The revised water supply act came into effect last October: it prescribes ‘a concession method’ that allows municipalities, keeping the right of possession of water infrastructure as it is, to sell out the right of management to a private company. Miyagi Prefecture has engaged in privatizing facilities, which is one of first trials. Privatization of water supply system in Japan is defiance at the world trend.

WORLD TREND IS RETURNING TO PUBLIC OWNERSHIP

Facilities are aging

Municipalities are responsible for clean drinking water supply, except for big cities. The service was provided publicly up to 50% around the year 1960, 90% in the decade of 1980, and now, the ratio is almost 100%.

On the other hand, however, except for metropolitan cities, management bases are weak and the number of personnel stationed in charge counts three per 10 thousand residents on the average in most of the municipalities. In the 1970s infrastructure of water supply was intensely developed, and expected lifetime has come in terms of tubes. Many local governments face difficulties in financial allocation to renew facilities as well as succession of technical assets to new generations.

Under these circumstances debates had started to overcome privation and enhance running basis. Amendment of the water act was pursued to seek for broader links of municipalities. Nevertheless, the Diet’s extraordinary session approved two years ago to revise the law to allow collaborative management of the public and private sectors. This is the so-called concession method under which the right of management can be transferred to a business entity.

Municipalities’ responses 

The first to act along the decision was the Governor of Miyagi Prefecture Murai Yoshihiro, a self-claimed promoter of the government’s policy ‘to develop state’s affairs by efforts of local communities’. The prefectural assembly approved to revise the code in favor of the majority, which will take effect in April, 2022.

Governor Murai told that a sum approximately 24.7 billion Yen, which is equivalent to 7% of all expenditure necessary for coming 20 Years, could be saved through more efficient management and that a pace of rising water rate could be driven down.

In Hamamatsu City, Shizuoka Prefecture, sewage water service is provided by a special-purpose company, under which Japanese enterprises cooperate with a French transnational company, Veolia Environnement S.A. The service started in April, 2019. The city authority was intended to supply drinking water, too, in this method, but inhabitants oppose the plan. It is suspended.

Meanwhile, Kagawa Prefecture, Shikoku Island, and Iwate Prefecture in the northeastern region of the Honshu Island, have a plan to work together with neighboring prefectures to tackle with the expiring life of water tubes.

Now in the world returning to public ownership of water services is a growing trend. Two of the three water major firms, which cover 80% of the world’s water resources management, are headquartered in Paris, namely Veolia and GDF Suez. But in the France’s capital city water services came back to public ownership in 2010.

The right of ownership of water infrastructure is public, belonging to municipalities which are responsible for investments in facilities. An operational wing is entrusted to a private firm, but a municipality is responsible for the unpleasant incident, if it happens.

Profit-first behaviors deteriorate job quality

Once the private sector is in charge of management and operation of water services for decades, public authorities totally lose operational capabilities. Consequently, management becomes opaque, which leads to embezzlement of public funds and a raise in service rate.

According to reports, a drive to public ownership goes in the UK and Germany (Berlin) as well as in other 235 cities of 37 countries carried out in the past 15 years. Why did they back again to public possession? Consequences of privatization of water utilities are worsened services and water quality as it seeks for the biggest possible profit.

Protest movements of workers and citizens are essential here.

February 11, 2020