Improving access to water and sanitation is a goal set by all South Mediterranean Countries that needs substantial financial resources to be accomplished. Partnering with the private sector is an option that can be considered to close the financial gap if there are gains in service efficiency and reduction in costs. Based on the potential for involving the private sector as partner in water infrastructure investments and management, this guide aims to contribute in developing a better understanding of the potential for private sector participation (PSP) in Water Supply Services Delivery, with emphasis at the local level (i.e. municipal, governorate, provincial or district, rural areas) and at the financial sustainability.
More specifically, the Study aims at enhancing the knowledge of the local authorities on the main challenges and opportunities related to the PSP in water service delivery; identifying the necessary steps for creating / further improving the enabling environment for PSP – including the legislative, institutional and capacity of involved stakeholders - and providing advice on tested financial sustainability mechanisms that are necessary for functional/effective PSPs in water service delivery.
Known PSP models used at the national level, if adapted, can be also applicable at the local level. Their concept and substance are similar and can be modified to suit local conditions. A determining element for consideration, regardless of the scale of application (whether national, regional or local), concerns the type of stakeholders engaged in the implementation and their area of jurisdiction.
Governments, as well as local authorities, often need to undertake a comprehensive and transparent governance reform involving the legal, institutional and regulatory settings in order to fully exploit the potential of PSP. It also necessitates that the required human and financial resources are allocated to implement these reforms and adjusts tariff policies to interested investors. Moreover, for this process to be successful, the endorsement by all relevant stakeholders is a prerequisite, including at the policy-making and implementation levels.
To better address the objectives of the current study, the document is organized in six main sections discussing the following: 1- the main PSP modalities and the associated opportunities and risks; 2- the main roles and responsibilities of the various partners -including local authorities- under the different PSP modalities; 3- the necessary steps for creating and/or further improving the enabling environment, including the legislative and institutional frameworks and the needed capacity of the involved stakeholders; 4- the financial instruments and mechanisms needed to ensure sustainable PSP in water services delivery at the local level and the context of some innovative financing mechanisms; 5- the skills required to manage PSP at local level and; 6- the various risks involved with PSP in water service delivery at the local level and the means to mitigate their impacts.
The study aims to be a guiding tool for partnering with the private sector to mobilize resources at the local level. Also included are summaries of experiences, status assessments and required actions from the different SWIM Partner Countries to serve as a reference for the reader and references to other publications for those desiring to further develop their knowledge on the topic.
To download the full guide click here