Some basic principles should guide processes for selecting small network operators for such arrangements. Processes should encourage prospective operators who have strengths in dealing with local conditions and challenges, especially in informal settlements. It is also important to match operations scale with the financial capability of operators. Tendering processes should not disadvantage operators who may already have invested in an area. It might sometimes be better to screen and approve proposed systems rather than to tender them, considering technical (past experience, recognized entrepreneurial ability, etc.), financial (investment capacity, etc.), and social (references from recognized local or moral authorities, etc.) criteria. The approval process may be more or less sophisticated depending on the nature of the proposal. Whatever the selection process, it should be transparent and independently regulated. To encourage small local entrepreneurs who may only be able to operate in one neighborhood at a time, the city government or utility could prepare a list of preferred small network service areas that local entrepreneurs could selectively register their interest in. Existing conditions and service standard parameters would be described for each service area. All this would result from an inclusive and participatory strategic planning program. Any executed contract or license issued to build and operate a small piped network should include at least the following: (i) (ii) (iii) (iv)
Time-bound coverage and service level targets; Water supply pricing and adjustment formula; Concession period and exit/takeout undertakings; Performance monitoring requirements and criteria, and regulation arrangements; and (v) Termination clauses.
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