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Private Operators and Rural Water Supplies: Experiences Outside South Asia
Dr. Elizabeth KleemeierWater Unit, World Bank
December 15, 2011
National Workshop on Sustainable Rural Water Supply and Sanitation Services,Department of Water Supply and Sanitation, Government of Punjab
Chandigarh, India, December 15-17
Why private operators?
Provide market incentives to manage well
Introduce accountability by separating operations and oversight
Increase technical and financial expertise
Leverage private financing and investment
Review of experiences using private operators
http://water.worldbank.org/water/publications/private-operators-and-rural-water-supplies-desk-review-experience
Link to document:
Identified 25 initiatives
Found great diversity of approach
Range of Private Operator Profiles
International
Burkina FasoVergnet Hydro, a French company, and its affiliate, Faso Hydro
National
Paraguay Consortia of national construction firms
Local
CambodiaLocal family builds and manages the schemes and possibly associated activities such as ice-making or vehicle washing.
Decentralized Entities
Rural Entrepreneurs
Local Government
RegionalUtility
Vietnam Benin Malawi
Cambodia Burkina Faso Vietnam
Mali
Rwanda
Range of Contract Holders
Range of Contract Holders
Centralized Entities
Ministry Agency NationalUtility
Niger Mauritania Cote d’Ivoire
Senegal Paraguay Gabon
Bangladesh Morocco
Use of Community OrganizationsNo common practice
Initiative WUA NoneBenin ✔ ✔
Burkina Faso ✔
Rwanda ✔
Niger ✔
Senegal ✔
Mauritania ✔
Paraguay ✔
Cote d’Ivoire ✔
Morocco ✔
WUA = Water User Association
Some good ideas
Cluster schemes to increase profitability
Burkina Faso, Rwanda, Niger, Uganda• Clustering attracted more qualified firms
• Ability to spread costs and revenue across several schemes indispensible to firm entry
https://water.worldbank.org/water/multimedia/making-ppps-work-rural-and-small-towns-water-introduction-and-presentations-part-1
Links to Burkina Faso and Uganda Presentations:
Benin• Evaluation found profitability limited because so many
operators had only a single scheme
Offer design-build-operate contracts
Burkina Faso (and West Africa generally)• Firm will do quality construction
• No subsequent disputes over infrastructure
• Operator knows system
• Save time in contracting process
Link to document on West African experience
https://water.worldbank.org/water/node/83637
Haiti•May introduce DBO to deal with lack of interest in operations only
Use commercial bank to provide financing
Kenya• Kenya has large number of decaying community-managed
schemes• K-Rep Bank offers up to 80% financing; combined with output-
based aid program that provides 40% subsidy• Built up K-Rep capacity (in-house appraisal team)• Consultant-operators prepare loan application, implement,
and operate schemes for 5 years (loan period)• Found clustering and design-build-operate works best
https://water.worldbank.org/water/multimedia/learning-module-financing-small-piped-water-systems-kenya
Presentation and document on Kenya experience:
Franchising by public water utilitiesMorocco
Link to document on Moroccohttps://water.worldbank.org/water/publications/output-based-aid-morocco-part-2-expanding-water-supply-service-rural-areas
Develop standard contracts
Train private sector in preparing bids
Contract the private sector to provide business support services to private operators
Recruit and train graduates as private operators (Mauritania)
Use mobile phone applications to collect financial information on operators/schemes
Other ideas
Note: Sustainability not yet well-documented
Information on financial sustainability is scarce
Thank you
