• Richard

Economic Regulation for the Executive Masters OpT – Water for All, Montpellier


Sharing ideas on economic regulation with the English-speaking class of the International Executive Masters OpT – Water for All class of 2017-18 : http://www2.agroparistech.fr/International-Executive-Masters-programme-OpT.html


Using an adapted version of the WaterMan simulation exercise, to give participants the role of Economic Regulator in responding to the Utility request for price increases. Most groups tried to second guess the utility (‘Principal-agent’ problem?) and keep prices too low – so then ‘their’ service providers were unable to fund necessary capital maintenance or service expansion. Hhhmmm. The students also undertook a Regulatory Role Play complete with Customers, NGOs & Press as well as Utility MD, SMEs, Contractors, and the Economic Regulator backed up by the Minister of Water and Environment. Mixed results this time as I gave the Regulator the lead role – it has worked better in previous times giving the Utility MD the lead in the consultation meeting, the service provider making the case for improved services requiring higher prices etc.


Also sharing the 'THE REGULATION GAME' - "If regulation is the impartial referee in the football match between the government/policymakers and the utility direct providers (agreeing fair prices in return for societal desired standards), with the customers in the stands expecting a good performance, and the customer forum/customer committee as the biased linesman shouting ‘offside’whenever the game seems to be going against customer interests. … at present the poor are perhaps playing a different game altogether, on the dusty waste ground outside the main stadium – playing a game between the poor and their alternative providers with no referees/regulator and government. Our challenge as a sector is to ensure that th epoor are invited to join in the main match, perhaps standing on the hill at one end rather than sitting in the main seats – but definitely part of the experience. And to stretch the picture perhaps way too far, with the alternative providers also now in the stadium, selling drinks and ice creams to all the crowd! " (“Regulating Water and Sanitation for the Poor– economic regulation for public and private partnerships”, (with Esther Gerlach), 286 pages, Earthscan, 2008)

Taking the chance to see what I had always assumed was a Roman Aqueduct but I have since learnt is the 18th Cent SAINT CLÉMENT AQUEDUCT ‘used to bring the city's water over 14 km from the Saint-Clément spring to the water tower in Peyrou. Thanks to this structure, Montpellier can supply the numerous fountains scattered around the city.’


And then slightly longer journey to see the Millau road viaduct …. A 21st Cent. wonder. Costing $450m approx. …. A French student on the Cranfield Masters, undertaking her thesis on rural sanitation in France told me of a quote: ‘the water in the stream might be the colour of champagne but won’t taste like champagne …’. Society has to choose where to focus its investment …. The good news is that in very low density rural areas in France, even where wastewater treatment (usually dispersed septic tanks not being maintained and emptied properly, as in many other countries, including my own) the natural processes of the streams usually delivers good enough water quality in a few hundred (thousand?) metres …..



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