The justification for intervention for economic regulatory efforts stems from the market's alleged inability to address particular structural problems. Of course, the details of any program often reflect political strength, not reasoned argument. However, thoughtful justification is still required when evaluating programs.[1] The case of water reform in Chile is interesting. First, it allows us to think about a situation in which regulatory reforms address political decision-making through the outcome of proposed legislation. Second, the case is not about a lack of political commitment, but rather about a situation where the government now faces the important issue of passing legislation that directly affects their families – the main question is not whether to privatize , but how to regulate what will be privatized. Finally, it shows us the importance of having a credible and independent regulatory framework to implement effective reforms. Despite the success of SENDOS, the government had few concerns to address with publicly owned companies: it needed to restructure the public body that was responsible for regulating quality during service provision. SENDOS did not have the authority for economic regulation and tariff control which was under the Ministry of Economy. Only after the reform was a regulatory agency, the SISS, established, which was given the right, among other things, to set tariffs and supervise companies. But even then, its capabilities were limited due to heavy dependence on the government. The regulatory system has not provided the government with a credible system of checks and balances. In addition to defining the geographical area that the company was obliged to serve, there were many unclear aspects, including the indefinite duration of the concessions, which included the right of companies to assign or subcontract to another supplier which could be revoked by the government for failure to comply with revocation procedures. which were not specified. This adds to the subsequent issue of financing water services. - The government was heavily dependent on national budget allocations and loans. Due to the existence of insufficient tariffs to cover operational costs, the government had to make changes in management and regulatory structure by separating the functions of quality and tariff regulation from those of service provision. Sewer treatment required significant investments in water treatment, especially in the Santiago metropolitan area. Although three new water treatment plants were planned to be built under the BOT with EMOS, the targets set by the Chilean administration to treat 100% of all wastewater by 2005 did not seem realistic given the increase (up to 80%) of the amount of current financing needed for the annual investment.