Private Operators and Rural Water Supplies: Experiences Outside South Asia Dr. Elizabeth Kleemeier Water Unit, World Bank December 15, 2011 National Workshop on Sustainable Rural Water Supply and Sanitation Services, Department of Water Supply and Sanitation, Government of Punjab Chandigarh, India, December 15-17

Why private operators? Provide market incentives to manage well Introduce accountability by separating operations and oversight Increase technical and financial expertise Leverage private financing and investment

Review of experiences using private operators vate-operators-and-rural-water-supplies-desk- review-experience Link to document:

Identified 25 initiatives Found great diversity of approach

Range of Private Operator Profiles International Burkina Faso Vergnet Hydro, a French company, and its affiliate, Faso Hydro National Paraguay Consortia of national construction firms Local Cambodia Local family builds and manages the schemes and possibly associated activities such as ice- making or vehicle washing.

Decentralized Entities Rural Entrepreneurs Local Government Regional Utility VietnamBeninMalawi CambodiaBurkina FasoVietnam Mali Rwanda Range of Contract Holders

Centralized Entities MinistryAgency National Utility NigerMauritaniaCote d’Ivoire SenegalParaguayGabon BangladeshMorocco

Use of Community Organizations No common practice InitiativeWUANone Benin ✔✔ Burkina Faso ✔ Rwanda ✔ Niger ✔ Senegal ✔ Mauritania ✔ Paraguay ✔ Cote d’Ivoire ✔ Morocco ✔ WUA = Water User Association

Some good ideas

Cluster schemes to increase profitability Burkina Faso, Rwanda, Niger, Uganda Clustering attracted more qualified firms Ability to spread costs and revenue across several schemes indispensible to firm entry aking-ppps-work-rural-and-small-towns-water- introduction-and-presentations-part-1 Links to Burkina Faso and Uganda Presentations: Benin Evaluation found profitability limited because so many operators had only a single scheme

Offer design-build-operate contracts Burkina Faso (and West Africa generally) Firm will do quality construction No subsequent disputes over infrastructure Operator knows system Save time in contracting process Link to document on West African experience er/node/83637 Haiti May introduce DBO to deal with lack of interest in operations only

Use commercial bank to provide financing Kenya Kenya has large number of decaying community-managed schemes K-Rep Bank offers up to 80% financing; combined with output- based aid program that provides 40% subsidy Built up K-Rep capacity (in-house appraisal team) Consultant-operators prepare loan application, implement, and operate schemes for 5 years (loan period) Found clustering and design-build-operate works best dia/learning-module-financing-small-piped- water-systems-kenya Presentation and document on Kenya experience:

Franchising by public water utilities Morocco Link to document on Morocco ublications/output-based-aid- morocco-part-2-expanding-water- supply-service-rural-areas

Develop standard contracts Train private sector in preparing bids Contract the private sector to provide business support services to private operators Recruit and train graduates as private operators (Mauritania) Use mobile phone applications to collect financial information on operators/schemes Other ideas

Note: Sustainability not yet well-documented Information on financial sustainability is scarce

The World Bank is your partner Elizabeth Kleemeier

Thank you