According to a report uploaded in www.madamasr.com the Egyptian Government is in a process of privatizing (among others) the water facilities in the country: in September, under the pretext of regularizing the sector, the Cabinet approved a water and sanitation Bill that permits the participation of private enterprises in such endeavors. Said Bill has not reached the Parliament yet, it nevertheless constitutes a step towards granting to private entrepreneurs access to water services as well as a proof of the Egyptian Government’s intentions on this issue.
As per a draft of the Bill the Egyptian Water Regulatory Authority (EWRA) will be responsible for (a) ensuring competitiveness and (b) setting prices, while the government will have the final say on the tariff the consumers will pay: if such tariff is lower than the price set by EWRA the Government will cover the difference. Some two years ago the Egyptian Government reduced water subsidies; one fears that such subsidies will be further reduced or even dropped altogether, a victim of the financial consolidation process Egypt is currently undergoing.
One of course wonders how does this procedure ensure or encourage competition: apart from the fact that Water Regulatory Authorities cannot guarantee that consumers will receive the best services possible, the example of England shows that they are also prone to easily submit to most of the private sector’s demands; furthermore though the Egyptian State (by undertaking to subsidize the difference) clearly recognizes that water services and prices cannot be left to be determined by the market it allows is the market to have a say in such. Is this simply a contradiction or is it actually hypocrisy?
The dangers of privatizing directly or indirectly water and sanitation services have already many times been made public; no government, no public authority can claim it does not know the consequences of allowing private business a hand or a say in the sector. The main problem however waits in the day after when “mistakes” are finally officially recognized as such and the people are called upon to pay in order to get their water services back.
SGW will follow the issue of water services privatization in Egypt and come back when more is available