Prices and ownership in the water urban supply: a critical review

Most countries have opted for public sector management of the water supply service for residential uses. In countries where regulations permit the participation of private companies, this has led to major controversy. In fact, academics, political parties and civil associations are loudly calling for the remunicipalisation of the water service in cities where it is managed by private companies, as well as a halt on new privatisation processes announced by local governments. Much of the criticism centres on the idea that, counter to the public interest, private enterprises systematically set higher prices than public entities do. In this paper, a critical review is carried out of studies published in peer reviewed journals that jointly consider all the factors that can affect the price of water, including the management type. The first aim is to determine whether the hypothesis is confirmed that private companies systematically set prices higher than public entities do. The second aim is to identify the important limitations of this type of research; limitations that, at least in part, call into question the results obtained to date and pose a challenge for the researcher.     

Private sector participation in infrastructure projects: a methodology to analyse viability of BOT

Many developing countries are now attempting to finance new infrastructure projects through private sector participation. This paper outlines a methodology based on financial and risk analyses that a government or a government utility can use to analyse the viability of private sector participation in new infrastructure projects. The water supply projects in Sri Lanka are used for the case study to outline the methodology. Financial analyses of a bulk water supply project and a water distribution project are carried out to estimate subsidy percentages that are required to make the projects viable, using a model developed for the investment analysis of all types of infrastructure project. This analysis looks at four pricing options for the bulk supply project, and sixteen procurement options for the distribution project, from the view point of the utility, for three cases of non-revenue water (35% as base case, 50% and 25% as extreme cases). The risk analysis takes into account the risk and uncertainty in non-revenue water, cost and demand estimates, rate of debt and forecasts of escalation. These analyses show that the best option for the utility is to obtain both bulk supply and distribution projects through private sector participation using BOT arrangements.     

The private sector and public space in Dutch city centres

Private sector involvement in the design and financing of urban redevelopment projects has been relatively rare in the Netherlands. The public sector has traditionally played a central role in spatial planning and development. Since the 1980s, however, local authorities have been sharing the responsibility for urban development with the private sector. This article explores the viability of claims drawn from the literature about the effects of private sector involvement in redeveloped public space. Confronting those claims with our empirical material, we expected to find that the participation of the private sector would increase the redevelopment budget but would also lead to restrictions on public access. These two expectations are evaluated in light of the experience in four redeveloped squares in four Dutch cities: Rotterdam, Dordrecht, Enschede and ’s-Hertogenbosch. We found that actors on the public and private sides have different interpretations of what constitutes a direct financial contribution. Those from the private sector believe they have made significant contributions, while those from the public sector see themselves as the sole funders. But they agree on the issue of free access: both public and private actors deny any negative effects of private sector involvement in this respect.     

Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship

This paper combines the empirical finding of a functional specialization of cities with regional dynamics. We distinguish between cities dominated by headquarters and service firms (urban agglomerations), those with large stand-alone production plants in one sector (industrial agglomerations), and cities with integrated smaller firms (industrial districts). Based on German data, we find differing dynamics across these three city types. Cities that host basic research or integrated incumbents are more conducive to entrepreneurial activity, whereas the opposite is true of industrial agglomerations. Urban agglomerations dominated by headquarters with only administrative functions and the service sector are not very entrepreneur-friendly, either. However, although this type of city provides few externalities for startups in manufacturing, they could very well provide opportunities for service sector startups.     

Urban Space Production in Transition: The Cases of the New Urban Areas of Hanoi

In recent decades, hundreds of master-planned new urban areas (NUAs) have developed on the urban fringes of expanding cities in Vietnam. They are promoted as a new urban planning concept in the post-reform policies. This article discusses the NUAs' planning concepts based on qualitative case studies of four NUAs in Hanoi, and on an examination of the 1990–2000 urban policies. It sheds light on transitional planning and urban space production processes in Vietnam and discusses urban quality in a rapidly urbanising Asian context. The article argues that NUAs are products of a hybrid, transitional system in which local government and the public sector form an alliance with the private sector to serve private interests in urban development. At the same time, NUAs are hybrid products of government-led, entrepreneur-driven planning and self-organising space production by the residents. The self-organising space production activities contribute to the urban quality of these new urban spaces, while the production of privatised, commodified spaces by corporate actors poses a threat to community life.     

Public values as essential criteria for public entrepreneurship: Water management in France

Historically, major private companies were the dominant players in urban water supply in France. However, a new era of water supply restructuring is underway, whereby formally private water corporations are being made public. Given that many such public water corporations adopt practices associated with private entities, it is essential to identify what is expected of “public” entities by virtue of the fact that they are public. In this article, we examine the foundational ideas behind the raison d'être of public entities, which engender priorities that differ from their private sector counterparts. Using a research-action methodology, water utility management, staff and consumers of Greater Nantes were asked to specify the meaning of “public” and how it should be operationalized in the case of publicly owned utilities. The research shows that the attainment of public values is what lends legitimacy to a public utility charged with the provision of essential services. In this case, even in a context of neoliberal governance, where private values of an economic nature conflict with public goals; public values take precedence in the management and the regulation of the service.     

The impact of governance structure on firm performance: An application to the German water distribution sector

This paper investigates the impact of governance structure on firm performance (i.e., retail prices) using a database of 765 German water suppliers. Controlling for scale economies as well as technical and structural characteristics, we find that private sector participation is accompanied with higher retail prices. Furthermore, Eastern states on average feature higher prices mirroring significant investments during the past two decades as well as network over-dimension. Assuming that managers make strategic decisions (e.g., governance form) not randomly but rather decide based on expectations of how their choices affect future performance, we test for this self-selection applying a two-stage model.     

The productivity and supply of urban infrastructures

The paper examines the productivity and supply of urban infrastructure capital using a panel data set of 85 West German cities. A simple theoretical framework is used to infer the impact of infrastructure services on private production cost. Assuming local firms to operate under perfect market conditions we derive an optimal local infrastructure supply rule and an optimal business capital tax rate. The empirical part of the paper proceeds by a two step procedure. In a first step we examine the productivity of urban infrastructure service provision by evaluating the cost reductions that are associated with the supply of infrastructures. In a second step, the adjustment of the urban infrastructure capital stock and the urban business tax rate is estimated, incorporating the estimated monetary productivity effects as well as some simple inter-jurisdictional competition variables into the empirical model.The paper is a revised and abridged version of a paper presented at the 33rd European Congress of the Regional Science Association, Moscow, August 1993. I gratefully acknowledge suggestions for improvement by Klaus Conrad and two anonymous referees.     

A public sector multinational company: The case of Canal de Isabel II

Some publicly-owned enterprises (POEs) in water services have recently developed behaviour similar to private companies, tendering for and managing concessions and other contracts, both in their countries and abroad. The article first discusses the reasons for public sector provision of water services, and the different public and private mechanisms of production. It then examines the development of Canal de Isabel II, the public sector water company of Madrid, as a vehicle for public service responsibilities, and then its more recent policies of commercial diversification and overseas expansion, and discusses some contradictions between this commercial activity and the original terms of the company's public service remit. In conclusion, it seeks to explain this behaviour and its relation to transparency and democratic control, especially of risk.     

Model industrial settlements and their continuing governance

This paper explores the continuing governance of three important historical industrial company towns that were developed as model settlements: New Lanark and Saltaire in the UK and Pullman in the United States. It explores the changing roles of the private sector, the public sector and civil society in the on-going stewardship of the settlements.

This paper concludes that urban governance arrangements are important. In all three cases, the towns were initiated by private entrepreneurs but they are no longer in the ownership of the originating companies and their original economic base has vanished. In all three, public sector action was, at some stage, necessary to retain their integrity, but this action needed strong support from civil society actors. In all three examples, government and community action were supported by additional private sector initiatives. The interactions amongst the private sector, the public sector and civil society in the establishment and continuing stewardship of these settlements demonstrate the clear need for a better understanding of the role of governance arrangements in urban history.     

Reasonable concession period for build-operate-transfer road projects in the Philippines

This paper provides a methodology to determine the reasonable concession period that would be advantageous both to the government and the private sector with the impact of risks taken into consideration in the financial evaluation using Monte Carlo simulation and bargaining game theory. The simulation produced a range of concession period for the private sector and government to negotiate. Bargaining game theory was employed in an attempt to find a specific concession period. To demonstrate the applicability of the proposed methodology, two Build-Operate-Transfer (BOT) road projects in the Philippines were used as case studies. The resulting concession period was found to be longer than the actual concession period granted to the private sector indicating the impact of risks in the cash flow. With the proposed methodology, the government could further enhance its policies in processing BOT projects with the end in view of increasing private sector participation in infrastructure development.     

小汽车交通与城市空间发展

城市交通系统的发展有助于塑造城市形态,改变城市的空间结构。城市主导地位的交通方式决定着城市形态与城市空间结构的发展演化。西方发达国家小汽车交通的发展及对城市空间的影响趋于稳定状态,小汽车交通与城市空间发展相对匹配。中国从20世纪90年代开始城市小汽车交通的大规模发展,对城市空间形态和城市结构造成巨大影响,这种影响将在未来较长一段时期内体现在城市空间发展方面,对城市规划和交通规划提出了新的挑战。     

Privatizing water supply in Hong Kong

With the exception of the water supply industry, all major utilities in Hong Kong are owned and operated by private enterprises. In terms of price, returns, and productivity, the water supply industry in Hong Kong compares unfavourably with privately-owned utilities. The financial performance of the Water Supplies Department has been deteriorating in recent years. In order to improve the performance of the water supply industry, the Hong Kong Government should consider inviting the private sector to run the industry. Hong Kong can learn from other countries with regard to reforms made in the water supply industry.     

城市轨道交通的可持续发展

发展城市轨道交通,不能只着眼于解决城市交通问题,而应注重轨道交通建设对城市发展的影响,科学规划,合理布局,实现轨道交通与城市环境的协调发展.     

历史城市保护中的整体性城市设计思维初探

历史城市保护是一项具有社会实践性特征的复杂工作,既需要不断推进城市保护理念的提升,还需要不断加强保护规划的实施以及控制机制的完善。城市设计作为一种关注市民生活品质、有效改善城市空间环境质量的综合技术方法,还逐渐体现为一种控制引导城市空间发展的公共策略。二者之间的相辅相成与内涵共生,使作为延续城市历史文脉、改善空间环境品质、塑造宜人景观风貌为核心的整体性城市设计思维与方法逐渐成为历史城市保护中的重要技术工具和实现途径,对历史城市保护工作方法的完善起到了重要的作用。本文通过对中西方城市设计思想的梳理以及对历史城市保护工作影响的概述,明晰了积极探索面向历史城市保护与发展的整体性城市设计思维的重要意义。     

南京市二次增压供水方式的合理选择

随着国家供水水质标准不断提高，二次供水设施统一由供水企业进行专业化管理将成为今后的发展趋势。根据全国二次供水现状，结合南京市的实际情况，对常用的4种二次增压供水方式进行了技术经济分析，重点分析了水池不同的进水方式对供水管网系统的影响，选出了适合南京市供水现状的二次增压供水方式，并提出了今后运行管理的建议。     

Globalization and construction industry development: implications of recent developments in the construction sector in Asia

Recent developments in the construction sector in the Asian region demonstrate three trends: (1) larger private sector participation in infrastructure projects, (2) increasing vertical integration in the packaging of construction projects, and (3) increased foreign participation in domestic construction. This paper attributes the trends to the globalization and deregulation of markets necessitated by fiscal, technological and managerial constraints. Although these trends present intra-Asian opportunities, there are also areas of concern. The trends have helped polarize the financial and technical superiority of the developed countries and the corresponding inferiority of the developed countries in the region of the developing ones. In the long term, this gap could be filled through technology transfer. In the short term, however, there are concerns that imported construction services could grow at the expense of the indigenous sectors of the developing countries. This paper illustrates this dilemma with the case of Japan as a world leader in international construction services. Its dominance has apparently come through the orchestration of industrial and corporate policies, implemented in a highly regulated and protected domestic market. However, construction industries in other Asian economies (such as China) will have to leapfrog in technology, finance and management know-how (e.g. through joint ventures with developed countries' construction companies) before they can become formidable powers in an environment that has become much more global, more de-regulated, more open and more competitive than before.     

Delivering basic infrastructure services to the urban poor: a meta-analysis of the effectiveness of bottom-up approaches

In the provision of basic infrastructure services to the urban poor, limited rigorous evidence on the most effective service delivery approaches is available. This meta-analysis synthesises the evidence on the effectiveness of bottom-up approaches that is characterized by the strong involvement of alternate service providers such as NGO's and CBO's in improving access to electricity, water supply, and sanitation services for the urban poor. Although bottom-up approaches are espoused, we find that they do not have a statistically significant effect. This trend was consistent for all dimensions of access: connectivity, affordability, adequacy, and effort and time. However, our findings also show that bottom-up approaches may be more effective in the water and sanitation sectors than in the electricity sector. When bottom-up approaches involve active participation from the community, the results are significantly positive. Our study suggests that innovations to bottom-up approaches that facilitate active community participation can be an effective way to increase access to basic services among the urban poor.     

Assessing the impact of transitions from centralised to decentralised water solutions on existing infrastructures – Integrated city-scale analysis with VIBe

Traditional urban water management relies on central organised infrastructure, the most important being the drainage network and the water distribution network. To meet upcoming challenges such as climate change, the rapid growth and shrinking of cities and water scarcity, water infrastructure needs to be more flexible, adaptable and sustainable (e.g., sustainable urban drainage systems, SUDS; water sensitive urban design, WSUD; low impact development, LID; best management practice, BMP). The common feature of all solutions is the push from a central solution to a decentralised solution in urban water management. This approach opens up a variety of technical and socio-economic issues, but until now, a comprehensive assessment of the impact has not been made. This absence is most likely attributable to the lack of case studies, and the availability of adequate models is usually limited because of the time- and cost-intensive preparation phase. Thus, the results of the analysis are based on a few cases and can hardly be transferred to other boundary conditions. VIBe (Virtual Infrastructure Benchmarking) is a tool for the stochastic generation of urban water systems at the city scale for case study research. With the generated data sets, an integrated city-scale analysis can be performed. With this approach, we are able to draw conclusions regarding the technical effect of the transition from existing central to decentralised urban water systems. In addition, it is shown how virtual data sets can assist with the model building process. A simple model to predict the shear stress performance due to changes in dry weather flow production is developed and tested.     

Experience with private sector participation in Grenoble,France, and lessons on strengthening public water operations

This article looks at the experience with water supply reform in Grenoble, France, where, starting from 1989, different forms of private sector participation were introduced until the decision was made to revert to municipal operations. Identified risks of private operations include interest-seeking practices and a distribution of resources favourable to service providers, together with the high cost for local communities of exiting unsatisfactory deals. The new municipal operator has been able to improve performance in terms of contained pricing and enhanced investment. This can be explained in relation to the strengthening of accountability networks through advanced public participation and transparency.