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June 05, 2006

Water Privatization

Apologies but I find this on the water market in the UK to be deeply confusing. The argument seems to be that the problem with the water provision is that there is not enough competition, not enough of a free market.

Well, (sorry) possibly, but I’m not sure how to get more competition into it. The actual system of pipes (like the National Grid for electricity) is a natural monopoly. I can see how you might think that multiple companies should put water into it, again in the same way that it works in the electricity market, but I’m not sure that would really work. I have a (completely without evidence mind) feeling that it is the piping system which is actually teh major cost for water so the effects of such cometing suppliers would be minimal.

But what really gets me is that Okonski insists that only if water is properly metered will things get better. Agree fully: but why is he then arguing against compulsory metering?

Most odd.

Finally, how anyone can write on the water system without mentioning the absurd costs imposed by the various EU Directives is beyond me.

June 5, 2006 in Economics | Permalink


When he says:

The solution to our "water crisis" is neither mandated metering nor drought orders.

I think he means 'on their own', as the rest of the article wouldn't make sense if he meant he didn't agree with mandatory water meters.

I'm not sure natural gas was the best example he could have used as a comparison though. I would be against water metering if I thought the price was going to be prone to massive spikes.

Posted by: Matthew | Jun 5, 2006 8:29:12 AM

It's a quite dreadful piece by someone who quite clearly doesn't know what she's talking about.

ps Okonski is a 'she', not a 'he'.

Posted by: Neil Clark | Jun 5, 2006 10:42:02 AM

Here's some very interesting background info on Ms Okinski. Interesting that in her last sentence she purports to care about 'the environment'!


Posted by: Neil Clark | Jun 5, 2006 11:32:31 AM

Here's our great British water expert speaking to the American Enterprise Institute in March 2006:

Kendra Okonski: Yeah, I’ll answer that one too. The U.K. has a privatized water system. I have to admit I don’t know much about the details of how it was done.

Posted by: Neil Clark | Jun 5, 2006 2:00:56 PM