Water services management has become a key issue as urban water supply is considered a service of general interest in the European Union (EU, 2001). In this context, public-private partnerships (PPP) have emerged as a usual way of local water services provision. This paper contributes to analyze the effects and consequences of PPP in the management of water resources. First of all, we develop a theoretical framework to show the effects of water services contracting-out on water prices. Second, we estimate the model using a sample of Spanish municipal water services recently privatized. Our findings support that, in a context of limited resources, local governments are using public-private partnerships in order to get additional fundings to reduce their indebt- ness levels. Moreover, the fact of setting a high reservation price as a way to guarantee a minimum amount of resources has had consequences in terms of water price increases after water services privatization.
Water services; Public-private partnerships; Auctioning; Game theory; Water prices;
- L33: Comparison of Public and Private Enterprises and Nonprofit Institutions • Privatization • Contracting Out
- L95: Gas Utilities • Pipelines • Water Utilities
- Q25: Water
Maria A. García-Valiñas, Francisco Gonzales, Javier Suarez et Vera Zaporozhets, « Private Sector Involvement in Water Services: Theoretical Foundations and Empirical Evidence », TSE Working Paper, n° 15-590, juillet 2015.
TSE Working Paper, n° 15-590, juillet 2015