Water Utilities – governance and performance

This issue of Network Industries Quarterly is devoted to water utilities, their governance and their performance. With growing urbanization, pollution and water stress, utilities are ever more challenged to provide safe and affordable drinking water in an ecologically sustainable manner. Are they and will they in the future be up to the task? What is and should be the right size to do this? What is and should be the best governance of them (ownership, legal structure, regulation) to make sure that they can deliver? What is and should be the most appropriate articulation between governance of the water resource and governance of the utility? These are some of the questions that the four papers seek to address. The examples the authors refer to pertain mainly to Latin America, namely Brazil, Mexico, and Argentina.

The first contribution authored by Klien makes the argument that water utility aggregations do not necessarily lead to cost savings. The author uses a global database of utilities to document how aggregations change utilities with respect to network density and cost structure. He argues that aggregations typically do not change utilities in a way suited to deliver performance improvements.

Smiderle, Capodeferro, Fernandes, Gonçalves and Dutra discuss the concentration of state-owned water-supply and sanitation service providers in Brazil. In particular, they look at the contracts between these companies and municipalities and critically examine the kinds of goals that are pursued by means of these contracts.

Aguilar-Barajas and Ramírez examine the contextual and jurisdictional framework for metropolitan water provision in Mexico, based on the Monterrey Metropolitan Area case. They argue that proper understanding of the supply of drinking water requires an urban region-system framework so that major interactions are recognised and analysed.

Akhmouch, Cañamas-Catala and Salvetti critically and very comprehensively analyse water and sanitation service regulation and regulatory functions in Argentina (including water resources). From their analysis, they derive suggestions on how to improve such regulations.

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