It all made sense, and yet somehow that latter component was problematic, if only for the fact that the average eight-year old growing up in the United States rarely thought of water as something one had to go out and acquire. It was not as though it could be bought, sold or marketed by some giant corporation with enough capital. Housing was capital, and the bigger the better. Clothing was certainly capital. And food was just as booming a business as any. But water was not so much a need as a human right--right?

Last year, in the poorest country of South America, water became a non-right. Water became a commodity upon which the likes of Bechtel, Edison and International Water Holdings could capitalize. Under initial pressure by the World Bank and ultimately multinationals and other foreign investors, the government of Bolivia sold off the public water system of its third-largest city, Cochabamba.

As a result, the people of Cochabamba watched their monthly water bills soar- and not to the 10 to 30 percent increase pledged by Aguas del Tunari, the water company in which California-based Bechtel and Edison S.p.A. of Italy own equal shares--but double and triple what they had been paying.

"The poorest people were looking at nearly $20 a month instead of the previous $5," Ravi Khanna, Director of One World Communication, an international communications organization, told the Earth Times. "Bechtel was given exclusive rights to the water. If you had a private well, it had to be handed over."

The spike occurred in January of 2000, within weeks of Aguas del Tunari taking over the water system. And within weeks of that, labor, human rights and community activists took to the streets for several months to protest the privatization efforts that had come to spell disaster for their city. Perhaps the most prominent leader of the Coalition for the Defense of Water and Life (Coordinadora) was Oscar Olivera, 46, who is credited with effectively reversing water privatization in Cochabamba.

"In November of 1999, the farmers came to us and to other organizations to tell us the intentions of the government regarding water," Olivera told the Earth Times. "We told ourselves that the only way to get something done would be through a united effort. Nothing would be possible without that. That's why the Coordinadora was born."

It was an alliance that culminated in a week-long strike, whereupon the city virtually shut down. More than 500,000 citizens formed road blockades, and buses could not enter or leave the city. "It was a coalition with strength in four sectors: farmers, professionals, industrial workers and common people living in populated neighborhoods in the cities," Olivera said. "We were against what was basically a capitalist approach to water."

The government was ultimately forced to renege on its 30-year contract with International Water Holdings, but not before then-President Hugo Banzer Suarez declared martial law and sent the military to tear gas the protesters. The violence that ensued left 17-year old Victor Hugo Daza dead, shot in the face by a Bolivian soldier, and nearly 100 others injured.

"It was a total disaster and yet it was nobody's fault," charged Jim Shultz, Executive Director of the Democracy Center and a reporter for Pacific News Service, who has resided in Cochabamba for the past three years. "Bechtel just said, 'Gosh, we screwed all these people over, we have a 17-year old dead in the street and a bunch of injuries, and we're just going to leave. It's not our responsibility because we're just a minority interest."

And technically, Bechtel does hold a "substantial but minority interest" in Aguas del Tunari--half of the majority interest, to be precise, which is the London-based International Water Holdings.

"I'm painfully aware that Bechtel's affiliation with this comes across so often," said Alexander Winslow of Bechtel Corporation. "We're constantly having to clear that up." Winslow went on to inquire about Earth Times sources in Bolivia and suggested we speak with International Water directly.

While the local Bolivian press reported that International Water acquired the water supply worth millions for a mere $20,000 down payment, the company maintained that the amount was inconsequential, as the nature of the transaction was based on a concession agreement--one that ultimately fell through.

"I don't exactly know how much we paid for it," said Tim Lowe, Business Development Manager of International Water, Ltd. "It was the government's decision to open the water system to international competitors, so we were invited to bid. It was based on providing the number of services agreed upon."

"There has been a lot of misinformation," Lowe continued. "Price increases were necessary in order to fund the project. Through Aguas del Tunari, a high proportion of the people weren't getting any freshwater. Those people would buy it from truckers who would charge eight to ten times the regular rate. Our intent was to bring water to everyone--rather than, say, 65 percent of the people.

"The average water rate was scheduled to go up by 35 percent--although that increase never happened."

Government officials, too, were quick to contend that the increase never occurred. Rafael Loayza, President Jorge Quiroga's press secretary, who first alleged that he was not allowed to make any statements regarding the conflict and then lied about his name, said it was the government who was responsible for water prices.

"A company cannot raise prices," he said. "That is the responsibility of the government, and we never raised them."

A company can, in fact, raise prices, and it did. In response to allegations that water bills increased by as much as 300 percent with Aguas del Tunari, Loayza remarked, "Three hundred percent in Bolivia is still 500 percent less than it would be in New York."

Technically, yes. But one can hardly compare the expenses of one of the most industrialized cities in the world to those of the single poorest country in South America.

"Here, water is like the earth," Loayza said. "It belongs to the ones who live around it, who have it on their land. And water prices are the lowest in Bolivia than anywhere in the world."

It was almost as though he were trying to deny the crisis ever happened. And once again, for a nation wherein the minimum wage is 67 dollars per month, and the wealthiest teacher makes just double that, such a statement is, for all intensive purposes, irrelevant.

Furthermore, when it came down to facts and figures, Loayza simply lied.

"Prices are the same, and they never went up under [Aguas del Tunari]. The problem was only how to provide water to Cochabamba." He promised papers of evidence that never came, and proceeded to assail Olivera and his politics at length. "Oscar Olivera has a political view of life," he said. "He's running in the next election for Congress, so he says things to get votes. There was nothing close to civil war here."

Loayza went on to explain the government's reasons for partaking in the project and the aftermath as he remembered it. "This project's aim was to provide water to Cochabamba, because people had problems sharing water, particularly farmers and investors," he explained. "Time passed, and they decided to work on this project called Misicuni, which was about building a water press.

"A lot of little companies from outside the country came in to build it, and some political people in Cochabamba pushed one or another of the companies to get money for the project," he continued. "Aguas del Tunari did run the project, and they got the chance to build the press, but not the tunnel. These people from [Aguas del Tunari] wanted to be in charge of the water, so they started to push out people from other little companies, who then started paying politicians and media owners to boycott the project because they couldn't control the prices.

"It was all about money interests," he conceded. "Who got money to build, and who got money to spend."

Olivera, he said, was one of those politicians with monetary demands. "He decided to make a social movement out of it," Loayza said. "He got money through the strike. A lot of people died. People were against everything--against the companies, against the government, against water."

Well, that might be taking it a step too far. People put their lives on the line because they were against... water?

According to the Bolivian government, the people of Cochabamba did themselves in. "Now they don't have water," he said. "Well--they don't have this project," he corrected.

But after the disaster that became of water privatization, was it, in retrospect, the best idea to grant the rights to a nation's water supply to a foreign corporation?

"I think so," he said. "There probably would have been more water available to the people, for farmers. And if you want water you have to build a tunnel. To do that you need investors."

For those who know Olivera well, Loayza's accusations regarding the social figure were laughable. Coordinadora representatives alleged that it was the intention of the government to discredit Olivera's achievements.

"Farmers nominated him for government because he was a positive leader for them," Khanna explained. "But Oscar has absolutely no desire to run for anything. He is a busy man, and he just had twins. He couldn't think about running for office if he wanted to."

Olivera did, in fact, address local media at a press conference from the Irrigators Federation of Cochabamba on the morning of December 14 to thank his nominees for the honor, but to decline the offer on grounds that he disapproved of "the way this so-called democracy is run."

"It's absolutely insane that they would claim he is making money off of this," Khanna added. "He spends most of his own money supporting the movement and the people."

As for the notion that water prices never increased, Olivera's sister Marcela, who also works with the Coordinadora, was appalled. "I have documents!" she cried, her habitually composed tone agitated with stupor. "There were reports from the local press! I have bills!"

No problem. Could she fax those documents over within the hour?

Olivera hesitated. "It is so expensive," she said finally. "I'm sorry. I know you need it, but we cannot afford to fax anything here. I don't make that kind of money."

This from the sister of an allegedly wealthy, money-mongering protest leader running for office. Still, the documents were necessary. "I have access to a scanner!" she said suddenly. In a few hours they could be sent via e-mail, which would do just fine.

The bills, she said, were just a few of the hundreds collected by the Coordinadora from various residents, though many had been burned last year in protest. One indicated 91 bolivianos, or 13 American dollars, for the month of December 1999, while the bill from January 2001 amounted to 146.60 bolivianos, or 22 dollars--nearly double that of the prior month.

"In many instances the increased availability led to the use of far higher volumes of water, with the result that there were large increases in water charges invoiced to some users," read a statement issued by International Water. "After civil unrest...the regulator instructed Aguas del Tunari to revert to previous tariffs, which was a clear breach of the contract."

Yet the bills presented to the Earth Times showed that while the cost of water for most families had doubled or more, the consume was either exactly the same or differed within the confines of a gallon.

"People here are not going to respond to something they read in the paper," Shultz argued. "They respond to the guy who comes to the door to collect your money to keep water coming out of the tap when it's double and triple what it was before."

Looted streets, blockaded highways, 100 injuries, one dead 17-year old and endless months of unsettled disputes later, Cochabamba's water supply is now being run by irrigation cooperatives and community leaders, with prices down to their original, fairly low standard.

"Since the municipal company [Semapa] has been operating the network, water availability has again become very low and the water quality has declined to previous standards," International Water's statement concluded. "There is no prospect of any solution that will bring water to the inhabitants of Cochabamba."

But others in Bolivia have a different story to tell. "The system that was running under huge deficits is now functional because there's no corruption," Khanna said. "Irrigation cooperatives had invested their own resources, money and labor to build an irrigation infrastructure, which was handed over to Aguas del Tunari as part of the privatization deal. There are no more losses since the committee has taken over. Access to water has expanded into communities that never had it before."

Jim Shultz said he can attest to the abundance of available water because his toilets began to leak and his fittings shook.

But what might otherwise be a regular success story--obvious negative ramifications aside--is further tainted by several factors. One is the fact that Oscar Olivera was just arrested in November of this year on earlier charges of "sedition, conspiracy, instigating public disorder and criminal association." Two other community leaders were also charged.

Another is the $25 million arbitration suit filed that same month by International Water against the Bolivian government.

The corporation claims it has sought to negotiate a settlement with the government of Bolivia for a year and a half, and is only now acting on it by filing for arbitration with the International Center for Settlement of Investment Disputes (ICSID). "Complying with ICSID guidelines...Aguas del Tunari quantified the size of its investment so that ICSID could formally consider the consortium's request," read the statement by International Water.

That value, it said, exceeded $25 million. And while the company did not own anything in Bolivia approaching that amount, it is demanding payment for potentially lost profits.

"We seek a settlement that compensates for the government having expropriated this 30-years' concession," said Keith Donald, General Counsel for International Water. "It is fair to investors and helps maintain the ability of governments to attract foreign investment that will improve the quality of life for their citizens."

Shultz had a more cynical view of the corporate agenda. "Twenty-five million is what Bechtel makes before lunch on any given day," he said. "For Bolivia, this comes right out of their treasury--that's 12,000 teachers, 3000 rural doctors, or the cost of connecting 125,000 families up to a public water system. Which of those things do they think the Bolivian government should cut?"

It was a question Lowe chose to avoid. "I understand that it's a significant amount," he said. "But our concern is to settle this to enable other investors to feel comfortable putting money into Bolivia." He could not comment on whether International Water would be one of those investors in the imminent future.

The Bolivian government has since hired an American law firm to represent them for $50,000. Though government officials said arbitration has not begun as yet, it seems likely they will ultimately bow to the company's demands.

"The Bolivian government is completely unequipped to deal with these multinationals," Shultz declared. "Quiroga doesn't want it to look like Bolivia is in confrontation with a huge multinational. I think he'd gladly sign a check for ten million dollars if it got Bechtel to walk away."

Shultz also has a problem with the process by which the arbitration occurs. "There's a World Bank arbiter sitting in between these two behind closed doors, making a decision that is going to affect people's lives forever," he said. "And those people have no access to that process."

"The World Bank threatened to cut all public funding if the water system remained subsidized by the government," he continued, referring to a statement made by former President Banzer Suarez in 1997. "Now it is acting at its worst. 'We drove the car to the top of the hill, we pointed it downward, we pushed it off--but that it swerved to kill those people, that's not our fault'- that's their position."

Yet the World Bank maintains that they had no involvement with the Cochabamba project whatsoever. "We have been a major participant in La Paz, but anything circulating about our role in Cochabamba is very incorrect," said Chris Neal, World Bank External Affairs Officer for Latin America and the Caribbean. "The World Bank did not fund it, nor did we loan any money to the private sector."

Neal upheld that the World Bank's role in Cochabamba ended in 1997, after one of their experts was asked to analyze two potential privatization projects. One was called Corani, a low-cost, fully private-financed option under which no tariff increases would have been permitted for at least five years. The other was the ever-familiar, $252-million Misicuni venture.

"Our assessment was that Misicuni was far too expensive and would require a large tariff hike," he explained. "[International Water] chose not to follow our advice. It was at that point that we withdrew, and why we never got involved."

Furthermore, he said, privatization could work well in Cochabamba as it does in La Paz, the country's capital. What is needed is regulation.

"There's a huge gap between the need for water services and the availability of funding to build pipes to get that water to everyone," he said. "The solution does not have to be privatization outright, but it should involve the private sector.

"A publicly funded water system without regulation makes for a lot of waste," he continued. "You have rich neighborhoods getting lots of water for very little money, while poor neighborhoods aren't getting any. What the World Bank is proposing are different forms of privatizing--a government-owned system with concessions to the private sector."

Unfortunately, a concession system was essentially what the government has attempted the first time around, and it was hardly a success. As for Jim Shultz, Neal had his own complaints.

"Shultz and his partner, Tom Kruse, have been very active in spreading information regarding our involvement that is simply not true," he laughed. "It's fine to be attacked for your sins, but when you didn't commit them, you have to say, please! We had nothing to do with this--leave us alone!"

Gonzalo Cernal, General Adviser to Claudio Mansilla, Minister of Foreign Trade and Investments, stated that "the World Bank obviously supports privatization programs," but maintained that they were not the only organization encouraging the government to privatize.

"Privatization had the support of many international groups, including the Inter-American Development Bank. The effort was part of a program designed by the Bolivian government to better manage the economy. It didn't happen overnight--it had been in effect since 1985."

But was it ultimately beneficial to the people of Bolivia?

"It depends," he said. "In some ways yes, because of new technologies, and transactions with the private sector. When some of our public systems were handled by the government, they weren't well-administered. A bureaucracy always has a political end. There were political appointees running these administrations, and they tended to be corrupt...so privatization was going to be much better because it could provide adequate services for the people."

So much, in fact, that the government may make another attempt at privatizing in the near future.

"There is still a process of reconciliation, and a discussion as to how services will be run by the new Misicuni project, which is linked to Aguas del Tunari," he said. "It will probably be another privatized system."

But at what cost? Not much, according to Cernal, whose response was similar to those of International Water representatives when it came to water prices. "It was an average tie," he said. "Rich people living in a certain type of sector paid higher tariffs."

When faced with very tangible bills showing a 90 percent increase for some low-income families, he said, "That probably did happen in some sectors but not on the whole. People thought they were being cheated but that was not really true. It was according to income, what people could afford to pay."

And as for 600,000 people effectively shutting down the city for a week?

"That was due to many social and political factors," he said. "Obviously they were not agreeing with privatization, but much of the political and social conflict is run by politicians and people in non-governmental positions who stir up a strike."

At least he admitted it occurred.

It is not as though privatization is perpetually followed by disaster. Desire for profit, maybe. But water is only the latest in a series of privatization efforts in Bolivia. The sale of public enterprises to foreign investors has become a pattern over the past 16 years--one meant to boost the economy, according to Cernal. Some of these include electric, airline, telecommunications and train systems.

"Many of the systems which have been capitalized are doing fine," Cernal asserted. "In the army there were industries that were run by the government and which have since been privatized, and which are running successfully."

Cochabamba is also the only region of Bolivia currently under a public water system. Why, then, was the Aguas del Tunari project such a disaster? Could water not be privatized with a degree of success in a place like Cochabamba the way it has been in other areas--perhaps if in the hands of another, more sympathetic company? Or by a project like Corani?

For the Coordinadora, the answer is "definitely no." For one thing, Cochabamba is a hilly region wherein tunnels are difficult to build. For another, as Olivera insisted, "water is a social service, and not a thing that we can sell or buy."

Maybe the fact remains that water is one of those needs so inherently basic that there is no room for the grips of mass market capitalism in its current, no matter what the alleged advantages might be. Perhaps the poorest country in South America just wasn't the best place for such an experiment.

Whether the devastating ramifications lie at the foot of hills, bills or corporate greed, the experience did not truly become a success story until the system was reversed--if only for the 600,000 at the core of the Cochabamba's trial.