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Structuring and Governing the Use of Public Private Partnerships in Water


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Water is essential for life. Historically, governments or governing regimes have been responsible for delivering good quality water supply to their residents. However, recently, in many parts of the world there has been shift away from public delivery towards the use of public private partnerships (PPPs) for the delivery of water and sanitation services. Let us examine why this has been the case. Primarily there is often a feeling that public agencies are hampered by an intrinsic x-inefficiency stemming from bureaucratic procedures that they need to follow, and a lack of performance-based incentives for their personnel. This then leads to underperformance of public agencies and can be borne out by fact when public agencies are benchmarked on metrics such as the quality of water supplied, the efficiency of water supply and so on. There is therefore a case to be made for bringing in private sector efficiencies into the provision of water. Although this rationale that the private sector can provide better quality services is not unjustified, it does not automatically follow that PPPs – projects wherein the private sector shoulders greater ownership and risks as compared to traditional construction contracts – will always be successful where there are cases of government failure in service delivery. In particular, projects should be carefully chosen and structured such that they can be governed over their lifecycle.

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