Remunicipalisation commonly refers to the return of previously privatised water supply and sanitation services to municipal authorities. It also encompasses regional or national initiatives.
Overview The concept is broadly used to cover:
Changes from private to wholly public ownership of assets or companies. Changes from outsourcing (or contracting-out) of services to direct provision by a public authority. Replacement of concessions or lease contracts by public management. Remunicipalisation happens at many levels:
Municipal and community levels (such as in France or the US), including inter-municipal groups or associations. Regional levels (as in the Buenos Aires and Santa Fe provinces of Argentina). National levels (such as in Malaysia). At least 234 cases of water remunicipalisation in 37 countries were recorded between 2000 and March 2015, including high profile cases in Europe, the Americas, Asia and Africa. By then, the total number of people served by remunicipalised water services had grown to exceed 100 million. Cases are more concentrated in high-income countries, where 183 remunicipalisations took place in the last 15 years, compared to 51 cases in middle- and low-income countries. Two countries, France with 94 cases and the US with 58 cases, account for the greatest majority of cases in high-income countries. Analysts also signal that the pace of remunicipalisation has doubled in the 2010-2015 period compared with the first decade of the millennium.
Akteure Very often, utility managers, bureaucrats and politicians are the ones to recognise problems with water privatisation. Labour involvement is critical for the success of remunicipalisation because frontline workers have important insights into operational challenges and opportunities. Civil society movements have proven key to promoting remunicipalisation as a policy option, as well framing it as an opportunity to build socially desirable and environmentally sustainable public water models to benefit present and future generations. Researchers have been playing a role in international exchange of expertise on how to achieve transparent, accountable and effective public water management following remunicipalisation.
Reasons for remunicipalisation Direct experience with common problems of private water management has persuaded many communities and policy makers that the public sector is better placed to provide quality services to citizens and promote the human right to water. These problems with water privatisation include:
Poor performance of private companies (e.g. in Dar es Salaam, Accra, Maputo). Under-investment (e.g. Berlin, Buenos Aires). Disputes over operational costs and price increases (e.g. Almaty, Maputo, Indianapolis), Soaring water bills (e.g. Berlin, Kuala Lumpur). Difficulties in monitoring private operators (e.g. Atlanta). Lack of financial transparency (e.g. Grenoble, Paris, Berlin). Workforce cuts and poor service quality (e.g. Atlanta, Indianapolis). At the global level, 92 of the 234 cases of remunicipalisation recorded followed contractual termination, while 69 cases were non-renewals of private contracts after expiry. In the great majority of cases private contracts proved to be unsustainable. Local governments, then, opted to remunicipalise even though they knew that they may have to pay compensation, because they evaluated that it would be less costly than continuing with privatisation in the long run. David McDonald puts remunicipalisation debates in a historical perspective: “Most contemporary water services around the world started as private enterprises (as early as the mid-1800s), but as the inefficiency of private sector providers became increasingly evident, and as private companies denied water services to the poor (contributing to outbreaks of cholera and other illnesses), local governments began to municipalise these services for the first time.”
Benefits Financially, there have been direct savings from remunicipalisation for most of the municipalities – around €35 million in the first year in Paris, and about C$6 million in the first three years of remunicipalisation in Hamilton, Ontario – some of which was realised immediately when profit-taking fees for private management were removed. As a result, some new public operators significantly increased investments in the water systems, such as in Grenoble (France), Buenos Aires (Argentina) and Arenys de Munt (Spain). In turn, such longer term infrastructure development helps avoid future cost burdens associated with the types of health and environmental hazards experienced under privatisation, much of which was borne by the state in the past. Further, the social benefits of water remunicipalisation have been visible in Arenys de Munt (Spain), where the local government and the new public operator restructured the tariff system to guarantee equitable access to water for low-income households. In Buenos Aires, Argentina, achieving universal access to water became a top priority for the new public operator AySA. The utility increased investment in infrastructure dramatically, and extended training programmes for employees who work with poor neighbourhood residents to expand services. Remunicipalisation also allows strengthening accountability and transparency. In Paris and Grenoble (France), the new public water operators have introduced advanced forms of public participation. This allows civil society to partake in decisions on the management of this basic public service, and to make operations responsive to the interests of local communities. With remunicipalisation, the perspective often changes from a narrow, profit-oriented one to broader social and political objectives. Many remunicipalised water entities have demonstrated their ability to think beyond their sector to be more holistic in their planning and action. Intergovernmental coordination is often essential on issues such as watershed management for example. Research on Buenos Aires and Hamilton has shown that public water employees became more engaged in the planning and operation of water services than they were in the past and more committed to public water services beyond the narrow financial and technocratic concerns that dominate private water management.
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