Water sector reforms in recent years have concentrated on involving the private sector in the operation and management of monopoly water utilities. Much effort has gone into regulation to stop utilities from abusing their monopoly power, but relatively little into considering ways to reduce that...

Many private infrastructure projects mix regulation that subjects the private company to considerable risk, a government or regulator that is reluctant to see the company go bankrupt, and high leverage on the part of the company. If all goes well, equityholders make a profit, debtholders are...