Lessons learned : small-scale service providers have a contribution to make : lessons learned from PPIAF activities : pricing and affordability in e...

The line between small-scale private service providers (SPSPs) and formally recognized services is gradually blurring. It is difficult to get the regulatory balance right. Outright illegal status for all but ‘official’ services creates perversities and allows governments to divert attention from public service failures by branding alternatives as criminal. Relaxing technical norms creates double standards, but standards that are rigid make it difficult to set up services in physically constricted informal settlements. Regulating tariffs centrally can be risky due to the potential for running operators out of business if tariffs are set below costs, thus re-establishing the vacuum of provision which will inevitably be filled by another generation of SPSPs. SPSPs can provide a dynamic and responsive service to communities who lack access to networked utility services. A two- pronged approach may be worth consideration: recognizing both the networked utility service providers and the potentially valuable role played by the SPSPs. This would require a nuanced balance of performance and technical standards, along with attention to licensing and access to depots and sources. [authors abstract]