Water Supply and Sanitation Deregulation

Water Supply and Sanitation Deregulation

Liberalisation of the water supply and sanitation (WSS) sector involves a host of issues which are quite different from those that dominate the energy and telecommunications sectors. These have, in turn, generated a series of different drivers for deregulation, price competition and private sector partnerships (PSP). To meet these criteria…

Liberalisation of the water supply and sanitation (WSS) sector involves a host of issues which are quite different from those that dominate the energy and telecommunications sectors. These have, in turn, generated a series of different drivers for deregulation, price competition and private sector partnerships (PSP).

To meet these criteria a range of different models has been developed for PSPs. Private Sector Participation in water supply and sanitation (WSS) involves a continuum of options ranging from those with a relatively low level of PSP to unrestricted ownership of all assets and conduct of operations.

The UK presents the most extreme example of a privatised water industry, where investor-owned water and sewage companies own the assets and supply the services in a highly regulated environment. At the other end of the continuum, with minimal privatisation, the state or municipality owns the assets. Private companies may be involved in some operations as contractors as well as be involved in the purchase of some services or components. Most privatised WSS utilities lie somewhere between these two extremes; the state or municipality owns the assets and leases out management and operations on a fixed-term contract, often for 20 or 30 years.

Privately owned utilities come in all sizes. Utilities where assets are owned privately can be large companies, as is the case in the UK. All water and waste utilities in England and Wales are owned and operated by private investors. At the opposite extreme in the private spectrum are individual vendors who carry small containers of water on bicycles, carts, or donkeys in areas where there is no piped water, often selling it for small amounts of money but at a price up to and over 20 times the cost of piped water.

These are the most ‘private’ of all water operators, they own all the assets and conduct all the operations of their business. Most often, these companies are too small to attract much attention, if any, from regulatory authorities, except perhaps the payment of bribes to local officials. These providers have always been around in poor countries and proliferate in Africa and South Asia.

In between these two extremes is a type of private water or waste disposal company, small in size but by no means negligible which is becoming increasingly common, especially in South America. These are operated by local entrepreneurs, making some investment in a plant either to extract water from source or to purchase bulk supplies from a larger utility or water wholesaler and to distribute it. Some have built small local water distribution pipelines, other distribute by tanker.

Many of these offer valuable distribution services, augmenting public utilities. But for the consumer, there is often only one choice of supplier in their area. The UK is taking steps to change this, and this year the market will be opened for competition to consumers and businesses.

Of course, there is no one global system and the sector is always in a state of change. NRG Expert research the Global Water Sector and produce in-depth reports helping you to understand the water deregulation landscape.

Utilitywise

Posted by on Tuesday, the 7. March at 9.52

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