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Running Head: WATER PRIVATISATION 0

Water privatization

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07/02/2021

A large number of the current public water and sewage systems in major European and American cities were designed and developed during the industrialization period in the 19th Century. Globalization has led to the exponential growth of many of these cities, and this has outstretched public resources, which has overwhelmed city governing councils. Public water and sewage agencies encounter several problems, including limited financial and human resources, stringent regulations, outdated infrastructure, etc. Water is an essential commodity, and thus the challenges faced by public water agencies provide a good investment opportunity to private companies. In their recently released 2016 Annual Privatization Report, the Reason Foundation provides some insightful survey data from the Public Works Financing annual water partnerships survey. 

Private corporations always seek to make profits (Budds, 2003). A private water company will most likely supply water to those who can afford to purchase only. This is ethically wrong as it will deny people from low-income communities’ access to water. The water company will also likely review the city’s water tariffs to recover their investment and make profits. A high water tariff will also alienate the lower classes from constant access to water. The United Nations lists access to water and sanitation as a basic human right. This is ethically unacceptable as it involves violating citizens’ basic rights for profits.

Ensuring water quality and quantity is the main function of public water service agencies. These two aspects are relatively easy to contract for a city’s governing agency. Water is an essential element in the city and thus will be closely monitored by several stakeholders, they include, government officials, media, private institutions and other groups. The governing body issue guidelines to the private company to maintain the water quantity and quality at certain levels or risk legal action. The citizens, media, watchdogs’ groups also closely monitor these and alert the city authorities in the event of a deviation.

As mentioned earlier, private companies work towards maximizing their profits while government agencies work to serve citizens. This is because private companies are accountable to their shareholders, while governments are accountable to citizens. The private corporation will most likely change the water tariffs; this can either be positive or negative. They can increase the rates to increase profits or decrease to gain positive public opinion. Both scenarios will affect the financial aspects of the city’s residents. This decision will open the public water and sewage sector to other private investors. This will cause competition in the sector, increasing the quality of services provided and thus benefit the city residents.

Private corporations are better run than most government agencies. This is because private companies are run by executives who make business decisions based on analytical reasons. On the other hand, government agencies are run by politicians who make decisions for personal and political gain. Thus, I think that water privatization will benefit the city’s residents who will have access to a reliable water supply. The main opposition to water privatization is the fear of customer rights violation (Fletcher, 2018). Sceptics assume that private companies will increase rates to recover their investment. However, governments can issue contracts with clauses that prevent private companies from increasing water rates. This government-private collaboration will improve water and sewage delivery systems in urban areas (Alseaf, 2017).

Water is an economic resource and thus is scarce and valuable. Thus, like all other economic resources, its availability is controlled by the laws of demand. It has been noted that when governments provide economic resources to the public for free or at low prices, they misuse them. On the other hand, private companies operate in a competitive environment and thus will provide water to the residents in a limited manner to avoid wastage. These companies also have experts in their organizations who can consult with the government and set a fair rate for the service. Thus, water privatization will reduce wastage and give rise to a free and competitive market that will benefit all parties involved.

Kantianism and utilitarianism have different ways for determining whether an act we do is right or wrong. According to Kant, we should look at our maxims, or intentions, of the particular action. Kantians believe “human life is valuable because humans are the bearers of rational life” (O’Neill 414). It is easier to determine an action as morally right in Kantian ethics than in utilitarian ethics. When data is scarce, Kantian theory offers more precision than utilitarianism because one can generally determine if somebody is being used as a mere means, even if the impact on human happiness is ambiguous. Kantians “consider only the proposals for an action that occur to them and check that these proposals use no other as mere means” (O’Neill 413).

Fletcher, C., van Heelsum, A., & Roggeband, C. (2018). Water privatization, hegemony and civil society: What Motivates Individuals to Protest About Water Privatization? Journal of Civil Society, 14(3), 241-256.

Alseaf, H. F. (2017). Water privatization: is privatization of water utilities the right approach to achieve efficient water resources management? Revista de Arquitetura IMED, 6(1), 3-13.

Budds, J., & McGranahan, G. (2003). Are the debates on water privatization missing the point? Experiences from Africa, Asia and Latin America. Environment and urbanization, 15(2), 87-114.