Revisions that allow private firms to run water supply services draw mixed reviews

TOKYO/SENDAI/OSAKA/HAMAMATSU, Shizuoka -- The enactment of revisions to the Water Supply Act to allow private companies to run water supply services has drawn mixed reactions from local bodies that have adopted such services.

The law is expected to encourage local governments to commission private businesses to run water services in their areas while retaining their authority to permit such projects.

"The move is significant for Japan's future. Miyagi wants to create a model for Japan," said Miyagi Gov. Yoshihiro Murai. The government of Miyagi Prefecture in northeastern Japan has been considering outsourcing a package of its household and industrial water supply and sewage services to a private company beginning in fiscal 2021. The measure is estimated to reduce the prefectural government's expenses by somewhere between 33.5 billion yen and 54.6 billion yen over a 20-year period.

Draft ordinances submitted by the Osaka Municipal Government to privatize and integrate water supply services in the western Japan city have failed to clear the city assembly. However, the enactment of the revised law has made it easier for the city to outsource these services to a private firm.

Mayor Hirofumi Yoshimura is determined to reform the city's water supply and sewage services despite his earlier setback in the municipal legislature. "What would happen to water supply charges if we do nothing?" he tweeted on the night of Dec. 5.

In the meantime, the city of Hamamatsu in the central Japan prefecture of Shizuoka announced shortly before the revised law was enacted that it will postpone deciding on a plan to outsource its water supply services to private firms while retaining its authority to issue permission for such services.

The city has already commissioned private firms to operate part of its sewage services.

In October this year, Mayor Yasutomo Suzuki toured France where water supply services have been extensively privatized.

A city official explained that the local body decided to delay the decision on the measure because it has not yet provided a sufficient explanation to local residents about the details of the plan and differences between the plan and complete privatization.

Concerns persist among local bodies across the country about the amended legislation. The assembly of Niigata Prefecture along the Sea of Japan coast had adopted an opinion voicing opposition to the revisions to the law in October. Members of the ruling Liberal Democratic Party (LDP) joined other parties in voting for the move.

"A group of (LDP) members of the assembly are concerned that water service charges could rise, water quality would deteriorate and such services could be run by a foreign company," admitted one of the LDP members of the prefectural assembly.

In deliberations on the bill, the Diet failed to dispel concerns about the stable supply of tap water caused by the privatization of water services.

In Bolivia and the Indonesian capital of Jakarta, tap water charges rose and water quality declined following privatization of their respective water supply services.

According to one international survey organization, 235 water supply services in 37 countries were placed under government control again after being privatized over a 15-year period from 2000.

The government did not grasp these figures as it only examined three of these examples.

Even if local bodies sell the right to operate water supply services to private companies, those that have taken over such services will not be allowed to freely set tap water charges. The amended law also empowers the national government to inspect service providers.

However, the number of local government officials in charge of water supply services has kept decreasing, and the national government has no section specializing in overseeing water supply services, raising questions as to whether the central government can keep tabs on such services sufficiently.

(Japanese original by Atsuko Motohashi, Sendai Bureau, Takashi Okamura, Osaka City News Department, Tomoki Okuyama, Hamamatsu Bureau, and Hiroyuki Harada, Tokyo Medical Welfare News Department)