The two referendums “on water” represent – unfortunately – a bad example of abuse of an important democratic institution such as the abrogative referendum. It is very probable that the vast majority of Italians will vote YES or NO in the conviction of deciding whether water should remain a common public good or not. The very title of the first of the two referendums (“referendum on the privatization of water”) supports this belief.
But is not so. The referendum abrogates the provisions of the Ronchi-Fitto decree on the liberalization of a large number of local public services: the most relevant are those of local transport, water collection, purification and distribution, waste collection and disposal. In addition, the Ronchi-Fitto decree explicitly establishes that water is a public good, that the related infrastructures (aqueducts, purifiers) are public, and that it is up to public institutions to set the tariffs. Water remains a common and free good; you pay for the service that captures it, brings it to homes or factories, purifies it. The price is set by the municipalities (today), the public water agency (tomorrow). The same thing happens in waste disposal and local transport (city streets remain public, and you don't pay to walk on them, you pay for the transport on the bus, the price is determined by the municipality).
Therefore the effects of the referendum: a) will not concern only water, but also many other services; b) will not concern the nature of the water asset and its ownership, but the management of the services.
According to the Ronchi-Fitto decree, these services (water, waste, transport, etc.) will have to be granted under concession (for a predetermined period) to public or private companies, which will win specific tenders: may the best one win. Local authorities will have to define the conditions and standards of the services (in the tender specifications and then in the service contracts) and check that they are respected (otherwise they could impose fines or even revoke the concession). This is the rule: the same that inspired the previous attempts at reform by Giorgio Napolitano (XNUMXst Prodi Government) and Linda Lanzillotta (XNUMXnd Prodi Government), both of which failed. The basic idea is that the management of these services must be done by expert and equipped industrial companies: it does not matter whether they are public or private or with mixed capital; it matters to choose the most efficient ones, those that ensure the best services at the lowest costs. And the tender mechanism will make it possible to choose the most efficient companies. And it will force everyone, starting with public enterprises, to improve their efficiency and give up super profits, otherwise they will lose the tenders. Local authorities will have to define the conditions and standards of the services and check that they are respected (otherwise they will be able to impose fines or even revoke the concession).
As for the second question, the obligation to take into account, when setting the tariff, the "adequate return on invested capital" is not in favor of private profits, given that the company that wins the tender could be public; but it is the condition for being able to make the necessary investments in the sector. Investors (or even loans from banks and CDPs) are found only if the capital or loans are remunerated.
The legal representatives say that this paves the way for speculation and super-profits. But private individuals will not determine the rates but the public water agency, an independent body. Therefore the tariffs will take into account the costs of managing the service, maintenance of the systems, and the remuneration of the investments and the necessary financing. Moreover, the tender mechanism will make it possible to choose the most efficient companies, those that ensure the best services at the lowest costs.
It is true that the Ronchi-Fitto decree also provides for (debatable) exceptions. The possibility of direct public management, if the Municipalities demonstrate that there are valid reasons for choosing this hypothesis (the one that the legal representatives would like to generalize); and the possibility of (temporarily) leaving the current management concessions in direct assignment (awarded without a tender) alive, in this case ensuring that private individuals have a significant shareholding, able (perhaps) to resist clientele pressures and the needs of division that often burden public management. But these are exceptions, limited or transitory, with respect to the principle of liberalization and competition. A referendum limited to these exceptions would have deserved everyone's YES. Not a referendum that abrogates the virtuous rule and saves the exceptions.
I would add that the supporters of the referendum have never given an answer to an objection: the effects of a possible success of the YES on public finances. If they win, a regulatory vacuum will be created that will need to be filled. According to the promoters of the referendum, it would be necessary to return to the public management of these services: it will be difficult to counter this request legitimized by the popular vote. Now, in-house public management in water, waste and local transport (and in other minor sectors), means that the necessary investments (120/140 billion estimated over the next 10 years, in the three sectors) should be financed by local authorities on their balance sheets. But local authorities are running out of gas, and the European Stability Pact forbids them to borrow more money, indeed it requires them to reduce public debt by 3 points a year (of GDP). Therefore: either investments will no longer be made and the cities risk being left without water and submerged in waste; o essential resources will be removed from other services (schools, care for the elderly, nursery schools, road maintenance, etc.) which cannot be entrusted in concession to public or private companies; or local taxes will be dramatically increased, to pay for the year's investments year by year. I don't know which of the three scenarios is worse: they are all disastrous.
I would add that in the case of water, which is a scarce good, even partial taxation of service and investment costs would encourage waste; it would in fact be paid in proportion to the declared income, not to consumption; and a retiree or fixed-income employee would also pay for the pool water of the real estate developer or tax evader financier!
All of this is ignored by the vast majority of voters: the promoters of the referendum contributed to this colossal disinformation, who know they can win and convince only by manipulating the reality of the facts and the rules; and many party exponents, who see the referendum only as an instrument of political struggle. So much so that the Democratic Party has aligned itself against liberalization, which had made liberalizations (also in the public utilities sector) its banner (from Napolitano to Bersani) in the previous 15 years.
For these reasons, I believe everything must be done to derail the referendum. Under normal conditions I would vote NO, convinced that the strong reasons for the liberalization of services can prevail. In these conditions, with pain, I will choose not to collect the two cards "on water": also because water is not pure water but, in this case, a smelly mixture of water, waste, subways and buses, garden maintenance and school cleaning. And hardly anyone knows!
*Constitutionalist
