García-Valiñas, Maria A., Gonzales, Francisco, Suarez, Javier and Zaporozhets, Vera (2015) Private Sector Involvement in Water Services: Theoretical Foundations and Empirical Evidence. TSE Working Paper, n. 15-590, Toulouse

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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.

Item Type: Monograph (Working Paper)
Language: English
Date: July 2015
Place of Publication: Toulouse
Uncontrolled Keywords: Water services, Public-private partnerships, Auctioning, Game theory, Water prices
JEL Classification: L33 - Comparison of Public and Private Enterprises; Privatization; Contracting Out
L95 - Gas Utilities; Pipelines; Water Utilities
Q25 - Water
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 21 Sep 2015 13:08
Last Modified: 29 Nov 2021 14:55
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