Sep. 4 (Bloomberg) -- The carcass of a dead dog floats on the lake that supplies tap water to 750,000 Venezuelans. Witch doctor Francisco Sanchez has just dumped the previous night’s sacrifice from a cliff, contaminating the resource that has become more scarce than gasoline in Caracas.
The water from Lake Mariposa, polluted by sacrifices and garbage from a local cult, is pumped to a 60-year-old treatment plant that lacks the technology to make it safe for drinking, said Fernando Morales, an environmental chemistry professor at Simon Bolivar University in Caracas who has visited the site.
Eight kilometers (five miles) away from the lake, in Caracas, sales of bottled water are booming, with families paying the equivalent of $4.80 for a five-gallon jug, twice the price of gasoline.
“The treatment process has not adapted to the steady degradation of the water source,” Morales said in an interview at the university campus Aug. 22. “I wouldn’t use this water at home.”
The socialist revolution implemented by late President Hugo Chavez redirected funds from state-owned companies to reduce poverty and widen access to education, health-care and housing. It built 422,340 homes in the past two years, while neglecting the basic services in a country that has the world’s largest oil deposits and eight times more fresh water per capita than France. Blackouts and water cuts have become weekly events in Caracas, and when water does flow, few dare to drink.
The water crisis is the latest hardship affecting Venezuelans. When a main pipe burst last month, 60 percent of the capital was without water for two days. Yesterday, more than half of Venezuela was in the dark for several hours when a transmission line accounting for 60 percent of the country’s supply failed.
Shortages of imported goods ranging from sugar to beef are stoking the world’s second highest inflation after Iran. Real wages fell 9 percent in the second quarter from a year earlier, according to the central bank. The public-sector deficit will finish the year at 11 percent of gross domestic product, according to Bank of America Corp.
The deficit wasn’t used to finance investment in the water industry. The budget of the Caracas water monopoly Hidrocapital fell 49 percent to 25 million bolivars ($9.7 million) in 2010, the last year the Environment Ministry published a detailed report on spending plans.
The yield on benchmark sovereign bonds due 2027 rose 0.11 percentage point to 12.36 percent on Sept. 3. On average, Venezuelan sovereign debt yields 12.48 percent, almost double the average in emerging markets, according to JPMorgan Chase & Co.
A year before Chavez came to power, in 1998, state-owned Hidrocapital had an annual budget of $250 million, according to the company’s former vice president Norberto Bausson.
Environment Ministry spokesman Alejandro Franco and Information Ministry spokesman, who asked not to be named citing internal policy, declined to comment on the supply of tap water in Caracas. A spokesman for President Nicolas Maduro, who can’t be named because of internal policy, also declined to comment.
Greater Caracas’ population grew by 800,000 residents to about 5.5 million since the last reservoir or processing plant was built near the city in 1997, said Bausson, who now directs water policy at the opposition alliance Democratic Unity Table.
“Not a drop of water has been added to Caracas’ supply system in 15 years,” he said from his office last month. “The network is falling apart.”
Caracas residents pay 30 bolivars ($4.80) for five gallons of filtered water delivered in jugs by trucks once a week. The same volume of gasoline costs 14 bolivars, making it the cheapest fuel in the world, according to data compiled by Bloomberg.
In the meantime, witch doctor Sanchez, is left free to practice his water-polluting rituals.
“No one is bothering me here at all,” Sanchez, 42, said as he prepared a chicken for sacrifice later in the day. “I moved here two years ago because I wanted to get deeper into witchcraft. People come to worship every evening from the city.”
The reservoir was last cleaned four years ago, unearthing dozens of animal carcasses, said Inmer Parra, a councilor at the Los Salias municipality, home to the lake.
Ten years ago, Mariposa was a sunbathing and sailing destination. Today it is a haven for followers of Santeria, a mix of Christian and West African beliefs, which includes worship of Guaicaipuro, a 16th century local American Indian chief.
Caracas has to pump its water an average of 800 meters (2,620 feet) upwards from the six reservoirs supplying the city. An outmoded system of 86 pumping stations is operated by manually turning about 1,000 valves, said Bausson. A breakdown in any part causes supply cuts affecting at least one Caracas borough every day.
“I have to get up at 4 a.m. to load the washing machine with clothes,” said Bilenis Gonzalez, a 24 year-old babysitter from Catia neighborhood in western Caracas. “Water stopped coming to my house during the day-time over a year ago.”
President of Hidrocapital, Ernesto Paiva, and Water Vice Minister Manuel Regino declined to be interviewed. Regino is Venezuela’s fourth Water Vice Minister in 11 months.
“We can guarantee that the water which reaches your home is 100 percent potable,” Hidrocapital says on its website.
The utility’s water treatment is inadequate for the level of contamination, said chemistry professor Morales. The chlorine they use kills the organic bacteria, while leaving the viruses in the water source unharmed, he said. Getting rid of potential viruses would require molecular sieves and modern biological monitoring systems, which don’t exist in Venezuela, Morales said.
Hidrocapital stopped publishing results of sanitary tests last year, according to Bausson, even as the law says the information must be available publicly.
The company’s information center doesn’t have water quality records, said press officer Mayyuly Castellanos. The water quality department’s manager Linda Manzanero didn’t respond to a phone message and e-mail seeking comment.
The majority of Caracas’ water comes from River Tuy, born in the hills of Aragua state about 50 kilometers west of the capital. Until the 1980s, the valleys through which Tuy runs were an agricultural zone. Today, it’s an extension of the Caracas urban sprawl, collecting the waste of 690,000 residents, according to the 2011 Census.
Instead of trying to clean Tuy, the government is building a dam on River Cuira, which flows through a sparsely populated national park and remains clean, to increase water supply to Caracas, according to Morales. The work, which began in May 2011, has yet to finish, a year after it was scheduled to end.
Diverting water from Cuira won’t guarantee the water quality, as much of the contamination occurs after the processing plant, while water sits in old tanks and then travels through rotting secondary pipelines to people’s homes, Bausson said.
The water is provided by private plants from wells and mountain streams in Los Teques area near Mariposa. Household consumption of bottled water in Caracas grew 39 percent since 2010 to reach an average 125 liters a year in June, said Rosibel Chacin, account manager at market research company Kantar Worldpanel.
Price controls and dollar shortages are making the water business increasingly difficult, said Kiara Santucci, owner of Zenda, the only Los Teques water company to sell five-gallon jugs that are certified by the government.
Two weeks before the presidential elections on April 14, the government forced Zenda to lower the price of the jug by 26 percent to 20 bolivars, as it tried to slow inflation that has since quickened to 42.6 percent. A can of Coca Cola costs 15 bolivars in Caracas.
To stay afloat amid price controls companies are “cutting corners” on filtering, Santucci said by telephone from Los Teques Aug. 23. The government doesn’t test bottled water for quality, Santucci said.
“I don’t trust the water, including the bottled variety,” said Nancy Santa Fe from the Julian Blanco shantytown in eastern Caracas, who was spending her 14th day without running water on Aug. 23. “Even people in the slums are investing in in-house filters to be on the safe side.”
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