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Bringing competition to urban water supply

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  • Sibly, Hugh
  • Tooth, Richard

Abstract

This paper proposes a market-based reform that would introduce competition into the provision of urban water. This proposal calls for a decoupling of infrastructure control and ownership of water whereby the property rights to water would be transferred to private hands. The proposal involves periodically allocation (e.g. by auction) of existing water stock held in urban catchments to virtual suppliers who then compete in providing bulk water. This change when coupled with effective third party access and retail competition would lead to a competitive market for the provision of urban water. The approach aims to address concerns over inefficient pricing and infrastructure provision under the current arrangement.

Suggested Citation

  • Sibly, Hugh & Tooth, Richard, 2008. "Bringing competition to urban water supply," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 1-17.
    • Handle: RePEc:ags:aareaj:118541
    DOI: 10.22004/ag.econ.118541
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    References listed on IDEAS

    as
    1. R. Quentin Grafton & Tom Kompas, 2007. "Pricing Sydney water ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(3), pages 227-241, September.
    2. Hugh Sibly, 2006. "Urban Water Pricing," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 13(1), pages 17-30.
    3. R. Quentin Grafton & Michael B. Ward, 2008. "Prices versus Rationing: Marshallian Surplus and Mandatory Water Restrictions," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages 57-65, September.
    4. Mansur, Erin T. & Olmstead, Sheila M., 2012. "The value of scarce water: Measuring the inefficiency of municipal regulations," Journal of Urban Economics, Elsevier, vol. 71(3), pages 332-346.
    5. Hugh Sibly, 2006. "Efficient Urban Water Pricing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(2), pages 227-237, June.
    6. Bert Willems, 2005. "Physical and Financial Virtual Power Plants," Working Papers of Department of Economics, Leuven ces0512, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    7. Unknown, 2003. "Water Rights Arrangements in Australia and Overseas," Commission Research Papers 31899, Productivity Commission.
    8. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications - Books, The World Bank Group, number 15024, December.
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    Cited by:

    1. Hugh Sibly & Richard Tooth, 2014. "The consequences of using increasing block tariffs to price urban water," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), pages 223-243, April.
    2. Hugh Sibly, 2008. "Can Urban Water Markets Work? An Optimistic View," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(3), pages 83-94.
    3. Freebairn, John W., 2012. "Risk Aversion and Urban Water Decisions," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124206, Australian Agricultural and Resource Economics Society.
    4. Liam Byrnes, 2014. "The cost of failing to install renewable energy in regional Western Australia," Energy Economics and Management Group Working Papers 9-2014, School of Economics, University of Queensland, Australia.
    5. Grafton, R. Quentin & Chu, Long & Kompas, Tom, 2015. "Optimal water tariffs and supply augmentation for cost-of-service regulated water utilities," Utilities Policy, Elsevier, vol. 34(C), pages 54-62.
    6. Kogan, Konstantin, 2021. "Limited time commitment: Does competition for providing scarce products always improve the supplies?," European Journal of Operational Research, Elsevier, vol. 288(2), pages 408-419.
    7. Gary Madden & Jeffrey Petchey & Aaron Morey, 2011. "Recent Australian Infrastructure Liberalization," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 26, Edward Elgar Publishing.
    8. Yi Liu & Peng Li & Zhiwei Zhang, 2018. "Resilient or Not: A Comparative Case Study of Ten Local Water Markets in China," Sustainability, MDPI, vol. 10(11), pages 1-16, November.

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