Privatisation in WASH sector

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  • SusannahClemence
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Re: Reply: Privatisation+in+WASH+sector

Thank you Lourdes. Look at the comprehensive failure of privatised water supply and sewage companies in the UK, if you want back-up evidence. The largest regional company, Thames Water, is on the brink of being renationalised, having polluted our rivers and run out of money, while paying large dividends to shareholders, many in other countries. It's a way of leaking water, shit and wealth, all at once. Good luck, hope you are able to resist, Susannah
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  • lourdesv
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Re: Privatisation in WASH sector

Hi, im Lourdes from Bolivia, South America:

In South America, Chile has been the country that has privatized water service and in the Latin American region, the privatization of water in Chile has been a controversial issue with significant implications for the population and the environment.
The experience in the region is that strong governments are needed to monitor and regulate private companies in matters of investments in expansion of services and rates or tariffs. Unfortunately, solid and strong governments that regulate in favor of the population is not a characteristic of governments in Latin America Aqui  information  Chile  y  region 
The privatization of water in Chile has been a contentious issue with significant implications for the population and the environment. Let’s explore the advantages and disadvantages of this approach in comparison to neighboring countries:Advantages:
  1. Efficiency and Infrastructure Improvement:
    • In theory, privatization can enhance efficiency in water management and infrastructure.
    • Private companies can invest in technology and maintenance to ensure a more reliable water supply.
  2. Cost Reduction:
    • Competition among private companies may lead to lower operational costs.
    • This could result in lower water tariffs for consumers.
  3. Innovation and Technology:
    • Private companies can introduce new technologies and management methods.
    • This may improve water quality and distribution.
Disadvantages:
  1. Inequality and Limited Access:
    • Privatization can exacerbate inequality, as water tariffs may be unaffordable for the poorest segments of the population.
    • Rural and marginalized communities may suffer due to lack of water access.
  2. Profit Maximization:
    • Private companies often prioritize profits over equitable water access.
    • This can negatively impact people who cannot afford higher tariffs.
  3. Environmental Impact:
    • Profit-driven motives may lead to overexploitation of water resources.
    • Pollution and overuse can harm aquatic ecosystems and water quality.
  4. Lack of Public Control:
    • Privatization reduces government oversight of a vital resource.
    • Regulation and protection of citizens’ rights become challenging.
Compared to neighboring countries like Argentina or Uruguay, where water access is primarily managed by public entities, Chile has embraced a more radical privatization model.  This has sparked debates and tensions regarding access, equity, and water sustainability

Lourdes Valenzuela
Regional SuSanA Coordinator (Latinoamérica)
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Calle Nicolás Ortiz no. 33 (a media cuadra de la Av. Calampampa)
Tel (591) 4 424 2164
Casilla 6264
Cochabamba – Bolivia

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  • blevira
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Re: Privatisation in WASH sector

Hi Paresh, I appreciate you initiating this type of discussion.

Analyzing the privatization of the water sector in the United Kingdom, it's conceivable that the private sector might be inclined to invest in the Global South if governments promulgate and rigorously enforce regulations. The success of such investments, however, would depend on various factors including the stability of regulatory frameworks, political climate, economic conditions, and the potential for returns on investment in those regions.

Similarly, during my studies in the UK, I was eager to understand the challenges surrounding service provision and noticed that; In terms of water tariffs, different companies in different regions of the UK set their own pricing structures based on various factors such as operational costs, infrastructure investment needs, and regulatory requirements. Therefore, water tariffs varied between companies and regions. From my perspective, it is challenging to implement this scenario in the global south.

In summary, while water sector privatization has benefits, it must be adapted to local realities. The global south can learn from the UK experience but should tailor solutions to address unique challenges.
Beda Modest Levira
Environmental engineer and researcher
Ifakara Health Institute (IHI)
Tanzania, East Africa
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Working as the project leader for 2 projects 1) HDIF (DFID) and 2) LIRA 2030 here in Dar es Salaam, Tanzania
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  • Euphresia
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Re: Privatisation in WASH sector

Hello Paresh!

Disruptive question indeed. I attach my recent piece with Smart Water Magazine on the subject hope it provides some answers bottom line from so much evidence in the sector including OECD remains private sector cannot be the main financier they shall need to play with the sector rules especially on tariff setting and alos agreeing to remain Transparent and Accountable in their operations.

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  • paresh
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Re: Privatisation in WASH sector

Dear all,
Happy to share another piece  related to England's water system. Like the previous piece, this piece also highlights the focus on creating wealth for investors while paying inadequate attention to improving water and wastewater management. Importantly, the piece suggests:
  • Takeover of utilities by the public authority (Reminds me of a similar initiative posted here ) 
  • Establishing social regulatory system as the top-down command and control mechanisms seem to be highly inadequate 
  • Ensuring the reuse of treated wastewater to reduce the pressure on freshwater sources and ensure the sustainability of the water system. 
I think these pieces and movements towards remunicipalisation in Europe point towards the need to either keep services such as WASH with public utilities or promulgate and enforce stringent regulations. That is, Governments cannot shy away from their role in the provision of WASH services.

The question that arises in my mind is  - Will the private sector be willing to invest if governments in the Global South promulgate and enforce regulations? 

Regards
paresh
Paresh Chhajed-Picha
Researcher at Indian Institute of Technology - Bombay, India
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  • paresh
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Privatisation in WASH sector


Source: @paullewismoney via  twitter

There has been a widespread push towards privatisation of water supply especially in urban areas. In India, attempts to privatise haven't worked and I haven't heard of any plans in the recent past (fortunate or unfortunate - only time can tell).  But came across this a year old piece:  England's privatised water firms paid £57bn in dividends since 1991  while amassing almost an equal amount of debt - effectively taking loans to pay dividends. And this happened in the UK, a country that has a strong regulator.

In India, private sector participation is being encouraged in the FSM space and there is interest in providing emptying services and operating treatment plants. Lessons from regulating them will hopefully emerge gradually. Not sure however if it makes sense to push for privatisation in countries of the Global South where there are no regulators and certainly the culture of regulation is poor and often  regulatory institutions toothless. 

I'd like to learn about experiences (good and bad) about privatisation and regulation of services. Request to share your experiences and relevant references.

Regards
paresh
Paresh Chhajed-Picha
Researcher at Indian Institute of Technology - Bombay, India
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