Performance improvement planning : enhancing water services through performance agreements

The challenge of providing improved water and sanitation services (WSS) in India is substantial. More than 300 million people in urban India are unable to reach or afford safe WSS services. While in recent years investment in, and access to, infrastructure have increased, there are still severe deficiencies in the availability, quality, and equity of these two basic services. Typically, poor and inadequate water service delivery outcomes have been ascribed to the lack of adequate capital investment, poor finances of service providers or capacity, and staff constraints. Increased investments have not necessarily resulted in better outcomes but rather in short-lived performance improvements that remain stand-alone initiatives, unviable in the long run. It is increasingly being recognized that institutional arrangements, and the incentives and accountability measures associated with them, need to change if services are to improve. Although the 74th Amendment to the Constitution of India has made urban local bodies responsible for WSS services, the water departments of these bodies continue to depend extensively on central and state governments for technical and operational direction. Since they do not have functional or financial autonomy to run their departments sustainably, incentives to improve services remain weak. Performance agreements could help bring about a change in the
way services are delivered in a sustainable manner, through a change in the institutional arrangements and associated incentives. In recent years, many public water utilities and service providers across the globe have brought about improved accountability and better services through contractual arrangements based on the principles of customer orientation and financial viability. Performance agreements include arrangements that public entities and service providers have signed with lower tiers of government or urban local bodies and operating arms of public service providers. Such arrangements have stressed operational efficiency, sustainable revenue strategies, improved cost
recovery, and enhanced service delivery accountability as a means for improving the delivery of WSS services in a public service provision setting. The field note uses global experiences to explain some of these arrangements and brings out lessons they have to offer for the Indian context. [authors abstract]