What environmental concerns have been raised regarding the privatization of water utilities?
A. The private operator has few economic incentives to promote water conservation because a corporation’s chief goal is to maximize profits, which often means encouraging increased consumption. Private water companies also have little reason to leave sufficient water for ecological needs, endangered species, and other downstream uses. Privatization agreements may also result in reduced water quality because private water companies make decisions based on profitability rather than public health. Especially in the case of asset sales, there is concern about land that may be subject to development. When a private operator purchases a municipality’s water-related assets, they may include the municipality’s watershed areas as well as industrial equipment. Since preservation of watershed lands does not generate revenue, the operator may either want to develop the watershed area or sell it off to others for development.
