Water in Bucharest : A Utility’s Efficiency Gains under a Concession
In March 2000 Bucharest entered into a concession contract for its water utility with the aim of turning around the utility's faltering performance. Under the private operator the utility has raised service quality above Romanian standards and...
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| Format: | Viewpoint |
| Language: | English |
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Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2011/02/15476286/water-bucharest-utilitys-efficiency-gains-under-concession http://hdl.handle.net/10986/11066 |
| Summary: | In March 2000 Bucharest entered into a
concession contract for its water utility with the aim of
turning around the utility's faltering performance.
Under the private operator the utility has raised service
quality above Romanian standards and toward Western European
levels. By 2008 efficiency gains had produced cost savings
totaling US$349 million. The concessionaire has financed
US$259 million in investment, without public subsidy, while
keeping tariffs well below the Romanian average. Not all
water concessions have been as successful. What accounts for
the gains under this one? The concession of Bucharest's
water utility has brought its citizens higher-quality water
services, at a lower cost, than they could have had under
continued municipal provision. The credit for this goes to
the leadership of the municipality and the municipal utility
in the late 1990s, which saw that private finance and
management were needed to reverse the cycle of poor performance. |
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