Guidebook on private sector participation in water supply and sanitation

Abstract

A number of countries in the Asian and Pacific region have already involved, to a certain extent, the private sector successfully in the delivery of water supply and sanitation services. Others are actively trying to bring projects to fruition with the participation of the private sector, and many are keenly interested in the potential of this development route. It is widely recognized that governments are under extreme pressure to make improvements in the water supply and sanitation sectors, but also that public funds are limited and must serve many other sectors. It is also recognized that the private sector might assist in providing those services by making additional skills available, together with some contribution towards funding needs. Regional experience in involving the private sector is described in the various text boxes in the body of the guidebook. They give the situation in several countries as of mid-1996, but conditions are changing fast. Some specific projects are mentioned here to illustrate the range of regional experience. The list is not intended to be comprehensive nor to include many countries. The Coordinating Council of the Philippines Assistance Programme (CCPAP) has published a handbook of detailed procedures for all types of ВОТ projects in all sectors. It sets out the conditions under which ВОТ contracts can be let in the Philippines, including the degree of local ownership. China held a large seminar entitled “ВОТ in the Water Supply Sector”, in October 1996. These activities indicate the importance of BOT-type contracts and mechanisms within a general policy for involving the private sector more in the water supply and sanitation sectors. The ВОТ approach applies mostly to funding and operating new infrastructure components. Some countries also have, or are close to having, concession contracts for the operation and expansion of old systems. Malaysia has let long-term concessions for water supply and sanitation. In 1985, Macau entered into a 25-year concession with a joint foreign consortium for full water supply services. In 1994, the Provincial Water Authority of Thailand established an autonomous company, East Water, to operate the existing bulk water supply system in eastern Thailand under a lease-type contract. This will be converted to a concession shortly to include expansion of infrastructure, to be funded by offering shares in the company on the stock market.