Approaches to Private Participation in Water Services: A by PPIAF, World Bank

By PPIAF, World Bank

'Approaches to personal Participation in Water providers' is an informative toolkit that gives thoughts for the layout of rules to facilitate the supply of excellent caliber water and sanitation prone to the negative. It highlights the necessity for price lists, funding, stakeholder session, and regulatory guidelines to handle the affordability and sustainability of these prone. detailed to an viewers that incorporates executive advisors in addition to specialists, legal professionals, and donors, the toolkit builds on prior international event in deepest participation in water and sanitation offer. constructing state governments and people attracted to inner most participation in water and sanitation offer will locate this toolkit a useful source.

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Because the operator’s remuneration does not depend on the customer tariff, the government does not have to design an arrangement that protects the operator from tariff-related policy risk. Conversely, management contracts do not offer the same potential as other arrangements to address the problem of paying for services: the government is not required to commit to a cost-covering combination of tariffs and external subsidies. Nor is much risk transferred to the operator, so large improvements in operating and investment performance are less likely than under other arrangements.

Economists are typically needed to develop demand forecasts from surveys and consultations. These forecasts should take into account the sensitivity of demand to price. Technical engineering consultants may estimate the cost of achieving service standards in such areas as water quality, pressure, and service coverage. This will feed into developing reasonable performance targets and methods for measuring performance. Most private operators will also wish to conduct their own technical due diligence.

By limiting private investor control, joint ownership may help secure agreement to private participation. It may also signal to the operator the government’s commitment to the venture. Jointly owned companies require the parties to determine who has management control, otherwise the private firm may not feel that its interests are protected and may not be able to produce the efficiency gains expected from private involvement. In Appendix A, Cartagena, Gdansk, Sofia, Santiago, and Senegal all provide examples of joint ownership; the extent of government ownership, however, differs widely among them.

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