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Public-Private Partnership for Water Services in the Developing World

This article explores the challenges of water services in developing countries and the role of public-private partnerships. It discusses the need for infrastructure investment, sustainable operation, and maintenance, and the issue of who will bear the cost. The text also highlights the high prices the poor often pay for water and the role of government in ensuring access to water and sanitation. The article concludes by discussing various options for water service delivery, including self-provision, municipal services, and private sector engagement.

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Public-Private Partnership for Water Services in the Developing World

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  1. PUBLIC PRIVATE PARTNERSHIP FOR WATER SERVICES IN THE DEVELOPING WORLD Alan Thompson #BERSAMADEMIAIR

  2. WATER IN DEVELOPING COUNTRIES:What is all About? DPP BARAT • 2.1 billion people without access to water • 3.4 billion people without access to sanitation • In 2015, 6.6 billion people used improved drinking water sources* • Who will pay for the needed infrastructure? • Who will ensure sustainable operation and maintenance of these services? Data source: United Nations

  3. WATER: AN ECONOMIC OR SOCIAL GOODS DPP BARAT She can pay for water ……… Can she pay for water ???

  4. COMMON SITUATION IN DEVELOPING CONTRY • Poor --- usually not connected but pay high price • Non-poor --- connected to the water network and pay a price below the cost of the service • Municipal budget (APBD) --- finances the operating deficit, • or… • Water system --- progressively falls into disrepair and ultimately collapses DPP BARAT

  5. THE POOR OFTEN PAY20 – 100 TIMES MORE FOR WATER Jakarta 1 jerrycan (20 l.) = Rp 1.000 – Rp 2.000 = Rp 50.000 – Rp 100.000/m3 Water tariff (low-income) = Rp 1.050/m3

  6. ROLE OF GOVERNMENT --- NATIONAL, REGIONAL & LOCAL • Ensure access to water and sanitation to all people • Ownership of the Water Resources • Develop and Implement Policies • Planning and Oversight • Tariffs and Subsidies • Determine proper delivery of water and sanitation services (role for Local Government) OPTIONS : • Facilitate self-provision by the people themselves e.g. PAMSIMAS • Direct provision by municipal service e.g. BWRO at P. Untung Jawa • Engage private sector service company DPP BARAT MONITORING/CONTROL  SEPARATE  DELIVERY FUNCTIONS

  7. PRIVATE SECTOR PARTICIPATION --- RANGE OF ALTERNATIVES Concession Affermage BOT DBO Operations & Maintenance Technical Assistance 3 5 10 25 Years Privatisation or Asset Transfer DPP BARAT Private Ownership Shared Ownership DEGREE OF PRIVATE INVOLVEMENT Delegated Management Infrastructure Contract PUBLIC PRIVATE PARTNERSHIPS Management Support

  8. PPP – LESSONS LEARNED (1 of 2) • Define the “Deal” • Engagement of Multiple Stakeholders • Clear allocation of tasks & responsibilities • Transparent performance reporting • Sound Contract : • Commitment by both parties • Adjustment mechanisms to baseline data • Periodic Reviews • Realistic Risk Allocation • Project based on sound and sustainable economic principles to withstand : • Economic shocks • Changes in political objectives • Regulatory and legal issues DPP BARAT

  9. PPP – LESSONS LEARNED (2 of 2) • Control Financing Needs • Avoid up-front concession fee • CAPEX Program profiled to cash-flow & predictable revenue stream • Financing tied to local economic conditions and employing local currency • Mixture of Financing Sources • Public and Private • New mechanisms and improved support from Multilateral institutions to support and guarantee large-scale development of water services • Enforce Obligations of Both Parties • Balanced Termination Provisions DPP BARAT

  10. CREATING SUSTAINABLE WATER AND SANITATION SERVICES TO MEET THE SDG’s Governance Investment Management DPP BARAT USERS Expect Efficient Service Delivery • Public • Private • Multilateral Agencies • Local • Municipal • Public Private Partnership Participatory Approach is Utilizing to the Strength of Each Party

  11. THANK YOU #BERSAMADEMIAIR

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