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TitleNew rules, new roles : does PSP benefit the poor? : preparing for private sector management in Kathmandu
Publication TypeMiscellaneous
AuthorsEtherington, A, Wicken, J, Bajracharya, D
Pagination44 p.; 7 tab.; 1 box; 4 fig.; 10 refs.
Date Published2006-01-01 ?
Place PublishedS.l.
Keywordsaccess to sanitation, access to water, financial management, millennium development goals, nepal, nepal katmandu, poverty, private sector

Governments, both northern and southern, have rightly placed themselves under much pressure to achieve better water and sanitation coverage. The Millennium Development Goals (MDG) aim to halve the proportion of people without access to water and sanitation services by 2015. Millions die every year from lack of access to safe water and adequate sanitation. On one hand there is an undeniable urgency about these issues that makes prolonged discussion frustrating and a questionable use of resources. But on the other, the risk of the blanket promotion of one debatable method of reform is an unnecessary waste of scarce resources. Most southern governments have consistently failed to deliver affordable and sustainable water and sanitation to the poor. It is difficult to summarise the causes for this failure as each situation is different and complex. However, some broad problems cut across many public utilities and municipal services: bad financial management, low funding priority, lack of staff experience and qualifications, absent or weak
customer service orientation, political interference, little or no independent regulation and an absence of civil society consultation. Many of these problems have been described as attributable to weak government capacity – equally acute in urban and rural contexts. Our research shows that the policy of private sector participation (PSP) does not comprehensively tackle the underlying causes of water utilities’ failure to serve the poor. In four
key areas capacity building, community participation, finance and institutional reform, major problems persist, making it unlikely that the multinational private sector is going to play any significant role in achieving the MDG. Currently the pursuit of a policy of PSP generally undermines local and national government capacity. For one, it limits the ability of the public sector to take services back should PSP fail or when contracts end. Private sector contracting must not result in irreversible dependence on private companies, and there must be clauses in contracts to prevent this dependence. Without adequate government capacity, no reform processes can be successful. The private sector cannot be contracted without tackling failing government. The government’s role to facilitate, monitor and regulate is as much an essential element in PSP as in public and usermanaged utilities. Yet, it seems that this requirement is being practically ignored in the rush to establish PSP. It is essential that donors
refocus efforts to building government capacity at local and central levels. The involvement of local communities is often lacking in PSP reform programmes. Where PSP has failed to deliver the promised gains, the case often is that the poor are seen mainly as recipients, rather than contributors to development. Whether projects involve large or small-scale PSP, the focus is on giving contracts or concessions to the private sector. Social mobilisation and community participation, proven time and again as prerequisites for sustainable development, are seen as burdens and nonessential components of the task. Failure to consult communities means that the interests of the poor are often not being represented. It results in a lack of ownership over projects and an absence of accountability between users and service providers. It seems that the lack of community involvement that led to previous failures is continuing, raising serious doubts over the sustainability of PSP projects.
(authors abstract

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