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Home > Privatization Alert - July 2010
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Privatization Alert - July 2010
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Focus: Private sector participation in the provision of water services and sanitation
Private sector participation in water and sanitation declined in 2009 by 30 percent, with a total of 35 projects reaching closure and investment valued at US$2 billion, according to the latest data from the Public-Private Infrastructure Advisory Facility. China accounted for 28 of the 35 water projects. The number of private sector operators in the provision of water services remains small. Up until 2001 only six international companies accounted for 85 percent of the population served under public-private partnership contracts in developing countries. Recent years, however, have seen the ascendancy of water operators from developing countries, serving a market whose population has increased by about 40 percent between 2002 and 2008.
In the past, private participation in, and privatization of, water services have been controversial, often with public backlash or violent conflict. These controversies have given rise to disputes, some of which have gone through arbitration (e.g. Aguas del Tunari S.A. v. Republic of Bolivia ICSID Case No. ARB/02/3). Controversies arise because of the many different social, environmental and political dimensions that the privatization of water services entails. Increasingly the private sector is recognizing the need for transparency and stakeholder involvement for successful privatization agreements, as well as the involvement of local private actors. According to the OECD's Infrastructure to 2030: Mapping Policy for Electricity, Water and Transport private water companies are focusing on key regions and are moving from concessions to Operation and Maintenance contracts. There has also been a growing trend towards wastewater contracts, as these tend to be less controversial. The use of concessions is expected to remain attractive in the more stable economies, but in others a shift in preferences in favor of Operation and Maintenance contracts will continue.
Status and upcoming transactions
Europe and Central Asia:
Poland has proceeded with the sale of the government's 52 percent stake in Tauron Polska Energia S.A., its second largest electric utility. The government has also begun the process for the sale of a majority stake in ENEA S.A., its third largest utility. Ukraine is planning to complete the privatization of commercial banks that were recapitalized by 2013. Kazakhstan is looking to privatize state owned enterprises in energy and finance. Bulgaria is in the process of amending its Privatization and Post-privatization Control Act.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Middle East and North Africa:
Tunisia has announced the status of its 2010 privatization program as of June 30, 2010.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Sub-Saharan Africa:
Zimbabwe has slated several parastatals for sale, many of which are saddled with high debts. Kenya and France Telekom have resolved a dispute that arose after France Telecom purchased 51 percent of state-owned Telkom Kenya. Botswana intends to privatize Botswana Telecommunications Corporation. Zambia has sold a 75 percent stake in Zamtel, its telecommunication company, to Libya’s Lap Green Networks.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
East and South East Asia:
South Korea is planning to delay announcing the timing and details of the privatization of Woori Finance Holdings Co.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
South Asia:
Pakistan is restructuring Pakistan International Airlines, Pakistan Railways and Pakistan Steel Mills, but is not planning at this time to privatize them.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
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