This desk study examines the implications of the growing private sector participation in urban water supply (UWS) on the administrative capacity of governments undergoing structural adjustment around the world.
|Title||Urban water supply sector review|
|Year of Publication||1996|
|Secondary Title||The role of government in adjusting economies|
|Publisher||University of Birmingham, School of Public Policy|
|Place Published||Birmingham, UK|
|Keywords||cab97/2, efficiency, financial management, franchising, institutional framework, literature reviews, policies, private sector, research, urban areas, water supply|
This desk study examines the implications of the growing private sector participation in urban water supply (UWS) on the administrative capacity of governments undergoing structural adjustment around the world. It aims to provide a broad framework of analysis for the four country case studies (Ghana, India, Sri Lanka and Zimbabwe) to be carried out under the same research project. The study identifies a variety of factors, internal to the provider and arising from pressure by external actors, for this growing private sector participation. These range from pressure by foreign donor agencies to a desire to achieve efficiency gains on existing operations. However, the overriding motive in most low-income countries appears to be the need to obtain finance to expand networks to meet the demand arising from rapid peri-urban population growth. The study has revealed the enormous diversity of experience around the world in the form that private sector participation is now taking in the UWS sector. These have been divided into eight different forms of service delivery - the state-owned enterprise, the service contract, the management contract, the lease contract, the concession arrangement, the co-operative arrangement, the build-operate-transfer contract, and divestiture. The theoretical arguments for private sector participation are examined in the light of the traditional perception of UWS as a public good. Some of the assumptions regarding the alleged benefits of vertical unbundling and franchising are questioned. The basis for assessing the benefits of private sector participation is approached through a review of the major indicators used to measure performance of UWS utilities in terms of effectiveness, productive efficiency (both operational and financial), and equity. Finally, the study identified four broad issues related to governmental capacity in the light of private sector participation in UWS-the capacity to manage the broad macro-economic environment, the capacity to promote private sector participation, the capacity to regulate private sector participation, and investment decision-making.
|Notes||Bibliography: p. 46 - 53|
|Custom 1||202.2, 205.40|