counteracts many of the advantages associated with the market economy because without competition between multiple water service businesses there is nothing to drive prices down and levels of efficiency up. external influences external influences, such as from the world bank and the international monetary fund (imf), often play a role in the decision of governments to privatize water, as was the case in bolivia and in several african countries. this influence may take the form of structural adjustment programs, whereby a development loan is given on the condition that the receiving country privatize their water utility system. other aid agencies have also supported water privatization. these include the inter-american development bank (e.g., in ecuador, colombia and honduras), the asian development bank (e.g., in china), the european bank for reconstruction and development in eastern europe, german development cooperation through kfw (e.g., in albania, armenia, jordan and peru), french development cooperation (e.g., in senegal) and british development cooperation (e.g., in tanzania and guyana). critics claim that these external influences are problematic and argue that influencing water privatization is part of a broader movement of western powers imposing neoliberalism on countries in the global south. in the uk, the world development movement campaigned against the support of water privatization through aid from the uk. financial motives in some cases, where access is already universal and service quality is good, financial motives dominate, as it was the case in berlin, germany, and in chile. in berlin the state government sold a 49.9% share of its water utility in 1999 for 1.69bn euros in exchange for a guaranteed profit for the private shareholders amounting to the interest rate on 10-year government bonds plus 2 percent, as specified in a contract that was kept confidential until the state government was forced by a referendum to make it public. as a result, tariffs increased (15% in 2004 alone) and the state government's revenues from the company declined compared to the situation before privatization (168m euro profit for the state in 1997 compared to a 10m euro loss in 2003). in chile, where no wastewater treatment plants existed prior to privatization, the government's desire to finance their construction off-budget drove privatization in 1998. financial motives for water privatization are also common in countries where water access and service quality is poor. in cities with rapidly growing slums, it is very expensive for the government to expand their water utility system infrastructure at the pace of the growing population. furthermore, maintaining the good condition of old infrastructure is also expensive. thus, if a significant portion of public funds is not allocated to maintenance, pipes and waste water treatment plants can fall into disrepair. for some countries, the cost of managing a public water utility system becomes unaffordable. in these cases, privatization can be seen as a possible solution for governments to attract national and international private investment. prevalence prevalence of public-private partnerships prague is one of many cities whose water supply is provided by a private company there are widely differing estimates of the number of people served by private water companies. the world bank estimated that, as of 2007, about 270 million people received water from private companies in more than 40 countries, including about 160 million in developed countries and 110 million in developing countries. however, the report did not include estimates of the number of people served by private companies on the wastewater side. the pinsent masons water yearbook uses a broader definition including also wastewater services. more importantly, it also includes cases where a water or wastewater treatment plant is operated by a private company on behalf of a publicly owned and operated utility that serves the final customer. on the basis of this broader definition and taking into account the growth of both population and water privatization between 2007 and 2011, it estimates that 909 million in 62 countries or 13% of the world population were served by the private sector in one form or another. this includes 309 million people in china, 61 million in the united states, 60 million in brazil, 46 million in france, 23 million in spain, 15 million in india and 14 million in russia. in england and wales the entire population of 55 million is served by private companies. in addition, in chile, the czech republic, armenia, and three african countries – côte d'ivoire, gabon and senegal – private companies provide water services to the entire urban population. in hungary, they serve almost half the population. in algeria, colombia, germany, italy, malaysia, mexico, morocco, poland, and south africa less than half the population is served by private companies. in the philippines, indonesia, bulgaria, estonia, and cuba, private water companies serve only the capital city. 24 countries, such as argentina, bolivia, and a number of small countries like guyana, ghana or the central african republic, had reverted to public management as of 2009. however, 84 percent of contracts awarded mostly in the 1990s were still active. on the other hand, in many countries, such as in japan, canada, egypt, pakistan, or scandinavia, there are no private water companies. nicaragua, the netherlands, and uruguay have even passed laws banning water privatization. in italy, in june 2011 a law favoring water privatization was repealed by an overwhelming majority of italians through a referendum. in 2019, the city of baltimore, maryland became the first major city in the united states to ban water privatization. list of countries with formal private sector participation in urban water supply with number and type of contracts countryextent of country served by privatized urban water supplytype and number of contractsstart date france9,000concessions and leases1853 englandentire countryfull privatization (26)1989 united states73 million people, including through ppps 14% of water revenues without pppsinvestor-owned and 2,000 ppps1772 in providence côte d'ivoireall urban areaslease (1)1960 in abidjan 1973 country-wide gabonall urban areasconcession (1)1997 mozambiquemaputo and other citieslease (1) and management contract (1)1999 senegalall urban areaslease (1)1996 south africambombela and dolphin coastconcessions (2)1992 malaysiaselangor and penangconcession (1) and full privatization (1)1992 indonesiajakartaconcessions (2)1998 philippinesmanilaconcessions (2)1997 armeniayerevan and otherslease (1) and management contracts (2)2000 brazil65 cities in 10 statesconcessions1995 chileall urban areasfull privatizations and concession (1)1998 colombiabarranquilla, cartagena, colombia and more than 40 other cities and townsmixed-ownership companies and concessions1996 ecuadorguayaquilconcession (1)2001 moroccocasablanca, rabat, tangiers and tetouanconcessions (3)1997 hondurassan pedro sulaconcession (1)2000 ghanaall urban areas until 2011management contract (1)2000 saudi arabiariyadh, jeddah, mecca and taifmanagement contracts (3)2008 algeriaalgiers, constantine and oranmanagement contracts (3)2005 cubahavanaconcession (1)2000 chinashenzhen, fuzhou, lanzhou, wuhu city and 23 othersconcessions (22), full privatizations (3) and management contracts (2)2001 spainbarcelona and more than 1,000 other municipalitiesmixed-ownership companies and concessions1867 romaniabucharest, timișoara, ploiești and otopeniconcessions (3) and lease (1)2000 bulgariasofiaconcession (1)2000 polandgdańsk, bielsko-biała, tarnowskie góry & miasteczko śląskie, dąbrowa górnicza, głogów, woźniki, drobin and toszekfull privatizations (4), concession (1), leases (2) and management contract (1)1992 estoniatallinnconcession (1)2001 czech republicprague and 23 other citiesconcessions (24)1993 (reform) and 2001 (prague) hungarybudapest, szeged, debrecen and five other cities and townsconcessions (8)1994 mexicocancún, saltillo and aguascalientesmixed-ownership company (1) and concessions (2)1993 a world bank report lists the following examples of successful public-private partnerships in developing countries: the full privatization in chile; the mixed companies in colombia; the concessions in guayaquil in ecuador, brazil, argentina, eastern manila in the philippines, morocco, and gabun; and the lease contracts in côte d'ivoire, senegal, and yerevan in armenia. small-scale operators: the other private sector a small scale private operator using a water tanker to distribute water beyond water privatization, which involves contractual relationships between a government and formally established large companies, there is also "the other private sector" in water supply consisting of small-scale, often informal local operators. they exist in most cities in the global south and sometimes provide a large portion of the city's population with water. for example, a study of six latin american countries showed that they provide water to 25% of the population in seven cities. in africa, they serve an estimated 50% of the urban population. they mainly operate in slums, serving the people who are not catered to by the city authorities. many small-scale water operators provide water through tanker trucks or animal-drawn carts. others operate water distribution networks fed by wells, as it is the case in asunción, paraguay, and in sanaa, yemen. small-scale operators can be owned by individual entrepreneurs or can take the form of cooperatives, as it is the case in honduras. small-scale operators do not always comply with technical norms and the quality of the water they provide or their tariffs are often not regulated. more often than not, their tariffs are significantly higher than those of public water utilities. this can attributed to either profiteering or simply the high transportation costs expended during the distribution of water. they typically lack capital to further expand their network. however, in a few pilot cases – such as in kenya, uganda, cambodia and vietnam – international aid agencies have provided them with grants to increase access, often in the form of output-based aid. selecting private operators private companies are typically selected through international competitive bidding and need to have demonstrated previous experience. selection is either done through a combination of price and quality, or solely based on price. in the case of a management contract, the price is the management fee (fixed fee plus performance-based fee); in the case of a lease it is the lease fee per unit of water sold; in a concession it is the water tariff; and in an asset sale it is the price paid for the company. in some cases – such as in casablanca in 1997 and in jakarta in 1998 – private companies have been selected through direct negotiations without competitive bidding. in other cases – such as in cartagena (colombia) in 1995, cochabamba (bolivia) in 1999 and guayaquil (ecuador) in 2000 – only a single bid was submitted. if development aid agencies are involved in directly financing private sector participation, they systematically require competitive bidding. however, in some cases – such as in timişoara, romania – the european bank for reconstruction and development has financed parallel investments, while a concession was awarded by the government after direct negotiations. forms of regulation being monopolies, all water utilities – public or private – need to be regulated concerning tariff approvals, service quality, environmental compliance and other aspects. the awareness for the need to regulate typically increases substantially when profit-oriented private operators become involved: monitoring the performance of both the private and the public partner, applying sanctions in case of non-compliance and dispute resolution become particularly important. the regulatory tasks depend on the form of private sector participation: under a management contract the monitoring of the achievement of performance standards, on which the remuneration of the private company depends, is typically carried out by an independent consulting firm. under a concession contract or in the case of an asset sale, tariff regulation through a regulatory agency or the government is a key regulatory function. water concessions are frequently renegotiated, often resulting in better terms for the private company. for example, negotiations of concessions in buenos aires and manila resulted in investment requirements being reduced, tariffs being increased and tariffs being indexed to the exchange rate to the us dollar. the quality and strength of regulation is an important factor that influences whether water privatization fails or succeeds. the tasks, form and capacity of the public entities charged with regulation vary greatly between countries. globally, regulation of private water companies is being carried out by the following types of public entities or, sometimes, a combination of them. type of entity charged with the regulation of private water providersexamples municipality or an association of smaller municipalitiesfrance and spain specialized body at the city level set up to regulate a single contractguayaquil, ecuador; san pedro sula, honduras; jakarta, indonesia (with some control by the national government in the latter case); manila, philippines; formerly in buenos aires, argentina specialized regulatory agency at the supra-municipal sub-national levelpublic utilities commissions in u.s. states; some brazilian states specialized regulatory agency set up permanently under law at the country levelofwat in england; water superintendency siss in chile; water regulatory commission cra in colombia specialized unit in a ministry set up temporarily by decreeministry of water in jordan ministerial departmentministry of interior in morocco examples of privatization the best-known examples of