What's in this report?
- In depth description of the types of water and wastewater privatisation
- World survey of Water & Wastewater deregulation
- Coverage of deregulation in the water sector at the country and
Water deregulation - the growth and the backlash
The world's population is averaging a growth rate of around 1.1% annually.
This is creating a greater demand for improved water supplies and sanitation,
especially in developing countries and urban areas. As stronger population
growth is generally observed in these regions. They may also have more
challenging requirements to meet the water target under the UN's Millennium
Development Goals (MDGs). A target of reducing ‘the proportion of people
without sustainable access to safe drinking water and sanitation' for eligible
countries by half by 2015.
To meet the growing demand for safe water and sanitation private sector
involvement will be needed in the water sector has increased. This is in the
context of the developing countries. There is also a demand for repair to
existing infrastructure and plants, and new facilities in the developed world.
Due to the investment involved and expertise needed. The share of private
companies in the water and wastewater market is forecast to increase from 8%
of the global population in 2003 to 17% in 2015. A problem for the water
industry is that water is perceived as a right and citizens are less willing
to pay for water than they are for electricity.
Private sector opposition
Opposition to privatisation of the water sector is strong in some countries
and the subject is conten-tious. The renationalisation of some assets has
occurred with major water companies paying fines failing to comply with their
contract, usually in terms of investment in infrastructure. In some countries
there are moves to make water privatisation illegal. For example, there is a
water privatisation ban in the Netherlands and Uruguay, and a draft law to
make water privatisation illegal is under development in Italy. There has been
an increase in Public-to-Public Partnerships (PUP) contracts for water
projects, and the World Bank is softening its approach towards privatisation.
The recent Arab spring also included protests against water privatisation. For
example, in Rabat and Tetouan in Morocco there were demonstrations to
terminate Veolia's contracts and Veolia's offices in Tanger were set on fire.
In many countries, major water companies such as Veolia and Suez are involved
in joint ventures to develop projects. Recently, Veolia publically announced
that it plans to expand worldwide mostly through build-own-transfer (BOT) and
management contracts, with fewer ‘ownership' projects.
Key countries for the water sector in terms of future investments are China
and India. A total of RMB 15 billion ($2.2 billion) was spent on sewage
treatment facilities in the first half of 2010 in China alone.