Pros and Cons of Water Privatization

Water Privatization

Water is a limited resource which needs to be handled with great care and fairness. It is a precious resource that is considered as a utility service. The process of treatment and distribution of quality water is a taxpayer-funded service.

Water privatization is a process of taking out the service from the public sector and allow private corporations to take over the process for the purpose of making profits. There are various advantages and disadvantages associated with leaving the water distribution services to private corporations

 

Pros:

1. Improve overall supply of water: Privatization of water services ensures communities are supplied with quality and clean water. There will be no drinking of contaminated water since the profitability of the firm will be from clean water.

2. Reduce mortality rate: Leaving the water supply to a profitable business venture, people will be guaranteed that their consuming clean water and will not face health risk due to dirty water. This reduces child mortality rates. Private ventures are held accountable for the distribution of dirt water.

3. Efficient systems: Privatization of public sector services means there will be more efficient and profitable services offered by private ventures. Water distribution services will be more efficient and reduce the chances of water contamination.

4. Specialized services: Private corporations are able to hire highly qualified and specialized employees who can bring their expertise in handling water systems. This results in a better overall product.

5. Saves municipalities money and time: If all the city services are privatized, then more billions of money as upfront payments will be generated from the private corporations. The private corporations will be more profitable as well as save municipalities some money and time.

6. Reduce maintenance cost: Outsourcing water management services to private institutions leads to division of maintenance cost of water’s main source of supply with other companies.

7. Reduce public sector risks: If water distribution services are left for a private sector, the public sector will reduce the risks associated with workers compensation thus saving taxpayers money.

8. Better operations: Privatization ensures there is the utilization of water resources and increase water supply.

9. Higher investment: Water infrastructure requires a huge investment in order to supply clean water. The government is in a lot of debt and can’t invest in the infrastructure and provide clean water thus this obligation is left for a private institution.

10. Support from the World Bank: World Bank and IMF provide money to privatized water institution so as to ensure they are able to provide an adequate supply of water to the citizens.

 

Cons:

1. Higher rates: Since private corporations are a profit-making organization, the water distributions rates are very high. Communities also complain of poor customer care services.

2. Limit water distribution: Privatization limits who receive this basic commodity. If the corporation’s main goal is to make a profit instead of meeting public needs, it will reduce public accountability and this affects the quality of water distributed.

3. Conflict of interest: Privatization may result in a conflict of personal interest and public interest. The focus should be to offer an effective monitoring system that protects citizens from bad management.

4. No accountability of quality of services: Most of the time, the private institutions have resulted in cost overruns and increased prices since there no accountability placed on them. Public sector always carries out a cost-benefit analysis before hiring or consider state workers services to reduce the cost. This is not the case with private institutions.

5. Failed responsibility: In privatization, it is difficult to ensure private companies are able to respect the obligation of developing and providing
continuous water supply to the poor communities and conservation improvements.

6. Affects low-income earners: In water privatization, only those who will be able to pay for the services will be able to get water. This leaves the poor underserved because they can’t afford this basic commodity.

7. Violation of human rights: Private corporations may decide to put profit before people. This is dangerous to the citizens simply because they can’t live without water. If water is treated as a marketable commodity then it leads to violation of human rights.

8. No public participation: Private corporations fail to include public participation and some of their contracts don’t have enough provision for monitoring and accountability.

9. Private multinational companies have no stake in local issues: Private companies have no consideration of the community they operate. They are unable to honor their social responsibility to the community by proving employment services among other services.

10. Water siphoning: Water resources are part of natural wealth in a country. Private institutions can buy land and channel the water underground to a different location so as to obtain more profits. This may also affect the ecological system.

One Comment on “Pros and Cons of Water Privatization”

  1. That’s a good point that a privately owned water company would make the quality of the water. I would think that the company would make sure that they have a good quality product, or people would switch to another company. The competition would make sure that you could have a continually better product.

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