New Research Finds Water Privatization Raises Rates

New Research Finds Water Privatization Raises Rates

Date: 19 Feb 2016 | posted in: Public Good News, The Public Good | 0 Facebooktwitterredditmail

Food & Water Watch has issued a thoroughly researched report on water privatization. A survey of more than 200 public and private water systems found that private suppliers charge significantly more than public systems. The 10 largest initiatives increased water rates  on average 15 percent a year after privatization. After local governments brought water systems back in-house their rates, on average, were 21 percent cheaper.

Many cities privatize their water systems to generate a much-needed quick infusion of revenue.  But the report offers compelling evidence that this decision is penny-wise and pound-foolish. “The funding that a city receives by selling or leasing its water system is effectively an expensive loan that a water company will recover from consumers through water bills. A Food & Water Watch analysis estimated that the typical interest rate on this loan would be 11 percent. This is 56 percent more expensive than public financing through a typical municipal revenue bond.”

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David Morris is co-founder of the Institute for Local Self-Reliance and directs its initiative on The Public Good. He is the author of the New City States, Seeing the Light, and three other non-fiction books. His essays on public policy are regularly published by On the Commons, Alternet, Common Dreams and the Huffington Post. Connect David on twitter or email dmorris(at) Sign-up for our monthly Public Good Newsletter

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