I'm trying to understand what it means for a private company to "ban" something. My guess is that the government created a framework for a private company to operate as highly regulated utility with a monopoly on water distribution. If my guess is correct then it is really the government that is supporting that "ban" and I would guess (putting my cynical hat on) that there are some pretty cozy relationships between the owners/investors in the private company and the government.

The private part doesn't sound crazy all by itself, but I think it is a challenge to create systems that prevent a private regulated utility from abusing its privileged position.