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Debating Water Privatization

Debating Water Privatization. Karen Bakker Director, Program on Water Governance Associate Professor, Department of Geography University of British Columbia. Private sector participation in water supply in Canadian cities. Private Participation in Developing Countries (water and sewerage).

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Debating Water Privatization

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  1. Debating Water Privatization Karen Bakker Director, Program on Water Governance Associate Professor, Department of Geography University of British Columbia

  2. Private sector participation in water supply in Canadian cities

  3. Private Participation in Developing Countries (water and sewerage) Source: WB PPI database

  4. Some history… • Private water supply companies in many 19thC. cities • Network coverage concentrated in wealthier areas • Public sectordominates provision during 20thC. • Governments had access to cheap finance and the political legitimacy to develop extensive water supply networks • Majority of water supply networks are publicly owned • private sector retains role as service provider (e.g. France, Spain) • recent resurgence of private sector involvement

  5. Some definitions… Water Supply Privatization: • Private sector ownership (example: White Rock) Private sector participation in water supply (P3s): • Participation of private sector in building, operations, maintenance (ownership by public sector) (Canmore) Privatizing water resources • Tradeable water rights and water markets (Alberta)

  6. More definitions… Commercialization • Water managed according to commercial principles (e.g. full-cost pricing and household metering) Corporatization • Converting a water supply utility from a municipal department to a corporation (e.g. Edmonton)

  7. Does water supply privatization improve performance?

  8. Does privatization lead to water conservation? “Leakage of treated water is not a problem cost-wise. After all the money spent on pipes, a bit of money spent on chemicals etc. is incidental. The water doesn’t cost that much to treat. So companies don’t really lose a lot of money this way, until resources are tight…It is cheaper to go on treating and leaking as long as water is plentiful” -senior water manager, Thames Water

  9. What does the evidence say? Without strict regulation (which is expensive and time-consuming), good contracts, and appropriate incentives, private companies: • Are not necessarily cheaper • Are not necessarily more efficient • Reduce accountability and transparency • May underperform the public sector

  10. But… • Without strict regulation and appropriate incentives, governments may… • under-invest in water infrastructure • fail to be transparent • fail to meet standards (e.g. water quality) This is true for some communities in Canada…

  11. Debating Privatization: What should we do? • Consider your options • Improve governance • Debate the BIG question: Is water a public good or a commodity?

  12. 1. Consider your options… • Municipal Department • Municipal Agency (e.g. Commission) • External provider (public or private) • Corporatization • Privatization • Cooperative (rural areas)

  13. 1. Consider your options…

  14. 2. Improve Governance…. • Canada’s water governance has recently been characterized as ‘shocking’ and ‘unacceptable’ • Key issues: • Underfinancing of municipal infrastructure; • Lack of legally enforceable water quality standards; • Lack of data • Weak regulation

  15. 3. Do you believe water is a public good or a commodity?

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