Private sector participation in water supply and sanitation in Latin America

The return of cholera to the Latin American and Caribbean region in 1991 is a symptom of inherent problems in publicly operated water supplies and sanitation systems seen particularly in urban areas. These problems fall into four categories; namely, technical and operational, commercial and financial, human and institutional, and environmental. There is a growing consensus that at least some functions related to the management of water and sanitation services should be privatized; a special emphasis is placed on expanding sewage treatment to reduce water pollution and public health hazards. This publication consists of two chapters. In the first, the main problems of the public sector are analyzed, the rationale for private sector participation (PSP) is explained, and the array of options for PSP is reviewed, including the types of contractual arrangements possible between public water authorities and the private sector and the need for adequate legislative regulation. In the second chapter, Case Study: The Buenos Aires Concession, Argentina's concession for Buenos Aires' water supply and sewage services to a private consortium is presented and analyzed, as a model of the planning and implementation stages needed to ensure a successful transition from public to private management. The positive results of this transition include improved water quality, no water shortage during summer months, and fully operational waste treatment plants.