Water in Bucharest: A utility's efficiency gains under a concession
In March 2000, Bucharest entered into a concession contract for its water utility with the aim of turning around the utility’s faltering performance. Under the private operator the utility has raised service quality above Romanian standards and toward Western European levels. This paper explores why this project was so successful.
The concession of Bucharest’s water utility has brought its citizens higher-quality water services, at a lower cost, than they could have had under continued municipal provision. The credit for this goes to the leadership of the municipality and the municipal utility in the late 1990s, which saw that private finance and management were needed to reverse the cycle of poor performance. Credit also goes to the managers and staff of Veolia and Apa Nova, who have made the utility work; the union leaders, who were able to chart a course through the labor force reductions; and the municipal tech- nical regulator, which ensured that the public interest was protected throughout.
