The private sector has reared its head in various ways through my blog posts so far, but until this week I had not read much of the broader literature on the subject. Having now done so, I wanted to share some of my insights and reflect on the role of the private sector in improving water access.
To begin with I want to point out that the privatisation of a water supply is not one single strategy. Instead it encompasses a whole range of approaches from short-term service contracts through to full divestiture. In Africa one important distinction is that between the French model of privatisation, which works through leasing arrangements, and the British model which involves the transferal of asset ownership to a private entity (Pierce 2015).
The next thing to note is that the success or failure of a privatisation initiative has a great deal to do with the context in which it takes place (Bayliss 2003). As we saw in my last post City Water failed to make good of that which was left behind by DAWASA. But in Cote d'Ivoire privatisation proved hugely successful and only began to falter as the country's wider economic circumstances changed in 2002. Further examples of this relationship abound and can be found in Bayliss' article.
A related point, but one worthy of individual mention, is that privatisation will only work with due oversight and regulation on behalf of the government (Golooba-Mutebi 2012). A large part of the success in Cote d'Ivoire was down to a social tariff which ensured the provision of water to those who could not afford the going market rate. While such forms of regulation are necessary they can be difficult to implement given the lack of competition amongst private companies to provide the service (Bayliss 2003).
The fourth and final point I want to make is that innovation, either in the form of the cross-subsidies mentioned above, or the participatory action outlined in an earlier post, rarely come from the private sector (Hall and Lobina 2007). Instead these ideas emerge from the public sphere -- from communities, authorities and political activity.
The conclusion then, as much as I can offer one at this stage, is that privatisation alone is not a solution (Carter and Danert 2003). That what is needed is a combination of private sector participation, government regulation and community initiatives. More on this next time!
To begin with I want to point out that the privatisation of a water supply is not one single strategy. Instead it encompasses a whole range of approaches from short-term service contracts through to full divestiture. In Africa one important distinction is that between the French model of privatisation, which works through leasing arrangements, and the British model which involves the transferal of asset ownership to a private entity (Pierce 2015).
The next thing to note is that the success or failure of a privatisation initiative has a great deal to do with the context in which it takes place (Bayliss 2003). As we saw in my last post City Water failed to make good of that which was left behind by DAWASA. But in Cote d'Ivoire privatisation proved hugely successful and only began to falter as the country's wider economic circumstances changed in 2002. Further examples of this relationship abound and can be found in Bayliss' article.
A related point, but one worthy of individual mention, is that privatisation will only work with due oversight and regulation on behalf of the government (Golooba-Mutebi 2012). A large part of the success in Cote d'Ivoire was down to a social tariff which ensured the provision of water to those who could not afford the going market rate. While such forms of regulation are necessary they can be difficult to implement given the lack of competition amongst private companies to provide the service (Bayliss 2003).
The fourth and final point I want to make is that innovation, either in the form of the cross-subsidies mentioned above, or the participatory action outlined in an earlier post, rarely come from the private sector (Hall and Lobina 2007). Instead these ideas emerge from the public sphere -- from communities, authorities and political activity.
The conclusion then, as much as I can offer one at this stage, is that privatisation alone is not a solution (Carter and Danert 2003). That what is needed is a combination of private sector participation, government regulation and community initiatives. More on this next time!
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