The pursuit of profit by private owners in water supply facilities is worrying in Finland. However, both currently and in the new draft law, the income is limited to “reasonable”.
There are no privately owned water plants in Sweden. One facility is owned by the state, but otherwise the water facilities are in the hands of municipalities and municipal associations.
There are a total of 1750 municipal water plants in the country, which produce drinking water for 9.5 million inhabitants. The rest draw their water from the yard well.
Strategist of the Swedish water industry association Svenskt vatten Erik Karlsson says that, in principle, the ownership of water plants could be of interest to investors, but there is one reason for the lack of interest.
– In Sweden, you can’t make a profit with water.
Within the limits of the Swedish Water Services Act, private investors could own 49% of the water utility.
– However, municipalities have no incentive to sell such large shares to private individuals.
The Water Management Act is currently being reformed in Finland. There has been a heated debate in the public about how private ownership in water plants should be organized. Currently, the amount of private ownership is not defined by law.
In Wednesday’s A-studio, a member of parliament from the center Anne Kalmari expressed his concern that private owners are on the move with a profit-seeking mindset, which could lead, among other things, to a drastic increase in water fees.
However, there are already restrictions on the return on capital.
– According to the current regulations, you can make at most a reasonable profit in water supply. And before that, you have to make sure that the costs of water supply are covered with the payments, explains the director of water management Olli-Matti Verta from the Ministry of Agriculture and Forestry.
The new draft law would not change the starting point of the current law, according to which the water supply fees may include no more than a reasonable return on capital after the repair needs have been taken care of.
According to the Ministry of Agriculture and Forestry’s press release, rather with the reform of the Water Supply Act the privatization of water supply is prevented. The law is scheduled to enter into force on January 1, 2026.
Even public ownership does not guarantee that the systems will stay up-to-date. Even though Sweden’s water supply is in the hands of the municipalities, the debt to repair the systems increases every year.
Sweden’s annual investment need for the water and sewage system is According to Svenskt vatten 2.5 billion euros. At the current level, investments amount to 1.6 billion euros per year.
– In some municipalities, the water pipelines date back to 1860, says Erik Karlsson.