Kauppalehti as Actor and Forum for Water Commercialization

The following longitudinal content analysis of Kauppalehti newspaper should be seen as to complement the interview data and support the argument that the commercial and business interests of actors have increased over the past decade. Among daily newspapers and magazines, the business newspaper Kauppalehti had been covering water services most extensively and at least since 1995, which represents the starting date for the analysis at hand. Media and especially mass media, such as the Kauppalehti newspaper, can be a powerful actor as it may affect public opinion and therefore, it is different from professional journals that usually reach only a small circle of experts and professionals working in a sector (e.g. 5,000 copies) although these small journals may also be important because they may be read by policy makers. Therefore, Kauppalehti News is not only a daily business newspaper but because of its potential to decide what to cover it may affect public opinion and needs to be considered also an actor in its own right.

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In order to provide a longitudinal description of how water supply and sanitation was covered in the magazine and how that has changed over the years, I chose the time period of January 1995 (beginning of energy market liberalization) to March 2006 (latest data available when the empirical analysis for this study ended). On basis of my analysis, three periods of different thematic coverage emerged. I named the first period ‘the phase of development assistance’ which lasted from 1995 to 1998, followed by the second period of ‘privatization interests’ from 1999 to 2002, and the third period, named as ‘the phase of restructuring and commercial interests’ from 2003 to 2006. The following paragraphs briefly summarize the characteristics of these phases by referring to Figure 4-7 (a more detailed account of the analysis is to be found in the appendix).

0 1 2 3 4 5 6 7 8

1995 1996

1997 1998

1999 2000

2001 2002

2003 2004

2005 2006*

Total Number of WSS Related Articles per Year

Assistance to Foreign Countries

Assistance in Finland

Renewing Finnish WSS

Other Water-Related

Amount of Water -Related Articles with Commercial Interests**

Figure 4-7 Water Sector Media Coverage in Kauppalehti News 1995-2006

* 2006: First six months. Total amount of articles 1995-2006 N = 45.

**The line reads as: “In 1996, five out of eight water-related articles had a significant emphasis on the commercial aspects of the topic they were reporting about”.

As depicted in Figure 4-7, the newspapers’ coverage of the water sector in the middle of the 1990s was mainly focused on business activities of Finnish firms abroad that were constructing water supply and sanitation in developing countries. Also, development aid that was granted by the European Union to Finland in order to rehabilitate water and wastewater infrastructure, especially in rural areas, was reported. However, the commercial focus in Kauppalehti changed in 1999 by providing a forum to investment bankers that argued for a privatization of Finnish water services while also publishing articles that report on the poor condition of water and wastewater infrastructure in Finland and thus, on the investment needs.

Period 1 Period 2 Period 3

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But the articles that seemed to promote or at least suggest privatization as an option for the Finnish water sector to acquire new capital stopped in 2002 and it became rather quiet in 2003. However, while 2003 was a quiet year for articles in Kauppalehti about water services, it becomes clear in the articles of 2004 that actors had still been rather busy in the previous years. This was noticeable by the unsuccessful attempts to privatize water services that were admitted by investment bankers; they changed their proposals for restructuring the water services by promoting mergers between water and energy companies.

In 2006, the discussion had clearly shifted into the direction of creating energy and water multi-utilities as also municipality-owned energy companies pronounced their interest in Kauppalehti. From this perspective, the issues in the water sector have been changing from commercial interest of in fact privatizing the water sector (during 1999 to 2002) to merely restructuring it and finding new organizational forms, including creating water and energy multi-utilities (in the years 2003 to 2006).

Almost all articles published from the year 2000 onwards discuss the renewal of the domestic WSS in some way, even though from rather different angles. Those who would like to see the water utilities merged with electricity utilities have some kind of change and renewal in mind, as do the water professionals who argue for a water sector independent from the electricity sector. Therefore, both parties argue for change but in different ways. An increasing business interest in the Finnish water sector is noticeable in these last two periods. The development started with information about the serious and worrying condition in which the Finnish water and sanitation sector, especially in rural areas, seems to be, followed by a report on the problems with financing necessary infrastructure rehabilitation. Subsequently, privatization is suggested by the investment bankers as a means to inject new capital into the sector and finance infrastructure rehabilitation. After that, interest by the electricity sector (especially the municipality-owned electricity utilities) starts to surface. As a result, the discussion between water, electricity, and investment banking professionals gains momentum. During the last two periods, water professionals (mostly academic experts but not water utility directors)

‘defend’ the water utilities in Kauppalehti News and argue against merging water and energy. They try to maintain the water sector’s professional boundaries by openly arguing for more independence from the municipal owners and restructuring inside the water sector.

Therefore, the business newspaper Kauppalehti allows to trace the commercial interest in the water sector as it changes from foreign and domestic development – related infrastructure construction to ownership and operational changes by proposing privatization and last, to giving up privatization and acknowledging the municipalities’

determination to hold on to their utilities but also to propose and promote the merging of water and energy companies. This development shows that the initial intention of financial actors to promote the privatization of water utilities did not succeed and after a

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period of learning they adapted to the municipalities’ needs for capital and restructuring without privatizing their water utilities. Therefore, the content analysis of Kauppalehti also provided insights into how financial actors adapted to the circumstances in their environment.

Instead of attributing significant power to their ability to influence other actors and create change, the investment bankers’ success needs to be seen in terms of staying in the game by adapting to the powerful actors’ logics and requirements, which in this case are the municipalities. Nevertheless, the emergence of the multi-utility concept that seeks to combine municipal water and energy utilities is driven by the municipalities’ need for capital and willingly facilitated as well as promoted by investment bankers.

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