Public-Private Partnerships for Service Delivery (PPP4SD) WORLD WATER DAY 2007 “Coping with Water Scarcity: Can Developing Countries in Asia and the Pacific Achieve the Millennium Development Goals?” Batdelger Luuzan, PPP Policy Specialist Regional Centre in Bangkok Regional Centre in Bangkok
Basic Services & the Poor • Service Provision Costs are too High • Customer Management Costs are too High (high percentage of unpaid bills, high rate of unbilled or fraudulent consumption, it is not always cost effective to bill due to low consumption, high maintenance costs) • Problems of providing the service to areas without secure land tenure Regional Centre in Bangkok Regional Centre in Bangkok
…poor are getting water, though, at high cost, poor standards & quality, & very limited quantities… . For instance, in Sta. Ana, the Philippines: • deep well (not used for drinking and cooking) @ P20-25/drum; • MWCI water @ P35/drum consumption; & • bottled mineral water, costing P35-45/5 gallons (used specifically for drinking; for infants & families who can afford it), whereas • those directly connected to system - one drum @ approximately P2.20 Regional Centre in Bangkok Regional Centre in Bangkok
How They Are Getting Water? • State not performing very well: significant chunk of water supplied in Asia-Pacific are not met by public water utilities. • NSAs filling in the gap in various ways in a context of a regulatory vacuum. • Growing need for water not matched by existing capacity of traditional service providers & NSA. Regional Centre in Bangkok Regional Centre in Bangkok
2006 UNDP HDR: …water crisis is not so much one of absolute scarcity but one of Governance… It is the direct responsibility of National & Sub- • national Governments to adopt Pro-Poor Policies for extending services to the poor In case of PPPs, it is Also the Government’s role • & duty to define these policies, make necessary regulatory changes & build them into contracts with the private sector with incentives for the private sector to meet these objectives & enforceable penalties for failure of doing so. Regional Centre in Bangkok Regional Centre in Bangkok
All economic agents & actors need to work together to achieve poverty alleviation objectives . This cannot be achieved easily, & certainly not • voluntarily, unless: the State institutes clear rules & procedures of • engagement to achieve pro-poor objectives & regulates all economic agents & economic activity in a society in such a way so that all, including itself, are accountable on pro-poor delivery (the “stick”), while each of them benefits in a tangible way from such a concerted effort (the “carrot”) This in turn points at the capacity of the state to • effectively perform such tasks as well as at the capacities of other NSAs to meet those requirements Either of which unfortunately are in shortage in many • developing countries Regional Centre in Bangkok Regional Centre in Bangkok
UNDP/PPP-SD (PPP-UE) Involved in the facilitation & support of basic services • delivery to the poor through PPP arrangements Accumulated knowledge on PPPs that deliver • economic, social & environmental benefits to the poor. Directly engaged in modifying existing unbalanced or • “poverty neutral” PPP models to incorporate pro-poor dimensions & incentives &, hence, influence the regulatory environment of developing countries in Africa, Asia & Latin America. Aware of the existence of a body of work that has • resulted in the accrual of knowledge & experiences in establishing Pro-poor PPPs & Pro-poor regulatory frameworks for PPPs that prevent adverse impacts on the poor & follow principles of good governance. Regional Centre in Bangkok Regional Centre in Bangkok
PPP-SD Field Experience in Enhancing Access of the Poor to Water Supply Services: Mozambique – Águas de Moçambique Rehabilitation & reallocation of standpipes in poor areas • of Maputo & Matola Small Systems – AdeM & SSWP (Identification & • Cooperation) Training & Implementation of New Model • Pre-Paid System (to avoid outstanding payments / • protecting users) Reselling in bulk water rate (where networks available) • Introduction of user fees/charges culture/principle • Regional Centre in Bangkok Regional Centre in Bangkok
PPP-SD Field Experience in Enhancing Access of the Poor to Water Supply Services: Mozambique – Águas de Moçambique (continued) Quality control (detection of improper/unsafe water from • wells) Awareness raising campaigns (in schools) • Involvement of CRA & FIPAG with Local Authorities & • Municipality – agreement to be concluded with NGO’s Improvement of the model to solve the illegal connections • (through contracts & benefits for the operator) Pro-poor tariffs • Regional Centre in Bangkok Regional Centre in Bangkok
Nepal Experience Legal PPP Policy (for PPP Guidelines (for local bodies) 2061 framework not local bodies) Amendments to in place 2060 LSGR Progression in PPP legal context Regional Centre in Bangkok Regional Centre in Bangkok
Nepal Experience Content of PPP Policy PPP Policy Content The policy document is � Policies � Strategies primarily concerned with � Forms of partnership PPP strategies & � Property rights of the local policies. It defines the bodies � Provisions concerning proper enabling transfer of security and environment & criteria contracts for well-structured PPPs � Framing of legislation � Public Private Partnership & procedures for Committee establishing the same. � Settlement of disputes PPP Policy document Dispute resolution concerning Public-Private Partnership mechanisms for running � Manuals and implementation PPPs are also procedures proposed. Regional Centre in Bangkok Regional Centre in Bangkok
Nepal Experience PPP Guidelines (for local bodies) 2061 Contents of PPP The PPP Guidelines are Guidelines procedural & were developed to Scope, principles & facilitate the implementation of priorities of partnership the PPP Policy. The Guidelines Institutional arrangements Partnership project define the scope, principles & identification and priorities of partnerships & development stages Project appraisal, institutional arrangements for sustainability & risks PPP projects. They also talk in Partner selection, MoUs, depth about partnership project etc. identification, project appraisal, Project monitoring, reporting & regulatory sustainability & risks; partner provisions selection, MoUs and MoAs; Dispute settlement, project project monitoring, reporting & evaluation & amendment PPP Guidelines regulatory provisions. Clearance document Regional Centre in Bangkok Regional Centre in Bangkok
PPP-SD Field Experience in Enhancing Access of the Poor to Water Supply Services: Hetauda Municipality, Nepal CBO investment • in infrastructure Not required to • pay royalty on condition that CBO invests 50 • percent of net profit in infrastructure Loan Rs. 300,000 • Regional Centre in Bangkok Regional Centre in Bangkok
Policy, Institutional & Regulatory Frameworks for Pro-Poor PPPs Some of the Pro-Poor PPP Policies include: Reducing costs to serve poor neighbourhoods by adapting flexible • technical standards Allow services to be differentiated in order to satisfy user preferences • Allow phased payments of connection/service provision fees • Addressing land tenure issues • Providing direct, well targeted subsidies to the poor • Non-exclusive clauses that allow small providers to serve poor • neighbourhoods Promote users forums & adequate customer care • Promote & facilitate microcredit • Regional Centre in Bangkok Regional Centre in Bangkok
as regards the PPPs themselves: Service improvements may mask reduction in services to • the poor Modifying an existing poverty neutral model may prove to be • costly & time consuming Design & implementation of pro-poor tariffs requires • considerable investment in data collection & management Contractual arrangements – allow for meaningful discussion • of legal, regulatory & risk sharing issues governing relationships Urban policies must ensure that private contractors do not • “cherry pick” most attractive neighbourhoods Regional Centre in Bangkok Regional Centre in Bangkok
Thank You! For more information, please visit: http://pppue.undp.org Regional Centre in Bangkok Regional Centre in Bangkok
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