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Key Text Reforming Urban Water Utilities in Western and Central Africa: Experiences with Public-Private Partnerships: Impact and Lessons Learned

Author: Matar Fall et. al.
Date: 2009
Size: 68 pages (499 kB)

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Summary

What has been the impact of public-private partnerships (PPPs) on urban water quality and access in Central and Western Africa? This report from the World Bank examines fifteen countries throughout the region, analysing different models and drawing out lessons learned. It concludes that public-private partnerships have had a positive impact on access, reliability, and cost of water in Central and Western Africa and can provide useful examples for the implementation of such arrangements elsewhere.

Western and Central Africa has one of the longest experiences with public-private partnerships in the developing world, with some partnerships dating back to 1959. It also has the widest variation of models implemented, ranging from long-term concessions to affermage to management contracts. In practice, PPPs have met with mixed success in the region. Five initiatives have succeeded, five have failed, and five have had mixed outcomes or are too new to judge.

In spite of the challenges to their implementation, PPPs can play a central role in improving the quality of urban water supply services, increasing the efficiency of operations, and establishing the financial credibility of the sector. Drawing from the partnerships in Western and Central Africa, several broad findings have been observed:

PPPs have had a positive impact on access expansion, mostly through residential connections;
Successful PPPs have improved the reliability of the service; and
Private operators have achieved significant operational efficiency gains that were eventually passed to customers through lower tariffs.

With improved water quality chief among the goals of governments and donors alike, Western and Central Africa offers interesting lessons for other developing countries contemplating PPPs in the water sector. Through its successes and failures, the region’s experience with PPPs demonstrates the following:

PPPs in combined power/water utilities face more problems
Successful PPPs are part of well-designed sector reforms
Social connection programmes for poor urban households are a major success factor
Collecting bills from public accounts is a recurrent problem
Most financing for investment comes from donors and cash-flows from tariff revenues
Regulation by contract usually works better than regulation by an ‘independent’ regulator
Affermage contracts appear well-adapted to Central and Western Africa, resulting in a specific model emerging.

Moving forward, the Western and Central African experience also suggests a number of recommendations for donors and governments interested in pursuing PPPs in the urban water sector. Given the specific characteristics of some of the region’s partnerships, the emerging Western and Central African affermage model itself may not be best suited to transplantation elsewhere in the developing world, but some general points remain relevant:

PPPs require a true partnership in which both parties are committed to the conditions of the contract. Donors should encourage governments to provide suitable regulatory environments and enabling conditions for the private operator to succeed.
PPPs are usually implemented in conjunction with foreign operators, but successful PPPs should transfer the management to local investors and managers as soon as possible.
The arrival of new operators, particularly those based in developing countries, should be embraced, encouraging South-South collaboration.

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Source: Fall, M. et al, 2009, 'Reforming Urban Water Utilities in Western and Central Africa: Experiences with Public-Private Partnerships - Impact and Lessons Learned', Water Sector Board Discussion Paper Series, Number 13, World Bank, Washington D.C.