Journal of Environment and Earth Science www.iiste.org ISSN 2224-3216 (Paper) ISSN 2225-0948 (Online) DOI: 10.7176/JEES Vol.9, No.9, 2019 58 Proposed Privatization of Water Service Delivery in Lagos: Reviewing the Evidence of Water Utilities Privatization Odafivwotu Ohwo * Department of Geography and Environmental Management, Niger Delta University, Wilberforce Island, Nigeria Abstract One of the major reform options considered by governments in developing countries to improve financial investment and service efficiency of water utilities is privatization, based on the public-private partnership (PPP) model. Hence, this study reviewed the evidence on the proposed privatization of water service delivery in Lagos State. The study was based on a comprehensive review of the literature on privatization of water utilities. Studies reviewed include case, comparative, cross country and systematic reviews, which were obtained from academic journals, research reports, commissioned studies, conference papers and proceedings. The study revealed that privatizations of water utilities are generally hinged on two major hypotheses: improved performance efficiency and financial investment. However, the literature on public utilities privatization has shown conflicting results on these two major hypotheses, as some empirical studies confirm these hypotheses, while others reject them. The study revealed that the major types of water utility privatizations were lease, service and management contracts, which are not suitable, if the focus is to obtain new sources of financial investment for expanding water network. This shows that privatization of water utility is not a magical solution to an inefficient and poorly financed water utility. Therefore, before the Lagos State Government finally decides to go ahead with the planned privatization of the Lagos Water Corporation (LWC), it should review the available empirical evidence and the major success factors, which may act as barriers to a successful privatization of water service delivery in Lagos. Keywords: Lagos, Privatization, Public-Private Partnership, Water Utility DOI: 10.7176/JEES/9-9-07 Publication date:September 30 th 2019 1. Introduction Safe drinking water is a basic necessity of life, which enhance healthy living and promote socioeconomic development of any society. In spite of its importance, the provision of adequate public water in Nigeria, especially in Lagos State is deteriorating due to several challenges such as rapid rate of population growth and unplanned urban expansion, limited budgetary allocations, which has led to underinvestment in new and expanded capacity, erratic power supply, ageing pipes resulting in frequent breaks (increasing unaccounted for water) a highly politicized tariff setting regions (leading to poor cost recovery) and unmotivated staff (Ohwo, 2016). These challenges have led to poor service delivery by the Lagos Water Corporation (LWC) charged with the responsibility of providing potable water for the citizens. For example, Stimson Global Health Security (2012) observed that in 2008, the LWC was only able to meet a small portion of the daily water demands of the citizens as it delivered only 200 million gallons (33%) per day as against a demand of 600 million gallons, creating a demand gap of 400 million gallons (66%) per day. This situation has even worsened as there have not been any appreciable expansion of services since 2008 in spite of the rapid rate of population growth and urban expansion of Lagos. Also, a study by Ohwo and Agusomu (2018) on residential customers satisfaction with public water provision in Ojota (a settlement in Lagos) shows that public water provision in Ojota was perceived as fairly satisfactory, and only 12.21% of the customers were willing to pay for water, based on their overall rating of the services provided by the LWC. This unwillingness to pay for water could lead to poor cost recovery and further increase the woes of the corporation. The inability of the LWC to satisfactorily carry out its mandate has prompted the state government to propose the privatization of water service delivery in the state. It is the belief of the government that privatization will improve the funding and efficient service delivery of the LWC, resulting in the expansion of the pipe distribution network and the connection of households not serviced. The privatization model proposed by the government is the public- private partnership (PPP) model. The government defined a PPP as “a contract whereby the private sector is engaged by the public sector to manage public services and/or to design, build, finance and operate infrastructure to enhance efficiency, broaden access, and improve the quality of public services”. PPP is therefore structured in a manner that allows both the public and private sectors to take on certain tasks and enjoy certain advantages relative to each other while performing their specific tasks (Nigeria Infrastructure Advisory Facility, 2012). Since the proposed privatization of the water sector became public knowledge there has been debate on the