Publication:
Institutions, Politics, and Contracts : The Attempt to Privatize the Water and Sanitation Utility of Lima, Peru

Simple item page
dc.contributor.authorAlcazar, Lorena
dc.contributor.authorXu, Lixin colin
dc.contributor.authorZuluaga, Ana Maria
dc.date.accessioned2014-08-27T18:05:46Z
dc.date.available2014-08-27T18:05:46Z
dc.date.issued2000-11
dc.description.abstractThe main reason Lima failed to implement a concession was geographical: the scarcity of water sources meant high marginal costs, partly for pumping water from deep wells and building adequate storage for dry periods. High extraction costs were compounded by years of neglect; much of the system needed to be replaced. Attracting private investors meant setting prices high enough to recover these high costs and provide a reasonable return on capital. But the government had subsidized costs for years, so a concession would have required a sharp and sudden price increase to cover marginal costs. Moreover, any forward-looking investor would want to slow the pace of future investment by curbing demand through more effective (meter-based) bill collection. And cross-subsidies, which reduce the incentive to conserve water, would also have to be reduced. The ultimate cause of the concession's failure was geographical but the proximate cause was political. Privatizing a utility is politically tricky if it involves higher prices and the controversial ceding of monopoly powers to private parties, especially foreigners. Private participation in water is further hampered by the social importance of water and by the lack of international experience and the technical difficulties in designing privatization reform in the sector. At the same time, water offers fewer benefits than other utlities--few revenues to reward supporters or compensate losers-- and the price increases likely in Peru would especially hurt the urban poor, who were important to the president's support base. After a favorable start, the political equation shifted against privatization. The concession's failure was costly, in access goals not fully met, in adverse effects on health, and in the failure to curb consumption through metering--and hence in continued depletion of the aquifer and its increasing contamination by ocean salt. Peru's institutional weaknesses, especially its lack of an autonomous judiciary, might have limited how much could have been achieved. But considering the net gains from private operation in the much weaker nstitutional settings in Africa, Lima would probably have been better off with a concession.en
dc.identifierhttp://documents.worldbank.org/curated/en/2000/11/717450/institutions-politics-contracts-attempt-privatize-water-sanitation-utility-lima-peru
dc.identifier.doi10.1596/1813-9450-2478
dc.identifier.urihttps://hdl.handle.net/10986/19761
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2478
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectBILL COLLECTION
dc.subjectBOREHOLES
dc.subjectCENTRAL GOVERNMENT
dc.subjectCONCESSION CONTRACT
dc.subjectCONNECTION CHARGE
dc.subjectCONSERVE WATER
dc.subjectCONSUMER COMPLAINTS
dc.subjectCONSUMER SURPLUS
dc.subjectCOST OF WATER
dc.subjectCUBIC METER
dc.subjectCUBIC METER OF WATER
dc.subjectCUT OFF
dc.subjectDEBT
dc.subjectDEMAND FOR WATER
dc.subjectECONOMIC FACTORS
dc.subjectELASTICITIES
dc.subjectELASTICITY OF DEMAND
dc.subjectEQUILIBRIUM
dc.subjectEXPENDITURES
dc.subjectEXTERNAL COSTS
dc.subjectEXTERNALITIES
dc.subjectFINANCIAL VIABILITY
dc.subjectFISHING
dc.subjectFIXED CHARGE
dc.subjectGROUNDWATER
dc.subjectHEALTH PROBLEMS
dc.subjectHEAVY METALS
dc.subjectINCOME
dc.subjectINDUSTRIAL USERS
dc.subjectINFLATION
dc.subjectINTERMEDIATE INPUTS
dc.subjectINVESTMENT COSTS
dc.subjectINVESTMENT REQUIREMENTS
dc.subjectLABOR COSTS
dc.subjectLABOR FORCE
dc.subjectLEGISLATION
dc.subjectLITERS PER CAPITA PER DAY
dc.subjectMAINTENANCE COSTS
dc.subjectMARGINAL COST
dc.subjectMARGINAL COSTS
dc.subjectMETER READING
dc.subjectMINES
dc.subjectNUMBER OF CONNECTIONS
dc.subjectPIPED WATER
dc.subjectPOLITICAL ECONOMY
dc.subjectPOLLUTION
dc.subjectPRESENT VALUE
dc.subjectPRICE OF WATER
dc.subjectPRICE SETTING
dc.subjectPRIVATE OPERATOR
dc.subjectPRIVATE PARTICIPATION
dc.subjectPRIVATE PARTICIPATION IN WATER
dc.subjectPRODUCTIVITY
dc.subjectPUBLIC UTILITY
dc.subjectPUMPING
dc.subjectQUALITY OF SERVICE
dc.subjectRAINFALL
dc.subjectRAINWATER
dc.subjectRAW WATER
dc.subjectRECHARGE
dc.subjectREGULATING WATER SUPPLY
dc.subjectREGULATORY AGENCIES
dc.subjectREGULATORY FRAMEWORK
dc.subjectRESIDENTIAL CONSUMERS
dc.subjectRESIDENTIAL CUSTOMERS
dc.subjectRESIDENTIAL DEMAND
dc.subjectRETAINED EARNINGS
dc.subjectRIVER FLOW
dc.subjectRIVERS
dc.subjectSALINITY
dc.subjectSANITATION PROBLEMS
dc.subjectSANITATION SERVICE
dc.subjectSANITATION UTILITY
dc.subjectSAVINGS
dc.subjectSCARCE WATER
dc.subjectSCARCITY OF WATER
dc.subjectSERVICE AREA
dc.subjectSEWERAGE SYSTEM
dc.subjectSOCIAL COSTS
dc.subjectSUPPLY INTERRUPTIONS
dc.subjectSURFACE WATER
dc.subjectTARIFF REFORM
dc.subjectTARIFF REGULATION
dc.subjectTARIFF SETTING
dc.subjectTRANSPARENCY
dc.subjectUTILITIES
dc.subjectWAGES
dc.subjectWATER COMPANIES
dc.subjectWATER COMPANY
dc.subjectWATER CONNECTIONS
dc.subjectWATER CONSUMPTION
dc.subjectWATER COVERAGE
dc.subjectWATER DEMAND
dc.subjectWATER REGULATION
dc.subjectWATER SECTOR
dc.subjectWATER SERVICE
dc.subjectWATER SERVICES
dc.subjectWATER SHORTAGES
dc.subjectWATER SOURCES
dc.subjectWATER STORAGE
dc.subjectWATER SUPPLY
dc.subjectWATER SYSTEM
dc.subjectWATER TABLE
dc.subjectWATER TARIFF
dc.subjectWATER TARIFFS
dc.subjectWATER UTILITY
dc.subjectWELFARE EFFECTS
dc.subjectWELFARE GAINS
dc.subjectWELLS
dc.titleInstitutions, Politics, and Contracts : The Attempt to Privatize the Water and Sanitation Utility of Lima, Peruen
dspace.entity.typePublication
okr.crossref.titleInstitutions, Politics, and Contracts: The Attempt to Privatize the Water and Sanitation Utility of Lima, Peru
okr.date.disclosure2000-11-30
okr.date.doiregistration2025-04-10T10:52:17.698621Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2000/11/717450/institutions-politics-contracts-attempt-privatize-water-sanitation-utility-lima-peru
okr.globalpracticeWater
okr.guid907981468774890395
okr.identifier.doi10.1596/1813-9450-2478
okr.identifier.externaldocumentum000094946_00111605303051
okr.identifier.internaldocumentum717450
okr.identifier.reportWPS2478
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/12/15/000094946_00111605303051/Rendered/PDF/multi_page.pdfen
okr.region.administrativeLatin America and Caribbean
okr.region.countryPeru
okr.sectorOther Water Supply & Sanitation
okr.sectorWater, sanitation and flood protection
okr.topicWater Resources::Water and Industry
okr.topicEnvironmental Economics and Policies
okr.topicWater Supply and Sanitation::Town Water Supply and Sanitation
okr.topicWater Supply and Sanitation::Water Supply and Sanitation Governance and Institutions
okr.topicWater Resources::Water Conservation
okr.unitRegulation and Competition Policy, Development Research Group
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
multi_page.pdf
Size:
2.71 MB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
multi_page.txt
Size:
116.15 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Policy Research Working Papers