Water and wastewater PPPs
Water PPPs, unlike most others, are more about renovating and managing existing facilities than about building a visible new piece of infrastructure, although the contracts may also contain requirements for the water network to be extended in countries where some households are not connected to the water network.
Water PPPs have been among the most controversial globally, with well-publicised large-scale failures such as Cochabamba and La Paz in Bolivia, Buenos Aires in Argentina, and Grenoble in France.
In fact, many more contracts are also under question, >have been terminated, or have not been renewed at the end of the concession, including in Paris, which can be considered the global centre of water privatisation considering that it is home to the two largest companies involved in water privatisation globally – Suez and Veolia.
Other attempts to end contracts in Europe are taking place in various cities in France, and Pecs in Hungary, and in April 2012 the Budapest city council signed a preliminary agreement with RWE and Suez Environnement for the city’s repurchase of their stake in the Budapest Water Works ten years before the contract was due to expire.
Much less attention has been paid to PPPs in the wastewater sector, due to the behind-the-scenes nature of the work. However there are at least a couple of cases that give cause for alarm, namely the Zagreb wastewater treatment plant in Croatia and the Brussels wastewater treatment plant in Belgium.
Studies do not confirm superiority of PPPs
A 2008 overview of studies comparing public and private operation of water supply globally found that private sector participation has not reduced costs, although this has been one of the main advantages cited in favour of private sector participation.
Another report, by the World Bank’s Public-Private Infrastructure Advisory Facility, has found that in the water and electricity sectors, private sector participation has resulted in increased efficiency, but that this has not necessarily translated into increased investments or lower tariffs, meaning that either the starting tariffs were so low that increased efficiency still has not led companies to a sustainable position, or that the additional income has simply ended up as company profits that have not been re-invested.