According to a new study by Global Water Intelligence, the market for private sector participation in the water sector is on the verge of a comeback with the greatest demand for private expertise in limited service offerings.
The new private water market looks set to be much more diverse than the first private water boom during the 1990s. It brings together a much larger cast of regional and local players, as well as more specialist international companies looking to develop niche service markets, according to the report.
“The outlook is bright for the private water market, and there will be significant changes within five years as utilities turn to the private sector to make up for public sector deficits,” said Christopher Gasson, publisher of GWI's “Private Sector Participation in Water” report. “Private investors and operators need to be ready to anticipate and act on the opportunities on the horizon in this sector. This report gives a detailed analysis of the trends driving change and global forecasts for the market value of operations contracts, and capital investment and regional market size forecasts.”
The report’s findings reveal that increasingly the greatest demand for private expertise is in more limited services offerings, these include:
- Management contracts
- Performance contracts
- Specific service contracts
- Build-operate-transfer (BOT)
- Design-build-operate (DBO)
The largest markets for private sector participation are the UK, the U.S., Brazil, China and France. The report predicts that the French domestic market may shrink slightly between now and 2020, while no new opportunities are expected in the UK. Meanwhile, China and Brazil will continue to offer opportunities both for utility concessions and for asset finance and operations.
The fastest-growing markets it says will be countries which have a relatively small amount of current activity, but which have made a policy decision to support PPP include Egypt, Vietnam, India, Canada and Saudi Arabia.
Spending on projects featuring private sector participation is expected to outstrip spending on water utility services overall. Within the wastewater sector, total spend is growing slightly faster than drinking water with the fastest-growing areas including sludge management and water reuse. The utility operations sector is the slowest growing area of the market, but management/ performance contracts and knowledge-based services contracts are expected to deliver good growth rates.
For more information on the Private Sector Participation in Water report, visit www.globalwaterintel.com/PSPreport.