Honduras, one of the poorest countries in the Western Hemisphere with an extraordinarily unequal distribution of income and massive unemployment, has fallen as a prey of the water privateers.   In recent years, low prices for coffee, one of the country’s biggest exports, have further impoverished Honduras.  As of 2004, eighty percent of the 6.5 million people in Honduras live in poverty.

In December 1999, the Municipality of San Pedro Sula, the largest industrial and commercial area of Honduras with a population of approximately 527,000, called for tenders from national and international companies to partake the privatization process involving a 30-year concession contract.  The project aimed to transfer the water and sewerage services of the city of San Pedro Sula from the municipal division, the División Municipal de Agua (“DIMA”), into private hands.  In August 2000, the consortium named “Acea y Otros” won the Concession.  The consortium consisted of a group of Italian companies (Acea, Agac, Astaldi, Carlo Lotti, and Ghella) and a Honduran company that served as representative of various international firms (Terra).

Meanwhile, taking advantage of the Honduran government’s urgent need for funding, the IMF and the World Bank are including water privatization as a condition of new loans.   In 2000, the World Bank approved a structural adjustment loan conditioned upon the passage of a “framework law” that would facilitate private concessions in the provision of water and sewage services.

In August 2003, thousands of protestors blocked highways leading to the capital, Tecucigalpa, and demonstrated at the congressional building, waving banners saying “No to the IMF.”  Honduran President Ricardo Maduro has been negotiating with the IMF and is implementing “reform” policies that he hopes will convince the institution to grant a new loan. One of the most controversial policies was a law passed by the Congress permitting private companies to buy concessions in the public water sector. Honduras has not received any credit from the IMF since 2001, although the country has continued paying back debt to the tune of $32 million in 2002 and another $16.3 in 2003.  Eighty percent of the 6.5 million people in Honduras live in poverty.

The privatization of water continues to meet vehement, organized resistance from the Honduran people. The Hondurans’ resistance also took the form of actively experimenting with alternative solutions.   With the assistance of WaterPartners International, an American organization, six Honduran communities (Guacual, Gualcinse, Cacahual, El Aguila, Cholunquez and Las Crucitas) were able to construct spring-fed, gravity flow systems with individual household taps and drainage.   While WaterPartners’ Honduran partner organization provided the engineering design, members of the communities provided labor.  Community-elected local technicians and treasurers maintained and operated the new systems.