which can range from rivers to piped water. As a safety alternative, U.S. families are advised to use bottled water for drinking, cooking and tooth brushing. At Monte Belo, the Chevron expats will continue to buy bottled water, as the water from the well, once operational, will be used only for other purposes.

The concerns of the expat American families with water safety are in stark contrast with those of the Angolan ruling elite. The latter seems unfazed by the untested water that reaches their underground tanks and their taps and is more interested in acquiring luxury goods. In fact, such an elite is now in an open competition with Russian oiligarchies and other state-controlling mafias of the world, in squandering public resources in the untrammeled consumption of luxury goods. More and more, Angolan nouveaux riches are buying Ferraris to adorn their garages the same way art collectors buy paintings to hang on their walls.

For the majority of ordinary Angolans, the lack of piped water and electricity has been part of daily life. In provinces like the diamond-rich Lunda-Sul, less than seven percent of the local population has access to clean water.

During the electoral period, the ruling People’s Movement for the Liberation of Angola (MPLA) claimed that in 2011 clean water consumption reached 56 percent of people living in urban areas, compared to 33 percent in 2009. Domestic propaganda and the international fascination with the Angolan economic growth and construction boom gave credence to such inflated statistics. Both have been determinant in creating an image of a country moving forward at a faster pace. In fact it is, but where is it headed?

Last year, President José Eduardo dos Santos approved the Oil Fund, and endowed it with 100,000 barrels a day and the mission to invest in water and energy infrastructures. After the elections, the same fund, now with a budget of US $5 billion, became the Angola Sovereign Wealth Fund (FSDA), without proper legal procedure. In a clear case of nepotism and wholesale plunder of public resources, the President appointed his son Filomeno José dos Santos “Zenú” to manage FSDA.  The fund’s mission suddenly changed. Instead of energy and water projects for Angola, the fund will now be used to promote investment in the West and to build hotels and touristic infrastructures.

What kind of economic growth or development can be sustained with acute water and electricity shortages? It is unlikely that Angola will produce such a miracle. In the meantime, it is important to swiftly address the problem of access to water.

Agostinho Martins, a middle-class manager living in the center of Luanda, spends over US $300 a month to fill up the water tank of his two-bedroom apartment, in order to provide water for a family of three. Yet, every month the water utility company charges him over US $300 for water it does not provide, and keeps threatening him with cuts. “I laugh and I say: ‘Go ahead’,” he states jokingly.

After the elections, the government claimed that the lack of water in the capital was due to drought. Nature denied any responsibility by providing heavy rains soon after. More recently, the spokesperson for the state-owned water company EPAL, Domingos Paciência, provided another explanation of sorts. He said that the company lacked fuel to keep power generators running in the water distribution centers.

But Angola is the second largest oil producer in Africa, after Nigeria. The lack of water for lack of fuel is hard to fathom.

Moreover, Luanda is running on fuel as the city has been experiencing severe electricity shortages. The reconstruction initiatives, implemented under the oil-for-infrastructure deals with China, worth US $15 billion, have not included serious water and electricity projects.

While Chevron can dig a water well for its employees at an affordable cost, the same type of easy, inexpensive fix cannot be engineered to solve power blackouts. Chevron’s offices, as well as many office buildings in Luanda and even the presidential palace, consume nowadays more electricity from power generators than from the electrical grid. Some office buildings in the city center run up monthly bills of up to US $30,000 in fuel consumption for the generators.

Either affordable or expensive, these fixes are not long-term alternatives that can sustain the economic growth of Angola. Rather than patch-up solutions and scanty official excuses, the country needs a serious program for infrastructure construction, urban planning and institutional change that can provide a solid foundation for sustainable socio-economic development.

A recent article http://www.nytimes.com/2012/11/15/business/energy-environment/15iht-green15.html?_r=0  on water in the New York Times highlights precisely this point. John Briscoe, a professor of environmental engineering and environmental health at Harvard University, told the paper that “in the developing world, the most pressing water needs center on providing more infrastructure and ensuring that administrative institutions function better.”

One can only hope that the MPLA government officials are working on such a plan right now, instead of thinking of ways to rig the statistics or in new excuses to explain water shortages and power blackouts.