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Water services, such as the domination of the market by a few multinational

enterprises and higher prices to water users (IWA & UNEP, 2002).

Thus, water is contested resource. But water is also often considered as a common

pool resource because it is essential for all aspect of live to achieve a minimum

standard of health and to undertaking productive activities (Mehta, 2002). Access to

water is fundamental to survival and critical for reducing the prevalence of many

water related diseases (Gleck et al.,2002). Therefore, water is just not basic needs.

Access to safe and adequate water is a human right based on the criteria established

in the 1948 United Declaration of Human Rights.

The nature of water as a human right has several fundamental consequences. Most

important amongst these is that national governments have an obligation topromote and protect the right to water so that it is not reduced to a more privilege

of a left over subject to the market (CIEL, 2003). Consequently allocation of water

should benefit the poor at an affordable price (Mehta, 2002).

Water has also been treated traditionally as a natural right a right arising out of

human nature historic conditions, basic needs or notions of justice. But the water

rights have now been deterioriated. Many large water companies are taking over

the public water utilities under the imposed policy of public-private partnership of

the World Bank and other International Financial Institutions (IFIs). Water might

soon become inaccessible and unaffordable for larger parts of the population due tothe stimulation of the full cost recovery principles and elimination of subsidies

(Shiva, 2002).

3.4 Models of Privatisation

Privatisatiion can be partial, leading to so-called public-private partnership, or

complete, leading to the total elimination of government responsibility for water

system (divestiture). At a larger scale, private water companies build, own and

operate water system and at the smallest scale, private water vendors and sales of

water at small kiosk and shops provide many individuals and families with basic

water supplies (Gleck et al.,2002).

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Gleck et al. (2002) in his book the New Economy of Water illustrated several

different models of privatisation, i.e. public water corporations and corporatization,

service and leasing contracts, concession models and fully private businesses. Those

various private models are very much different from a fully public water system,

which means that the decisions and funds are provided by public. Figure 3.1

illustrates models of public and private water providers characterized by the public

and private nature of the assets and management.

Divestiture or direct involvement of the private sector has put water under private

management and established water as a fully private commodity, It is relatively

recent phenomenon and the only existing completed major divestiture of drinking

water supply and sanitation services is in England and Wales. Full privatisation under

competitivw pressure is expected to increase efficiency, which will benefit the

consumers. However, it is believed that there are some possible shortcomings of

divestiture models such as the risk for government of conflict of interest problems.

Private ownership of water eliminates the financing and tax advantages of public

management and prices often increase to cover true costs. The advantages of pure

form of privatisation may only be realized, if it is coupled with integrated regulations

(Becher, 1999).

In some cases, public water utilities may award private companies the

responsibilities for operation and maintenance activities, general service contracts,

and control over management of facilities, but ownership continues to reside in

public hands (Gleck et al.,2002). The contract models have many variations, with

various types and degrees of private sector involvement. A long-term contract,

usually called full concession5

may last for 25-50 years and a short-term contract or

partial concession may last for 10 15 years (e.g. management and lease contract).

Variations of full concession include Bulid-Operate-Transfer (BOT), Bulid-Operate-

Train-Transfer (BOTT), Build-Own-Operate-Transfer (BOOT), Bulid-Operate-Own

(BOO) and Rehabilitate-Operate-Transfer (ROT). Table 3.1 describes the types of

contracts in the water and sanitation sector.

5Agreement in which a public authority awards to a private company, usually

through a competitive qualification process, a fixed-term rigt to provide a service

with characteristics of a monopoly within a defined geographical area.