Public-Private Partnerships for Service Delivery (PPP4SD) WORLD - - PowerPoint PPT Presentation

Regional Centre in Bangkok Regional Centre in Bangkok

Public-Private Partnerships for Service Delivery (PPP4SD)

WORLD WATER DAY 2007 “Coping with Water Scarcity: Can Developing Countries in Asia and the Pacific Achieve the Millennium Development Goals?”

Batdelger Luuzan, PPP Policy Specialist

Regional Centre in Bangkok Regional Centre in Bangkok

• Service Provision Costs are too High
• Customer Management Costs are too

High (high percentage of unpaid bills, high rate of unbilled or fraudulent consumption, it is not always cost effective to bill due to low consumption, high maintenance costs)

• Problems of providing the service to areas

without secure land tenure

Basic Services & the Poor

Regional Centre in Bangkok Regional Centre in Bangkok

…poor are getting water, though, at high cost, poor standards & quality, & very limited quantities… . For instance, in Sta. Ana, the Philippines:

• deep well (not used for drinking and

cooking) @ P20-25/drum;

• MWCI water @ P35/drum consumption; &
• bottled mineral water, costing P35-45/5

gallons (used specifically for drinking; for infants & families who can afford it), whereas

• those directly connected to system - one

drum @ approximately P2.20

Regional Centre in Bangkok Regional Centre in Bangkok

How They Are Getting Water?

• State not performing very well: significant

chunk of water supplied in Asia-Pacific are not met by public water utilities.

• NSAs filling in the gap in various ways in a

context of a regulatory vacuum.

• Growing need for water not matched by

existing capacity of traditional service providers & NSA.

Regional Centre in Bangkok Regional Centre in Bangkok

2006 UNDP HDR: …water crisis is not so much one of absolute scarcity but one of Governance…

• It is the direct responsibility of National & Sub-

national Governments to adopt Pro-Poor Policies for extending services to the poor

• In case of PPPs, it is Also the Government’s role

& duty to define these policies, make necessary regulatory changes & build them into contracts with the private sector with incentives for the private sector to meet these objectives & enforceable penalties for failure of doing so.

Regional Centre in Bangkok Regional Centre in Bangkok

All economic agents & actors need to work together to achieve poverty alleviation

• bjectives.
• This cannot be achieved easily, & certainly not

voluntarily, unless:

• the State institutes clear rules & procedures of

engagement to achieve pro-poor objectives & regulates all economic agents & economic activity in a society in such a way so that all, including itself, are accountable on pro-poor delivery (the “stick”), while each of them benefits in a tangible way from such a concerted effort (the “carrot”)

• This in turn points at the capacity of the state to

effectively perform such tasks as well as at the capacities of other NSAs to meet those requirements

• Either of which unfortunately are in shortage in many

developing countries

Regional Centre in Bangkok Regional Centre in Bangkok

UNDP/PPP-SD (PPP-UE)

• Involved in the facilitation & support of basic services

delivery to the poor through PPP arrangements

• Accumulated knowledge on PPPs that deliver

economic, social & environmental benefits to the poor.

• Directly engaged in modifying existing unbalanced or

“poverty neutral” PPP models to incorporate pro-poor dimensions & incentives &, hence, influence the regulatory environment of developing countries in Africa, Asia & Latin America.

• Aware of the existence of a body of work that has

resulted in the accrual of knowledge & experiences in establishing Pro-poor PPPs & Pro-poor regulatory frameworks for PPPs that prevent adverse impacts on the poor & follow principles of good governance.

Regional Centre in Bangkok Regional Centre in Bangkok

PPP-SD Field Experience in Enhancing Access of the Poor to Water Supply Services: Mozambique – Águas de Moçambique

• Rehabilitation & reallocation of standpipes in poor areas
• f Maputo & Matola
• Small Systems – AdeM & SSWP (Identification &

Cooperation)

• Training & Implementation of New Model
• Pre-Paid System (to avoid outstanding payments /

protecting users)

• Reselling in bulk water rate (where networks available)
• Introduction of user fees/charges culture/principle

Regional Centre in Bangkok Regional Centre in Bangkok

PPP-SD Field Experience in Enhancing Access

• f the Poor to Water Supply Services:

Mozambique – Águas de Moçambique

(continued)

• Quality control (detection of improper/unsafe water from

wells)

• Awareness raising campaigns (in schools)
• Involvement of CRA & FIPAG with Local Authorities &

Municipality – agreement to be concluded with NGO’s

• Improvement of the model to solve the illegal connections

(through contracts & benefits for the operator)

• Pro-poor tariffs

Regional Centre in Bangkok Regional Centre in Bangkok

Nepal Experience

Legal framework not in place PPP Policy (for local bodies) 2060

PPP Guidelines (for local bodies) 2061 Amendments to LSGR

Progression in PPP legal context

Regional Centre in Bangkok Regional Centre in Bangkok

Nepal Experience

Content of PPP Policy

The policy document is primarily concerned with PPP strategies &

• policies. It defines the

proper enabling environment & criteria for well-structured PPPs & procedures for establishing the same. Dispute resolution mechanisms for running PPPs are also proposed.

PPP Policy Content

Policies Strategies Forms of partnership Property rights of the local bodies Provisions concerning transfer of security and contracts Framing of legislation Public Private Partnership Committee Settlement of disputes concerning Public-Private Partnership Manuals and implementation procedures

PPP Policy document

Regional Centre in Bangkok Regional Centre in Bangkok

Nepal Experience

PPP Guidelines (for local bodies) 2061

The PPP Guidelines are procedural & were developed to facilitate the implementation of the PPP Policy. The Guidelines define the scope, principles & priorities of partnerships & institutional arrangements for PPP projects. They also talk in depth about partnership project identification, project appraisal, sustainability & risks; partner selection, MoUs and MoAs; project monitoring, reporting & regulatory provisions.

Contents of PPP Guidelines Scope, principles & priorities of partnership Institutional arrangements Partnership project identification and development stages Project appraisal, sustainability & risks Partner selection, MoUs, etc. Project monitoring, reporting & regulatory provisions Dispute settlement, project evaluation & amendment Clearance

PPP Guidelines document

Regional Centre in Bangkok Regional Centre in Bangkok

PPP-SD Field Experience in Enhancing Access

• f the Poor to Water Supply Services:

Hetauda Municipality, Nepal

• CBO investment

in infrastructure

• Not required to

pay royalty on condition that

• CBO invests 50

percent of net profit in infrastructure

• Loan Rs. 300,000

Regional Centre in Bangkok Regional Centre in Bangkok

Policy, Institutional & Regulatory Frameworks for Pro-Poor PPPs

Some of the Pro-Poor PPP Policies include:

• Reducing costs to serve poor neighbourhoods by adapting flexible

technical standards

• Allow services to be differentiated in order to satisfy user preferences
• Allow phased payments of connection/service provision fees
• Addressing land tenure issues
• Providing direct, well targeted subsidies to the poor
• Non-exclusive clauses that allow small providers to serve poor

neighbourhoods

• Promote users forums & adequate customer care
• Promote & facilitate microcredit

Regional Centre in Bangkok Regional Centre in Bangkok

as regards the PPPs themselves:

• Service improvements may mask reduction in services to

the poor

• Modifying an existing poverty neutral model may prove to be

costly & time consuming

• Design & implementation of pro-poor tariffs requires

considerable investment in data collection & management

• Contractual arrangements – allow for meaningful discussion
• f legal, regulatory & risk sharing issues governing

relationships

• Urban policies must ensure that private contractors do not

“cherry pick” most attractive neighbourhoods

Regional Centre in Bangkok Regional Centre in Bangkok

Thank You! For more information, please visit:

http://pppue.undp.org