Preparing for private sector participation in the provision of water supply and sanitation services

This report is designed to assist governments in developing countries and international donor agencies in overcoming obstacles to increased private sector participation in the water and sanitation sector. It is intended for policy makers in public sector institutions and their advisors who are contemplating comprehensive and formal arrangements with the private sector. The report outlines the most common forms of private sector participation: service and management contracts; short- and long- term leasing arrangements; and investments in build, operate, and transfer (BOT) or build, operate, and own (BOO) projects. The report also discusses divestiture. The individual benefits of each of these arrangements are discussed, along with the criteria for assessing when each arrangement is appropriate. The report concludes with guidelines for public agencies to determine the suitability and extent of private sector participation. Of the four examples given in the boxes, only one example discusses the experience of a developing country, the other examples come from developed countries.