Socialization | Berlin: Water in state hands

In 2011, Berliners had had enough: 98.2 percent of voters supported a law requiring the publication and review of the privatization contracts between the State of Berlin and the private investors who had been involved in Berliner Wasserbetriebe since 1999. This was despite the fact that, due to previously built-up public pressure, the contracts had already been published by the State of Berlin and the co-shareholders themselves three months before the referendum. "The fact that 678,247 Berliners nevertheless voted for the publication of the water contracts on the day of the referendum was symbolic of the fact that a large part of the population rejected the partial privatization of Berliner Wasserbetriebe and supported remunicipalization," states the non-fiction book "Berliner Wasser," published by the water company in 2014.

The water decision was driven by the Berlin Water Table initiative. Public pressure against partial privatization was followed by the state's political will and, ultimately, the willingness of the co-owners to sell, so that the water company was fully remunicipalized in 2013.

The Berlin Water Council emerged from the Water Table at the time, "to support the development of the company," as Ulrike von Wiesenau and Gerlinde Schermer from the Water Council told the "nd" newspaper. The council is "a body for citizen participation that sees itself as a supplementary direct democratic control body and a driving force." However, the Water Council does not have legally enshrined rights, although attempts were made to establish it "as an advisory body endowed with rights," explains von Wiesenau.

Schermer and von Wiesenau consider it "a great win for the capital" to have fully returned the water company to state ownership . Nevertheless, even twelve years later, there is still room for improvement regarding the company's transparency and business practices. "The laws governing the calculation of water fees created with the partial privatization remain unchanged to this day; they continue to serve to maximize profits," say the Water Council spokespersons.

Furthermore, the €1.2 billion loans used to buy back the private shares in the water companies must be repaid by 2043, according to von Wiesenau and Schermer; according to the book "Berlin Water," this is paid through "profit distributions previously allocated to the private shareholders." Schermer explains that Berlin water customers must repay the money because it is included in the calculation of water charges.

The Water Council is demanding transparency regarding the portion of the water company's revenue that flows directly into the state budget. According to the budget plan, this should amount to €130 million for 2025. According to the annual financial statements, Berlin Water Company recorded a net profit of €127 million in 2024.

"The retained profit is transferred to the state budget in accordance with the law. This was the case before remunicipalization and hasn't changed since," Stephan Natz, press spokesperson for the water company, told the "nd" newspaper. The Senate Department for Economic Affairs, in turn, emphasizes that the money benefits "the entire city community." "Whether it's better schools, more affordable housing, modern public transport, or climate and environmental protection: the money supports many key tasks and helps balance the state budget."

"The fulfillment of the public service obligation and the generation of profits are incompatible."

Gerlinde Schermer and Ulrike von Wiesenau , Berlin Water Council

The economic administration believes the remunicipalization of the water utilities is the right thing to do. "This ensures public control over such a vital resource as water," it explains. Advantages include transparency, greater political participation, and the opportunity to make long-term investments. Water charges can also be made "socially acceptable," it says. "Since 2014, drinking water prices have been stable and have remained unchanged at €1.694 per cubic meter for eleven years now. Prices for wastewater have even declined over the same period, amounting to just €2.155 per cubic meter since 2022."

However, the stability will soon be over: starting in 2027, water charges are set to increase "moderately," as Senator for Economic Affairs and Chair of the Water Company Supervisory Board, Franziska Giffey, said when presenting the Water Company's annual financial statements in June. She justified the price increase by citing the need to invest in infrastructure. The upcoming increase will be "in the cent range," the Senator stated. The Economic Affairs Administration justifies the expected price increase as follows: "It is about taking into account the increased material, personnel, and investment costs, as well as the requirements of the new European Water Regulation."

The Water Council is not at all pleased with the announced fee increase. "I say stop," said Gerlinde Schermer. The Senate should not increase fees for Berliners while simultaneously taking "customer money for investments" from the water companies and transferring it as the company's profits. In general, the "legally required profit-making" requirement must be removed from the Berlin Companies Act; instead, a "pure cost-coverage principle" is needed. "The fulfillment of the public service obligation of providing public services and the generation of profits are incompatible," said Schermer and von Wiesenau.

Rising water charges aroused Berliners' discontent as early as the 2000s. In 2004, water prices had been raised by 15 percent, and even further until 2010. For the Water Council, this was a clear consequence of partial privatization. In 1999, the state sold 49.9 percent of its water companies to private companies to fill empty coffers—but also because it reflected the spirit of the times, according to the book "Berlin Water."

From Schermer's perspective, the partial privatization is a negative example for all so-called public-private partnerships. Because such partnerships continue to be a topic of discussion in politics and business, the Water Council wants to pass on the experiences of 14 years of partial privatization to young people. "Otherwise, this will happen again," says Schermer.