Valdovinos, J. (2022). Transnational corporations in urban water governance: Public private partnerships in Mexico and the US. Routledge. ISBN 9781032052472 (paperback, £42)/ ISBN 9780367440596 (hardcover, £135) / ISBN 9780367440596 (ebook, £38).
Kate Bayliss
SOAS, kb6@soas.ac.uk
To cite this Review: Bayliss, K. (2025). Review of “Transnational corporations in urban water governance: Public private partnerships in Mexico and the US”, Routledge by Joyce Valdovinos, Water Alternatives, http://www.water-alternatives.org/index.php/boh/item/386-TNC
This book documents the rise of two of the largest global private water companies: Veolia and Suez. Water privatisation and public private partnerships (PPPs) came to policy prominence in the 1990s, and were presented by supporters as a way to bring both investment and efficiency to transform ailing public sector water companies. Success has been limited but despite setbacks, these two companies have emerged to operate global portfolios and, since the book was published, have combined, following Veolia’s hostile takeover of Suez in 2022 to create a single giant global corporation.
The book begins with an overview of the different ways that water management is organised to show how PPPs fit in this wider policy context, followed by a scoping of the role of Transnational Corporations (TNCs) in water. The chapter sets out the book’s ambition to interrogate the role of Veolia and Suez in PPP contracts through the lens of territorial embeddedness, institutional frameworks and the power of TNCs. Chapter 2 outlines the history of water PPPs, pointing out that they are heavily promoted by international organisations such as the World Bank. Progress with PPP implementation stalled in the 2000s but climate change has created new business opportunities for water TNCs. Chapter 3 then takes us to the origins and evolution of Veolia and Suez. This is a forensic account of their transition from 1850s France to the global power houses that they are today. The chapter shows how the companies were able to focus on their core activities of water as well as waste, to take advantage of global trends, as PPPs gathered momentum globally. The support of the French state has been crucial, with the government employing protectionist policies and ‘selected interventionism’ (p.82) to encourage the growth of these companies in France and abroad. As the book says, ‘the French state is not shy about taking an active role in the country’s economy’, including through supporting global water initiatives such as the World Water Council. This is facilitated by the fact that the companies’ senior management are from the same elite as the business and ministerial players in the country. As France – unlike other countries - has a history of private water provisioning and strong government support for their water companies at home and abroad, it is no wonder that French companies have come to dominate global water markets.
The second part of the book contains case studies of these companies’ overseas operations with two case studies from Mexico: Aguascalientes and Mexico City, and two from the USA: Atlanta and Milwaukee. These chapters provide extensive details supported by interviews to show how these companies adopted different strategies to work with the local context in securing and sustaining PPP contracts. Chapter 4 sets out in detail the background to the PPP contracts of Veolia and Suez in Mexico.
International agencies like the World Bank played a key role in promoting PPPs in water in Mexico but implementation has been limited in part because water is highly politicised. The author documents in detail how the companies’ have navigated the political terrain to maintain their presence in the country. What I found fascinating was that these contracts have not been particularly successful: in Aguascalientes, (p.125) the chapter says that the PPP remains controversial with complaints about the lack of water and an increase in water rates. And later, (p.142) the PPP ‘has not yielded the expected outcomes … and it has generated substantial social and political opposition’. The experience of Suez in Mexico City seems to be similar. In spite of this, the PPP contracts have been renewed six times since they were first signed. But still very high levels of leakage persist.
To a large degree, the limitations are due to the wider context. The municipal infrastructure continues to impair service provision and low prices constrain the financial viabilities of water services. But against this potentially unfavourable backdrop, Veolia and Suez have maintained dominant positions, in large part due to the strategic alliances they have developed in the country: ‘it was not so much innovation and expertise that paved the way for Veolia and Suez’s success in Mexico but rather diligence in learning how to play the game in Mexican politics’ (p.167).
The book then moves to the USA where both companies entered the country with partnerships with local firms. It has been a rocky road for both, with Veolia facing legal action for its role in the Flint contaminated water crisis and then for mismanagement in Pittsburgh. Suez also faced corruption scandals. Their PPP in Atlanta was terminated after just five years instead of the contracted 20 years. Veolia’s experience in Milwaukee was rather more successful. A big difference seems to be the pre-existing state of the water infrastructure which was poor in Atlanta compared with Milwaukee. The institutional framework also was important with considerable discretionary power in the hands of the mayor in Atlanta who was subsequently indicted for fraud. In Milwaukee by contrast, there was much greater democratic scrutiny of the water contract by a range of parties. And the chapter shows how the companies achieved varying results from mobilising resources to garner support from political and business actors.
The book concludes with a synthesis of the findings, showing how essentially Veolia and Suez have managed to adapt to a changing world. The author makes clear that this book is not about the pros and cons of public or private water, but about the role played by TNCs in urban governance. However, this positioning of the book means that we are left feeling a little unsure about the role of these companies. Are they a good thing? The book on the one hand makes it clear that the company bosses are close to the French elite and shows that strategic connections are important in the countries where they operate, possibly more so than objective performance measures. But then on the other hand the book also celebrates the corporate innovations. Chapter 3 in particular trumpets the companies’ achievements using language that at times reads like promotional material such as ‘Veolia and Suez have integrated challenge-driven innovation policies in their adaptation strategies’ (p.93). Perhaps this then is the takeaway from the book. The challenges are not just in the technicalities of water systems but in sustaining political support and this is the path to achieving global dominance on the scale of these two companies, regardless of what one may think of privatisation.
