'Water and DG competition', PSIRU, May 2003
At the start of 2002 DG competition commissioned a report into the water sector, which was delivered in December 2002. It has received little publicity or public debate, and was carried out without consultation of major stakeholders, for example trade unions. The report however is of importance because it is intended to support DG Competition's policy of promoting liberalisation and privatisation in the water sector.
This policy was most explicitly stated by Commissioner Bolkestein in a speech in November 2002, where he spoke of the need to introduce market forces into the water sector, and that once the Water Framework Directive is implemented, then water can be treated as a cross-border product and so subject to competition rules. Other recent initiatives have encouraged privatisation and liberalisation in the water sector, including a strategy paper from DG Market, guidelines for accession countries from DG Regional Policy, the GATS demands submitted by DG Trade for the opening of the water sector , and the EU Water Initiative .
This paper offers a critique of the report, which was intended to justify EC intervention to promote liberalisation in water in Europe. However, it fails to offer the evidence or argument needed - it relies largely on generalised arguments; assumes, without demonstrating, the superior performance of private operators, and ignores key features of private interests in this sector, such as the overwhelming dominance of two multinationals who frequently work together. (full report attached)