Titans of Industry - Should Big Business Control The Tap?

(Originally posted on waterefficiency.net)

By Elizabeth Cutright
Editor
Water Efficiency Magazine

In many parts of the country, water utilities depend on tiered rate structures to promote water conservation: the idea being that as the gallons increase, the cost goes up and the water usage will decline. This works…sometimes. There will always be that one customer who cherishes his lawn and is willing to pay whatever it takes to keep his jewel green.
In the United States, 3/4ths of water systems are public, which affords us the luxury of using water rates to promote conservation. Other countries are not as lucky. In fact, many struggling nations with crumbling infrastructures have chosen to turn over their water utilities to private companies. Known as the “Water Barons” or “Big Water,” these companies build and/or manage municipal systems for profit.
Some of the more successful private water companies offer a virtual genie’s lamp of promises. Just turn your system over to us, they imply, and watch as new pipes are laid, old leaks are fixed and every man, woman and child gains access to pure, plentiful tap water. All this while instituting a rate system they argue will fund system improvements and promote water conservation
The reality is not so pretty. Although there have been some successes, privatization of water utilities has resulted in a long list of tragedies: in China citizens are sometimes forced to pay a quarter of their annual income for barely usable water; in South Africa those unable to pay turning to untreated lakes and streams (resulting in the worst Cholera outbreak in the nation’s history); and in South America, unfinished projects are often abandoned in the wake of civil unrest, leaving the task of reinstating the defunct and barely functional municipal systems in the hands of under-funded and fragile new governments.
Can increasing the cost of water decrease water waste? Of course, especially if the rate increases are combined with conservation education and government-sponsored tools (i.e. low-flow rebate programs and free water audits). But when you are dealing with a region experiencing extreme water shortages and substandard or nonexistent infrastructure, rate increases can be counterproductive and even cruel.
What is the answer? I think it depends on whether or not you are asking the right questions. Although water can be a commodity – something to be bought and sold based on the balance of supply and demand – that is not its only identity. End users in the third world struggle to meet the daily demands of survival. There is no expendable income to fund an ornamental rose garden or patch of vibrant green sod. They count themselves lucky if the well has yet to run dry. Ultimately no one can forgo water and survive: it’s not just a “want” it’s a basic need.
So the question is not “can water rates promote water conservation?” We first need to determine whether we are committed to fair, equitable, and cost-effective water distribution that rewards conservation where possible but does not deny access in the process. Within that context, I think it’s fair to then ask, “should water delivery be a for-profit undertaking?”