Bailout terms force water utility sale in Greece, Portugal

Criticism of the bailout conditions set for Greece and Portugal by the European Commission, European Central Bank and International Monetary Fund troika call for shedding state-owned companies, including public utilities, as a condition for billions of euros in funds to stave off insolvency.

Greece came under renewed pressure this week from Eurozone finance ministers to approve a fiscal overhaul in order to receive €31.2 billion in an aid installment that is already two months overdue. German Chancellor Angela Merkel made a one-day visit to Athens on Tuesday to give cautious support to the austerity plan backed by her Greek counterpart, Antonis Samaras.

David Hall, who heads the Public Services International Research Unit at the University of Greenwich, says water privatisation is a mistake both politically and operationally, leading to higher prices and disgruntled customers.

In terms of operating efficiency, there is really no visible difference between public and private sectors,” Hall said in a telephone interview, adding “there is no evidence at all to support the widely asserted view that the private sector is more efficient.”

“There is actually very strong public resistance to the idea of water privatisation, and indeed even stronger resistance to the experience of it,” he said, noting that some city and regional governments have reversed course and resumed control over water services.

Greece hopes to raise €3.5 billion from the privatisation of energy and utility companies, while efforts to sell state and locally owned water services are gaining speed in Portugal and Spain”…READ MORE