Water services for Asia’s urban poor are intermittent, polluted, expensive and inconvenient. The public sector is not meeting the needs of the urban poor. On current progress, it looks unlikely that Asia will meet the Millennium Development Goal of halving the number of people without water and sanitation by 2015.

Research from the Asian Development Bank (ADB), carried out in partnership with Cranfield University, draws on evidence from twenty public-private partnerships (PPPs) in ten Asian countries to investigate how well the public sector, private entities and civil society are serving the urban poor with water supply, sanitation and solid waste services.

Asia has the world’s lowest tariffs for water and sewerage services. Prices are well below cost. This means that there is no funding available to extend the distribution networks to enable the poor to be connected. Public providers are not only failing to achieve the goal of public health provision for the poor but are also, in effect, subsidising the water and sanitation needs of the richest.

Whilst public providers assist the better-off, the essential needs of the urban poor are being met by a mixture of low quality provision by informal private operators – often at high, unregulated prices – or by innovative civil society projects that experience difficulties in expanding into larger scale programmes. Though some of the new public private approaches are successfully reforming direct public providers, these usually serve poor people only by default through general improvements in performance.

The authors describe how:

• Countries with higher average incomes have been quicker to recognise the benefits from PPPs.
• Many long-term (25-40 year) contracts have been hastily put together without the parties understanding their roles and responsibilities.
• Unrealistic expectations of the new schemes are widespread. Governments wrongly believe that the private sector will relieve them of financial burdens, whilst consumers hope that services will improve while tariffs will not rise and companies imagine that they can easily re-negotiate contracts and raise tariffs by directly approaching politicians at any time.
• Although the limited number of city-wide PPPs involving international operators has improved services to the poor, there are questions about the long-term stability of these because of currency fluctuations and delays in tariff adjustments.

The ADB urges:

• governments to have more courage in making politically difficult decisions on land ownership (recognising currently illegal dwellings) and tariff revisions and increases
• governments to assume the role of water policy legislators and economic regulators rather than direct service providers
• private companies to adapt their knowledge to developing countries’ circumstances and to be more willing to learn how to develop approaches to serving the poor
• civil society to stay engaged by assisting providers – regardless of whether they are public or private – and monitoring the quality of the service and the extent to which the poor can gain access to it.

Neither civil society, the private sector nor governments are capable on their own of meeting the water and sanitation needs of the poorest in Asia’s dramatically expanding cities. Rather, a coordinated joint effort is required. The involvement of organisations from civil society is vital because of their flexibility and commitment to tackling poverty. The private sector is needed to shake-up the old system of service provision and manage it more efficiently. All this must be overseen by government as the economic regulator and facilitator.

Source(s):
‘Public–private community partnerships in infrastructure for the poor’ by Richard Franceys and Almud Weitz, Journal of International Development, vol 15, no 8, pp1083-1098, November 2003

Funded by: Asian Development Bank RETA 5926

id21 Research Highlight: 30 January 2004

Further Information:
Richard Franceys
Institute of Water and Environment
Cranfield University
Silsoe
Bedford MK45 4DT
UK

Tel: 44 (0) 1525 863105
Fax: 44 (0) 1525 863344
Contact the contributor: r.w.a.franceys@cranfield.ac.uk

Cranfield University

Almud Weitz
Social Sectors Division
Asian Development Bank
P.O. Box 789
0980 Manila
Philippines

Contact the contributor: aweitz@adb.org

Asian Developement Bank

Other related links:
Beyond Boundaries - Extending services to the urban poor

'Helping municipalities work with the private sector: a salutary experience from South Africa'

'Getting municipalities ready to work with the private sector: experience from Zimbabwe'

id21 Insights 49 - Regulating for development

The Institute for Public Private Partnership