Privatization: Lessons from Argentina

Abstract

In the 1990s Argentina was the testing ground for the privatization of water and sanitation services by international consortia. Touted as the solution to economic woes and poor service, three major concession contracts, Aguas Argentinas S.A., in the Buenos Aires Metropolitan Region-the largest concession in the world-and Aguas del Aconquija in Tucumán and Azurix in the province of Buenos Aires together became a global reference model both for management and financing. Yet all three were terminated prematurely, with companies and the government each blaming the other. A detailed analysis of external and internal factors delves into the complex dynamics at work in each of the privatizations to explain what led to the failure of the model.