Mikkeli proposes corporatization of water utility amid political debate

Mikkeli is proposing to corporatize its water utility, which is currently classified as a municipal enterprise. Upon corporatization, it would become a subsidiary of the city. This move follows a report prepared by consultants and is next set to undergo political review, as reported by the local newspaper Länsi-Savo.

There appears to be a division of opinion on the necessity of corporatization between Mikkeli’s Mayor Janne Kinnunen and the head of the water utility, Jarkko Laitinen. Kinnunen stated that the city no longer requires bookkeeping benefits from a sale, especially after resolving balance sheet deficits through the sale of a minority stake in energy company Ese. Laitinen contends that water utilities of similar size to Mikkeli’s are already largely corporatized elsewhere in the country.

Professor Jukka Pellinen from the University of Jyväskylä believes that corporatization presents valuable opportunities, allowing for more stable operations less influenced by political shifts and leadership changes. He cites the experience of Alva, an energy company owned by the city of Jyväskylä, which was corporatized in 1997 and has since improved the city’s cash flow and balance sheet.

Pellinen argues that the corporate structure could also facilitate recruitment, enabling management to negotiate salaries and work conditions more flexibly. He does not anticipate any negative impact on decision-making transparency; instead, he trusts that the media will highlight any emerging issues.