Tanzania: UK company Biwater suing government for termination of contract

Updated - Friday 06 January 2006

UK water company Biwater has instituted arbitration proceedings against the Government of Tanzania via the International Centre for the Settlement of Investment Disputes (ICSID). In May 2005 the government terminated a ten year water privatisation contract on the grounds that Biwater had failed to make the required investment or improve services in Dar es Salaam [1].

Campaigners have condemned Biwater’s actions. Benedict Southworth, Director of the World Development Movement (WDM) said: "This is an absolute disgrace, Tanzania is one of the poorest countries in the world, and now Tanzanian citizens are being punished for being the victims of a failed policy which they did not want”. Southworth claimed that “Biwater's use of bullying tactics” had “resulted in mass disconnections”. The Tanzania Association of Non-Governmental Organisations said it was starting a campaign to stop both Biwater’s legal case and water privatisation in Tanzania.

In a statement Biwater said they were left with no choice but to invoke the claim as, in their view, the Government of Tanzania had broken international law. According to the company, the government had “stolen our assets, broken the terms of its contract and acted disgracefully towards our staff”, adding that the project has failed due to a “lack of political will”.

[1] Tanzania, Dar es Salaam: government scraps water privatisation contract, Source Weekly, 31 May 2005

Contact: Jo Kuper, Press Officer, WDM, UK, jo@wdm.org.uk ; Steve Marinker, Biwater, UK, corporate.communications@biwater.com

Source: WDM, 1 Dec 2005 ; Biwater, 1 Dec 2005