Water resources, flood and utilities infrastructure

Water resources, flood and utilities infrastructure

What about public-private partnerships (PPPs)?

The challenges in the provision of water resources infrastructure

Meeting the MDGs is not just about providing water for all, but also about providing water resources and infrastructure that can meet the challenges related to global warming.

Government policy has a large role to play in the management of adaptation for climate change, as does regulation of those responsible for delivering and managing the infrastructure.
The challenges in providing infrastructure include:

  • Skills availability in government

  • Providing for customers who are unable or unwilling to pay

  • Maintenance of infrastructure

  • Management and control of private providers to realise objectives

  • Setting up independent regulating bodies or contractual tools for enforcing services and standards where government outsources the provision, maintenance and operation of utilities infrastructure to the private sector (World Bank/PPIAF,2006)

Key points for engineers

  • Understand the role of government policy and regulating bodies
  • Be aware of changes in policy or regulation to address global warming

 

The role of the private sector – public private partnerships
The private sector can have a key role in water provision, and various Public-Private arrangements exist which establish how the partnership will work, including aspects such as:

  • Ownership of capital assets
  • Responsibility for investment
  • Risk sharing and
  • Contract duration


(Good Governance in Restructuring Water Supply)

 

Benefits of PPP’s include transfer of risk to those most capable of managing it, potential for better quality infrastructure and potential for cost savings.

The challenge for shorter-term contracts with public bodies retaining ownership of assets is how to ensure long-term maintenance of and investment in the utility.

Manage public-private partnerships (PPPs) with contract and regularity frameworks within the local context

Example: Affermage Water Supply Contract in Senegal: Affermage contracts generally place responsibility for operation and maintenance of the water supply network with the private sector, with minimal specific investment requirements.
However, through longer-term contracts and contractual mechanisms, the operator can be incentivised to invest in the network.

In Senegal, increases in operational efficiency and large-scale network expansion were achieved through:

  • Contractual innovations aiming to increase private operators’ incentives to perform efficiently
  • Requirements to finance network rehabilitation with cash flow

In the first case, targets were introduced for collecting payment for bills and for reduction in “non-revenue” (unaccounted for) water, with associated financial penalties for non-performance. In the second, by requiring the operators to put money back into the water supply network, they were provided with incentives to improve operational efficiency and flexibility in the way in which they could achieve this. (World Bank, 2010)

References/Further Reading

World Bank/PPIAF (2006) Approaches to Private Participation in Water Services, A Toolkit
Good Governance in Restructuring Water Supply: A Handbook, University of British Columbia.
Foster et. al (ed), World Bank (2010) Africa’s Infrastructure, a Time for Transformation,
PPI in poor countries, J Leigland, Gridlines Note No. 51, PPIAF (Feb 2010)
/DMS Practice Guide 2: Construction procurement strategy.