Inderscience Publishers

Private sector involvement according to European water liberalisation scenarios

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What are the possible scenarios for the drinking water sector in Europe? This paper presents the results of the EU-financed Euromarket project. [For more information on the Euromarket project including all the freely downloadable reports, visit the website: http://www.epfl.ch/mir/euromarket.] On the basis of a transactions framework, five end states (ES) were identified as follows: End state 1 (ES1), Delegated Contracts; End state 2 (ES2), Outsourcing; End state 3 (ES3), Regulated Monopoly; End state 4 (Es4), Direct Public Management (DPM) and End state 5 (ES5), Community Management. The scenarios show more Private Sector Involvement (PSI). A distinction is made between four water markets, and the study points to increased pluralism. In most countries different models for drinking water management exist side by side according to this study. Total privatisation (through divestiture, or selling of all the shares) is not one of the scenarios discussed, for the simple reason that it hardly exists, except for England and Wales and some private water companies in the USA and in Chile. However, all scenarios show a more important role of the private sector in the future, through either Public?Private Partnerships (PPP) or other forms of PSI.

Keywords: private sector involvement, PSI, scenarios, water liberalisation, Europe, drinking water, water markets, delegated contracts, outsourcing, regulated monopoly, direct public management, community management, public?private partnerships, PPP

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