In March 2000 Bucharest entered into aconcession contract for its water utility with the aim ofturning around the utility's faltering performance.Under the private operator the utility has raised servicequality above Romanian standards and toward Western Europeanlevels. By 2008 efficiency gains had produced cost savingstotaling US$349 million. The concessionaire has financedUS$259 million in investment, without public subsidy, whilekeeping tariffs well below the Romanian average. Not allwater concessions have been as successful. What accounts forthe gains under this one? The concession of Bucharest'swater utility has brought its citizens higher-quality waterservices, at a lower cost, than they could have had undercontinued municipal provision. The credit for this goes tothe leadership of the municipality and the municipal utilityin the late 1990s, which saw that private finance andmanagement were needed to reverse the cycle of poor performance.
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