Water Privatization

Water privatization is a short-hand for private sector participation in the provision of water services and sanitation, although more rarely it refers to privatization of water resources themselves. Because water services are seen as such a key public service, proposals for private sector participation often evoke stronger opposition than for other sectors. Globally, more than 90% of water and sanitation systems are publicly owned and operated.

There are two main types of private sector participation in water supply and sanitation, sometimes known as the "British Model" and the "French Model". The British model consists of privatising both the assets (water and sanitation network, treatment plants and so on) and the operation of the assets, whilst in the French model, the assets remain publicly owned. The British model is largely limited to England and Wales (the system is still public in Scotland and Northern Ireland), with only isolated examples elsewhere.
For the more common "French model" of keeping assets public and privatizing service operations, there are three major types, in order of increasing risk transfer to the private operator:
• management contract, under which the private operator is responsible only for running the system, in exchange for a fee (usually performance-related). Investment is typically financed and carried out by the public sector, but implementation may be delegated.
• lease contract, under which assets are leased to the private operator, who recoups the cost from end users. Investment is typically financed and carried out by the public sector, but implementation may be delegated.
• concession, under which the private operator is responsible for running the entire system, including planning and financing investment. Concession contracts usually run for 20-30 years.

INDIA: Water Privatisation - 'No Need For Costly Consultants'
By Keya Acharya

A Tata official turns on the tap for a low-income household in Jamshedpur... [continues]

Read full essay