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ly in Honduras. Prior to 1994, the water supply was inefficient due to poor management. In an attempt to correct this, it was restructured through decentralisation, contracting outwards and reductions in staffing. Since then SANAA has been recognised by the United Nations (UN) as a model project (Lobina and Hall, 2000). The restructuring under public ownership has improved operating efficiency without imposing the economic and social costs associated with water privatisation showing that retention of public sector involvement can be highly successful.

 

In Holland the bulk of the twenty-five water companies are public limited companies (plcs). The level of provision is good, with high water quality being provided at an affordable price (US$1.26/m3), and the performance of these Dutch companies relates to the framework set up in order to support them since they are not interested in excess profits as shareholders, who are the municipalities themselves, are not concerned with maximising the return on their investments (Lobina and Hall, 2000).

 

Municipalities are responsible for the control and management of the German water industry where there are around 6,500 utilities compared to the 15,000 in 1957, and as a result of this restructuring, the WB has estimated savings of up to 50%.

 

In Sweden, the majority of water facilities are municipally owned. The Swedish water companies appear to enjoy considerably lower costs than those of the UK, possibly by not seeking excessive profits. Stockholm Vatten AB is a prime example of the Swedish municipal model suggesting that public provision can be preferable for financial and economic as well as social and environmental reasons.

 

Notes: M = municipally owned; P = privately owned; cost per cubic metre of water delivered, purchasing power parties, US$.

 

It can be seen that the average cost of water in Sweden (0.36) is considerably lower than in Britain (0.93). Hence a state-run system is more efficient in some developed nations. Whilst it is hard to dispute the empirical data above, I would contend that Britain should not revert back to its state-run system. We must take into account, for example, the differences in climate, topography and populations of the respective countries. England and Wales have an average rainfall of 920mm which is considerably higher than the 535mm received in Sweden. At first glance, it would seem that Britain is at an advantage but has a population of over 60 million compared to Sweden’s 9 million. The impact of a larger population has other implications, such as more complex and higher maintenance and delivery costs given that in the UK the highest demand for water is in the South East whereas the maximum precipitation is in the South West and Scotland. One of the key decisions which influences a country’s decision to privatise that Lobina and Hall fail to take into account is the strength of the economy and the capability of the infrastructure.

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