Author

Water and Sanitation Division and World Bank Institute (WBI)

1999

Number of Pages:

71

The Private Sector in Water Competition and Regulation

Abstract

This selection of Notes shows the strength and diversity of a global trend to involve the private sector in the

delivery of basic water services that until recently in most countries were the exclusive preserve of public

sector providers. The selection also illustrates some of the hurdles in designing and implementing successful

arrangements for private participation, suggests some lessons from early experience. and shows that much

more needs to be learned.

Among the early lessons:

Private participation can and must be tailored to meet the unique needs, goals, and constraints of each

country and city. Countries at extreme ends of the income and risk spectrum have been successful in

enlisting the private sector, but they could not possibly use the same blueprint.

Private participation is no magic pill. Investors will not commit or perform their role in service delivery unless

governments also commit and perform their vital role in building and maintaining a supportive regulatory

environment, ensuring a transparent process, and clarifying roles, risk allocation, goals, and incentives.

Designing and implementing a successful private participation scheme takes time, political will, and resources

including quality advisory inputs, extensive consultation with stakeholder groups, and early efforts to develop

regulatory capacities.

It is hoped that this collection of notes will be helpful to practitioners not as a set of models to copy but as

food for their thought and process. Private participation in water is recent, and new lessons continue to

emerge and new questions to arise.