What are the linkages between municipal management, poverty reduction and the private sector? Can service delivery be simultaneously pro-poor and for- profit? How can municipalities in developing countries learn to work with the private sector to improve water and sanitation services?

A report from GHK International documents the experience of the Zimbabwean city of Gweru as it recognised the need to introduce private sector skills, efficiency and investment into municipal functions. Analysis of the municipality’s learning curve as it attempted to establish a concession for water and sanitation services illustrates best practice in capacity building, consultative processes and team working, It highlights the importance of economic and political stability if investment-linked public-private partnerships (PPPs) are to succeed.

The process of establishing private sector participation in Gweru, a city of 250,000 people, was stimulated by workshops convened in the mid 1990s by the World Bank and the Ministry of Local Government. Structural adjustment helped to devolve authority to Gweru and other municipalities. Municipal officials and wide sections of civil society came to see the merits of managerial reform and commercialisation of council services.

In 1997 the council realised that they could no longer continue delivering water and sanitation services in the city - and they saw private sector involvement as the way to reverse deteriorating service provision. At one level, the scheme was commercially attractive as Gweru, atypically for a developing country, has a water and sewer network, which serves almost all urban households. All seemed to be going well until massive inflation, a plunging exchange rate, power cuts and chronic political instability frightened the private operator from moving further than the preparatory Memorandum of Understanding. The future of the initiative remains uncertain.

The report looks in detail at municipal, private sector and civil society interactions during the initial phase of establishing the concession. Among the key findings are:

• In Zimbabwe, as in many developing countries, what is lacking for PPPs to succeed, is not so much the legislative framework but the capacity of national agencies to enforce agreed standards on water and effluent quality and to establish a viable regulatory framework.
• The failure of the Zimbabwean armed forces and security apparatuses to either pay their water and sewerage bills or curb their water consumption has bedevilled the council’s financial planning.
• Gweru is trapped in an all-too-typical vicious circle: a culture of non-payment increased as the council was unable to maintain infrastructure and reduce the high level of water leakage.

How can a change-friendly environment be created? The report suggests the need for municipalities, donors and international operators to:

• Recognise that only transparency can establish public confidence and minimise concerns about corruption which often dog PPPs.
• Document the PPP process, anticipate setbacks and prepare strategies to overcome them.
• Identify and encourage high-placed-champions able to get municipal staff on board and make them feel their input is valued. Change is assisted by appealing to the individual interests of staff members.
• Appreciate that reaching agreement on a tariff system invariably takes time.
• Present clear jargon-free financial reports.

Source(s):
‘Preparing a concession: working towards private sector participation in water and sanitation services in Gweru, Zimbabwe’, GHK Working Paper 442 04 by Janelle Plummer with Godfrey Nhemachena, January 2001 Full document.

Funded by: DFID (IUDD)

id21 Research Highlight: 16 January 2002

Further Information:
Janelle Plummer
GHK International
526 Fulham Rd
SW6 5NR
London
UK

Tel: +44 (0)20 7736 8212
Fax: +44 (0)20 7736 0784
Contact the contributor: plummerj@ghkint.com

GHK International, UK

Other related links:
'Tapping the market. Can private enterprise supply water to the poor?'

'Private sector participation in water and sanitation: promises and pitfalls'

'PPPs, PWUs or PUPs? Alternatives to private sector water delivery'

UNDP focuses on Public-Private Partnerships for the Urban Environment

WSP helps the poor gain sustained access to improved water supply

Read the Water Supply and Sanitation Assessment 2000

See the Water Supply and Sanitation Collaborative Council for further publications