Analysis of water privatization scenarios in Korea with multi-criteria decision-making techniques

Abstract

This study introduces three scenarios for water privatization in Korea and analyses them with multi-criteria decision-making techniques. The three scenarios are developed to provide the general directions in which the current Korean water industry is to be privatized. They are thus formulated on the basis of the current situation of the Korean water industry and foreign examples of privatization. The scenarios are called the British model, the French model and a mixed model since the first and second models are similar to the privatization processes that took place in the United Kingdom and France. In applying multi-criteria decision-making techniques for comparison of the three scenarios, this study classifies decision makers into four groups: the central government, local governments, consumers and employees of the water industry. Each group evaluates the scenarios with 25 criteria and the evaluation results of each group are compared. The analysis results indicate that the mixed model is the most favoured by all the groups. And it is also indicated that the most important factors for the success of privatization include strong commitment of and implementation by the central government and development of more programmes to induce more active participation of local governments and employees. Among the four groups, central government is found to favour privatization the most while the employees favour it least. In addition, this study proves that the multi-criteria decision-making techniques can be useful tools for analysing water management issues that are highly debated among various social groups and for providing a sound basis for compromise.