Competition in Urban Water and Sewage: The Case of Sydney, Australia

Policy makers have long grappled with the problems associated with introducing competition into natural monopoly industries such as railways, telecommunications, electricity and gas in order to eliminate excess profits and assure efficient provision of services. In the case of water supply and wastewater disposal in urban centres this process has tended to be even more difficult. This article analyses the circumstances surrounding the granting of third party access to infrastructure facilities in the water and wastewater industry in Australia's largest city, Sydney, and identifies difficulties that have been involved in this process. The effective introduction of competition into the water and wastewater industries, through robust access arrangements, would provide an additional path for the diversification of water sources, and potentially in ways that minimise environmental impacts.