Overview
Remunicipalization is when the management of utilities is brought back under public control. Some of the most important examples concern water, but remunicipalization encompasses regional and na- tional-level services from energy and transportation to internet access and education.
A major trend has emerged as more and more communities insist on returning water and wastewater services to public management through remunicipalization, forcing water multinationals to pull out of services in Latin America, Asia, the United States, Africa, and Europe.
— Remunicipalisation.org
The remunicipalization of utilities is often a community response to dysfunctional governance by privatized utility suppliers and public-private partnerships between governments and private industry. The factors leading to water remunicipalization, for instance, are similar worldwide: poor service performance, under-investment in infrastructure, disputes over operational costs and price increases, soaring utility bills, environmental hazards, and lack of financial transparency. Their experiences of these common problems have motivated many communities and policy-makers to take services back into public control. Between 2000 and 2015, 235 cases of water remunicipalization occurred in 37 countries around the world, including in major cities from Kampala to Kuala Lampur and Bogotá to Berlin.
Though each case differs, remunicipalization brings benefits to local governments and citizens alike. Since remunicipalizing its water supply in 2007, Houston, Texas has saved $2 million annually while Paris, which remunicipalized in 2011, saved €35 million in the first year alone. Without the obligation of generating profits for shareholders, the publicly owned utilities companies don’t have to fight to reinvest revenues in improving the water systems—as have governments in both Dar es Salaam and Berlin.
Remunicipalization efforts can increase access to water for low-income households by making water policy more accountable to community needs. Arenys de Munt, a small town in Spain, has promoted social policies to guarantee the right to water for all its citizens since 2011, when the town successfully remunicipalized water services. The newly established municipal company Aigües de Arenys/ GUSAM reformed the tariff structure by providing a discount on the first 100 liters of water per person per day. The most vulnerable families—those earning less than a single minimum wage income—are guaranteed access to water.
Similarly, Medina Sidonia—another Spanish city with remunicipalized water services—has developed an innovative approach to ensure the provision of a minimum amount of water (three cubic meters per person per month) to residents experiencing financial difficulties. After remunicipalization, the city council has not only declared water a human right but is implementing a policy to make it an accessible reality.
Most cases of remunicipalization around the world have involved terminating private contracts, either before they were due to expire or directly after the expiration date. However, challenges can arise with the premature termination of a contract. If the contract is terminated before it expires, private operators can obtain compensation for the profits they would have generated. If municipalities claim a breach of contractual obligations, private operators often contest this in court. The government of Castres, France, for example, was forced to pay €30 million in compensation to private water empire Suez, even though its contract had been illegally signed by former Mayor Jacques Limouzy without proper consultation with the town council.
Beyond national litigations, investor-state dispute settlement (ISDS) provisions, which allow multinational companies to sue states, increase the risks for governments and citizens wanting to remunicipalize utilities. Multinational water companies use ISDS provisions to claim significant amounts of public money in compensation for canceled service management contracts, despite failing to meet their own obligations.
Many of the successful remunicipalization efforts around the world would not have been possible without the tireless mobilization of committed citizens. Berliners organized a referendum to demand that secret water privatization contracts be disclosed. In Uruguay, a referendum calling for a nationwide end to privatization eventually led to the remunicipalization of water and sanitation services.
Remunicipalization is about building better public services—more transparent, more accountable, more efficient, and more focused on people’s long-term needs. If citizens are willing to fight for remunicipalization and against privatization, it is because they believe that the public sector is better equipped to meet broader social and environmental goals than profit-driven private companies.
Remunicipalization strategies can be applied to other essential services such as energy, transportation, healthcare, education, and more. Hundreds of cities in Germany have remunicipalized energy services; several cities in Sweden have reversed private contracts in elderly care; and numerous cities in France have remunicipalized waste collection, transportation, and school meal services. In Spain, many services from public park maintenance to funeral services have recently been remunicipalized.
These efforts reflect a global recognition of the need for cross-sector strategies and alliances among citizens, workers, and local authorities to de-privatize essential services. People are rediscovering the value of public ownership for the common good.
