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Title: Lessons from Argentina : the Buenos Aires Water Concession
Authors: Loftus, Alex
McDonald, David A
McDonald, David A
Bond, Patrick
Date: Apr-2001
Series/Report no.: Occasional papers series / Queen's University, Municipal Services Project; no. 2
Abstract: As part of its research mandate the Municipal Services Project has been conducting comparative studies on the privatization of municipal services in other parts of Africa and Latin America. This report presents the findings of a study of the private water and sanitation concession in Buenos Aires, Argentina. This is the first major English-language study of the concession conducted outside of the World Bank Group since the concession began in 1993. The decision to conduct research on the Buenos Aires water system was taken for several reasons. First, it is one of the largest water concessions in the world – servicing a population of 10 million people – and has been hailed as a success story internationally. It is important, therefore, that South African policy makers review this model in their own deliberations over private sector involvement in water and sanitation delivery. Second, the major shareholder in the consortium that operates the water concession in Buenos Aires is Suez Lyonnaise des Eaux, a large French multinational that is also active in South Africa. Lyonnaise des Eaux is involved in the Johannesburg water management contract and has been actively pursuing contracts in other South African cities, as the opening quote to this executive summary attests to. Third, there have been at least two trips to Buenos Aires by South African policy makers and bureaucrats to review the water concession as a possible model for South African municipalities. The first trip, taken in 1997 by a councilor and a senior engineer from Cape Town (paid for by the French government), was extremely positive in its evaluation of the concession, arguing that it has been “remarkably successful” in turning around an otherwise “potentially disastrous situation” (Bekker and Marsden 1997, 10). A second trip taken in May of 2000, involving 12 senior local government officials from various parts of South Africa, was similarly positive in its review (PADCO 2000). Our own research findings are much more critical of the concession. Although there have been some positive developments in terms of investments in infrastructure and the extension of services since 1993 there have been some major failures as well. While some of these failures are unique to Buenos Aires and the politics of Argentina, they do raise some more general questions around the role of the private sector in the delivery of municipal services, and challenge some of the widely held arguments in favour of privatization. The following paragraphs provide a brief overview of the main findings of our research, with a specific focus on the themes of accountability and efficiency. Our intention here is to flag what we consider to be the most serious problems with the Buenos Aires water concession in hopes of contributing to the ongoing debate over private sector involvement in the water and sanitation sectors in South Africa...
ISBN: 0-88911-970-8
Project Number: 100192
Project Title: Municipal Services Restructuring (South Africa)
Municipal Services and Health in Southern Africa - Phase II
Access: Open Access
Copyright: Municipal Services Project
License: OA Permission Letter; copyright statement required on document
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