By David Hall
This article is part of a special issue on water and water privatisation in Africa produced as a joint initiative of the Transnational Institute, Ritimo and Pambazuka News. This special issue is also being published in French.
Donors and development banks have largely focused on private-public partnerships in their attempts to develop water management capacity around the world, overlooking the vast expertise of public sector water operators. But now they too are starting to recognise the benefits of Public-Public Partnerships for the provision of public water and sanitation services, writes David Hall.
Water operators need to be efficient, accountable, honest public institutions providing a universal service. Many water services however lack the institutional strength, the human resources, the technical expertise and equipment, or the financial or managerial capacity to provide these services. They need support to develop these capacities.
The vast majority of water operators in the world are in the public sector – 90 per cent of all major cities are served by such bodies. This means that the largest pool of experience and expertise, and the great majority of examples of good practice and sound institutions, are to be found in existing public sector water operators. Because they are public sector, however, they do not have any natural commercial incentive to provide international support. Their incentive stems from solidarity, not profit. Since 1990, however, the policies of donors and development banks have focused on the private companies and their incentives. The vast resources of the public sector have been overlooked, even blocked by pro-private policies.
Out of sight of these global policy-makers, however, a growing number of public sector water companies have been engaged, in a great variety of ways, in helping others develop the capacity to be effective and accountable public services. These supportive arrangements are now called ‘public-public partnerships’ (PUPs). A public-public partnership (PUP) is simply a collaboration between two or more public authorities or organisations, based on solidarity, to improve the capacity and effectiveness of one partner in providing public water or sanitation services. They have been described as: ‘a peer relationship forged around common values and objectives, which exclude profit-seeking’.
PUPs avoid the risks which are typically encountered in public-private partnerships: Transaction costs, contract failure, renegotiation, the complexities of regulation, commercial opportunism, monopoly pricing, commercial secrecy, currency risk, and lack of public legitimacy.