[A-List] Fwd: [globalization] Water privatisation in Africa: how successful is it?

[Mark Jones <jones.mark@xxxxxxxxxxxxx>]

[this forward from the invaluable and indefatigable Mark Ritchie]


Date: Fri, 21 Dec 2001 02:28:57 -0600
From: mritchie@xxxxxxxx
Subject: [globalization] Water privatisation in Africa: how successful is it?
To: jones118@xxxxxxxxxxx

Globalization (globalization@xxxxxxxx)    Posted: 
12/21/2001  By  mritchie@xxxxxxxx
============================================================




  Water privatisation in Africa: how successful is it?

In much of Africa it is now thought that only privatisation can deliver
improved water supply services. Is this assumption correct and is it based
on concrete evidence? Can privatisation address the chronic problem of
under-investment? How have management and institutional frameworks adapted
to the arrival of major international water firms?

A study from the University of Greenwich?s Public Services International
Research Unit (PSIRU) reports that there have been 14 major water
privatisations, mostly in Francophone Africa but also in South Africa and
Mozambique. The market is dominated by French multinationals, particularly
SAUR and Vivendi. The study reviews evidence from three African countries:
Cote d?Ivoire, Guinea and Senegal.

On the basis of World Bank research, PSIRU finds much that has gone awry.
Confused institutional frameworks have not clarified responsibilities for
maintenance and investment. Regulatory powers of governments are weak and
frequently ignored by private investors. The widespread use of lease
contracts means that governments must still pay for capital investment.
Privatisation has failed to make public operators pay their bills. When
they don?t, the private sector companies claim compensation from
governments, further reducing funds available for investment.

In Guinea the military government, under pressure from donors, adopted a
lease contract for water supply in 1989. Water quality has improved, almost
all houses are now metered and billing is better. There is a downside however:

Very high levels of leakages still exist with no incentive for the operator
to reduce them.
The number of new connections is far less than expected ­ partly because of
a big increase in prices.
The private operator is not required to use competitive tendering and
sources products from its parent company.
The regulator has also failed to make the operator comply with reporting
requirements or to justify price hikes.
Cote d?Ivoire?s privatisation, the first in Africa, has achieved more. The
public sector retains ownership of assets, provides investment financing
and sets tariffs for end-users. Water quality is good, connection rates are
rising, leakages are low and labour productivity is increasing. Though the
regulatory regime is more robust than elsewhere, the operator is still able
to get round competitive tender rules.

Further findings include:

Billing procedures and collection rates are improving with privatisation.
Increases in revenue do not reach the bodies responsible for investment in
the water sector.
Authorities are generally powerless to determine the revenue position of
private investors.
High prices and disconnections affect poor people and increase use of
unsafe water sources.
Private firms are the real winners from poorly regulated lease contracts.
The implications for policy makers are that:

More research is needed on the impact on those excluded from privatised
water supplies.
Governments have found it difficult to police the operations of private
firms. Effective regulation remains elusive.
Despite privatization, the public sector still has to source finance for
long term investment. Private investors tend to focus more on raising
revenue from the operation.
Contributor(s): Kate Bayliss

Source(s):
?Water privatisation in Africa: lessons from three case studies?, Public
Services International Research Unit, University of Greenwich, by Kate
Bayliss, May 2001 More information.


Date: 18 September 2001

Further Information:
Kate Bayliss
Public Services International Research Unit (PSIRU)
University of Greenwich
30 Park Row
London SE10 9LS
UK

Tel: +44 (0)208 331 9993
Fax: +44 (0)208 331 7781
Email: k.bayliss@xxxxxxxxx

Public Services International Research Unit, UK

Other related links:
Insights #37 'Tapping the market. Can private enterprise supply water to
the poor?'

'PPPs, PWUs or PUPs? Alternatives to private sector water delivery'

'Competing for water: is integrated management an elusive goal?'

IPWA promotes opportunities for private sector participation in water
utilities

IRC focuses on Water and Sanitation

Refer to WHO's 'Water Supply and Sanitation Assessment 2000'

WSSCC enhances collaboration in the water supply and sanitation sector




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