access, distribution and maintenance of clean water is a challenging task for developing countries. Efforts to supply clean water have in the past fallen short, hence prompting the World Bank to advocate in privatization. From a theoretical point of view, privatization has the advantages of corporate efficiency with management that is responsible on behalf of the national government. In the Philippines, water privatization has increased the people who can access to water from 58 to 84 percent, but the prices of water have increased five times.
Based on more than half of the human population, they will be living in the urban areas a year from now. By 2030, this population is expected to increase to almost five billion. One percent of the water on earth I suitable for human consumption, and this water are not freely accessible to human since it is frozen in the ice caps. The distribution and supply of water is therefore, key to a development that is successful and plays a key role in urbanization globally. In the world lived in, the developed nations have made significant investments in the water institutions, infrastructure, and management capacities. This kind of investment has led to improvement in public health, hence laid the foundation of steady economic growth and at the same time stable social conditions.
Providing clean water services are quite costly. The massive infrastructure investments in water purification, piping, waste water treatment and pumps are necessary. The general revenues collected from tap water are not able to cover all these costs. Developing countries have difficulties in recovering fall and costs far short of short recover. In addition, water systems in this country are particularly inefficient. Loss of water due to theft and leakage ranges between 40 to 60 percent in the developing nations as compared to 10 and 20 percent in the developed nations because they are far more efficient managed.
For stability and economic progress to be achieved, it is very important for the developing countries to address this issue of water sanitation and provision by making sure that they invest more in infrastructure, establish regulatory frameworks, solid operational principles and fine tuning economic instruments. Fallen short, unable to, or unwilling to finance these investments, the government in the developing nations has been unable to meet the public need for affordable and adequate water and sanitation services. However, public water privatization has worked as a possible alternative.
Water privatization proponents do believe that the challenges can be lucrative business opportunities. The world Bank since 1980’s has advocated actively for private sector participation in public water works, by reasoning that the private sector is well equipped than the government that deal with delivering clean water services to the public. This notion proved spurred and popular water works privatization projects in both the developed and developing nations.
Although the projects of the public-private involvement do differ, fundamental goals of privatization efforts are usually standard across the board. These theme include the improvement of water and sanitation services to every citizen, meeting or exceeding the water quality standards and expanding coverage area set forth by the World Health Organization. On eof the main difference between the private and public water project sectors is the profit motives, which in most cases; do conflict with the idea of equal distribution of this basic necessity of all citizens. The end results of water privatization projects have varied. In other incidences, privatization has increased the rates of deteriorating services and corruption; and loss local operational control. Others do improve successfully on both reliability and service coverage. However, it is quite important to note that the increase in rate does not always mean that they are negative.
Reasonable rate increases always reflect on the true cost of water and as a result ensuring that low tariffs are removed by the government and subsidized by tax dollars. However, water delivery process that is inferior should not accompany these hikes of prices. The prices should also not increase over a short period of time.
Due to this mixed record, it is not quite clear that privatization is the correct prescription to sort out water woes in developing nations. Is it that reasonable to assume that the private companies are able to generate more sufficient profits so as to cover the operating costs and give a feasible revenue base to finance system expansion? What are the opportunities presented by water privatization?
On a theoretical point of view, water privatization presents an opportunity that improves domestic water supplying the absence of powerful local governments. The main advantage of private companies is that they offer expertise and resources. Although these partnerships may be successful, there are also examples of failed partnerships. For a successful fusion of private and public entities requires careful arrangement of clear goals, responsibilities, and expectations for government and private organizations, and also transparency operations. Water privatization is a very delicate endeavor that needs careful and purposeful balancing of interests. It is also delicate because it exposes the provider and the consumer to market focus that are out of control.
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