Water Privatization Water Is Necessary for Life

Water Privatization

Water is necessary for life on the earth. Humans, animals, and all plant life require water in order to sustain existence. Looking for clean and drinkable sources of water has become difficult, especially in humid and dry areas such as the Middle East or in parts of Africa where water supplies have become contaminated. In the wake of these types of situations, a market has developed for the privatization of water sources. Large corporations are buying out sources of clean water and selling it again to people in need at a substantial profit. This term, privatization, can also refer to the taking over of water supplies for local areas by large conglomerates rather than public companies.

As in the privatization of other industries, the comodification of the water industry has its proponents and its critics. There are those who state that having privatized water companies allows for certain groups to send water to locations where it is most desperately needed.[footnoteRef:1] There are various motivations behind the desire to transfer public works into a privatized enterprise. Among these are the desire to increase efficiency and improve the quality of service and also the desire and ability to replace inefficient or corrupt management of the utilities[footnoteRef:2]. Often the services provided before privatization are poor and shoddy, leading those affected by the takeover to be pleased by the result.[footnoteRef:3] It has been documented that locations in poor and rural areas with privatized water companies have a child mortality right that is 5-7% lower than locations without these groups. [1: Ronald Bailey. "Water is a Human Right." Reason. 2005. ] [2: Emanuele Lobina & David Hall, "Problems with Private Water Concessions: a Review of Experience." 2003. ] [3: Philippe Marin, "Public-Private Partnerships for Urban Water Utilities." Trends and Policy Options. 8. World Bank. (Washington, DC: International Bank for Reconstruction). 20.]

Those who disagree with these supporters state that the privatization of water companies has allowed certain groups to take command of a necessary commodity and then to essentially abuse and misuse the needs of the corresponding peoples. One of the major problems that people have with water privatization is that the company who purchases the water supply effectively has a monopoly.[footnoteRef:4] With no competition in the area who are able to supply the same necessity, the companies are able to charge whatever they wish without fear of reprisal or without any real competition for the product. Some of the protests against privatization of water have even become violent, such is the resistance to turn public enterprises into private businesses. [4: Fredrik Segerfeldt, "Private Water Saves Lives." Financial Times. 2005. (CATO Institute)]

There are two different types of privatization: full privatization and a public-private partnership (PPP).[footnoteRef:5] Of the latter, there are four distinct types: management contract wherein the private operator is only responsible for running the system in exchange for a fee, a lease contract wherein the assets of the company are leased to the private operator who shares in the revenues, a mixed-ownership company, and a concession. The last occurs when the private owner is responsible for running the entire system and the investment is financed solely or almost entirely by the private company. The concession is the most common form of PPP used in water privatization. [5: Philippe Marin, "Public-Private Partnerships for Urban Water Utilities." 20. ]

Water privatization has been around since the 17th century in powerhouse nations like England, whose population was already heavily-dependent on their government and her interests for their livelihoods and means of survival. One reason that so many nations have come to rely on privatized water is because when a company is responsible for the utility, the tendency is that efficiency in the organization improves. A corporation's main concern is the acquisition of money. Only by providing the customer with what they want and by providing that product in an efficient way can that company turn a profit. It is in the company's best interest to do well by its customer base.[footnoteRef:6] [6: Philippe Marin, "Public-Private Partnerships for Urban Water Utilities." 35. ]

During the regime of Margaret Thatcher in the 1980s that the majority of the control of the nation's water supply would fall under the jurisdiction of the government. In 1989, the English government privatized all public water and sewage companies that were currently operating in Great Britain. In so doing, the nation's heads removed public ownership from these utilities and forced the people to pay for services in which they had little control or voice. France and other countries had already privatized much of their water supplies.[footnoteRef:7] What made the privatization in Great Britain so different was that through the creation of the Office of Water Services, Thatcher and the British government not only turned over efforts to private companies but also transferred ownership of those water utilities to private investors.[footnoteRef:8] [7: Caroline van den Berg, "Water Privatization and Regulation in England and Wales." Public Policy for the Private Sector. 115. 1997. ] [8: Philippe Marin, "Public-Private Partnerships for Urban Water Utilities." 36. ]

In 2011, private companies function in more than forty countries around the world. This amounts to service of more than 250 million people.[footnoteRef:9] In developing nations in particular privatized water companies have been important because the governments themselves do not possess the necessary funds to create a fully-functioning public utility. According to the World Bank, out of 65 developing countries that had utilized the efforts of privatized companies, more than 2/3 had kept their water privatized after they had become more sustained.[footnoteRef:10] This illustrates one of the points of proponents of privatized water. Because the money of investors is involved, the people working for the utility have more of a desire and will to function effectively and efficiently. Although it may seem like it is encouraging the citizens to be taken advantage of, the people of the communities are actually being cared for by the privatization of water companies in their areas. [9: Philippe Marin, "Public-Private Partnerships for Urban Water Utilities." 22.] [10: Philippe Marin, "Public-Private Partnerships for Urban Water Utilities." 22. ]