Upper House approves bill allowing private firms to run water supply services

JIJI, Kyodo

The Upper House on Wednesday passed a controversial bill by a majority vote to revise the Water Supply Act to allow private companies to run municipal water services.

The government and the ruling coalition aim to pass the bill in the Lower House plenary session Thursday, but opposition parties fear it could lead to effectively privatizing the water supply business.

The bill is intended to strengthen the foundation of municipal water supply services, as many local governments across the country face the need to address aging water facilities and deterioration in the earnings of their services due to declining populations.

The bill was carried over to the current extraordinary Diet session after clearing the House of Representatives, the lower chamber, during the regular parliamentary session that ended in July.

The bill calls for the introduction of a concession system to enable local governments to sell the rights to run water supply services to the private sector without giving up their ownership of relevant facilities.

Also included in the bill are measures to facilitate integration of water services and joint use of facilities to help stabilize municipal water supply operations.

Some people expect that the concession system will make water services more efficient, while others are concerned about the possibility of higher water bills and deterioration in tap water quality.

Some countries that have privatized water services through a similar approach have subsequently returned to run such operations publicly.

In Upper House committee deliberations, the Constitutional Democratic Party of Japan and other opposition parties strongly opposed the introduction of the concession system.