moting good governance and transparency in the water sector.

"At a time when we are talking about increasing investments to expand water supplies and water resources, we also have indications that about 25 to 30 percent of state budgets on water investments are lost due to corruption," Hakan Tropp, WIN's interim chair, told IPS.

This is only an average figure, he pointed out, but the numbers could vary from country to country -- going lower or higher depending on the degree of corruption and mismanagement.

The six groups that have joined hands to fight corruption in water management include the Stockholm International Water Institute, Transparency International, Swedish Water House, the International Water and Sanitation Centre, Water and Sanitation Programme- Africa and AquaFed.

The network's mandate will include diagnosing problems, proposing solutions, building capacity and monitoring progress. It will coordinate with civil society, public and private sectors, and with news media and governments.

Asked about the extent of corruption in the water sector, Tropp said there have been several recent case studies both in Africa and in major urban centres in India, particularly regarding the unsteady relationships between consumers and service providers.

At the grassroots level, he said, the poor have been forced to pay bribes to connect to water pipes or to water tankers. But there was also increased high-level corruption both in procurement and infrastructure development, resulting in misallocation of scarce economic resources.

Corruption is a two-way street, with a supply side and a demand side. And it is prevalent both in developing and developed countries, said Tropp, who is also project director of the Water Governance Facility at the Stockholm International Water Institute.

"It takes two to tango," he said, singling out some of the corrupt practices of multinational corporations seeking investments and contracts in developing nations through bribery and commissions.

He said the network plans to work through the various chapters of Transparency International, which is well established in several world capitals.

According to WIN, corruption not only diverts irrigated water away from poor villages but also leads to biased decisions about the allocation and location of water service points, pipe systems and waste water treatment facilities.

Additionally, corruption also results in falsifying water meter readings; fosters ill-advised procurement of expensive and poorly constructed facilities; and buys jobs and promotions.

David Nussbaum, chief executive officer of the Berlin-based Transparency International, told reporters Tuesday there are two types of corruption in the water sector: petty corruption and grand corruption. "Both destroy the supply mechanism," he said.

In a 37-page report released Tuesday, Janelle Plummer and Piers Cross of the Water and Sanitation Programme Africa say "petty corruption" involves a vast number of officials who abuse public office by extracting small bribes and favours while "grand corruption" involves the misuse of vast amounts of public sector funds by a relatively small number of officials.

These corrupt practices take the form of abuse of resources, such as theft and embezzlement from budgets and revenues; corruption in procurement resulting in overpayments and failure to enforce quality standards; administrative corruption in payment systems; and corruption at the point of delivery.

The study, titled "Tackling Corruption in the Water and Sanitation Sector in Africa" and released in Stockholm, says corruption involves a vast range of stakeholders: donor representatives, private companies, multinational corporations, national and local construction companies, consultancy firms and suppliers, large- and small-scale operators, middle men, consumers, national and sub-national politicians, and all grades of civil servants and utility staff.

"Corrupt activities between these partners occur at a range of institutional levels, with different stakeholders often involved in one or more types of corruption," the study notes.

In sub-Saharan Africa, some 6.7 billion dollars is required annually to meet the U.N.'s development goals to halve extreme poverty by 2015. A 30 percent leakage would drain more than 20 billion dollars over the next decade, it adds.

In a second study titled "Corruption in the Water Sector: Causes, Consequences and Potential Reform", the Swedish Water House says that corruption affects the governance of water by affecting who gets what water when, where and how.

"Corruption worsens the world water crisis and evidence suggests that the costs are disproportionately borne by the poor and by the environment," the study says.

But it warns that breaking with corruption in the water sector "will not be easy."

Fighting corruption should include legal and financial reforms, reform of public service delivery systems, reform in the private sector, and public awareness and capacity building.

"Further delays to step up anti-corruption action will deepen the governance crisis in the water sector, with devastating effects for millions of people and for the environment," the study concludes. (END/2006)