01.06.2021
In France, the public sector wants to take water distribution back
In the late 18th the efficiency of the municipalities in managing water was put into question. Progress in water management had become crucial due to the increasing requirements around hygiene, medicine, and drinking water, for which local administrations were responsible. Due to this and the growing water demand, the creation of the March 22, 1890 law on intercommunality allowed municipalities to mobilize and fulfill obligations that they could not face alone. At the time, the private sector was more efficient: since they wanted their businesses to grow, they worked on improving their services and attracting more clients. Simultaneously, the public sector didn’t have as high of standards as it should, so it wasn’t as committed as the private sector to deliver proper services.
Water was privatized in the second half of the 19th century. Facing growing market demands, other municipalities chose to regroup and entrust private companies with water management. From there, private companies and communal unions began to coexist.
The management of water in France
The delegation system was implemented as the French model of water management in 80% of the country. This sector has three main companies: Veolia, Suez, and Saur.
In 2000, the return to public water management began to be considered, but this process will not be achieved before 2010, the year the City of Paris also departs from the private sector. According to public water services operators, this departure was due to various cases of fraud and poor infrastructure maintenance.
Each year, the public sector had to produce different documents that specified the price and quality of their water distribution services. The public sector had become more transparent than its private counterpart. In addition, there was a lot of controversy regarding the price differences between the two, with the private sector having higher fixed costs and a lower variable cost margin. Furthermore, since the public sector isn’t geared towards profit, when it had a surplus, it decreased water prices the next year or invested in public interest matters.Last December, three areas of the Grand Paris decided to leave Sedif, the union between Veolia, Syndicat des eaux d’Ile-de-France and Île-de-France residents. That decision was due to a significant drop in the number of clients for Veolia.
The parting resulted from the lack of competition caused by their natural monopoly status, as there are only three companies (mentioned above) in charge of water distribution. Moreover, the greatest part of the population considers water to be a fundamental right for human beings and as such, should not be subjected to market forces, susceptible to being affected by the laws of the market, where profit can override common interests and lead to higher prices. This opinion is reaffirmed by the European Union, which elevated water to the rank of common good.
A parliamentary inquiry into the control of water resources by private companies was launched because of a history of favouritism and corruption. The number of privately operated water services has fallen from 70% to 60% in just 15 years, and is still falling. The newspaper “le Monde” has also reported that Veolia had been sentenced twice for illegal water cuts. In France, cutting off water for non-payment has been prohibited since March 2013. Due to the growing water stress in the Region of Brussels-Capital, Belgium will adopt, in 2022, a law that prohibits water cuts to domestic users.
The new public water company in France
Eau de Paris, the new public water management operator in Paris, has been awarded multiple times for its undeniable achievements since 2010 that included low water bills. Now, prices are lower than they were before the remunicipalisation. Eau de Paris has also introduced strong social innovations that facilitate access to water to poorer households, homeless people and refugees.
For the public sector, the public interest matters most. The sector has a long-term plan for public water interests: funding infrastructures, acting to preserve water resources… For example,in Montpellier, the public water management operator had a surplus of 40%, and the community decided to lower bills by 10% and invest the remaining 30% in pipelines.
Things are very different in the private sector. The cities of Nîmes (Saur) and in Évreux (Saur) have lost respectively 30% and 40% of produced water in the subsoil. Capesterre-Belle-Eau (Veolia) has recorded 70% of leaks.
In 2010, the UN General Assembly recognised access to quality water and sanitation as a human right. In 2008, the United Nations Economic Commission for Europe (UNECE) estimated that over 100 million Europeans lacked safe drinking water. According to Solidarité Eau Europe, “Even today, 5% of Europeans still do not have access to safe drinking water and 10% do not have access to sanitation.”
In essence, beyond its economic benefits, we must take into account that water is essential to all of us. For that reason, it is vital that the public sector sets higher compulsory standards to adhere to, and monitor the best practices for themselves and private companies. That way, we would ensure that whatever organisation is in charge of water management is going to do what is best for the public interest: motivating private companies and the public sector to reach environmental goals, taking social initiatives, supporting transparency, and encouraging excellent practices.
In Belgium, each region is responsible for managing water. AQUABRU, AQUAWAL and AQUAFLANDERS manage Brussels-Capital, Wallonia and Flanders.
Want to know more about water efficiency and improved public services regarding water? Check our website here.
Sources:
Les écarts de prix de l’eau en France entre les secteurs privé et public (Vanessa Valero), june 2015
Université Paris-Dauphine, 13rd june 2019
Métro politiques (Claire Lévy-Vroelant), 26th june 2017
Cash investigation – L’eau : scandale dans nos tuyaux (Intégrale)