ABSTRACT
This chapter provides a general introduction in a European context to one of the significant policy challenges to emerge in the last two decades: the privatisation of water supply and sewerage. With the political ascendancy of Reagan in the US and Thatcher in Britain in the late 1970s neoliberal ideas about the virtuous power of unfettered markets to create value and to – as the popular phrase of the time had it – “float all boats” were applied wholesale to nationalised and/or heavily regulated utilities. In time telecommunications, energy, postal services and, eventually, water were either deregulated or sold off lock stock and barrel to private investors. Thus started a roller-coaster process of sell-offs, mergers and acquisitions and horizontal (re)integration that led, ultimately to the spectacular failure of Enron in 2001 and Worldcom in 2002. Whilst both of these cases were American, what many Europeans fail to realise is that Enron was, at that time, moving into the British water sector. Enron CEO Rebecca Marks even proclaimed, chillingly, that Enron would “do” for British water what it had “done” for the American energy sector! Very fortunately Enron sold its sole European water company, Wessex Water, to YTL Holdings, in 2001, less than six months before Enron filed for bankruptcy protection. Other European initiatives, such as Waterdesk.com, an attempt to create, singlehandedly, a market for virtual water futures, were closed down at the same time. However, although the English and European water sectors avoided being seriously affected by the collapse of the likes of Enron and Worldcom, our water sector has now moved into a dangerous phase, with virtually all English water companies now in the hands of merchant banks like Macquarie of Australia and Alinda Capital Partners of the UK. Simultaneously, the big French water multinationals, Suez/Ondeo and Vivendi/Veolia, both of France have restructured their global portfolios over the past few years and are again on the prowl for water sector acquisitions.
