Feasibility Study on Deregulation of Public Water Industry Market in Chinese Taipei

Abstract

To coordinate with the government in reviewing the first phase in privatization of water industry is deregulation, this research is taken by Taiwan Water Supply Corporation and Taipei Water Department as objects to probe into “Feasibility Study on Deregulation of Public Water Industry Market in Chinese Taipei”. The former one is under the command of state-operated corporation, and the other is subordinate to Taipei Municipal Government. Taipei Water Department will require the approval of Taipei City Council on this matter, and water industry belongs to local public affair; as far as its benefits is concerned, unlike Taiwan Water Supply Corporation is in financial deficits, Taipei Water Department is unwilling to participate in reforming the structure of the market. According to the experiences from other country, for instances, British enterprise is the only water supplier that sells in large quantities to the whole nation and brings privatization into effect. Other countries like USA, Australia, and Japan do not yet, but they adopt the measures such as BOT (Build-Operate-Transfer) or the collaboration of government and local people operating together to increase the operating efficiency and quality of service, and reduce the expenditure of the government.

The upper courses of water industry (water resources development) are mainly operated by the government, but the mid and lower courses could be leaded to BOT, which is the collaboration between the government and private companies, or BOO (Build-Own-Operate). However, the requirement is that the water industry must consider making the water price reasonable as their first mission in deregulation. In addition, according to Article 13 of Water Supply Law, the analysis of the basin of water sources and economic scale should be taken into consideration, and the plan of domestic regional operation should be reviewed so as to improve the mechanism of competition. For short and mid term, local water industry should either review and expand the scope of the business authorized to private companies, or advance the BOT system, or the government should cooperate with private companies, drawing up the relevant means of management and supervision, and in the end deciding the timing of promoting privatization depending on the effects.