Water Privatization – Good or Bad for a Vital Resource?

Is Water Privatization the Solution?

 

is water privatization the answerPrecious drinking water – our most important resource. We can survive without food for longer than we can live without water. We know that there is a  global water crisis  – and it’s probably going to get worse.

We could easily face water wars, and that’s a very scary thought.

Who Supplies Water?

In most countries, piped water is supplied either by the country’s government, or by private for-profit companies. (Bottled water is usually sold by highly-profitable companies).

Water is increasingly becoming privatized, i.e. controlled by for-profit companies instead of the public sector (government).

Why Water Privatization Benefits Governments

Today, with government spending under scrutiny in most countries, more and more governments are looking at options to save money.

And companies offer enticing revenue scenarios to city governments.

With a cash payment up front, local governments may be able to, for example,

  • pay for long-awaited police and fire stations and other community services – for cash instead of incurring further debt
  • create annual savings
  • erase budget deficits
  • immediately close pension obligation deficits
  • avoid increases in various taxes

And of course, people in these areas benefit from this too.

Another Advantage of Water Privatization

water leak with water privatizationAnother benefit, which I find is rarely discussed or considered, is that when there is private investment in infrastructure, there may be fewer problems with unseen leaks, or fewer hassles after flooding, for example.

Traditionally, governments are not particularly concerned with efficiency.  So privatization could mean that water could reach more people in a more efficient manner.

Leaks (both above and below ground) may get fixed more quickly after water privatization, because private companies have a monetary incentive, while governments may not.

But What About the Cost?

The problem most people cite when it comes to water privatization is cost.

I couldn’t find a single example of water costing less after privatization.  It always seems to cost more.

Other Problems with Water Privatization

Aside from increased costs, these are some other problems that occur when water is privatized:

  • Investor or shareholder interests may override those of customers.
  • Private companies will only provide water services where it is economically viable for them to do so, whereas governments normally have a responsibility to provide water to all their citizens (so some locations may not get water piped to their area).
  • Private multinational companies don’t have a stake in the communities in which they operate.
  • Some water privatization agreements fail to include public participation, or enough provisions for contract monitoring and accountability.

What About Developing Countries?

water privatization may end collecting drinking water Many developing countries have been pushed by the World Bank to privatize their water if the existing facilities are not up to scratch.

Water privatization should improve these facilities because people are paying for it.  It also creates revenue through taxes for the government. But:

  • Many people can’t afford the newly-increased costs of water.
  • Some rural areas may not receive water because it is not economic for companies to provide it.
  • Private firms may be inefficient if there is not enough oversight.

What About the Environment?

Providing water has massive impacts on the environment. For example:

Because private companies make profits from selling water (and more profits from selling even more water), they may neglect the potential for water use efficiency and conservation improvements.

Many privatization efforts ignore the impact on local ecosystems and downstream water users, and may have long-term negative effects on the environment.

Of course, private water companies are not the only ones to ignore the environmental impact of their actions.  Governments are dependent on voters, and are often lobbied by big business. Power and politics often override environmental concerns.

What About Water Rights?

Many people argue that water is a universal right and therefore cannot be bought and sold; water service should be a responsibility of governments.

Private water suppliers argue that, like most things in life, you need to pay for it to get it.

What Do You Think?

How do you feel about water privatization?

water privatization drop Is it better to have a business control water, with profit and loss and cold business decisions controlling a valuable resource?

Or should government provide water to all citizens, at the whim of politicians and power?

What about the cost increase?  Should water be affordable to everyone?  With dwindling supplies of clean water, do we need to be forced into taking more care of a relatively expensive commodity?  Is it important that we start to consider the true price of goods?

Let me know what you think in the Comments below, I’d love to hear your views! And please share this post – let’s get the conversation going! (Quick share buttons below and right).

Next:  What you can do to help

Warm regards,

signature Clare

 

 

 

Related Items of Interest:

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Tags

bottled water, cost of water, drinking water, ecofriendly, government water, green, piped water, water, water privatization, water rights


  • Clare, I can share with you I don like the idea of a company deciding what I can do with water.
    Scott Sylvan Bell

    Now go implement!

  • I wouldn’t trust the government to handle it. I hear way too many stories of government projects where people are paid off to accept low grade materials instead of high grade that was supposed to be used etc. Can’t we all just use some type of filter to clean all of our own water as it comes into our houses? I’ll have to go back and read your other posts, maybe there is something about this. We once looked into a filtration system in a house that even handled its own septic.

    Lisa McLellan
    Child Care Expert

  • Very interesting topic and I’m not sure which option is worse. I just remember as a kid not having to go to the store to buy safe, clean drinking water because it can out of the tap safe and clean.

    I don’t believe anyone should be denied access to safe clean water but as to how to ensure that happens….that’s a tough one that’s going to require more thought and study.

    Michael

    • I’m not sure that bottled water is quite as clean as people seem to think it is, but you’re right, it’s not that long ago that we didn’t need to worry. Thanks Michael!

  • I guess I am kind of a skeptic but I see chances for fraud and greed in both government control of the water and in privitization.But if past experience is any indication, I think private control might have a slight edge.And who decides what is a right…..
    Sonya Lenzo

    • Agreed, there is plenty of evidence of chances for fraud and greed in both scenarios. Who decides what is right…….ah, there’s a question!

  • Clare,
    In my country we still do not have to buy water. Noone should control water, because this is essential to our survival.

    • Gosh, I didn’t know that, how interesting! You’re right, no one should control water, but I think there are plenty of people who would like to!

  • Water is required to live, absolutely. However, what we pay for is the transportation of the water, not the water itself, right?

    Mark Hogan

    • Paying for water is a way of refunding government for putting in the pipe infrastructure, yes. How the costings work, varies between countries. And companies, if it’s privatized. So if you have your own well or borehole, you are responsible for the costs of drilling if necessary, setting it up etc. But you don’t then pay for the water you use. Nor do you have any come-back on anyone if your well dries up or the water is contaminated.

  • Let’s see, government management – those wonderful people who manage Amtrak, the Postal System, etc. I do believe I opt for Privatization.

    Lyle R. Johnson – aka The “Wiz”

  • Without getting into this too deeply or too politically, I would simply observe that private companies always manage and run things better than government.

    Cherie Miranda

  • That is a very tough question. Each have their pluses and minuses. Water is necessary for life so I wouldn’t want to have it restricted.

    With Passion & Conviction,

  • Growing up we were very fortunate to have our own private well on our property.

    Yours In Health!

    G.E. Moon II

    • You were indeed fortunate, and hopefully good fortune will prevent the well from being sucked dry by industrial and agricultural demand for underground supplies in the future.

  • Hi Green Goddess,

    I really do not like the idea of Privatization of Water. Not only is that too weird, it is certainly potentially quite dangerous.

    Because really, neither the Government nor Private Companies own water.

    We all own it.

    Happy Dating and Relationships,

    April Braswell, CHt, RH

    • For sure, neither governments nor companies own water (though try telling that to the bottled water companies!). Thanks April!

  • I have read and re-read most of the above and I do not find the comments very comforting.

    Water as a resource is running out and we need to look after what is left very carefully. Both private companies and government are guilty of corrupt and/or illegal practices when it comes to supply of essential services such as water supply.

    In my mind privatisation is the efficient way to go so long as the appropriate contractual safeguards and penalties are in place. If this happens to cost you $10 more a month then so be it. WATER IS RUNNING OUT!

    • Hi Will, proper contracts and safeguards are vitally important if water is to be privatised. It takes a lot of skill to get those contracts right, because once the private company has the water, there’s no competition. I agree with you wholeheartedly that water is running out, world wide, and it’s because we’re abusing our natural resources. Thanks for your comment!

  • Interesting arguments on both sides…..but I think I’d be a little uncomfortable to get a letter from the ACME Water Supply Co. saying ” Dear Former Customer, Unfortunately as it is no longer profitable for us to provide you with water, we have no choice but to discontinue your service. Best of luck. ACME”
    Scary?
    Be Well.
    Jc

  • Privatization has never seemed to work, as the best option for the customer.
    Looking forward to tomorrow!

    • Privatization with no other competition is definitely bad for the customer under most circumstances, I agree!

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