Private sector participation

Credit: Brent Stirton

The issue of private sector participation (PSP) in the provision of water and sanitation services in developing countries is contentious. WaterAid has been carrying out research on the issues surrounding PSP since 2001.

WaterAid believes it is the ultimate responsibility of national and local governments to ensure all citizens have access to adequate and affordable water and sanitation services and to decide how they are delivered to all, whether via public, private or non-profit providers or utilities.

As such, WaterAid encourages donors to build the capacity of national and local governments to effectively manage and regulate water and sanitation services so that those responsible for ensuring the delivery of services are accountable to, and meet the needs of, all communities, particularly poor people.

In the recent past, major donors have actively promoted private sector participation and the debate has become further polarised and focused on the role of large multinational water companies. However only around 5% of the world's water is actually distributed by large private operators and evidence suggests that there are successes and failures with both public and private approaches.

WaterAid believes that privatisation should not be imposed upon poor countries through aid conditions, trade rules or conditions for debt cancellation. There is no single solution to ensuring everyone gains access to water and sanitation in developing countries. In most developing countries the reality is a complex mix of delivery mechanisms, including the local small scale private operator. So it is impossible to say in general terms whether it is a good idea for private, public or community organisations to be involved in the delivery and management of services.
The polarisation of debate between public and private is unhelpful and lumps together two very diverse sets of actors and agencies on both sides. Each circumstance should be looked at individually and a suitable pro-poor, affordable and sustainable solution found to fit each context. The decision-making processes should be transparent and consultative, involving all relevant parties, to determine how these services will be provided and managed to commonly agreed standards.

WaterAid believes that:

• Privatisation or private sector participation should not be imposed upon poor countries through aid conditions, trade rules or conditions for debt cancellation
• National and local governments, ultimately responsible for providing their citizens with water and sanitation, should make the decisions on how services are provided in their country in a transparent and consultative way with users and other stakeholders
• All service providers (whether public, community or private) must be regulated and their performance monitored, preferably with the involvement of users, to ensure they are accountable for service levels, price and quality
• The role of small and medium sized private water providers (whether for-profit or not-for-profit) must be acknowledged and regulated; as poor people often rely on these providers as their main source of water
• Users must have their say in the provision, management and regulation of their water and sanitation facilities
• Solutions should be pro-poor, affordable and sustainable

WaterAid is engaged in a number of ongoing multistakeholder review and research processes which aim to examine where and how the private sector can contribute to the delivery of affordable and sustainable water supply and sanitation services, especially to poor communities. We are committed to ensuring that the evidence generated and lessons learnt from experience in the countries where we work is used to inform the development of national strategies that are wholly owned by developing countries and supported by international donors.