1. Privatisation 1 Corinne Waelti, seecon international gmbh

2. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info Copy it, adapt it, use it – but acknowledge the source! Copyright Included in the SSWM Toolbox are materials from various organisations and sources. Those materials are open source. Following the open- source concept for capacity building and non-profit use, copying and adapting is allowed provided proper acknowledgement of the source is made (see below). The publication of these materials in the SSWM Toolbox does not alter any existing copyrights. Material published in the SSWM Toolbox for the first time follows the same open-source concept, with all rights remaining with the original authors or producing organisations. To view an official copy of the the Creative Commons Attribution Works 3.0 Unported License we build upon, visit http://creativecommons.org/licenses/by/3.0. This agreement officially states that: http://creativecommons.org/licenses/by/3.0 You are free to: Share - to copy, distribute and transmit this document Remix - to adapt this document. We would appreciate receiving a copy of any changes that you have made to improve this document. Under the following conditions: Attribution: You must always give the original authors or publishing agencies credit for the document or picture you are using. Disclaimer The contents of the SSWM Toolbox reflect the opinions of the respective authors and not necessarily the official opinion of the funding or supporting partner organisations. Depending on the initial situations and respective local circumstances, there is no guarantee that single measures described in the toolbox will make the local water and sanitation system more sustainable. The main aim of the SSWM Toolbox is to be a reference tool to provide ideas for improving the local water and sanitation situation in a sustainable manner. Results depend largely on the respective situation and the implementation and combination of the measures described. An in-depth analysis of respective advantages and disadvantages and the suitability of the measure is necessary in every single case. We do not assume any responsibility for and make no warranty with respect to the results that may be obtained from the use of the information provided. Copyright & Disclaimer

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

4. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 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

5. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 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.

6. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 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)

7. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 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

8. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 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.

9. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 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)

10. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info Applicability 10 4. 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)

11. Privatisation Find this presentation and more on: www.sswm.info.www.sswm.info 11 5. References APPP (Editor) (2009): A Step by Step Guide to Public-Private Partnerships (PPPs). Croatia: Agency for Public Private Partnerships. URL: www.javnanabava.hr/userdocsimages/userfiles/file/Razne%20publikacije/Step%20by%20step%20guide%20to%20PPP.pdf [Accessed: 30.08.2012]www.javnanabava.hr/userdocsimages/userfiles/file/Razne%20publikacije/Step%20by%20step%20guide%20to%20PPP.pdf GREEN (Editor) (2003): Advocacy Guide to Private Sector Involvement in Water Services. London: WaterAid and Tearfund. URL: www.tearfund.org/webdocs/Website/Campaigning/Policy%20and%20research/Advocacy%20guide%20to%20private%20sector%20inv olvement%20in%20water%20services.pdf [Accessed: 02.09.2010] www.tearfund.org/webdocs/Website/Campaigning/Policy%20and%20research/Advocacy%20guide%20to%20private%20sector%20inv 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: http://www.inwrdam.org/page/342 [Accessed: 31.08.2010]http://www.inwrdam.org/page/342 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: 02.09.2010]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: 02.09.2010] rru.worldbank.org/Documents/Toolkits/Water/Water_Full.pdf

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