In Peru’s small towns, municipalities have traditionally provided water and sanitation services and made decisions without consulting users. Providers have not invested in operation and maintenance and suffered from inability to recover costs, political interference, deficient management and high staff turnover. A new approach that encourages the participation of key stakeholders could improve the situation.

A paper from the World Bank’s Water and Sanitation Program looks at the Small Town Pilot Project (STPP), an initiative to encourage municipalities to delegate administration of water supply and sanitation (WSS) services to local operators.

Municipalities interested in changing their water and sanitation management were invited to participate. The ten selected to join STPP were required to sign an agreement committing them to work in partnerships with civil society organisations, the community and local small-scale providers.

STPP is based on the belief that long-term sustainability of supply systems is impossible as long as municipal providers set water charges without mechanisms to hold them accountable for service quality. Citizens need to be properly informed about the water and sanita­tion situation in their localities and actively involved in making changes. Once quality is improved, user satisfaction, and therefore social sustainability, should be guaranteed.

In the STPP the community determines the level of service quality it needs and what it is willing to pay for. Customers are aware that the charge they pay also includes a contribution to a fund administered by the operator or municipality for agreed purposes such as subsidising services to very poor people, environmental protection and health and hygiene education.

Key principles of STPP are:

• ending the municipality’s direct administration of water and sanitation services while retaining its ownership of infrastructure
• allowing communities to make informed decisions about the service quality they require and can afford
• contracting a private or public/private operator to deliver services
• requiring users to commit to paying service fees in full and on time
• promoting gender equality by targeting information campaigns at women and working to ensure their participation
• community consultation and in-depth participatory assessments.

Neighbourhood Community Boards (NCBs) are being set up to enable communities to hold operators to account. NCB members are to receive training in how to use quality indicators, check information provided by the operator, monitor water quality, deal with user complaints and resolve disputes. NCB members will be responsible for ensuring that action is taken against operators who breach their contracts.

STTP has been launched in small towns in the highlands, the Amazon and the coast. Six communities have decided to contract private specialised (local, regional or national) operators, while three, to ensure that commercial interests are mediated by social ones, have chosen to have their municipalities work with specialised operators to deliver the services. Each of these three private-public operations has a different approach:

In Talavera, the partnership is between a WSS users’ association and the municipality (the municipality has a 49 percent interest).

In Urcos, it is an association between two local engineers and the municipality (the municipality has a 25 percent interest).

In Laredo, the association is between private regional stockholders and the municipality (the municipality has a 10 percent interest).

STPP will be built upon to become a national initiative. To ensure success, it should:

• encourage local entrepreneurs, merchants and technicians to participate in delivering services: operators will require start-up capital of approximately US$ 5,000
• provide training for operators’ staff in service operation and maintenance, utility service administration and social promotion
• encourage alternative technologies and use unskilled labour and local materials wherever possible
• provide mechanisms to help share local, regional and international experience in providing WSS services to small towns.

Source(s):
‘The small town pilot project in Peru: a private-public and social partnership to change water and sanitation management models’, Water and Sanitation Program World Bank, by Jorge Luis Mcgregor, June 2005 Full document.

Funded by: World Bank

id21 Research Highlight: 2 December 2005

Further Information:
Jorge Luis McGregor
Water and Sanitation Program
Latin America and the Caribbean Region
World Bank Office, Lima
Alvarez Calderon 185
San Isidro
Lima 27
Peru

Tel: +511 6150685
Fax: + 511 6150689
Contact the contributor: jmcgregorarnao@worldbank.org

Water and Sanitation Program - Latin America and the Caribbean

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