Competition in the Water Sector: A Review of the Cost-Benefit Analysis Knowledge Base

Reference: 11/RG/03/2
ISBN: 1 84057 589 1N/A
Published Date: 16/05/2011

There has been a great deal of dicsussion about competition reform over the past three years. This discussion has generated a large knowledge base on the costs and benefits of introducing competition in the water sector, referred to as 'the cost-benefit analysis knowledge base'.
UKWIR commissioned Oxera to review this knowledge base, with the ultimate goal of helping future policy-making decisions. The review was undertaken in two parts: Part I: a high-level review of the costs and benefits of introducing competition; Part II: a more detailed review focused on the costs and benefits of separation.
To undertake this review, Oxera explored three main sources of information: publicly available papers on water competition published over the past three years; additional industry knowledge, obtained via interviews and consultation with water companies, regulators and other key industry stakeholders; the experience of separation in other sectors, obtained via a thorough review of a number of case studies.
The fundamental finding of Oxera's review is that some areas of the CBA warrant more in-depth analysis. Based on this finding, Oxera recommends that these areas of the analysis be examined more fully as an input into future policy reform decisions.

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