Regulatory Reform of Public Utilities

Regulatory Reform of Public Utilities

The Japanese Experience

Fumitoshi Mizutani

Covering issues such as deregulation, privatization, organizational reforms, and competition policy, Regulatory Reform of Public Utilities provides a comprehensive summary of regulatory reforms in Japanese public utility industries.

Chapter 5: Water Supply

Fumitoshi Mizutani

Subjects: economics and finance, public sector economics


While private companies provide electric power, gas utility, and railway transportation in Japan, water is supplied by the public sector, in contrast to the situation in countries such as France and the UK, where the water supply, according to Ishii (2005a), is handled by the private sector. In France, for example, although the government is ultimately responsible for ensuring that users have access to water, about 78% of the water supply industry is comprised of private companies holding contracts with the government. In the UK, the water supply industry has been privatized. Although the market size of the water supply industry in Japan is 2.9 trillion yen per year, the industry remains in the public domain. The basic principles of the Japanese water supply industry have traditionally been that water is managed with a self-supporting system and is in general supplied by municipal governments. This system remained essentially unchanged until 2002, when the private sector began to be allowed to participate partially, under government contract, in the management of water supply facilities. Compared with other utility industries in Japan, however, the role of the private sector in the water supply industry is minimal.

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