A public sector multinational company: The case of Canal de Isabel II

Abstract

Some publicly-owned enterprises (POEs) in water services have recently developed behaviour similar to private companies, tendering for and managing concessions and other contracts, both in their countries and abroad. The article first discusses the reasons for public sector provision of water services, and the different public and private mechanisms of production. It then examines the development of Canal de Isabel II, the public sector water company of Madrid, as a vehicle for public service responsibilities, and then its more recent policies of commercial diversification and overseas expansion, and discusses some contradictions between this commercial activity and the original terms of the company's public service remit. In conclusion, it seeks to explain this behaviour and its relation to transparency and democratic control, especially of risk.