Public-Private Partnerships for Urban Water Utilities: A Review of Experiences in Developing Countries

This study seeks to contribute to the understanding of the performance of PPP projects in urban water utilities in developing countries. It focuses on projects in which a private operator is introduced to run the utility, consequently excluding build, operate, and transfer (BOT) projects and  similar arrangements limited to the construction and operation of treatment facilities. It reviews the overall spread of urban water PPPs during the past 15 years and seeks to respond to the questions of whether and how they have helped to improve services and to expand access for the populations concerned.

The study analyzes performance data from more than 65 large water PPP projects that have been in place for at least five years (three years in the case of management contracts), a sample that represents a combined population of about 100 million people—close to half of the urban population that has been served by private water operators some time between 1990 and 2007. This sample represents, by size of population served, close to 80 percent of the water PPP projects that were awarded before 2003 and that have been active for at least three years.
 
Four dimensions of performance are analyzed: access (coverage expansion), quality of service, operational efficiency, and tariff levels. The analysis focuses on the net improvements and actual impact for the concerned populations, rather than whether contractual targets were met. Based on what worked and what did not, conclusions are then drawn on how governments  can better harness private initiative to improve water supply and sanitation services in the developing world.