Privatise the supply of water

L

Latrade

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Water charges should be brought in, but this should also coincide with the removal of the LAs from controlling water supplies. Upto 50% lost due to leaks as well as prolific contamination issues, it go against a very fundamental belief, but the system just work more efficient and with less problems in the hands of private companies.
 
Re: Is it now time to introduce water rates?

Latrade said:
but the system just work more efficient and with less problems in the hands of private companies.
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Where do you get this from? From what I hear about the privatised service in the Uk, it is a mess - expensive, poor service, and just as many leaks as in the old days.
 
Re: Is it now time to introduce water rates?

Latrade said:
Without some Public Private Partneship how do you think we'll get the necessary work completed on the supply network?
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Given that Govts can generally borrow money at cheaper rates than the private sector, what is the benefit of turning to PPPs for infrastructural investments?
Latrade said:
It's a leap to suggest that the privatised companies and the change in regulation forced the hands of the state owned, but one did follow the other.
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You're right - that's a huge leap, one that mixes up causation and coincidence. Just because things happened at a certain time does not mean that one caused the other. [broken link removed] makes a pretty good case for showing that there is no evidence internationally showing that privitised water services are more efficient than public.
 
Re: Is it now time to introduce water rates?


Plenty of benefits. First is that the state doesn't have to borrow the billions it's likely to cost on it's own. The usual results (outside of Irish experiences...ahem, concede on that one) are that the private companies achieve a quicker turn around and with cheaper costs. Again, not the Irish experience.

I didn't mix anything up, it was the result of different factors in the UK. But there was a lag in the upgrading of the English and Welsh systems with the following of Scotland (NI is different as they were a few years behind anyway). The regulatory change was a main thing because of how the LAs controlled everything from supply, foul as well as the regulation. But the counties slower to move over remained behind in their improvements.

Your report is right, I'm surprised they didn't also mention the failure of PPPs in Bolivia and other areas. Sadly it ignores the minor issue that both Turkey's and Bolivia's lack of investment prior to private investment meant the starting point was a disgusting mess. It also skips over the general culture of corruption in those countries as it is. Just as I'm not allowed to make a causation link between the statistics showing an improvement post privatisation, I don't think it fair to suggest that those same issues would arise here.

All those companies operate within the EU in various capacities, yet due to regulation we do not get the same issues. The lesson is to ensure good regulation.

However, here's the problem. They have one single example. One. The others in the report are the old leftie favourites of Coca Cola, Nestle and Dow Chemicals. Ummm, only problem there is they have nothing to do with providing water in a private capacity. All have been responsible to varying degrees of contamination in the Third World. Well guess what happens when they do that in a regulated region such as the EU? They get hammered and prosecuted.

If privatisation is so bad, where are the scare stories from Developed Nations that have private water supply? They're missing. Given they could only find the one example of a bad service (and there are others, beyond the Bolivia example I gave) I'd put it down to poor research more than anything else. But it's like comparing the customs, practices and pay rates of a McDonalds in Delhi to the one at Artane Castle.

Yes, given enough rope the multi-nationals will claw as much profit as they can out of a situation. But where there is regulation and enforcement they adhere to it.

Oh and hats off for the completely partisan report by the Public Service International. I deliberately didn't link to a glowing report on privatised water by the World Bank for precisely the same reason that it wasn't balanced.

However, given that they don't even look at the OFWAT (independent body) reports on water services and how that compares since privatisation. Given that they don't even look at one single case from the UK or US, you have to wonder.
 
Re: Is it now time to introduce water rates?

Latrade said:
Plenty of benefits. First is that the state doesn't have to borrow the billions it's likely to cost on it's own.
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I'm not sure if you understand how PPPs work. Of course the state has to borrow and repay. Through the PPP, it repays the initial capital cost, the cost of borrowing (at a higher rate than if it borrowed itself) plus a generous profit margin. So tell me again how this benefits the state?

Latrade said:
The usual results (outside of Irish experiences...ahem, concede on that one) are that the private companies achieve a quicker turn around and with cheaper costs. Again, not the Irish experience.
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Perhaps we should consider the Irish experiences with PPP's, such as the 6% excess cost of PPP over conventional methods noted by the C&AG http://www.audgen.gov.ie/viewdoc.asp?DocID=765&&CatID=5&StartDate=1+January+2010


Latrade said:
Oh and hats off for the completely partisan report by the Public Service International. I deliberately didn't link to a glowing report on privatised water by the World Bank for precisely the same reason that it wasn't balanced.
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Please don't shy away from the World Bank papers. Check out this one; http://www-wds.worldbank.org/servle...341_20050306101429/Rendered/INDEX/wps3514.txt
which concluded that; "Probably the most important lesson is that the econometric evidence on the relevance of ownership suggests that in general, there is no statistically significant difference between the efficiency performance of public and private operators in this sector."
 
Re: Is it now time to introduce water rates?

Complainer said:
Perhaps we should consider the Irish experiences with PPP's, such as the 6% excess cost of PPP over conventional methods noted by the C&AG http://www.audgen.gov.ie/viewdoc.asp?DocID=765&&CatID=5&StartDate=1+January+2010
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That was based on the pilot scheme for PPP's back in 2001. It even says in the same report, 'significant changes have occurred in the way PPP projects are developed and managed since the deal was agreed for the grouped schools project'.

It doesn't reflect Ireland's experiences with PPP's.
 
Re: Is it now time to introduce water rates?

You're probably right - I'm sure the PPP providers have managed to increase their margins since then.
 
Re: Is it now time to introduce water rates?


One line from an entire report. There are other markers such as water quality (better), investment in the network (considerably more) and tackling leaks (better) all covered in the OFWAT report.

The last one on efficiency is, as the report itself says one of lack of study or more accurately means of study rather than being the same. The lines you ignore in your quote refer to a need for more study before any call can be made. Interestingly though, of the reports they do look at most claim no statistical difference and others say privatised is better. However, none point the other way and say public provides a better service.

So your original point of "hearing" the UK was worse is moot and has no evidence. In fact, the OFWAT reports clearly shows it isn't worse but considerably better.

We have significant leakages and we have serious contamination issues. There is no capacity or incentive for the LAs to tackle this. There will be no money forthcoming to do anything about it.

That's the benefit of PPPs (by the way, I clearly stated it hadn't worked in Ireland, I don't think you can use that against me). Yes it can (ok will) be more expensive in the long term, but it means the work can begin quicker as the initial cost is shared.

It'd be idiotic to suggest there isn't a cost to the state as there's no way a private company would get involved out of altruism. So yes, it's profit for them. But the concept of PPPs is the expidiency of beginning the work by an initial lower cost on the state over the accrual over decades or immediate borrowing of tens of billions by the state.

The key issue is regulation. As long as it is in public ownership whether a separate state company or the LAs there is no incentive to use the regulator. The poacher-gamekeeper role of the state just won't work.

As an aside, the same World Bank report actually completely shows how the last (PSI) report you linked to was nonsense, as in: the areas of doom and gloom for privatisation are areas of huge corruption and when icompleted in a regulated developed region you get improvements in water quality and investment.
 
Re: Is it now time to introduce water rates?

Complainer said:
You're probably right - I'm sure the PPP providers have managed to increase their margins since then.
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That's not what the C&AG says. Do you have a link? All evidence in other Countries suggests that PPP's have been extremely succesful in delivering infrastructure projects compared to traditional methods. You talk about the Government being able to borrow more cheaply so whats the point but you neglect to mention the risk that is transferred from the public to the private sector under PPP. PPP works because private operators can drive down the cost of projects when it's their money on the line to more than compensate for the higher cost of borrowing. Very rarely will you see a PPP suffer cost and time overruns. Look at all the roads being built below budget and ahead of schedule under PPP. If the port tunnel had built under PPP, I am willing to bet we wouldn't have seen the same problems with budget and timing.

Having said that, I am sure Ireland's record is as good as other Countries in relation to PPP's because we are a late developer so you could argue that the jury is still out either way.
 
Re: Is it now time to introduce water rates?

Woodsman said:
It also seems agreed that the work of installing meters etc should not be carried out by the local authorities (Too costly)but by private companies (Who usually work for their money).
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Laing O'Rourke were contracted to meter non-domestic water in a number of towns and cities over the last 4 years. So there is a precedent to use specialist private companies.
 
Re: Is it now time to introduce water rates?

This is patronising and insulting nonsense. The capacity for LAs to address our water problems is the capacity we allocate to them as part of the overall budget. The replacement of the drains network is obviously a huge capital cost, so if we don't invest adequetly (as we have failed to do), it should be no surprise that we lose a huge amount through leaks. The incentive for the LAs lies in the professionalism of their staff. I deal with LA staff on a daily basis, and the vast majority of them are committed, serious, professional folks who work hard to provide the best public services they can.

Latrade said:
In fact, the OFWAT reports clearly shows it isn't worse but considerably better.
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I wouldn't shout too loudly about the 'benefits' of the UK market, given that the average price per litre of water at the tap (22p) is dearer than still/sparkling bottled water in Superquinn (50c for 2l bottle). Is that really where we want to go?
Sunny said:
You talk about the Government being able to borrow more cheaply so whats the point but you neglect to mention the risk that is transferred from the public to the private sector under PPP.
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Ah the old 'risk transfer' theory - a very nice theory, and just that - theory. In Ireland, when the risk becomes reality for the 'partner', they just walk away, as McNamara did in O'Deveney Gardens. Not much partnership shown there. Otherwise, it is a guaranteed steady income for the 'partner', at the cost of the state.

Sunny said:
Very rarely will you see a PPP suffer cost and time overruns. Look at all the roads being built below budget and ahead of schedule under PPP.
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This is the old 'Ryanair' on-time statistics argument. They simply build lots of slack into their schedule (whether it is Ryanair's flight schedule or a road building schedule) and then make a song and dance when it comes in ahead of schedule. And let's not worry about any competitors - a little eliminates all those nasty inconveniences.
 
Privitise Water in Ireland - Lets put the Banks in charge of it! Perish the thought.
 
Generally speaking I’m against the privatisation of essential infrastructure (water, telecoms, train lines). I have no problem in theory with private operators delivering the service but I think that the state should retain ownership of the infrastructure and use the income generated by the service providers to maintain and update the infrastructure. The main reservation I have in practice is that the state has shown itself to be utterly incompetent when it comes to regulating the private sector. If the civil servants and politicians were competent enough to provide robust oversight then I would have no problem with the delivery of many more services being outsourced, but...
 
Purple said:
If the civil servants and politicians were competent enough to provide robust oversight then I would have no problem with the delivery of many more services being outsourced, but...
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In general, civil servants provide the level of service that Government wants or is prepared to facilitate.

I would agree that effective regulation of service provision (rather than the actual provision) should be the priority for Government departments. However, this would require a fundamental shift in the way Government departments are structured and the means through which staff are recruited, placed, developed and rewarded. How can generalist civil servants be expected to, for example, regulate the telecoms industry when the skills and knowledge needed to do so properly would allow them "name their price" in the private sector.

In any event, the political will needed to effect such a scenario would be of a scale not previously witnessed. Don't expect any significant changes anytime soon.

And as for the partnership element of the PPP arrangement, don't make me laugh. The budget in PPPs is generally higher in the first instance as it contains a premium for the risk that supposedly resides with the private partner. However, the McNamara case referred to by Complainer is a perfect illustration of where the risk ultimately resides.
 
Complainer said:
I wouldn't shout too loudly about the 'benefits' of the UK market, given that the average price per litre of water at the tap (22p) is dearer than still/sparkling bottled water in Superquinn (50c for 2l bottle). Is that really where we want to go?
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Ah yes, but...

But, Germany is more expensive than the England and Wales for water, and that's state owned. And England and Wales is only a couple of cent more expensive per year than France and Italy and they're state owned.

But, still/sparkling water as sold in bottles escape the stringent European standards for drinking water and the necessary costs of processing and distributing across a network. So it's not really comparing like with like.


I'd agree that there are some untouchables. We probably differ on what those are (health being one I believe should remain state controlled).

Regulation is a problem. But what's going to be more likely: the state regulating LAs to the fullest extent (50% leakage and contamination issues still in place and not one single action taken) or the state regulating private companies to the fullest extent?

It's history with the banks is one thing, but other regulators of the private sector don't do too badly, not all perfect granted.
 
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