Nationalisation
Corinne Waelti, seecon international gmbh
Nationalisation
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The contents of the SSWM Toolbox reflect the opinions of the respective authors and not necessarily the official opinion of the funding or
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Depending on the initial situations and respective local circumstances, there is no guarantee that single measures described in the toolbox
will make the local water and sanitation system more sustainable. The main aim of the SSWM Toolbox is to be a reference tool to provide
ideas for improving the local water and sanitation situation in a sustainable manner. Results depend largely on the respective situation
and the implementation and combination of the measures described. An in-depth analysis of respective advantages and disadvantages and
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Nationalisation
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Contents
1. Introduction
2. Implementation
3. Outcomes
4. Case Example
3. Conclusion
4. References
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1. Introduction
How to Improve and Expand Public Sanitation and Water Services?
•
•
•
•
No connection to the water or sanitation system
No constant supply
Poor drinking water quality
No proper wastewater treatment
Problem:
Unsatisfactory delivery of water and wastewater services
Nationalisation
Mixed
Privatisation
(e.g. Public Private
Partnership)
Possible institutional frameworks
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1. Introduction
Problem
Public as well as private operations cannot always guarantee water and
sanitation services to all their residents.
Why is it difficult to achieve local sanitation and water supply?
• Water and sanitation services are critical to all consumers
(independent of their purchasing power)
• There is often a natural monopoly
• Investments are long-lived and irreversible which hinders investors
Nationalisation is seen as one possible solution to these problems.
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2. Implementation
Four Most Important Models of (Re-)nationalisation
For the public sector, nationalising the utilities means facing the
following responsibilities: operational viability, conductive policy
environment and legal framework, legitimacy and accountability,
financial sustainability and independent, functional regulatory
system. (MONTEMAYOR 2005)
People-centred
Increased citizen and user
participation and other
democratic reforms.
Workers co-operation
Self-employed workers who are
members as well as owners of the
water and sanitation enterprise.
Community Control
Mobilisation of the community’s
capacities and local resources.
Public-Public Partnership (PUPs)
Collaboration of two or more
public authorities in order to
improve capacities.
Adapted from: BALANYA et al. (2005)
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2. Implementation
Enabling Environment
Five steps need to be achieved in order to successfully replace private
concessionaries:
Enabling
environment
Financial
sustainability
Independent,
functional
regulatory
Legitimacy &
accountability
Operational
viability
Conducive
policy
environment
and legal
framework
Adapted from: MONTEMAYOR (2005)
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2. Outcomes
Possible Positive Outcomes of Nationalisation
• Operating performance: If public officials depend on re-election,
they have higher incentives to act in the public interest than private
actors.
• Investment decisions: The public provider is not profit driven and
therefore focuses on fulfilling the public needs rather than
maximising benefit.
• Participation: Higher participation of the community members leads
to higher accountability and transparency and to a better selfesteem of the community members.
• Policies and legal framework: The issue is directly put on the
political agenda, leading to a positive change in water and
sanitation management policies and legal frameworks.
Adapted from: MONTEMAYOR (2005)
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4. Case Example
Porto Alegre, Brazil – A Well Working Case (1/2)
Positive outcomes
• Comparably low infant deaths.
• Increased service coverage and sewerage systems.
• Increased wastewater treatment.
Adapted from: HALL et al. (2002)
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4. Case Example
Porto Alegre, Brazil – A Well Working Case (2/2)
Reasons for successful implementation
• The Department for Water and Sanitation Sewage (DMAE) is wholly
owned by the municipality. Nevertheless, it enjoys legal,
operational and financial independence from the city council.
• Participatory budgeting allows citizens to take part in the decisions
on financial distributions.
• All decision-making processes are open, leading to higher
transparency and participation.
• Higher information flow through educational programs and training
courses by the DMAE.
Adapted from: HALL et al. (2002)
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5. Conclusion
Advantages and Disadvantages
Advantages
Disadvantages
• Increased participation
• High effort and costs for local
• An alternative to privatisation
government
• Investments occur in the public • Implementation is time
interest
consuming
• Problems with corruption are
possible
 Nationalisation only makes sense if the local government has the
capacity and capability to lead the water and sanitation sector.
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6. References
BALANYA, B. (Editor), BRENNAN, B. (Editor), HOEDEMAN, O. (Editor), KISHIMOTO, S. (Editor) (2005.): Reclaiming Public Water.
Achievements, Struggles and Visions from Around the World. Amsterdam: Transnational Institute (TNI) and Corporate Europe
Observatory (CEO). URL: www.tni.org/archives/books/publicwater.pdf [Accessed: 28.08.2012]
HALL, D., LOBINA, E., VIERO, O.M., MALTZ, H. (2002): Water in Porto Alegre, Brazil – Accountable, Effective, Sustainable and
Democratic. Public Services International Research Unit (PSIRU) and Municipal Department of Water and Sanitary Sewage (DMAE).
URL: www.waterjustice.org/uploads/attachments/attachment16.pdf [Accessed: 11.01.2010]
MONTEMAYOR, C.A. (2005): Possibilities for Public Water in Manila. In: BALANYA, B. (Editor); BRENNAN, B. (Editor); HOEDEMAN,
O. (Editor); KISHIMOTO, S. (Editor) (n.y.): Reclaiming Public Water. Achievements, Struggles and Visions from Around the World.
Amsterdam, 213-225. URL: www.tni.org/archives/books/publicwater.pdf [Accessed: 28.08.2012]
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“Linking up Sustainable Sanitation,
Water Management & Agriculture”
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