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Public-private partnerships (PPP) and the poor: An initial review

Author(s): Webster, Mike  |  Sansom, Kevin  |  Woodfield, Julie (ed)

Publisher: LSHTM | WEDC
Place of publication: London and Loughborough
Year: 1999

Series: WELL Studies in Water, Sanitation and Environmental Health Task 164
Collection(s): WELL

Links:

• http://www.lboro.ac.uk/research/wedc/well/

Background

There are still over one billion people in developing countries who do not have access to an adequate water supply and almost three billion who lack adequate sanitation facilities. In order to supplement public sector provision and thereby to improve coverage levels and service delivery, developing country governments are increasingly seeking private sector investment. There is a tension between the need to increase coverage, while at the same time ensuring the sustainability of programmes. Extensive PPP is now promoted in urban and peri-urban areas, although rural areas are best served through user committees with NGO support.

Study Output

The three outputs are:

• A review of literature on PPP with reference to the poor:
  An attempt was made to distil the large number of relevant publications into a useful format and to isolate literature and research that addresses the needs of the poor. None of these demonstrate substantial research on the subject or offer any real recommendations.
• The development of a PPP database
  A Microsoft Access database has been developed to collate relevant information sources, which is intended as a "template database" for future projects and as a resource for PPP researchers and practitioners.
• Analysis of the potential risks and benefits of different forms of PPP arrangements to poor communities

In general, the more complex PPP arrangements require greater risk mitigation, although these risks are largely unquantified. The potential risks are classified as:

• Finance/Affordability risks (e.g. high water connection charges and tariff rates);
• Supply/Allocation risks (e.g. the allocation of inadequate water supply to certain groups);
• Finance/Affordability risks (e.g. high water connection charges and tariff rates);
• Water supply/Allocation risks (e.g. the allocation of inadequate water supply to certain groups);
• Sanitation and Community Collaboration risks (e.g. reluctance of operator to provide or invest in appropriate services); and
• Staffing related risks (e.g. declining wages and redundancies).

The growth of PPP offers potential benefits in the form of solutions to many problems associated with the provision of infrastructure in developing countries. These benefits include increased funding; improved service provision; the transfer of management and technical skills from the private to the public sector; reduced political intervention and greater consumer-orientation of service providers. These measures are likely to benefit the poor via a trickle-down effect and by the inclusion of pro-poor measures.

This study has revealed certain gaps in existing knowledge about the impact of increased PPP on the poor, concerning how PPP relates to sanitation; the risks and mitigating measures required to ensure benefits; and the incentives and practical mechanisms needed by private operators to increase service provision to the poor.

Keywords:
Contracts  |  Partnerships  |  Poverty  |  Private sector  |  Sanitation  |  Water supply