Eau de Grenoble

PSIRU Reports - Grenoble-water re-municipalised

Par Emanuele Lobina - Juin 2000

Nota : cet article a été publié par Public Services International Research Unit-PSIRU (Unité de recherche internationale sur les services publics), de l'université de Greenwich :

The PSIRU was set up in 1998 to carry out empirical research into privatisation, public services, and globalisation. It is part of Greenwich University's School of Computing and Mathematics. PSIRU's research is centered around the maintenance of an extensive and regularly updated database of information on the economic, political, financial, social and technical experience with privatisations of public services worldwide.

Vous trouverez ce document sur leur site web, ainsi que d'autres études sur la question de l'eau.

Grenoble sacks Lyonnaise, re-municipalises water

(Note; This is a summary report. PSIRU is preparing a lengthier analysis on the lessons of Grenoble. For details (in French) of the Grenoble case, see http://www.ades-grenoble.org and http://eausecours.free.fr/. The PSIRU website, http://www.psiru.org, has material on the troubles with privatised water concessions in France).

The people of the French city of Grenoble can drink municipal water again. If they don't prefer bottled water from the nearby Alps. For almost eleven years, their water and sewerage systems were operated by a giant French multinational. The privatisation process turned out to be a text book example of corruption. The citizens paid the price: increased tariffs and less than honest invoicing methods created profits which, drop by drop, filled the company's coffers. Now, the City Council has decided to re-municipalise the water services. Ultimately, the Grenoble case shows that people can win a water war against the giants and is a blow to the international financial institutions promoting the French model of water management.

Last March, the Grenoble City Council finally forced French water multinational Lyonnaise des Eaux to abandon the water supply and sewerage concession it had secured through corruption back in 1989. This was the result of a long-standing fight. Two organisations, ADES (Association for Democracy, Ecology and Solidarity) and Eau Secours ("Save Water"), were in the forefront of the struggle. They have set an example for consumers and citizens worldwide, whose access to water is affected by corporate greed and corrupt deals.

This is the story. In November 1989, the then Mayor of Grenoble, Alain Carignon, took the initiative to privatise the city's water services to COGESE, a subsidiary of Lyonnaise des Eaux. The deal went ahead in spite of strong opposition.

As it turned out, both Carignon and Jean Jacques Prompsey, a Lyonnaise des Eaux executive, were prosecuted and convicted in 1996 for respectively accepting and paying bribes. More precisely, the privatisation deal was concluded in exchange for contributions to Carignon's electoral campaign. As a result, ADES and Eau Secours challenged the privatisation case in court and, subsequently, the decision to delegate the water service to COGESE was annulled for being illegal.

The City Council then opted for creating a "société mixte" which, in turn, immediately sub-contracted the services to another Lyonnaise des Eaux subsidiary. However, a second court ruling declared also this contract void and cancelled water rates which still incorporated the "costs" of corruption.

In March this year, the City Council voted to re-municipalise water supply and sanitation under a "régie" - an in-house unit - of the council.

The economics of corruption

The Grenoble case provides an insight into the economics of corruption, revealing the rationale for paying bribes to public officials and securing long-term monopolies.

Eau Secours estimates that:

Corruption is one of the practices adopted by French water multinationals to secure abnormous profits. With an increasing body of evidence exposing the irregularities and the "costs" of the French system of delegated management, this should not be promoted as a global model.


"Fighting for the right water price is an action of solidarity."
ADES Association for Democracy, Ecology and Solidarity

"We have to make sure that every irregularity is definitely swept away from this vital element."
ADES Association for Democracy, Ecology and Solidarity

PSIRU University of Greenwich 10/02/2003
PSIRU Public Services International Research Unit www.psiru.org
University of Greenwich
School of Computing and Mathematical Sciences
30 Park Row Greenwich London SE10 9LS UK
Email: psiru@psiru.org Fax: +44(0)208-331-9933 Tel: +44(0)208-331-7781
Director: David Hall Researchers: Steve Davies, Emanuele Lobina, Kate Bayliss