The highly controversial topic of water privatization is one that not only concerns the U.S., but the entire world. This is not only because water is pretty much essential to life on earth, and in such limited supply, but also because privatization of resources is possible almost anywhere in the world as long as there are people willing to pay for it.
So what exactly is water privatization and why do we care about it? Well, first off, anything regarding our fresh water supply should be of key importance because our fresh water is in such limited supply. Only 2.5% of water on Earth is freshwater. 68.6% of all freshwater on Earth is locked up in Glaciers and Ice Caps where we cannot access it. 30.1% of all freshwater on Earth is groundwater, which we do not have complete access to. The other 1.3% of freshwater is Surface water and other freshwater sources such as ice and snow, lakes, rivers, soil moisture, swamps and marshes, and atmospheric water. And as the human population continues to grow, so does the demand for fresh water, as well as the amount and severity of the pollution of our sources of fresh water. Canada, USA, Mexico, India, Britain, and China alone using over 1,996 liters per day. Water privatization, if done right, can be a very good thing, but if done inefficiently, can be a very destructive force to humans and the environment.
Privatization is a broad term, which in the water industry, ranges from providing basic services and supplies, to the design, construction, operation, and ownership of public utilities. One form of privatization is called “outsourcing” or “O & M contracting”. Outsourcing is both the private contracting for water utility plant operation and maintenance (O&M) and the private provision of various services and supplies, such as meter reading, and supplying chemicals. Another form is called “design, build, and operate” or DBO. DBO is the process of negotiating a contract with a private firm to combine design and construction services with operating agreements for new, expanded, or upgraded facilities. The final form is “water asset sale”; the sale of government owned water assets to private water companies. The most commonly seen examples of water asset sales are bottled water. For example, Nestlé Company literally owns approximately 75 spring water sources across the U.S. they use for their bottled water sales. However, sale of water assets can also occur with O&M contracting or DBO contracting or in a number of different combinations.
To put into perspective of how popular water privatization is these days, according to a market profile done by Global Water Intelligence, in 2010 there were approximately 866.4 million people served by private water or sewerage services globally. And according to the National Association of Water Companies, nearly 73 million Americans receive water service from a privately owned water utility or a utility with a public-private partnership. Private water companies own about 16% of the nation’s community water systems and 20% of all wastewater utilities. In this case, developed nation are actually embracing privatization. As of 2010, according to a water market profile done by Global Water Intelligence, The top corporate players in the World Water Industry are Suez Environnement (2008), and Vivendi S.A. (Societe Anonyme) with their water section Veolia Water; with more private water companies emerging in the market every year. According to Veolia Water’s website as of 2012, active in over 69 countries, they serve over 101 million people, 71 million residents with wastewater service, and have over 89,000 employees. Making Vivendi’s Veolia Water the world’s largest water service provider. Veolia Water North America is along side with American Water and ahead of Suez’s United Water as largest water supplier in U.S. They are responsible for the nation’s largest municipal wastewater partnership in the U.S. in Milwaukee, Wisconsin and largest