Water Privatization – Boon or Bane for South East Asia?

Published: 28 Sep 2005

By Gladys Mak, Research Analyst, Environment

It is 7 a.m. and you are all set for a good hot shower. You turn on the mains but not a drop squirts out. Does this sound familiar? If no, consider yourself lucky but if a resounding yes is the answer then blame it on your water utility provider!!

Situations like these are common in most developing nations. The Earth is 70-75% water yet only about 2.5% consists of fresh water. To add to this, the ever-growing global population is making water a much sought after component in this time and age. For decades, water has always been seen as a public good and most water utilities around the world have been publicly owned. This trend however is changing with countries now embracing the idea of privatization. Will that help? Perhaps.

What is Water Privatization?

Well, water privatization often refers to an increased participation of private companies in the provision of water. Privatization can be Public-Private Partnership (PPP), partial or even total. In Public-Private Partnership (PPP), the idea is that water itself is not deemed as a commodity and is not privatized. Instead, only the services and the job of supplying water are, while the government plays a regulatory role. In other sorts of privatization, depending on the agreement, water can be owned by a private enterprise and be offered for sale.

Why Privatize?

Some hard facts:

  • There are about 1.2 billion people who lack clean and affordable water globally
  • The government (Public utilities) have been slow and ineffective in providing access to safe drinking water to all
  • In Indonesia, only half of its urban residents have access to safe drinkable water while 80% do not even have it supplied directly to their residential homes
  • High incidences of water losses due to leaky pipes and mismanagement of water in most developing countries

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