EXECUTIVE SUMMARY
79
Marin (2009) p. 8.
40 French municipalities decided to re-municipalised part of water services, as well as Budapest, Napoli and some cities in Germany (see example of Bergkamen in European chapter). In France, a study from 1998-2008 covering most of the French water market (where private water management covers more than 60 % of the population), found 107 local authorities that switched from private to public while 104 switched from public to private. On the principles that guide part of the debate on ‘re-municipalization’, see http://www.fnccr.asso.fr/ documents/APE-GestionPubliqueDeLEau_2.pdf or Wollman (2013). 80
See European Chapter. Pigeon et al (2012). 81
See European chapter and also Hall et al (2011). 82
Hall et al (2005) and Cheng (2013). Some examples mentioned are: Malaysia, Manila (Philippines), Argentina and Bolivia. Hamilton (Canada) In Africa, contracts were terminated in Gambia, Mali, Chad, Nkonkobe (South Africa) and Dar-es-Salaam (Tanzania, 2005). Most recently in Morocco, increasing popular dissatisfaction with private operators in the water sector due to increasing tariffs. 83
84
Brugmann (2012).
Hasan (2006); Ostrom (1996); OECD (2009). 85
PPIAF, Gridlines, Note nº9, June 2006. 86
87
Etienne et al (2010).
88
Cited by Paulais (2012).
concessions in the water sector suggest that this option is generally more appropriate for upper-middle-income countries (where medium and long term private borrowing in the local currency is available). For low- and middle-income countries, they suggest that PPPs will probably need to be funded by public money and that the main contribution of private operators will be in the improvement of the operational efficiency of services.79 The role of the private sector in basic service provision is subject to debate in several countries. There has been a trend toward the re-municipalisation of basic services in some European cities;80 the municipality of Paris, France, chose to take water services back under municipal control in 2010.81 In 2011, Italian citizens, through a referendum, repealed laws allowing local public services to be entrusted to the private sector.82 In North America, Latin America, Asia and sub-Saharan Africa, some significant PPPs ran into difficulties associated with a breakdown in the relationship between the state and the private company or increasing public opposition.83 As the regional chapters stress, an effective, well-enforced regulatory framework is essential for getting the best out of private enterprises. Many countries have implemented reforms to facilitate the participation of private sector in service provision in recent years; however, in some regions (e.g. Latin America) local governments consider legal frameworks in relation to tendering, contracts and the oversight to be insufficient or unimplemented. The insufficient clarity of regulatory frameworks also discourages domestic and foreign business investment. PPP projects have proved to be complex undertakings, but successful cities have to encourage and retain private investment. In almost all contexts, the scale of necessary
investments in infrastructure and service provision in cities will require the contribution of all stakeholders.84 Experience has demonstrated the contexts in which PPPs work best. In order for partners to contribute to reinforcing public policies and local institutions, local governments need the capacity to be active and demanding partners.
The “other private sector” Small private enterprises in both the formal and informal sectors play an important role where the quality and extent of provision by official service providers is lacking, and provide a high proportion of the urban population with basic services.85 They range from individual operators to small enterprises serving hundreds of households. Some operate under contracts with utilities, others have specific licences, and many are unregistered. There are also cooperatives and community-groups organizing, managing and financing the installation of street sewers, public toilets and washing facilities with the support of local governments. Much of this happens in informal settlements, where small-scale service providers may serve communities of up to 50,000 people.86 Beyond responding to needs, small-scale operations and the informal sector are an important source of employment and innovation (the recycling industry has a turnover of over USD 1 billion in Latin America). Mozambique was a pioneer in delegating water service delivery to small-scale operators in 365 small municipalities.87 Similar initiatives have spread to in other African countries, resulting in a hybrid model of provision, especially in peripheral urban areas where small autonomous systems (with wells pumps, storage and piping systems) ensure distribution to a group of houses or a neighbourhood.88 The share of the population with water provided by such operators in major urban centres in Africa ranged from