Water Privatization

Water privatization is a short-hand for private sector participation in the provision of water services and sanitation, although sometimes it refers to privatization and sale of water resources themselves (see water trading). As water services are seen as such a key public service, water privatization is often controversial. Even the figures about how many people receive water from the private sector: One source claims that 909 million people were served by "private players" in 2011 globally, up from 681 million people in 2007. This figure includes people served by publicly owned companies that have merely sourced out the financing, construction and operation of water or wastewater treatment plants to the private sector. The World Bank estimated the urban population directly served by private water operators in developing countries to be much lower at 170 million in 2007. Among them only about 15 million people, all living in Chile, are served by privately owned utilities, the remainder being served by privately managed, but publicly owned companies under concession, lease and management contracts.

Proponents of private sector participation argue that it has led to improvements in the efficiency and service quality of utilities. It is argued that it has increased investment and has contributed to expand access. They cite Manila, Guayaquil in Ecuador, Bucharest, several cities in Colombia and Morocco, as well as Côte d'Ivoire and Senegal as success stories. Critics however, contend that private sector participation led to tariff increases and has turned a public good into a private good. They quote the aborted privatizations in Cochamamba, Bolivia, and Dar es-Salaam, Tanzania, as well as the still privately managed water systems in Jakarta and Berlin as failures. Water privatization in Buenos Aires, Argentina and in England is cited by both supporters and opponents, each emphasizing different aspects of these cases. Statistical studies comparing public and private utilities show little difference in performance between them.