An important part of my career has been spent working on the problem of supplying water and sanitation services, particularly to the urban poor in developing
countries. As a professional engineer specialised in water and sanitation, I currently work on the regulation of private utilities. When the World Development
Movement (WDM) organised a “Whose Rules Rule?” conference in July 2006 in London to assess the merits of water privatisation, I was glad to attend and keen to
hear the debate on private provision. This short article is a modified version of a letter I subsequently sent to debate participants.
Since I began specialising in water management, I have had the good fortune to work directly for two large utilities and with several others as a consultant, both in the UK and overseas. My first job as a water engineer was working for a privately managed concession in a medium-sized North African city. During my year’s
contract, my job was identical to the subject of the debate – providing access to clean water and sanitation to the poor areas of the city. My employer was mandated
to serve around 1.5 million people, 450,000 of whom were not connected to the service when the concession contract began.
My experience is not entirely within the private sector. I have also volunteered as a watsan (water and sanitation) engineer for a large international NGO in
emergency water provision during the recent refugee crisis in Darfur, and have supplied technical assistance to another large international development NGO
dedicated to providing safe water and sanitation to the poor. As a consultant, I have worked with various water providers ranging from public and private
utilities, to NGOs and individual entrepreneurs, in various developing countries. I have no vested interest in the private water sector – my only interest lies in solving the practical problems of water and sanitation supply.
The aim of the WDM conference was to discuss solutions to the global water crisis, with experts of extremely diverse outlooks assessing the practical advantages of private water management.
What is the main issue?
Most of the participants who spoke at the conference were more interested in political and economic ideas than in the dull reality and tedious details of water and sanitation provision. In fact, many people believe that the provision of water (a natural monopoly which is essential for life) should be carried out by a collective, not-for-profit organisation, such as the government or a municipality. However, in Europe and North America, the development and management of water utilities was initially done by the private sector, with public management only coming into fashion in the late 19th century.1 A closer examination of the realities of water provision therefore raises some serious questions.
The fact that I am writing this article might suggest I have an opinion on whether water provision should be privately or publicly managed.
I don’t. It’s not important. More than a billion people lack access to clean and safe water, and 2.6 billion are without basic sanitation facilities. According to the World Health Organisation, water-related diseases cause 80% of all illnesses and deaths in the developing world – with water-related diarrhea alone causing just under 2 million deaths.2
With that in mind, I believe the only thing which matters about a water utility is how it performs for its customers – both now and in the future. I think most people feel the same way. Very few people are genuinely interested in management and ownership models of utilities – either in developing or developed countries.
Certainly no-one in the peri-urban areas where I worked has ever mentioned that they were concerned that foreign shareholders were profiting from water. They
were usually concerned about more mundane issues – like the reliability of the service, the price they paid, or the unhygienic conditions in their suburb.
It is therefore interesting that so many participants at the conference (from wealthy countries) were most concerned about the management models (in developing
countries). I would be very surprised if any of them could tell me much about their own water companies – who the shareholders are, what the rate of return on
equity is, how it is financially structured, who the regulators are, how water prices are set or how service levels are monitored. I would be willing to bet that most
people could not tell me their water bill total, or their volumetric tariff, unless they had difficulty paying it.
This is not to accuse people of ignorance – only to demonstrate that management and financial arrangements for utilities are not very important issues.
People in developing countries are no different from those in industrialised ones – all over the world, people really only care about the service’s reliability and
Reflecting this reality, both sides in the debate professed to be mainly concerned with the practical results of efforts to deliver water and sanitation services. However I think the ensuing debate showed that claim to be untrue.
Jesús Mirás-Araujo and Carlos Piñeiro-Sánchez (2006). “Tensions between Public and Private: Water Supply in a Northwestern Spanish City under
the Franco Dictatorship” Business and Economic History Online, Volume 4, 2006. http://www.thebhc.org/publications/BEHonline/2006/mirasandpineiro.pdf
Kofi Annan (2003). “Message by Secretary-General Kofi Annan for World Environment Day, 5 June 2003” UN Press Release SG/SM/8707 OBV/348. http://www.un.org/News/Press/docs/2003/sgsm8707.doc.htm UN (2002). “Johannesburg Summit Secretary-General calls for global action on water issues” UN Press Release Johannesburg Summit, 22 March 2002. http://www.un.org/jsummit/html/media_info/pressrelease_prep2/global_action_water_2103.pdf