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Water, Politics and Money: A Reality Check on Privatization 2015 ed. [Hardback]

  • Formāts: Hardback, 214 pages, height x width: 235x155 mm, weight: 4794 g, 2 Illustrations, color; XIX, 214 p. 2 illus. in color., 1 Hardback
  • Izdošanas datums: 22-May-2015
  • Izdevniecība: Springer International Publishing AG
  • ISBN-10: 3319166905
  • ISBN-13: 9783319166902
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  • Formāts: Hardback, 214 pages, height x width: 235x155 mm, weight: 4794 g, 2 Illustrations, color; XIX, 214 p. 2 illus. in color., 1 Hardback
  • Izdošanas datums: 22-May-2015
  • Izdevniecība: Springer International Publishing AG
  • ISBN-10: 3319166905
  • ISBN-13: 9783319166902
This book reveals all that can potentially happen when a private company takes over a local water supply system, both the good and the bad. Backed by real life stories of water privatization in action, author Manuel Schiffler presents a nuanced picture free of spin or fear mongering.

Inside, readers will find a detailed analysis of the multiple forms of water privatization, from the outright sale of companies to various forms of public-private partnerships. After covering their respective strengths and weaknesses, it then compares them to purely publicly managed water utilities.

The book examines the privatization and the public management of water and sewer utilities in twelve countries: the United States, the United Kingdom, France, Germany, the Philippines, Cambodia, Egypt, Jordan, Uganda, Bolivia, Argentina and Cuba. Readers will come to understand how and why some utilities failed while others succeeded, including some that substantially increased access, became more efficient and improved service quality even in the poorest countries of the world.

It is natural that a private company taking over a local water supply system causes both fear and worry for consumers. With the aid of solid empirical evidence, this book argues that who manages the system is only half the story. Rather, it is the corporate culture of the utilities and the political culture of where they operate that more often than not determines performance and how well a community is served.
1 Introduction
1(16)
The Tragedy of Utilities in Developing and Emerging Countries
1(1)
The Water Privatization Wave of the 1990s
2(2)
The Role of the IMF, the World Bank and the IFC
3(1)
The Many Faces of Privately Managed Services
4(2)
The Extent of Water Privatization and Private Financing: Misleading Numbers
6(1)
Investment Financing in Water Supply and Sanitation
6(3)
Developed Countries: Investment Financing Through Revenues and Debt
7(1)
Developing and Emerging Countries: Investment Financing Through Grants and Debt
7(1)
Foreign Aid: An Overestimated Source of Financing
8(1)
Private Financing: Making Sense of the Figures
9(1)
Utility Turnarounds: How to Assess Their Success
9(2)
How to Avoid Comparing Apples with Oranges
10(1)
Chapter Overview
11(6)
Part I Latin America: Two Aborted Privatizations and One That Endured
2 Bolivia: The Cochabamba Water War and Its Aftermath
17(10)
Before the Privatization
17(4)
Ambitious Targets, High Returns and High Risks
18(1)
A First Failed Attempt: The World Bank and the Government Disagree
19(1)
The Second Attempt: Enter Bechtel
20(1)
The Privatization
21(3)
Increased Tariffs, Disputed Figures
21(1)
Leasing the Rain?
22(1)
The "Water War"
23(1)
After the Privatization
24(2)
The "Heroes" of the "Water War"
24(1)
International Arbitration: Bechtel Claims Compensation, Then Withdraws
24(1)
Cochabamba Revisited: A Sad End
25(1)
Conclusion
26(1)
3 Cuba: Water Privatization in a Socialist Country
27(4)
Poor Service
27(1)
Enter the Tourists
28(1)
Havana Goes Private
28(1)
Loans and Quasi-free Water
28(1)
Conclusion
29(2)
4 Argentina: A Flagship Privatization and Its Demise
31(16)
Before the Concession
32(6)
Preparing the Political Ground
33(1)
Dressing Up the Bride
34(1)
Ambitious Targets
35(1)
How to Regulate a Private Water Company?
35(1)
The Forgotten Poor
36(1)
The Fog of Bidding
36(1)
May the Lowest Offer Win
37(1)
The First Half of the Concession Period
38(3)
Corruption Argentinian-Style: The Alsogaray Saga
39(1)
The First Renegotiation: Higher Tariffs, More Investment
39(1)
The Second Renegotiation: Cancelled Fines, Less Investment
40(1)
The Economic Crisis and the Second Half of the Concession Period
41(1)
Serving the Poor, At Last
41(1)
More Renegotiations Fail to Save the Concession
42(1)
Impact Falls Short of Targets
42(1)
After the Concession
43(1)
Return to Public Management: A Drain on the State Budget
43(1)
Legal Aftermath
44(1)
Conclusion
44(3)
Part II The Middle East: Reform Deadlock, with an Exception
5 Egypt: Kafka on the Nile
47(8)
Dismal Conditions
47(1)
Decades of Tug of War over Reforms
48(4)
Privatization Stuck in the Mills of Bureaucracy
49(1)
A Kafkaesque Turn
50(1)
Arab Spring, Arab Fall
51(1)
Impact: Disappointing Results
52(1)
Conclusion
53(2)
6 Jordan: Private Plants, Public Utilities
55(8)
The Amman Management Contract
55(1)
Build-Operate-Transfer (BOT) Contracts: Concessions for Single New Plants
56(3)
The Samra Wastewater Treatment Plant: A Smart Mix of Public and Private Funds
56(1)
The Disi-Amman Conveyor: 10 Years in the Making
57(1)
BOT Contracts: The Most Common and the Least Known Form of Water "Privatization"
58(1)
Conclusion: Benefits and Risks for Governments and Taxpayers
59(4)
Part III Europe and North America: Private and Public Utilities Compared
7 The United Kingdom: A Natural Experiment Between Private and Public Management
63(20)
Before the Privatization
63(3)
The "Sick Man of Europe" and Public Water
64(1)
Pondering Alternatives for Reform
65(1)
Regulation of Private Water Companies
65(1)
The Privatization
66(5)
A Green Dowry
66(1)
"Shareholder Democracy"
67(1)
New Labor Turns Against the Private Companies
67(1)
Institutional Investors Take Over
67(1)
Over Their Head in Debt
68(1)
The Track Record of Regulation
68(1)
Private Water Calls for Government Help: The Thames Tideway Tunnel
69(2)
The Impact of Privatization in England
71(4)
Higher Bills and Profits
71(1)
Increased Investment
72(1)
Improved Quality of Service
72(1)
Reduced Pollution
72(1)
Loss of Employment and Increased Labor Productivity
72(1)
Leakage Goes First Up, Then Down
73(1)
Operating Costs Reduced
74(1)
Welsh Water: A New Model Emerges
75(4)
Cowboy Capitalism
75(1)
A Revolution from the Managers
75(1)
A Revenue-Making Not-for-Profit Company Built on Ethical Principles
76(1)
A First Transformation Attempt Foiled by the Regulator
76(1)
A Chance Event Creates a New Opportunity
77(1)
Support from the New Regulator
77(1)
The Green Wales and Welsh Water Model
78(1)
Performance Improvements
78(1)
Welsh Water and English Water Companies Compared
79(1)
The Scottish Turnaround
79(2)
Conclusion
81(2)
8 France: An Improved Partnership in the Motherland of Multinational Water Companies
83(14)
Fragmented Local Government
83(1)
Improved Governance, Step by Step
84(1)
The History of French Water Sector
85(5)
The Emergence of Private Water Companies in the Mid-Nineteenth Century
85(1)
The Demise of Water Concessions in the Late Nineteenth Century
86(1)
The Post-war Comeback of the Private Sector
87(1)
Nationalization Averted
88(1)
A Too Cozy Relationship with Politicians
88(1)
Paris Privatization
88(1)
A Rip-Off in Grenoble
89(1)
A New Law Chastises Private Water Companies
90(1)
International Expansion
90(2)
Remunicipalization
92(3)
Grenoble Remunicipalizes After Corruption Was Exposed
92(1)
Paris Remunicipalizes
92(1)
Eau de Paris: Underinvestment at the Expense of Future Generations?
93(1)
Remunicipalization in Other French Cities
94(1)
Marseille: More Competition Instead of Remunicipalization
95(1)
Conclusion
95(2)
9 Germany: Healthy Municipal Utilities, but with a Quirk
97(8)
Tariffs and Affordability
98(1)
Cross-Border-Leases: Selling German Sewers to Help Americans Save Taxes
98(2)
Is the German Water Business Profitable to Its Municipal Owners?
100(1)
Competition in Water Supply?
101(1)
Performance Benchmarking
101(1)
The Regulators Push Water Prices Down
102(1)
Utilities Fight Back in Their Own Way
103(1)
Conclusion
104(1)
10 Berlin: Privatized to Fill State Coffers, Remunicipalized at the State's Expense
105(10)
Before the Privatization
105(4)
Fiscal Motives
106(1)
Privatization Design: Institutional Acrobatics
107(1)
Selection of the Company
108(1)
More Acrobatics
108(1)
Private Management and Rising Opposition
109(1)
The Citizens Rise Up
109(1)
The Cartel Office Joins the Fray
110(1)
Remunicipalization
110(1)
The Impact of Privatization
111(3)
Tariffs Increase, but Mostly Before Privatization
111(1)
Who Gained More: The State or the Investors?
112(1)
Higher Productivity, Conflicting Figures on Operating Costs
113(1)
Transparency and Management Improved
113(1)
Conclusion
114(1)
11 Civil Society and the EU Concession Directive: David Beats Goliath, Using a Few Tricks
115(6)
What Is the Concession Directive and Why Was It Introduced?
115(1)
Opposition from Germany
116(1)
The European Citizens' Initiative Right2Water
116(1)
A TV Documentary Stirs Up Public Sentiment
117(1)
A Public Relations Disaster for the European Commission
118(1)
A Powerful Mixture of Fear and Brussels-Bashing
118(1)
Water Is Taken Out of the Concession Directive
119(1)
A Modified Directive Is Passed
119(1)
Conclusion
120(1)
12 The United States: Public Water in a Capitalist Country
121(14)
Infrastructure Backlog
122(1)
Reluctance to Increase Tariffs
122(1)
Friends and Foes of Federal Financing
123(1)
The Water Privatization Wave Hits the United States
123(3)
Enter the Foreign Companies
124(1)
Privatization Fatigue
124(1)
Private Equity Firms to the Rescue?
125(1)
Private Companies Serving Public Utilities
126(1)
New York City
126(2)
44 Years to Build a Tunnel
126(1)
Keeping the Money from the Hands of the Politicians
127(1)
The Federal Government Orders More Investments
127(1)
DC Water: A Public Utility Turnaround
128(2)
Conclusion
130(5)
Part IV Asia and Africa: Three Successful Utility Turnarounds, Public and Private
13 The Philippines: A Delayed Privatization Success Story in Manila
135(8)
Before the Privatization
135(3)
Making the Concession Attractive
136(1)
Splitting the Service Area in Two Halves
136(1)
The Bidding War
137(1)
Private Management: A Tale of Two Concessions
138(1)
Impact: Increased Access, Improved Efficiency and Customer Satisfaction
139(2)
Tariffs Go Down and Up, but Remain Affordable
140(1)
Did the Winning Companies Submit "Dive Bids"?
140(1)
Conclusion
141(2)
14 Uganda: A Public Utility Turnaround, Triggered by Pressure to Privatize
143(18)
Before the Turnaround
143(2)
The Heritage of Idi Amin and Milton Obote
143(1)
National Water and Sewer Company (NWSC) in the 1990s: A Basket Case?
144(1)
The World Bank Pushes for Privatization
145(1)
The Turnaround
145(9)
Making Customers Pay Their Bills
147(1)
Cutting the Number of Employees by Half
147(1)
Changing the Corporate Culture and Focusing on Customers
148(1)
Performance Contracts Between the Government and NWSC
149(1)
Creating a New Corporate Culture
150(1)
An Alternative to Privatization
151(2)
Increasing the Customer Base
153(1)
Reaping the Rewards
154(1)
After the Turnaround
154(4)
Management Fads Galore
154(1)
Stagnating Performance
155(1)
The Government Provides Debt Relief
155(1)
Doubts on the Accuracy of Figures
156(1)
Muhairwe's Exit
157(1)
After Muhairwe
157(1)
Impact
158(1)
Are Water Bills Still Affordable?
158(1)
Conclusion
159(2)
15 Cambodia: A Public Utility Turnaround, Ending with Privatization
161(8)
Before the Turnaround
161(1)
The Turnaround
162(2)
Laying the Foundations of Success by Gaining Trust
162(1)
Creation of an Autonomous Utility
163(1)
Increasing Tariffs, Especially for High-Volume Users
163(1)
Expanding the Network the Right Way
163(1)
Impact: Spectacular Results
164(2)
After the Turnaround
166(1)
From Obscurity to Fame
166(1)
Privatization Through the Stock Exchange
166(1)
Conclusion
167(2)
16 Utility Turnarounds Compared: The Importance of Corporate Culture and Financing
169(10)
Differences in Circumstances
169(1)
Performance Compared
170(5)
Similarities in Changes of Corporate Culture
171(1)
Differences in the Sequence of Reforms
171(1)
Efficiency Improvements
172(1)
Salary Levels
172(1)
Overall Costs
173(1)
Fiscal Impact
174(1)
Affordability
174(1)
Conclusion
175(4)
Part V Conclusions
17 Conclusion: It Is Not About Public or Private
179(6)
What Has Changed over the Last 25 Years?
179(1)
The Impact of Privatization and Remunicipalization
180(3)
Conclusion
183(2)
Annex 1 Management Modes, Subsidies, Water Use, Bills, and Affordability in Selected Cities
185(2)
Annex 2 Nonrevenue Water in Selected Cities According to Different Indicators
187(2)
Annex 3 Overview of Privatizations, Public Turnarounds, and Remunicipalizations in This Book
189(2)
Annex 4 Chronology of Key Events Covered in the Book
191(2)
Annex 5 Glossary of Technical Terms
193(4)
Annex 6 Sources
197(12)
1 Introduction
197(1)
2 Bolivia
197(1)
3 Cuba
198(1)
4 Argentina
198(1)
5 Egypt
199(1)
6 Jordan
200(1)
7 The United Kingdom
200(1)
8 France
201(1)
9 Germany
202(1)
10 Berlin
202(1)
11 Civil Society and the EU Concession Directive
203(1)
12 The United States
203(1)
13 The Philippines
204(1)
14 Uganda
205(1)
15 Cambodia
206(1)
16 Conclusion
206(3)
Index 209
Manuel Schiffler has worked for over twenty years on water management and water utilities in more than a dozen countries in the Americas, Europe, Africa, the Middle East and Asia. He worked as a researcher for the German Development Institute and as a project manager at the World Bank. He now supports water projects in developing countries at the German Development Bank KfW. He holds a diploma and a doctoral degree in economics from the Free University in Berlin.