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U.N. meeting says world must pay more for water

PARIS, March 21 (Reuters) - A United Nations conference on managing the world's limited fresh water supplies agreed on Saturday that water should be paid for as a commodity rather than be treated as an essential staple to be supplied free of cost.

The three-day conference, attended by environment ministers and officials from 84 countries, said costs should remain low and the poor must be assured of access to fresh water.

The conference's cautious appeal for more market forces in managing the world's water supplies prompted a note of caution from France's socialist Prime Minister Lionel Jospin, who addressed the meeting on its final day.

The conference's final declaration said the problem of water shortages was so important that governments would have to mobilise private funds for the vast investments needed for networks and treatment plants to assure future supplies.

After hearing that one-quarter of the world's 5.9 billion people have no access to clean drinking water and water shortages threatened world peace, delegates agreed that governments must ``mobilise adequate public and private funds...(to) use the available resources in the most efficient way.''

``The gradual introduction of a system to recover the direct and indirect costs of services should be encouraged,'' the conference concluded in cautious diplomatic language bound to put off poorer states that argue water should be free.

In his speech, Jospin urged prudence in dealing with a substance that was not ``a product like any other.''

``You have renounced the old belief, which held on for far too long, that water could only be free because it fell from the heavens,'' he told the conference.

But he said the switch to a more market-oriented way of dealing with water ``should be prudent.''

``There has to be a balance found according to the capacity of each category of user to pay for it,'' Jospin said.

France's conservative President Jacques Chirac, who invited the conference to meet in Paris, told the delegates on Friday that water prices had to rise.

``No more barren wrangling over the market versus the state,'' he said. ``Water has a price and zero price is a forewarning of scarcity.''

Chirac estimated it would cost $400 billion to set up reliable water networks around the world and told the conference that governments alone could not foot the bill.

According to the World Bank, states have only pledged $60-$80 billion over the next 10 years.

``We have to think up ways of attracting domestic and world savings towards this type of collective investment by guaranteeing sufficient returns,'' Chirac said.

The conference also approved the outlines of an action plan for 2000-2010 which should be rubber-stamped at next month's session of the U.N. Committee on Sustainable Development in New York.

The plan aims to improve knowledge, optimise resources and develop regulatory tools at global and regional levels.

Chirac also called for the creation of an ``International Academy for Water'' under the aegis of an existing organisation.

France wants the Kenya-based U.N. Environment Programme (UNEP) to take over responsibility for water issues, but the United States opposes giving the issue to a single body.

Senior officials of France's two major water utility companies, Suez-Lyonnaise des Eaux SA (LYOE.PA) and Cie Generale des Eaux (EAUG.PA), attended the conference and argued that users should pay more for their water networks.

``The private investment should be repaid by selling the water,'' said Daniel Caille, a senior CGE official.

In his speech, Chirac said: ``The risk of hostilities will grow in step with the depletion of resources. Are we going to allow the 21st century to be the century of the water wars?''

Water consumption was doubling every 20 years, 50 percent of water in main cities leaked away and a quarter of the world's population had no access to clean water, Chirac said.

``If we so decide, within a few years we can provide every Third World village, especially those in the drylands of Africa, with lasting access to drinkable water,'' he said.

``If we so decide, within a few years we can provide all city dwellers, including those in poor neighbourhoods, with drinking water and sanitation.''