Water Privatization 5
Water privatization
Water privatization involves transferring of water control and/or water management services to private companies. The water management service may include collection, purification, distribution of water and waste water treatment in a community.
Traditionally this service has been provided by the local governmental infrastructure such as the municipality and local city council. The pro privatization lobby including water corporations, the World Bank and IMF has aggressively campaigned for water privatization on the grounds that, while water subsidies promote wasteful practices, commodification of water should allow market forces (supply and demand)to set the water tariff, which in turn will reduce water consumption and promote water conservation. Furthermore, it is argued that opening this sector to private providers will bring in badly needed capital for upgrading and development of infrastructure. There are several models of water privatization that are currently in vogue in different parts of the world (Citizens Network, 2003).Depending on the degree of privatization, these models can be broadly categorized into:
Service Contracts – In this model, public authority retains overall responsibility for the operation and maintenance of the system, and contracts out specific components. service contracts last 1-3 years and include services such as meter reading, billing and maintenance. While public ownership is maintained and community accountability structures remain in place, the transparency of operation can be limited. Contracts are often not openly negotiated and regulation and oversight is usually lacking.
(Design), Build, Operate, Own and Transfer or (D)BOOT- this model of privatization is usually used for system infrastructure development such as water treatment plans that require significant finance. The private operator is required to finance, construct, operate and maintain the facility for a specific period of time (usually
Water privatization involves transferring of water control and/or water management services to private companies. The water management service may include collection, purification, distribution of water and waste water treatment in a community.
Traditionally this service has been provided by the local governmental infrastructure such as the municipality and local city council. The pro privatization lobby including water corporations, the World Bank and IMF has aggressively campaigned for water privatization on the grounds that, while water subsidies promote wasteful practices, commodification of water should allow market forces (supply and demand)to set the water tariff, which in turn will reduce water consumption and promote water conservation. Furthermore, it is argued that opening this sector to private providers will bring in badly needed capital for upgrading and development of infrastructure. There are several models of water privatization that are currently in vogue in different parts of the world (Citizens Network, 2003).Depending on the degree of privatization, these models can be broadly categorized into:
Service Contracts – In this model, public authority retains overall responsibility for the operation and maintenance of the system, and contracts out specific components. service contracts last 1-3 years and include services such as meter reading, billing and maintenance. While public ownership is maintained and community accountability structures remain in place, the transparency of operation can be limited. Contracts are often not openly negotiated and regulation and oversight is usually lacking.
(Design), Build, Operate, Own and Transfer or (D)BOOT- this model of privatization is usually used for system infrastructure development such as water treatment plans that require significant finance. The private operator is required to finance, construct, operate and maintain the facility for a specific period of time (usually