Water Privatization Pros and Cons


For many communities, water is something that is considered a utility service. This means that the treatment, distribution, and recycling of water is a taxpayer-funded service. Water privatization would take this process out of the public sector and allow a corporation to be able to take over the system for profitability. There are definitely some advantages in allowing this to happen, but there are some disadvantages to such a system as well. Here are some of the water privatization pros and cons to think about.

What Are the Pros of Water Privatization?

1. It can help to improve the overall water supply.
The most dangerous thing that people consume every day is water. Billions of people every year drink water that is contaminated and puts their health at risk. Through water privatization, better water would be achieved for many communities because profitability would be in clean water and not dirty water.

2. It would make systems more efficient.
Profitability dictates that a system be as efficient as possible so that it can be as profitable as possible. In the world of water distribution, this would mean that more people would receive their water in a more efficient manner and that would limit the ability of the water to be contaminated within the system.

3. It could reduce mortality rates.
Most nations are committed to increasing their population’s access applies and this naturally reduces child mortality rates. By releasing the water supply to a profitable business venture, people have more of a guarantee that their water will be clean or have a monetary source of damages if they are given dirty water.

4. It saves municipalities time and money.
The city of Chicago has privatized more than 40 city services in the past decade and this has generated more than $3 billion in upfront payments from corporations to be able to lease any assets. Although small communities are going to see this kind of cash upfront, it shows the possibility of how profitable up water privatization venture could be.

5. It reduces public sector risks.
By transferring the responsibilities of water distribution to the private sector, the public sector reduces their amount of Worker’s Compensation risk that must be assumed and this benefits the taxpayer on the back end of their fees.

6. It allows for specialized services to be provided through specialized utilities.
Instead of placing state workers into a job that they may not be fully knowledgeable about, a for-profit business would be able to bring in specialized employees who can provide a higher level of care to the water systems that are already in place. Starting from the water source, and ending at the user’s tap, a better overall product comes about thanks to the added expertise that is present throughout the entire chain of custody.

What Are the Cons of Water Privatization?

1. It could limit who actually receives water.
Many the consumption of water as a basic human right. Without water, humans are unable to survive. By making the system of water in a community about profit instead of about meeting needs, it would reduce public accountability and could ultimately affect the quality of water that is being received.

2. Low income individuals could be without water.
In a system of water privatization, those who can pay for the water are going to get it. Those who are unable to pay for the water and can’t find public assistance will be without water. This would create underserved communities and ultimately a new class of citizen in every community and put their lives at risk.

3. It could lead to higher rates and lower service.
Water privatization has been tried in several communities in the past. These communities have had to reclaim the water systems to make them public services once again because of the poor water quality and lack of customer service that was achieved. Many communities also have complained about the rate hikes that have occurred when water privatization has occurred.

4. National companies don’t have a stake in local issues.
That of hiring people who have local knowledge about water privatization systems, national companies look to the most affordable labor possible that can be as efficient as possible. This creates a system of management that puts the company first, profit second, and the environment and the people living in the community behind all of that.

5. There is no overall accountability in the quality of services provided.
Time after time, privatizing public sector has resulted in cost overruns and increased cost because no accountability has been placed on the private institution. Before any government agency decides to hire an outside contractor to work for a privatized utility, it is important to study how cost-effective hiring outside of the public sector would be. Most government agencies find that it’s less expensive to use state workers for service instead of outside contractors.

How Can Some of the Cons Be Negated?

In evaluating the water privatization pros and cons, it is clear that one measure could help to prevent some of the negatives from occurring. That would be to include an oversight organization or committee that would monitor the for-profit companies that are distributing water to communities. If these organizations for committees are given the powers be able to regulate the rates that can be charged for customers and require low income customers to still receive water despite not being able to pay for it, there is a chance to merge profitability with a public sector need so that everyone can have this basic human need met efficiently.

Sometimes a private business is able to make outstanding innovations in a field that is normally reserved for the public sector. In other times, the need for profitability outweighs everything else and so the quality of the product goes down. Some communities have found success in water privatization and others have discovered that the practice is not for them. By weighing the pros and cons of water privatization, each community can come up with a decision that works best for everyone locally.