Privatisation 1 Corinne Waelti, seecon international gmbh

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Privatisation Find this presentation and more on: Contents 1. Introduction 2. Implementation 3. Outcomes 4. Conclusion 5. References 3

Privatisation Find this presentation and more on: How to Improve and Expand Public Sanitation and Water Services? 4 1. Introduction PrivatisationMixed (e.g. Public Private Partnership) Nationalisation Problem: Unsatisfactory delivery of water and wastewater services No connection to the water or sanitation system No constant supply Poor drinking water quality No proper wastewater treatment Possible institutional frameworks

Privatisation Find this presentation and more on: Problem 5 1. Introduction Public as well as private operations cannot always guarantee water and sanitation services to all their residents. Why is it difficult to achieve local sanitation and water supply? Water and sanitation services are critical to all consumers There is often a natural monopoly Investments are long-lived and irreversible which hinders investors Privatisation is seen as one possible solution to these problems.

Privatisation Find this presentation and more on: What is Privatisation? 6 1. Introduction Privatisation is the process of transferring ownership or responsibilities from the public sector (government) to the private sector (e.g. business or non-profit organisation). Privatisation in the water and sanitation sector The private sector has always been involved in the water and sanitation sector in some form (e.g. construction contracts in large urban supplies or informal provision of water in unserved areas). However, a new role is currently being shaped due to globalisation, leading to increased importance of private actors. Adapted from: INWRDAM (2010)

Privatisation Find this presentation and more on: Different Privatisation Models 7 2. Implementation Adapted from: REES (2008) Privatisation modelResponsibility of private party Service contract / Buying inSingle function contract Management contractOperation & maintenance (O&M) Build-Operate-Transfer (BOT) /Build-Operate-Own (BOO) Construction of infrastructure LeaseO&M; sometimes asset renewals ConcessionCapital investment; O&M Partial divestitureJoint venture with private sector Full divestitureCapital investment; O&M; revenue collection Time scale of contract Short-term Long-term

Privatisation Find this presentation and more on: The Implementation Process 8 2. Implementation Implementing a privatisation follows four steps: Developing the policy Designing the details of the arrangement Selecting the operator Managing the arrangement Adapted from: THE WORLD BANK (2010) The time requirement for these steps differs according to the arrangement proposed and the already existent laws supporting or hindering the privatisation.

Privatisation Find this presentation and more on: More efficient operation Fewer profitable opportunities are being missed Often undermines local & national government capacities Community is seen as recipient rather than contributor (profit is more important than people’s needs) Government does often not know how to monitor private parties, which may lead to a lack of accountability  May lead to conflicts with civil society Advantages and Disadvantages 9 3. Outcomes Independence from the local government and strong incentives for being profitable may lead to: Adapted from: GREEN (2003) & THE WORLD BANK (2006)

Privatisation Find this presentation and more on: Applicability Conclusion Success depends on the laws supporting the process and on the arrangement proposed Needs a serious private operator Not useful for projects which result in fast technological changes, as it would be difficult to determine long-term standards Adapted from: APPP(2009)

Privatisation Find this presentation and more on: References APPP (Editor) (2009): A Step by Step Guide to Public-Private Partnerships (PPPs). Croatia: Agency for Public Private Partnerships. URL: [Accessed: ] GREEN (Editor) (2003): Advocacy Guide to Private Sector Involvement in Water Services. London: WaterAid and Tearfund. URL: olvement%20in%20water%20services.pdf [Accessed: ] olvement%20in%20water%20services.pdf INWRDAM (Editor) (2010): Public Private Partnership in Water and Sanitation Sector. Amman – Jordan: The Inter-Islamic Network on Water Resources Development and Management. URL: [Accessed: ] REES (Editor) (2008): Regulation and Private Participation in the Water and Sanitation Sector. Stockholm: Global Water Partnership (GWP). URL: eagri.cz/public/eagri/file/30628/Regulation_and_Private_Participation_1_.pdf [Accessed: ]eagri.cz/public/eagri/file/30628/Regulation_and_Private_Participation_1_.pdf THE WORLD BANK (Editor) (2006): Approaches to Private Participation in Water Services. A Toolkit. Washington, DC: The International Bank for Reconstruction and Development/ The World Bank. URL: rru.worldbank.org/Documents/Toolkits/Water/Water_Full.pdf [Accessed: ] rru.worldbank.org/Documents/Toolkits/Water/Water_Full.pdf

Privatisation 12 “Linking up Sustainable Sanitation, Water Management & Agriculture” SSWM is an initiative supported by: Created by: