1. Training session: Local governments’ role in planning investments and improving performance of WSS services Public Service Agreement (PSA) Trainers: Ms. Aida Jusufhodzic, AQUASAN, B&H and Mr. Jane Vrteski, ADKOM, Macedonia Danube Water Conference, Vienna, 18 May

2. Learning objectives To understand when is PSA used;
To understand what is PSA;
To understand the purpose of PSA;
To familiarize with the content of PSA.

3. PSA are often used where…
Other approaches of regulating W&S services tried but are not working;
Responsibilities between LGU and PUC are not clearly defined, they are full of unknown;
There are large performance gaps;
Cost-coverage declining;
Declining level of service;
Employees are frustrated and poorly directed.

4. What is PSA and how to develop one?
PSAs are negotiated legal agreements between municipalities and Utilities that deliver public water supply and sanitation services.
There is no “one model that fits all” approach.
Provisions of PSA can be derived from FOPIP.

5. What is the purpose of PSA?
To improve accountability of the contracting parties in provision of sustainable and reliable W&S services;
To establish mechanisms for improved long-term sustainability of the utilities; well-structured PSA ensures defining utility’s development goals and ensures adequate resources to bring about performance improvements;
To improve level of services, through setting performance targets, which among others, ensure better quality of service in terms of reliability of service and water quality.

6. Features of successful PSAs
Keep short and simple so that adjustments can be made easily;
Clear distinguish of rights and obligations, roles and responsibilities between the operator (PUC) and contracting authority (LGU);
Commercial orientation;
Financial sustainability:
Tariffs setting and adjustment according to the developed methodology;
Financial obligations of the contracting authority.

7. Features of successful PSAs (cont.)
Human resource management;
Autonomy od PUCs;
Progressive performance standards;
Contract monitoring, enforcement and dispute resolution.

8. Thanks a lot for your attention!