1963-2018 - 55 years of Research for Social Change

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How Far Does it Go? The Buenos Aires Water Concession a Decade after the Reform

27 Jul 2007

This paper examines the evolution of the Buenos Aires sanitation system during the post-privatization period. Its purpose is to evaluate the private management experience and assess the empirical validity of the main concerns voiced in its favour and against it. The analysis therefore concentrates on the evolution of system performance as it relates to the privatization objectives of expanding coverage, reducing consumers’ tariffs and increasing service standards.

The paper is organized into eight sections. Section 2 examines the completion of the contract’s targets as they relate to service coverage and investment outlays. Section 3 describes the taxonomy of unexpected tariff reforms. Section 4 reviews the financial performance of the licensee, while section 5 uses a simple model of index numbers to provide a comprehensive assessment of the concessions’ economic performance. Section 6 considers the role of the regulator, section 7 comments on actual pro-poor policies and explores alternatives leading to the achievement of universal service, and section 8 is the conclusion.

José A. Delfino was affiliated with the Department of Economics, Universidad Nacional de
Córdoba, Argentina until his death on 2 September 2005.

Ariel A. Casarin and María Eugenia Delfino are affiliated with IAE Escuela de Dirección y Negocios, Universidad Austral, Argentina.

Order PP-SPD-32 from UNRISD, 30 pages, 2007; US$ 12 for readers in industrialized countries and US$ 6 for readers in developing and transitional countries and for students.