GOVERNMENT SCOPE FOR PLANNING IMPROVED SERVICES TO THE POOR OPERATOR SCOPE FOR IMPLEMENTING IMPROVED SERVICES TO THE POOR High Nil High Nil Medium Nil High Nil High Medium Nil High Nil STEP 1STEP 2STEP 3 Select and Develop PSP Model PSP Prequalifica -tion Contract Award O & M of existing systems Extend, improve services Renegotiate or terminate Develop Policy, Investigate Range of Options

A SUCCESSFUL OUTCOME NAVIGATING A SUCCESSFUL PSP MANAGE THE TRANSITION EXPLORING AND UNDERSTANDING UNDERSTANDING THE CURRENT & FUTURE CHALLENGES LEARNING FROM OTHER SECTORS DEVELOP A STATEMENT OF NEED AND OBJECTIVES DESIGN THE TRANSITION DEVELOP STRATEGIC OPTIONS CHOOSE APPROPRIATE OUTCOME

Private Company Public Servant Deciding what you really want PSP…? ….good service… …acceptable tariffs… …reduced borrowing... A cleaner environment with better public health Re-election …the scope to manage… …secure returns… …growth prospects… …workload… …minimum risk... I’m poor

CLIMBING THE MOUNTAIN OF COMMITMENT START Operate, Maintain and Sustain TIME Eventual Delivery Planning Difficulties Cashflow Design Difficulties Ability to Pay study Willingness to Pay study Operator’s Ability to Pay Operator Promise Client Expectation Operator Horizon Planning Horizon Actual Summit Extension of Secondary Markets Degree of Commitment Operator’s Willing to Pay

Rising to the Challenge Household Willingness to purchase (Secondary Market) Water Supply Structure … with desire to sell Access Income Information Representation Application Established provider Networks Capital Resources

Hopefully TOR detail needs and desires Constrained Process START Consultant Bidding judged on price Standard solutions put forward Well…it’s 20% of customers giving 80% of revenue Time is short Information is difficult to obtain Budgets are tight No rewards for being adventurous Have the needs of the poor been addressed Bidding Operators can only comply with what is asked for Adjudication on price and lowest tariff increases Understanding the Commercial Process Is it now too late? Regulators need establishing and experience No?

FINDING THE BALANCE NOWFUTURE NOW High margins Low levels of service Low collection of billings Low expectations Borrowings Debts and Arrears Unwilling to pay Inefficiency Non-Accountability Awareness Education Information Existing public supply Reasonabl e Value Reasonabl e Service Reasonabl e Return PSP Existing Customer