InDepth: World Wide Water Mafia #07: Private Water Providers: A Complex Landscape

IC InDepth Team

Mumbai, 30 August 2019

It’s important to note that not all private water providers partake in water smuggling or theft. Many of them operate within legal boundaries, playing a vital role in service provision and sometimes even surpassing governmental efforts.

In fact, the World Bank and the International Monetary Fund have frequently advocated for the privatization of water supply in developing nations, especially sub-Saharan Africa.

This approach aims to enhance efficiency, extend water access, improve quality, and reach populations that the public sector struggles to connect with public networks.

Private Sector’s Performance and Potential

The private sector’s involvement in water supply has demonstrated commendable performance and potential benefits in various regions.

In South Asia, where corruption within water authorities escalates the cost of water provision by an estimated 20 to 35 percent, private entities have occasionally outperformed governmental agencies by offering more affordable and reliable water services.

Argentina serves as another example where water privatization is believed to have contributed to a 5 to 7 percent reduction in child mortality rates.

Success of Privatized Water Systems in Chile’s Privatization

In Chile, where robust government regulations oversee the privatized water industry, the privatization model has proven highly effective in ensuring equitable access, water quality, and affordability within urban areas.

Similarly, countries like Ghana have enthusiastically embraced privatization, showcasing its potential advantages.

It’s crucial to note that relying on private providers isn’t necessarily an indication of governmental corruption or negligence.

In certain urban areas, extending piped water infrastructure might be economically unfeasible, especially for governments in economically challenged regions.

In such cases, water delivery through tankers, kiosks, public-private partnerships, and even solely through private entities remains a practical means of providing water to the population.

Approximately 100 million individuals worldwide depend on tanker and containerized water deliveries to meet at least a portion of their water requirements.

These comprehensive water supply systems cannot be swiftly replaced, and at times, private delivery through tankers or containers might be the most suitable approach.

Necessary Government Intervention and Regulation

In some instances, government intervention becomes imperative to enhance the quality of private water delivery services.

As indicated by the preceding analysis and the subsequent discussion, private water providers can sometimes engage in illegal activities, charging exorbitant prices, and even resorting to aggressive tactics.

Malaysia, for instance, witnesses a diverse range of private water service performances, where both the top three and bottom two performers are private companies.

Notably, corruption, inefficiency, and water theft often taint the tanker sector in certain countries, leading to the delivery of subpar water quality.

The danger lies in the state relinquishing its obligation to ensure essential public services like water distribution, citing incapacity, and subsequently abandoning effective oversight, regulation, and enforcement of private providers.

A more prudent approach entails the establishment of collaborative water boards or public-private partnerships.

On a darker note, there are instances where the state and water authorities themselves become complicit in the corruption permeating the water sector, illegal water operations, and undesirable practices.

Addressing Systematic Water Theft

Regardless of the culprits—be it other state agencies or private enterprises—the state must possess the capability to combat pervasive water theft and smuggling.

This responsibility extends to ensuring equitable water distribution and safeguarding the integrity of water systems, reinforcing the state’s role as a guardian of crucial public resources.

Escalating Water Scarcity and Feedback Loops

Allowing systematic water theft and smuggling to persist only serves to perpetuate and exacerbate the mismanagement of water resources and shortages.

This approach has the potential to eventually jeopardize the entire nation’s water sustainability, impacting even affluent and influential businesses.

In the immediate term, this mismanagement sets off destructive feedback loops, intensifying the demand for illicitly smuggled water to meet escalating needs.

Difficulties in Initiating Reforms

Initiating comprehensive reforms within the state’s water supply system can prove to be an arduous endeavor, despite its undeniable importance.

Especially within an environment of official disregard for the issue, those capable of orchestrating water supply, including through unlawful means, reap substantial gains beyond mere financial profit.

In fact, these so-called “water mafias,” while at times frowned upon for their exploitative tactics and collusion with corrupt officials, can amass considerable political influence.

The survival of entire communities and the prosperity of farms and industries can hinge on these mafias’ actions.

As a result, they emerge as pivotal intermediaries and wield significant quasi-state authority at the intricate intersection of official and unofficial power dynamics.

Next: InDepth: World Wide Water Mafia #08: Political Involvement and Control of Illegal Water

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