Private sector participation

Credit: Brent Stirton

"WaterAid strongly believes that privatization should not be imposed upon poor countries through aid conditions, trade rules or conditions for debt cancellation."

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 extensive research and lobbying on the issues surrounding PSP since 2001.

While the big debate currently focuses on multinational water operators, their ability to properly serve the world's poorest people is unproven. WaterAid believes that insufficient attention and resources have been put towards improving the performance of in-country public services or supporting local community-managed services in order to deliver sustainable water and sanitation facilities.

WaterAid strongly believes that privatization should not be imposed upon poor countries through aid conditions, trade rules or conditions for debt cancellation. Instead, national and local governments must manage and regulate water and sanitation services and ensure the accountability of the public, community or private organizations delivering them.

WaterAid believes there is not one single solution to ensuring everyone gains access to water and sanitation, so it is impossible to say in general terms whether it is a good idea for private, public or community organizations to be involved in the delivery and management of services.

Each circumstance should be looked at individually and a suitable pro-poor, affordable and sustainable solution found to fit each community. The decision making processes should be transparent and consultative, involving all relevant parties, to determine how these services will be provided and managed to the standards of service people should expect.

On private sector participation WaterAid believes that:

• Privatization 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

• Even where the private sector is involved, ownership and control over water systems and water resources should never shift from the public to the private sector

• Solutions should be pro-poor, affordable and sustainable

• 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

• Users must have their say in the provision of their water and sanitation facilities

• The role of small and medium size 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 only source of water

WaterAid is engaged in a multistakeholder review and research processes which aim to examine whether and how the private sector can contribute to the delivery of affordable and sustainable water supply and sanitation services, especially to poor communities. Lessons from this exercise will generate information that can contribute to the development of sector strategies by governments and support for these strategies from international donors. You can find out more about this on the Water Dialogues website.

Read our reports on private sector participation