Privatization Issues | |
Private Utility Privatization |
Investor-owned water companies provide services to consumers at
virtually the same price as government-owned water companies,
yet the government companies have higher costs, are less efficient
and receive generous state and local tax subsidies.
The United States lags behind a number of countries that have
restructured all or part of their water-delivery systems to make
them more efficient. For example:
Evidence from England suggests private ownership has resulted
in increased capital investment, improved operating efficiencies
and better water quality.
A study that compared private water utilities serving 12 percent
of the state's population with public water systems in two counties
in California found that while tax relief to government water
companies cost $60.4 million, tax exemption didn't result in lower
rates to consumers.
Source: Kathy Neal, et al., "Restructuring America's Water
Industry: Comparing Investor-Owned and Government-Owned Water
Systems," Policy Study No. 200, January 1996, Reason Foundation,
3415 S. Sepulveda Boulevard, #400, Los Angeles, CA 90034, (310)
391-2245.
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