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This selection of Notes shows the strength and diversity of a global trend to involve the private sector in the delivery of basic water services that until recently in most countries were the exclusive preserve of public sector providers. The selection also illustrates some of the hurdles in designing and implementing successful arrangements for private participation, suggests some lessons from early experience, and shows that much more needs to be learned.
Among the early lessons:
Private participation can and must be tailored to meet the unique needs, goals, and constraints of each country and city. Countries at extreme ends of the income and risk spectrum have been successful in enlisting the private sector, but they could not possibly use the same blueprint.
Private participation is no magic pill. Investors will not commit or perform their role in service delivery unless governments also commit and perform their vital role in building and maintaining a supportive regulatory environment, ensuring a transparent process, and clarifying roles, risk allocation, goals, and incentives.
Designing and implementing a successful private participation scheme takes time, political will, and resources, including quality advisory inputs, extensive consultation with stakeholder groups, and early efforts to develop regulatory capacities.
We hope that this collection of Notes will be helpful to practitioners not as a set of models to copy but as food for their thought process. Private participation in water is recent, and new lessons continue to emerge and new questions to arise.
VINCENT GOUARNE SECTOR MANAGER WATER AND SANITATION DIVISION
Page 3
Contents
Private Participation in the Water and Sewerage SectorRecent Trends
Gisele Silva, Nicola Tynan, and Yesim Yilmaz
5
Improving Water Services through Competition
Michael Webb and David Ehrhardt
13
The Private Sector in Water and SanitationHow to Get Started
Penelope J. Brook Cowen
21
Regulating Water Companies
Michael Klein and Timothy Irwin
25
Getting the Private Sector Involved in WaterWhat to Do in the Poorest of Countries?
Penelope J. Brook Cowen
29
Competition in Water and Sanitation and the Role of Small-Scale Entrepreneurs
Tova Maria Solo
33
Management Contracts in Water and SanitationGaza's Experience
Jamal Saghir, Elisabeth Sherwood, and Andrew Macoun
37
Management Contracts and Water UtilitiesThe Case of Monagas State in Venezuela
Manuel Mario, John Stein, and Francisco Wulff
41
Lessons from the Guinea Water Lease
Penelope J. Brook Cowen
45
Expanding Water and Sanitation Services to Low-Income HouseholdsThe Case of the La Paz-El Alto Concession
Kristin Komives and Penelope J. Brook Cowen
49
Bidding for ConcessionsThe Impact of Contract Design
Michael Klein
53
Rebidding for Concessions
Michael Klein
57
Financing Water and Sanitation ProjectsThe Unique Risks
David Haarmeyer and Ashoka Mody
61
Sydney's WaterA Suitable Case for Private Treatment?
Ross Chapman and Sandy Cuthbertson
65
Page 4
1999 The International Bank for Reconstruction and Development The World Bank 1818 H Street, NW Washington, D.C. 20433 USA
All rights reserved Manufactured in the United States of America First printing March 1999
The findings, interpretations, and conclusions expressed in this publication are those of the authors and do not necessarily represent the views and policies of the World Bank or its Board of Executive Directors or the countries they represent.
The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, USA.
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