Public-Private Partnerships for Urban Water Utilities : A Review of Experiences in Developing Countries
Since 1990, many national and local governments in developing countries have contracted with private companies to operate or manage their water utilities under Public-Private Partnership (PPP) contracts. The assumption was that the private sector will improve utilities by bringing in new capital, raising the level of staff expertise, and making operations more cost-effective and efficient. More than 260 PPP contracts have been signed to provide water services in more than forty developing countries. The recourse to private operators has been accompanied, however, by a good deal of controversy. Several high profile contracts, such as in Buenos Aires, were cancelled in recent years following conflicts between the public and private partners. This has raised doubts about the suitability of PPPs to help improve water services in developing countries. Yet, there has been only little objective data available in the literature about the performance of PPPs, and the resulting debate has been based more on ideology than fact. This study attempts to redress the shortage of information by examining, through objective indicators, the actual performance of PPPs in developing countries over the last fifteen years. It collected data from as many as 65 PPP projects, representing a served population of about one hundred million people half of the urban population served at one point in time since 1990 by private water operators, and 80 percent of the population served by a private operator for more than 3 years and under a contract signed before 2003.