By Sara Jerome,
An activist movement is working to fight the privatization of utilities and peel back instances where utilities have already been privatized through what they call “remunicipalisation.”
The Transnational Institute, a research and advocacy group, is among the most vocal proponents of remunicipalisation.
A recent article published by the institute researchers described a view of current trends: “In recent years 235 cities from 35 countries have taken back water management into public hands, establishing a global trend towards remunicipalisation.”
Privatization was discussed a topic at the recent Global Congress of Global Water Operators Partnerships Alliance, according to the piece, where some speakers made the case for “remunicipalisation” of water.
“Private management is not best placed to deal with long-term issues due to its dependence on short-term return of investment. This means, for example, that it is not very good at planning for climate change impacts,” the article said, citing attendees.
Célia Blauel, president of Eau de Paris, a formerly private water operator, said: “We have differences with the private sector. We are not pipes managers. We tackle the problems of the 21st century; we have a long term vision.”
But there are drawbacks to the government-run utility model, as well. That includes the political processes that utility leaders must engage in, as CityLab has reported: “When public utilities try to increase their rates to pay for an infrastructure update or a new treatment plant, city council members or local commissioners have to vote to approve those rates. Those voting officials are tied to a constituency.” Deep budget cuts in municipal government can also make it difficult to find funding for crucial infrastructure repairs.
Many water sector experts argue that the public/private debate is not a simple either/or. Here’s how Michael Deane, executive director of the National Association of Water Companies, explained it in letter published on Water Online: “The reality is that there is no ‘showdown’ between public and private water utilities. It’s up to individual communities to explore all options including private water companies that have been providing quality service to American communities for well over 200 years.”
For best management practices for running a utility in a fiscally responsible manner, visit Water Online’s Funding Solutions Center.