Transcript Slide 1

Privatisation
Corinne Waelti, seecon international gmbh
Privatisation
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Privatisation
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Contents
1. Introduction
2. Implementation
3. Outcomes
4. Conclusion
5. References
Privatisation
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1. Introduction
How to Improve and Expand Public Sanitation and Water Services?
•
•
•
•
No connection to the water or sanitation system
No constant supply
Poor drinking water quality
No proper wastewater treatment
Problem:
Unsatisfactory delivery of water and wastewater services
Nationalisation
Mixed
Privatisation
(e.g. Public Private
Partnership)
Possible institutional frameworks
Privatisation
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1. Introduction
Problem
Public as well as private operations cannot always guarantee water and
sanitation services to all their residents.
Why is it difficult to achieve local sanitation and water supply?
• Water and sanitation services are critical to all consumers
• There is often a natural monopoly
• Investments are long-lived and irreversible which hinders investors
Privatisation is seen as one possible solution to these problems.
Privatisation
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1. Introduction
What is Privatisation?
Privatisation is the process of transferring ownership or responsibilities
from the public sector (government) to the private sector (e.g.
business or non-profit organisation).
Privatisation in the water and sanitation sector
The private sector has always been involved in the water and
sanitation sector in some form (e.g. construction contracts in large
urban supplies or informal provision of water in unserved areas).
However, a new role is currently being shaped due to globalisation,
leading to increased importance of private actors.
Adapted from: INWRDAM (2010)
Privatisation
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2. Implementation
Different Privatisation Models
Responsibility of private party
Service contract / Buying in
Single function contract
Management contract
Operation & maintenance (O&M)
Build-Operate-Transfer (BOT)
/Build-Operate-Own (BOO)
Construction of infrastructure
Lease
O&M; sometimes asset renewals
Concession
Capital investment; O&M
Partial divestiture
Joint venture with private sector
Full divestiture
Capital investment; O&M;
revenue collection
Short-term
Time scale of contract
Privatisation model
Long-term
Adapted from: REES (2008)
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2. Implementation
The Implementation Process
Implementing a privatisation follows four steps:
Developing
the policy
Designing
the details
of the
arrangement
Selecting the
operator
Managing
the
arrangement
The time requirement for these steps differs according to the
arrangement proposed and the already existent laws supporting or
hindering the privatisation.
Adapted from: THE WORLD BANK (2010)
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3. Outcomes
Advantages and Disadvantages
Independence from the local government and strong incentives for
being profitable may lead to:
• More efficient operation
• Fewer profitable opportunities
are being missed
• Often undermines local &
national government capacities
• Community is seen as recipient
rather than contributor (profit
is more important than
people’s needs)
• Government does often not
know how to monitor private
parties, which may lead to a
lack of accountability
 May lead to conflicts with civil
society
Adapted from: GREEN (2003) & THE WORLD BANK (2006)
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4. Conclusion
Applicability
• Success depends on the laws supporting the process and on the
arrangement proposed
• Needs a serious private operator
• Not useful for projects which result in fast technological changes,
as it would be difficult to determine long-term standards
Adapted from: APPP(2009)
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5. References
APPP (Editor) (2009): A Step by Step Guide to Public-Private Partnerships (PPPs). Croatia: Agency for Public Private Partnerships.
URL: www.javnanabava.hr/userdocsimages/userfiles/file/Razne%20publikacije/Step%20by%20step%20guide%20to%20PPP.pdf
[Accessed: 30.08.2012]
GREEN (Editor) (2003): Advocacy Guide to Private Sector Involvement in Water Services. London: WaterAid and Tearfund. URL:
www.tearfund.org/webdocs/Website/Campaigning/Policy%20and%20research/Advocacy%20guide%20to%20private%20sector%20inv
olvement%20in%20water%20services.pdf [Accessed: 02.09.2010]
INWRDAM (Editor) (2010): Public Private Partnership in Water and Sanitation Sector. Amman – Jordan: The Inter-Islamic Network
on Water Resources Development and Management. URL: http://www.inwrdam.org/page/342 [Accessed: 31.08.2010]
REES (Editor) (2008): Regulation and Private Participation in the Water and Sanitation Sector. Stockholm: Global Water
Partnership (GWP). URL: eagri.cz/public/eagri/file/30628/Regulation_and_Private_Participation_1_.pdf [Accessed: 02.09.2010]
THE WORLD BANK (Editor) (2006): Approaches to Private Participation in Water Services. A Toolkit. Washington, DC: The
International Bank for Reconstruction and Development/ The World Bank. URL:
rru.worldbank.org/Documents/Toolkits/Water/Water_Full.pdf [Accessed: 02.09.2010]
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Water Management & Agriculture”
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