Water Supply and Sanitation in The Netherlands - History and Recent Events

History and Recent Events

Consolidation of water companies. In 1945 the Dutch water sector was highly fragmented with more than 200 water companies. Their number gradually declined to 10 five decades later. One reason was a transition from groundwater to surface water, and the need to construct capital-intensive and relatively complex treatment plants which required the cooperation of many municipalities. Another reason was that the national government encouraged the creation of larger public limited companies through a law enacted in 1975. However, since the 1990s consolidation has not been driven by the government, but rather by a desire of water companies themselves to reach economies of scale and to be "competitive" in a more liberalized European market.

Benchmarking. Since 1997 the Dutch water companies have engaged in a voluntary exercise to benchmark their performance against each other, in order to improve their efficiency and increase transparency. Initially, the benchmarking was undertaken to forestall a government proposal by the Minisry of Economic Affairs to establish a regulatory agency following the British model. Later on, when the regulatory agency did not materialize, benchmarking was pursued more and more for its intrinsic benefits. The Dutch benchmarking exercise covers four areas: water quality; service; environment; and finance and efficiency. The Dutch benchmarking program was the first nationwide benchmarking exercise in the water supply sector in continental Europe. Since then it has inspired similar water and sanitation benchmarking exercises in other European countries, including Denmark, Finland, Norway, Sweden and Germany. Most of these exercises are coordinated since 2004 in the North European Benchmarking Co-operation.

Ban of private companies from providing drinking water. In 2004 the Netherlands passed a law which prevents any privately owned company from providing drinking water services to the public. The law is a follow-up to a 1997 government paper, which made clear that water supply concessions would only be given to government-owned companies. It had been introduced in 2000 by the Dutch Environment Minister at the time (1998–2002), Jan Pronk. The bill only covers drinking water provision to households, not sewerage and wastewater treatment. Since almost all water companies in the Netherlands are public and they contract out many services to the private sector, which the law allows, the law has not had any practical consequences.

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