Private-Sector Participation in the Water and Sanitation Sector

Abstract

This review examines experience with private-sector participation (PSP) in the water supply and sanitation (W&S) sector. Common ideological, theoretical, and practical justifications for and objections to PSP in water and sanitation are presented. Review of empirical evidence suggests that where gains in efficiency, investment, and environmental stewardship have been realized through privatization, they have often been achieved through unpopular yet predictable strategies such as retrenchment and tariff increases. Challenges persist regarding ensuring access to and affordability of services for low-income households during privatization, and evidence suggests that PSP will not benefit the majority of the 1.2 billion people who lack access to improved water supply and live in the world's poorest countries. The challenging features of W&S economics, along with mounting public opposition to privatization and globalization in the sector, will likely reduce PSP in the sector over the short term, particularly where the private sector is expected to assume commercial risk as well as responsibility for capital investment in municipal W&S networks.

The liquid politics of an urban age

“…Because of a lack of result in establishing an accessible and sustainable system for water distribution protests rose across the region. Neoliberal approaches became strongly rejected, particularly by those considering water as a human right should be free of charge, and disputing the impacts of privatisation on equity (Davis, 2005;Harvey, 2005).…”

Urban Water Supply and Sanitation : Sustaining Policy Momentum : IIHS-RF Paper on Urban Water Supply and Sanitation in India

“…This debate is closely linked to the next section regarding the funding of the sector. Globally, while the involvement of the private sector in water supply and sanitation has been far less than other infrastructure like power or telecom, the debate around involvement of private sector in WSS has been more polarised, and there has been greater opposition (Davis, 2005). At the heart of the debate is the question whether responsibility for providing basic services like water and environmental protection can be reliably left to for-profit companies (ibid.…”

“…As some authors have pointed out (Budds and McGranahan, 2003;Davis, 2005 ), there are a range of models for public-private participation depending on the proportion of financial risks borne by the private sector, asset ownership and type of contracts, etc. In the current scenario, the private sector is also seen as a means of raising capital investments for the creation of infrastructure.…”

“…Investments in water and sanitation are often 'lumpy' and require high capital investments. Also, the infrastructure systems often need to be put in place before demand is there (Davis, 2005). These systems are also natural monopolies, and cannot be easily unbundled (Budds & McGranahan, 2003).…”

Agua y pobreza en Santiago de Chile: Morfología de la inequidad en la distribución del consumo domiciliario de agua potable

“…En este aspecto, Kayaga, Calvert y Sansom (2003) establecen una relación inversa entre las tarifas y el consumo. Davis (2005) hace un recorrido extenso por la historia de la participación de los actores privados en el sector sanitario, de donde surge claramente que, a medida que crece su liderazgo, las tarifas se incrementan, lo que ha tenido un efecto claro en las características del consumo. El caso chileno no ha sido la excepción.…”