The Private Sector in Water and Sanitation : How to Get Started

The more risk and responsibility a
government hands over to the private sector in water and
sanitation, the more powerful the incentives for better
performance-but also the more demands on the government in
commitment and preparation. So a government about to enter
into a long partnership for a water concession or
build-operate-transfer arrangement - typically for
twenty-five to thirty years - needs to be sure that it does
not overlook details that will later land it in messy
renegotiations. A lease is less demanding, but offers
smaller gains and will not fix such problems as chronic
under-investment. It will, however, give the government time
to prepare a longer-term option. In this Note, based on
toolkits recently published by the World Bank, the author
sets out the range of options for involving the private
sector in water and sanitation and reviews the lessons on
what can make or break a private participation process.