EXECUTIVE SUMMARY
or by a national utility (as in Tajikistan). In recent years, more private operators have been attracted to the utility sector in some countries. In Russia, a quarter of the population is provided with water and sanitation by private operators under PPP contracts, though recent laws have limited the privatization of these assets. Waste management is the most ‘decentralized’ service in every region, often provided directly by local governments. However, contracts with private operators are common in many countries. In Europe, 80% of waste workers are employed by the private sector.22 In Latin America, municipalities manage about half of services, the private sector 45%, and cooperatives 3%.23 In most of Eurasia, local governments contract waste management out to private operators. Urban transport systems are often run by special public authorities or agencies in high-income countries, though there are also private operators and privately owned systems (i.e. bus and tram networks). In less populated areas, local governments run transport systems that would not be profitable for private operators. In Eurasia and Eastern Europe, after the fall of the Soviet Union, responsibility for urban transport was transferred to municipalities without sufficient funding for operation and maintenance; private operators sprang up as service quality declined. In less affluent countries, local governments have authority over transport routes, maintain roads, regulate traffic, and sometimes own services (e.g. Porto Alegre, Brazil), but the private sector dominates the sector, with small providers playing an important role. Wollman and Marcou (2010); Hall and Nguyen (2012). 22
See chapter 23
Latin
American
Electricity is not usually a local government responsibility but, in some cases, distribution is shared between central and local
authorities. The regional reports note cases where local governments have promoted renewable energies; or helped isolated areas with locally owned electric utilities or cooperatives (in the USA and Latin America). In China, metropolitan authorities own public electricity utilities. Whatever the form of management– inhouse or not – the organizing authority is responsible for ensuring accountability, control over public goods and equity of access. Therefore, when contracting out services, local governments should ensure systematic monitoring and control of external operators (public or private) and the evaluation of their performance. In many countries, local governments are ill-equipped to negotiate with private partners, who often have greater expertise and resources to deal with complex contracting processes. Asymmetric relationships can lead to misunderstandings, increasing uncertainty and risk and, in the long term, costs. There is no universal formula for success, but organizing authorities should try to maximise their strengths. The regional chapters present many successful local strategies for allowing competition between operators, while maintaining in-house control and expertise. This report highlights several local government initiatives that assess municipal and utility performance in service delivery. Voluntary and compulsory benchmarking initiatives include the World Bank’s IBNET, the European Benchmarking Initiative for water, ADERASA, and the network of regulation agencies in Latin America. Local governments should be supported to strengthen their monitoring capacity to promote efficiency in basic services.