ACTIVITY 2.25 Public or private provision? Lee plans meeting on water-sewer privatization There is to be a special informational meeting on the However, many residents fear the principal task of the potential privatization of the town's sewer and water private sector firm would be making money for itself systems. Privatization means that the local government and have asked town officials how they would be able to would hire a private company to take over the operation ensure consistent quality service from a profit-making of its sewer and water systems. entity. The company would be under contract to the town of But perhaps the most controversial aspect of the plan is Lee, and would run the two systems under one company that the present workforce would all have to reapply for umbrella. The principal reason for such a move would their jobs. Many workers have argued that there was no be to save money and improve service levels. At this way to ensure they would get the same health and point, most town officials concede that it is unclear retirement benefits they currently do as public employees whether privatizing the sewer and water operation would of Lee. In addition, the for-profit entity would not be be a money-saver. A consulting engineer would, in theory, bound to retain the workforce presently under contract be able to make that assessment. to the town. 1 What is privatization? 4 What are the likely implications and conflicts arising 2 How is the town of Lee planning to privatize its water from the privatization for the employees, local and sewer systems? residents and local taxpayers? 3 What economic arguments does the article highlight 5 Investigate examples of privatization in your own for and against the privatization of Lee's water and country. What arguments have different groups of people sewer systems? used for and against these privatizations? What impact, if any, has privatization had on you and your family