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onitor and test to ensure the water in the EU is healthy and clean. World Health Organisation (WHO) guidelines are used as the basis for the DWD. The drinking water quality runs in three year cycles and the results are presented in a report summarising the quality and any improvements required (European Commission, 2007).

 

Private Sector

 

In France, the water market is dominated by three companies: namely Vivendi, Suez-Lyonnaise des Eaux and SAUR/Bouygues (Lobina and Hall, 2000). These companiess are also big players in influencing the water supply in the developing nations for commercial reasons.

 

The private sector is not always efficient. Once a contract is granted, a company will behave in a monopolistic way until the contract is renewed. Prior to contract renewal, there is an incentive for the company to be competitive in order to keep the contract, such as reviewing prices and quality due to competition from other companies. In 1994 the Trinidad and Tobago Government delegated the management of water and sewerage authority (WASA) to a subsidiary of Severn Trent. By 1997, there had been no significant improvement in the management of WASA, leading to the termination of the contract in 1999. In Puerto Rico, the water management was delegated to Compa?ia de Aguas (subsidiary of Vivendi) in 1995. The company was criticised in 1999 for ‘numerous faults, including deficiencies in the maintenance, repair, administration and operation of aqueducts and sewers’ (Lobina and Hall, 2000, p.37). In addition to this the operating deficit increased to $241.1m.

 

Private companies can also demonstrate collusive behaviour and corruption in order to exploit their position. A subsidiary of SAUR/Bouygues was awarded the concession in 1987 for the entirety of the Ivory Coast without it going to competitive tender (Nickson, 1996). As there was no competition at the time of contract award the company was able to control price and quality to their best advantage which was not in the best interests of the consumer.

 

As a result of privatisation, consumers often experience a rise in tariffs which seem unjustified. In 1998 ‘Subic Water’ (subsidiary of UK-based Biwater) increased rates to industrial customers in the Philippines by 400% from P6 to P32.26 per cubic meter (P = pence), with the prospect of further increases to P39 by April 1999 without any evidence that this was reflecting increased operating or management costs. Where companies solely pursue profit, this can lead to reduced expenditure on maintenance and other costs which can affect the quality of water (Lobina and Hall, 2000). In Tucuman, Argentina, Aguas del Aconquija (subsidiary of Vivendi) were granted a 30-year contract. Subsequently water tariffs doubled and the proposed investment programme was not implemented. Consequently the quality of supply was impaired so much that the water turned brown (ibid).

 

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