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Bringing competition to urban water supply


  • Hugh Sibly
  • Richard Tooth


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. Copyright 2008 The Authors. Journal compilation 2008 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

Suggested Citation

  • Hugh Sibly & Richard Tooth, 2008. "Bringing competition to urban water supply ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 217-233, September.
  • Handle: RePEc:bla:ajarec:v:52:y:2008:i:3:p:217-233

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    References listed on IDEAS

    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. 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.
    3. 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.
    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. Bert Willems, 2005. "Physical and Financial Virtual Power Plants," Working Papers Department of Economics ces0512, KU Leuven, Faculty of Economics and Business, Department of Economics.
    6. Anonymous, 2003. "Water Rights Arrangements in Australia and Overseas," Commission Research Papers 31899, Productivity Commission.
    7. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications, The World Bank, number 15024.
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    Cited by:

    1. 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.
    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. Gary Madden & Jeffrey Petchey & Aaron Morey, 2011. "Recent Australian Infrastructure Liberalization," Chapters,in: International Handbook of Network Industries, chapter 26 Edward Elgar Publishing.
    4. 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.
    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. Freebairn, John W., 2012. "Risk Aversion and Urban Water Decisions," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124206, Australian Agricultural and Resource Economics Society.

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