Water returns to local councils: a study by the University of Barcelona reveals the extent of remunicipalisation in Catalonia
PRESS RELEASE
- A study by the University of Barcelona analyses almost 100 municipalities and concludes that remunicipalisation is the only effective brake on the dominance of large private companies in urban water management.
Published in the Cambridge Journal of Regions, Economy and Society, the study by Professor Germà Bel and researcher Joël Bühler, from the Faculty of Economics and Business at the University of Barcelona, shows that the remunicipalisation of urban water has become the most effective tool for curbing the quasi-monopolistic power of large private companies in Catalonia, far above competition for contracts.
Published in the Cambridge Journal of Regions, Economy and Society, the study by Professor Germà Bel and researcher Joël Bühler, from the Faculty of Economics and Business at the University of Barcelona, shows that the remunicipalisation of urban water has become the most effective tool for curbing the quasi-monopolistic power of large private companies in Catalonia, far above competition for contracts.
The article examines how, after decades of privatization, a very large and highly concentrated market — with a single private company dominating most contracts — has created conditions conducive to many local councils opting to regain direct management of the service. Methodologically, the authors combine analysis of Spanish and Catalan databases with surveys and interviews in 78 municipalities to study both the evolution of the degree of privatization and concentration and the motivations, instruments and results of remunicipalisation. From a perspective that integrates public economics and state theory, the paper reflects on how private monopoly conditions local political decision-making capacity and on the extent remunicipalisation opens the door to more democratic models of water management.
The study reveals that the private water market in Catalonia is dominated by Agbar, a company owned by the French multinational Veolia, which manages 78% of municipalities with private management. This company also serves 88% of the population that is served by private companies in Catalonia. The concentration is reflected in a Herfindahl-Hirschman Index (HHI) of between 6,000 and 6,600 points, well above the threshold of 1,800 points that US regulators consider indicative of a monopoly. Researchers explain that this monopolization intensified in the late 2000s, when Agbar bought its regional competitor, Cassa, shortly after laws were passed to increase competition in the contract market.
Between 2017 and 2024, private management in Catalonia fell from 45.2% to 42.4% of municipalities, and the population supplied by private companies fell from 79.5% to 73%. These figures contrast with the relative stability of Agbar’s share within the privatized segment, which throughout this period has remained at around 78% of municipalities with private management.
The main conclusion of the research is that remunicipalisation, rather than competition between private companies for contracts, is the only strategy that has effectively reduced Agbar’s market power. Between 2017 and 2024, remunicipalisation reduced the company’s overall market share by more than five percentage points, while competition in the contract market had no significant effect on its dominant position. This demonstrates that competitive tendering for contracts, which is the theoretical mechanism for ensuring efficiency in private management, has not worked as an effective tool for combating monopoly in Catalonia.
Since 2010, a total of 40 Catalan municipalities have remunicipalised their water services — almost 60% of the Spanish total — affecting more than 265,000 inhabitants. The intensity of the phenomenon has accelerated in recent years: since 2014, remunicipalisations have far outnumbered new privatizations, which have practically disappeared from the Catalan map with only three documented cases between 2014 and 2024.
One of the most notable findings of the study is the role of inter-municipal cooperation in this process. Forty per cent of remunicipalised water services in Catalonia are provided jointly by municipalities, a figure that contrasts with the 17% recorded in the rest of Spain. Entities such as the Consortium for Water Management in Catalonia (CONGIAC) and the public firm ONAIGUA provide technical, administrative and legal support to municipalities wishing to regain public management of the service, especially smaller municipalities with fewer resources of their own. Representatives of these entities consulted by the researchers pointed out that the current legal framework is highly disadvantageous for public management, and that Agbar uses systematic litigation as a strategy to discourage remunicipalisation and maintain its dominant position. Inter-municipal cooperation enables municipalities to share resources and jointly tackle these legal and political obstacles.
Regarding the democratization of water management following remunicipalisation, the study finds that progress has been modest both in Catalonia and in the rest of Spain. Despite notable cases such as the Terrassa Water Observatory, which has been the subject of numerous academic studies and political analyses, only five municipalities have implemented formal mechanisms for citizen participation in the governance of the service. These are Terrassa, Arenys de Munt and Vilassar de Dalt in Catalonia, and Ames and Alcázar de San Juan in the rest of Spain. In these cases, participation generally takes the form of citizen representatives or neighbourhood associations that have seats on the boards of directors of municipal water companies.
Germà Bel is a professor of Applied Economics at the Faculty of Economics and Business, and holds a master’s degree in Economics from the University of Chicago. He has extensive experience in the study of public sector reforms, inter-municipal cooperation and the provision of local services. Joël Bühler is a researcher at the Department of Econometrics, Statistics and Applied Economics, specializing in quantitative methods applied to the evaluation of public policies.
References
«Privatisation and remunicipalisation of urban water in Catalonia: between monopolisation, state and the commons». Cambridge Journal of Regions, Economy and Society. DOI: https://doi.org/10.1093/cjres/rsaf048.
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