Breaking Up Water Monopolies: Costs and Benefits

Abstract

This article looks at vertical and horizontal integration in the English and Welsh water and sewerage industry, estimating the costs and benefits of breaking up monopolies. The results of the analysis suggest that the most cost effective organisational structure for water and sewage services requires a separate but vertically integrated operation of these services. Water and sewerage companies should be integrated, while their internal management and organization design should be structured separately for water and waste activities in order to manage the day-to-day operations at a more efficient scale.

Keywords: Monopolies, Productivity, Price Performance, Regulation, Water and Sewerage Industry

JEL Classification: Q5