Our weekly feature article from Mirada Global:
The access to safe and clean drinking water and sanitation is a basic human right, declared the UN General Assembly in 2010. Yet, less consensus exists generally on the question whether the operation of water supply should be organized privately or by public authorities. The controversy is not new, but gains more and more attention. In Italy, a law that should pave the way to the privatization of water supply in June 2012 was rejected by an overwhelming majority of citizens through referendum.
In most cases, privatization efforts are not aimed at converting the entire supply structure such as wells, water tanks, piping systems, etc. in private ownership. The core of the discussion deals with the many attempts to organize the management of the water supply via the private sector through (temporary) concessions. Proponents of liberalization argue that private enterprises deliver these services in a more efficient and less expensive way than public companies do —a hypothesis however that to this day lacks empirical evidence—.
It is estimated that about 200 million people worldwide (six percent of the global urban population) are supplied from facilities which are publicly owned, but managed by private companies. About 70 million people are supplied by institutions that are fully privately-financed property (particularly England and Wales, parts of Chile, and the US).
The increasing penetration of private actors into water service, particularly in the 1980s and 1990s, that appeared as profitable business has since raised concerns about increasing prices and declining supply quality, primarily in poor rural regions. As private companies pursue business interests rather than common economic goals, they cannot be suitable for providing people with basic social services such as clean water supply, sceptics say.