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Bringing competition to urban water supply

  • Sibly, Hugh
  • Tooth, Richard

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.

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Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural and Resource Economics.

Volume (Year): 52 (2008)
Issue (Month): 3 (September)

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Handle: RePEc:ags:aareaj:118541
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  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, 09.
  2. Bert Willems, 2005. "Physical and Financial Virtual Power Plants," Center for Economic Studies - Discussion papers ces0512, Katholieke Universiteit Leuven, Centrum voor Economische Studiƫn.
  3. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications, The World Bank, number 15024.
  4. Anonymous, 2003. "Water Rights Arrangements in Australia and Overseas," Commission Research Papers 31899, Productivity Commission.
  5. Erin T. Mansur & Sheila M. Olmstead, 2007. "The Value of Scarce Water: Measuring the Inefficiency of Municipal Regulations," NBER Working Papers 13513, National Bureau of Economic Research, Inc.
  6. 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, 06.
  7. 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 S57-S65, 09.
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