From government-driven to commercially-driven mergers : changing drivers for upscaling in the Dutch water supply sector

Over the past century the Dutch water supply sector has undergone a process of upscaling in which the number of utilities dropped from 230 in the late 1930s to 14 in 2007. Although the policy of upscaling service provision has been continued over this period, the driving forces behind the upscaling process have changed from government-steered upscaling to mergers which are initiated and executed by the water utilities. The shift in drivFing forces reflects two interlinked changes in the Dutch water supply sector. First, it highlights a shift in objectives that public water utilities are expected to achieve. The government-driven mergers in the first part of the 20th century focused on expanding service coverage to the unserved population. The mergers of the past decade highlight the increasing emphasis on efficiency and “market position”. Secondly, the change in driving forces behind the mergers in the Dutch water supply sector, as illustrated by the case of Friesland, reflect the shift to a “new model of public management” in the water services sector in which public water utilities are expected to operate as autonomous agencies and on the basis of commercial principles (meaning that economic considerations for mergers predominate). [authors abstract]