Public Services International Research Unit

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FOCUS Prices and rates levels [and related issues] Rates - crucial, issues of fairness + equity + different resources + economic factors TASKS: You are meeting with consumer groups to discuss the proposed privatisation of water (or privatisation and/or competition for electricity) in your region. The consumer groups are inclined to support the proposal. They have heard that privatisation will bring down prices, because private companies are more efficient. Everyone knows that introducing competition means that the companies will reduce prices for everybody, including the poorest families. They have been told that the municipality will have the final decision over price levels, and so the companies will not be allowed to charge too much. They know that the municipality has not got enough money to invest in new installations, but the multinationals have got enough money to carry out the investment so the municipality will not have to raise taxes. They believe that private management are bound to pay much more attention to their customers - the public service always takes a long time before dealing with complaints. Finally, they think that the trade unions are just trying to defend inefficient over-staffing (but they will not say this openly). You have one hour in which to prepare a convincing case to win these groups round to your point of view. RESOURCES: Water costs to consumers Electricity prices and competition Water prices and labour cost Hungary: energy privatisation TIME 1½ hours