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Sample Research Paper on Privatization of Water in the United States

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Sample Research Paper on Privatization of Water in the United States

There has been growing concern over the last two decades in the United States with regard to the quality of water that Americans get from their taps. These concerns have been necessitated by the safety of water and services used in the supply from the source to the end users (consumers). Most notably, the incidence where there was an outbreak of Cryptosporidium in Milwaukee in 1993 that killed over 50 people and left over 400,000 hospitalized pointing to the deficit in standards of water quality flowing into people’s homes. There are various factors which have contributed to the decline of water quality and ought to be addressed for the health and safety of the citizens. The deteriorating factors affecting water quality can mostly be attributed to the poor and lack of all the water infrastructures that should be in place to enhance the accessibility of clean and reliable drinking water (Craig 3).

Water sector has mostly been left in the hands of the government and private investors have been locked out for decades due to the sensitivity of the resource. The resources allocated by the government in the water sector and the investment plan have been inadequate or underutilized. The public water system requires much more than what the government has been able to provide hence compromising on quality at all levels. The current infrastructural systems in place in the water sectors might even be more than a century old and need to repair and replace with technological friendly and adaptive facilities has become inevitable. The overhaul may be an expensive affair but constant repairs and maintenance are not only essential but also paramount to ensure quality is achieved and uphold (Olson 1).

The current society and generation have come to favor bottled water industrial purified and the companies offering the services have ever been increasing though steadily. The irony is, natural or tap water has remained readily available though the trend has shifted towards bottled water. In addition, tap water has been highly regulated by the government and other agencies in charge while bottled water has been sold all over. Various studies have been conducted in this field including the Natural Resource Defense Council (NRDC) in 1999 which suggested that bottled water is not regulated by government agencies and are necessarily not required to meet various federal regulatory requirements especially those of National Protection Agency. Major regulations deal with water safety and quality as well as quality for water channeled to people’s taps (U.S. Environmental Protection Agency 1).

The government has taken essential steps in ensuring challenges of the provision of quality and clean water is achieved has embarked on privatization process for the water infrastructure services. Various local and state governments have preferred removing regulatory and legal restrictions with regard to water infrastructural services. This process has liberalized the sector and private developers have come in to improve and construct newly water infrastructural services to increase water provision and quality. This has been the preferred process by various governments rather than the provision of public funds and improvement of the existing infrastructures. These steps have encouraged privately owned utilities to be directed in the water sector (Craig 6)

These efforts witnessed increased participation of privately owned utilities in the provision of water services increase tremendously. In addition, investment in the water sector and its related infrastructures are significantly increased from the 1990s up to date. These trends are not only being witnessed in the developed countries. The developing, middle income and low-income economies have increasingly experienced a private investment in the water sector especially from the powerful international financial institutions which enjoin privatization of the water sector as a condition to access their financial aid. The following discussion shall concentrate on the water privatization in the United States and consider the States which have privatized their water systems. Discussion on results of water privatization shall also be considered. Finally, steps which are undertaken and can be considered to improve on water quality from the private perspective shall also be discussed with New York State used as a case study or point of reference (Stuart 43).

Historical Background

The concept of water privatization in the United States has a historical background where the exercises are driven by historical actions (or inactions). Provision of safe and quality drinking water was a concept which has been in existence since the civilization era. Safe and quality drinking water, as well as wastewater disposal facilities, was a concept heavily emphasized by Mesopotamia, Crete, Egypt, India, Greece, and Pakistan. These systems were highly emphasized during the reign of the Roman Empire. These practices, however, declined during the era of “The Dark Ages” though practiced at small scale levels (Craig 11).

Cities witnessed overcrowding and limited social services like water during the industrial revolution in the late nineteenth century when the world’s population was estimated to be one billion people. There were public health concerns which came about as a result of the population increase which dictated new ways of safe and quality water supply had to be implemented. Public water supplies and systems were increased as a result of increased demand for water in industrial, commercial and residential places. According to Craig (2013), private water companies emerged during the periods of Renaissance. However, private water entrepreneurs had started trading in development of water infrastructure and systems on large scale basis during the late nineteenth century in the United States and Europe. However, the provision of waste management and sewerage services, as well as drainage facilities, remained solely as the responsibility of the local government (Stuart 43)

Public Water Systems in the United States

The first public water works were initiated by Hans Christopher Christiansen in 1755 at Bethlehem, Pennsylvania. It was until 1772 when the State of Rhode Island-chartered two private water delivery companies to operate in Providence (Hudson Institute, 1999). The Other States like New York utilized wells initially as their main source of water especially when the population was small. However, with an increase in population, these wells became fouled and an alternative was inevitable. These challenges necessitated Aaron Burr New York State Assemblyman to introduce legislation in 1799 creating the Manhattan Company as a source of water supply as a private company departing from the traditional State and public supply systems (Harold and Paul 23).

The need for water usage grew large due to demand of water for fighting fires which were rampant during the time, commercial, industrial and residential use, the local government had to develop new strategies for meeting the demand. Provision of water services was not hampered by some countries considering water as a vehicle for spreading cholera and typhoid, the need was still to be addressed. Such challenges never hindered the expansion of water infrastructures which rose to 83 by 1850 in the United States 50 of which were privately owned (Hail and Dietrich, 2000). The need for clean, quality and reliable water systems continued to soar and demand increased; consequently, the number of private and public water companies increased to 3,000 cumulatively at the beginning of the twentieth century (Olson 1)

Provision of water supply was becoming more the responsibility of the private sector players and numerous States allowed private entrepreneurs to take control. Baltimore allowed the formation of The Baltimore Company in 1805 while Boston provided private companies with a lease to operate the wells and supply water to residents and industries. Later The Aqueduct Corporation was created to serve water from small ponds within the city for efficiency and manageability purposes (Water Science and Technology Board 1).

               

 

 

 

 

 

 

 

 

Source: (Water Science and Technology Board 1)

The figure above demonstrates the increasing popularity of how private water companies were introduced in various States in America between 1800 and year 1890. Privatization of water services gained momentum during these periods and establishment of private water company were almost equal to the government established ones. From the above diagram, a large number of private companies to venture in the provision of water services started in 1860 majorly motivated by the increased demand as a result of increased population growth. Industrialization also increased demand for water services and the government through public water systems could not adequately handle the demand hence need for water privatization for reliability and efficiency became a necessity (Water Science and Technology Board 1).

Cases of Water Privatization

The United States is arguably the best country with the best privatization system especially in the provision of water services. The Various States have entered into a partnership with private entities to run and manage their water infrastructures and system for a specified period of time. Atlanta Georgia in 1999 entered into a 20-year contract with United Water Resources Inc. to provide and run their drinking water systems. However, their contract was terminated in 2003 as a result of numerous citizen complained of poor services and substandard quality of water. The case with Detroit State never materialized due to corrupt government officials colluding private companies to award them a contract in the supply of water services. The deal was compromised since the beginning and doubts were high as to whether it could be beneficial to the citizens. These activities resulted in the indictment of public officials who were involved in the deal crippling the operations. Leaders have also questioned the Detroit Water and Sewerage Department for frequent rate increases for services while the provisions were substandard. In addition, the company’s contracting practices were questionable hence making it difficult to deliver services as expected (Harold and Paul 24).

The privatization process in Emmaus, Pennsylvania never materialized after thorough consultation, lobbying, protests and demonstrations. The deal to privatize the essential commodities and services attracted controversy and finally dropped. In Indianapolis, the water and sewerage services were transferred to a charitable organization known as Citizens Energy Group at an estimated cost of $1.9 billion. In addition to the deal, the city also transferred all its debts, money it used to upgrade and rehabilitate the transportation systems in the city, remove abandoned homes and improvement of parks. This was one of the benefits of privatization of water services since it leaves the government with finances to improve other social public utilities while services are provided efficiently and of quality (Harold and Paul 26)

These water utilities held by government and transferred to private firms ought to be analyzed carefully with a thorough feasibility study to ensure the viability of the project is achieved. Like the case of Detroit, due diligence ought to have been followed to avoid complicity and corrupt dealing from being executed. Such are activities which have discouraged other interested States like New York and California. Their water utility infrastructures are so huge that any mistake in the execution could be catastrophic. Therefore, privatization should be executed in an open manner to ensure the purpose is achieved. Only then will such strong and immense benefits be realized when the utilities are used for the better good.         

Results of Water Privatization

Privatization of any public utility has its own ups and downs and without thorough consideration before implementation may result in serious and detrimental ramifications. Therefore, before any privatization especially in sectors with huge public interest like water, a feasibility study is important to determine the pros and cons to the government, private entrepreneurs, and the public. Such a move ought to be guided by the greater public good and benefits it would accrue to the general population. There have been numerous criticisms to the privatization of water systems in the United States and elsewhere across the world. Private entrepreneurs are profit guided and will not provide equitable access to facilities and services to all citizens. When infrastructural systems are developed, those areas which are unable to pay for the services may not get the essential services despite it’s a basic commodity (Harold and Paul 26)

Secondly, citizens have complained of slow responsiveness, false claims by these companies, rate hikes and impacts on water resources like wells as the main reason water privatization is a disaster. Major water towers are always exploited by the private investors whose main agenda is only profits. The sustainability of such resources is at the bottom of their concerns since they calculate the cost of investments and capital expenditure with little if any regard to resource depletion, degradation and climate change. Private companies are notoriously known for hiking charges at will without notice or deal process of the law hence inconveniencing users causing unbearable damages. According to Warner (2007), water privatization does not necessarily result to cost saving to the State government and only disrupts equality in the provision of such services to the citizens. Even though private companies are compelled by profits hence tends to work efficiently to gain from the marginal utility of every service they offer, their profit drive distorts the very core objective of them being in such kind of a sector (Harold and Paul 27).

Finally, private entrepreneurs have little incentives to undertake long-term infrastructural improvements and maintenance which may extend beyond their contract terms. This is with great consequences to the end user a fact which could be avoided if the government was in charge of such provisions. There are other critics of water privatization exercises who considers such as a security threat to the nation. The critical dependence of the American population of such essential commodity and infrastructures at the hands of individuals some which are foreign owned not only possess a great danger to Americans life’s but also the vulnerability is heightened to scarcity, conflict, international harm or even terrorism. When privatization of such sensitive public utility is left in total control of private hands, far-reaching, savvy and strong government oversight is not an option (Water Science and Technology Board 1).

Water privatization, on the other hand, has enormous benefits, especially when left in the hands of more than one private company who are tasked with service provision responsibilities. Privatization of the water sector promotes decentralization of government services which is more cost effective and efficient. Water users often tend to underutilize it mostly because it is provided in plenty especially by the government at the same time underpriced. In the hands of private investors, pricing would encourage people to minimize wastage and conserve water resources. When water resources are priced according to market rates, conservation will be the virtue and the resources raised would improve technological and infrastructural systems. In support of water privatization, these private entities make significant and sizeable contribution to the government inform of taxes which goes a long way in improving other services like road networks and schools. Finally, private companies operating water infrastructures and systems provide employment opportunities to the locals hence reduces unemployment rates in the areas they operate. In addition, these companies engage corporate social responsibilities which are essential to the welfare of the community like provision of health care services, environmental conservation, and climate change mitigation measures.

Conclusion

Water is an essential human component which survival would be difficult and near impossible without. Therefore, uttermost care and consideration ought to be undertaken to ensure such a sensitive public utility like water is handled with care considering the nature of its vulnerability. Water whether private or public ought to fulfill certain goals and objectives. First, public safety and health concerns should be addressed through the provision of reliable and quality drinking and firefighting water. These services ought to be provided at reasonable prices affordable by virtually all citizens since water is a basic human commodity. Water utilities as earlier observed should strive to ensure environmental conservation and provision of employment opportunities to the surrounding communities where they undertake their operations. Water especially drinking should never compromise on quality and standard measures should at all times be adhered to. The provision of money and capital to finance such mega water utilities should never be used as a scapegoat by various organizations and other players to compromise on quality. While considering on privatization of water services, various factors ought to be considered to ensure optimal benefits are achieved and the intended purpose is realized. The public safety, quality and water affordability is the responsibility of the State government and when they delegate the responsibility to a private entity, they should be convinced certain essential parameters are adhered to and fulfilled. Private companies are driven by profit margins rather that public welfare and goodwill. They are more likely to engage in activities geared towards realizing and achieving their goals as opposed to public good. When such a move in undertaken, the intended purpose of public welfare is negated and private firms are only concerned with profit maximization. In such a case, privatization of water systems goes against the public good and should not be approved nor undertaken.                      


Works Cited

Craig, Anthony Arnold. Water Privatization Trends in the United States: Human Rights, National Security, and Public Stewardship, Francis & Sons, 2014. Print.

Harold, Mooney and Paul, Ehrlich. Ecosystem Services: A Fragmentary History, in Nature’s Services: Societal Dependence On Natural Ecosystems. Routledge. 2011. Print.  

Olson, Erik. “Bottled Water: Pure Drink or Pure Hype,” Natural Resources Defense Council, 1999, 

Stuart, Alix Nyberg. “Water for Profit.” CFO Magazine. 2013. Print.

U.S. Environmental Protection Agency. “Liquid Assets 2000: Americans Pay for Dirty Water.” 2000, 

U.S. Water News Online. “Suez Lyonnaise Des Eaux completes acquisition of United Water. Resources.”2009,

Water Science and Technology Board. “Privatization of Water Services in the United States: An Assessment of Issues and Experience,” National Academy of Sciences. 2002, 

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