Revisiting the comparison of public and private water service provision: An empirical study in Portugal

Abstract

The controversy between the performance of public and private ownership of water and wastewater services is common worldwide. In most cases, this discussion is biased due to ideological issues or insufficiency or inconsistency of information. This study aims to compare the performance of private water utilities with that of public water utilities, using rich, robust, and audited information from Portuguese operators. The benchmarking exercise focuses on three distinct areas, namely, the efficiency and effectiveness of the investments made, the quality of service provided, and the tariffs and prices implemented. From the analysis performed, it is concluded that, on average, the performance of private water utilities exceeds that of public water utilities, and prejudice in most cases is unjustified regarding private ownership. Anyway, water, as an essential service, should always be provided, regardless of utility ownership.