Governance Principles for successful introduction of PPP in rural water Sector<br />Experiences from Rwanda, Uganda and Se...
Presentation outline<br /><ul><li>Good Governance – Why / Key Principles
What are the PPPs and Why
Experiences of Public Private Partnerships (PPPs) in Rwanda, Uganda, and Senegal
Benefits of PPP in the 3 countries
challenges
Lessons and  Recommendations;</li></li></ul><li>Good Governance<br />What is Good Governance<br />-Process in government a...
Corruption increases costs, reduces efficiency and threatens the ability to deliver required results.
Effective water provision depends more on the quality of governance.
To deliver services to the poor, PPPs have to take into account Good Governance</li></li></ul><li>What are Public-Private ...
Require new investments by the private contractor (time/expertise, technology, money, reputation, e.tc)
Transfer risks to the private sector ( operation, service delivery, design, construction, e.t.c.),
Payments are made in exchange for performance for the purpose of delivering a service traditionally provided by the public...
 PPP the private operator is told the outputs to meet
Value comes from telling the operator “WHAT needs to be achieved” and NOT “HOW to achieve</li></li></ul><li>Overview of Re...
Reform of the management of the RWSS - Rwanda<br /><ul><li>2002: First experience of Public Private Partnership developed ...
2004: Community management is recognised as a failure based on a specific extensive field survey ( over 30% of facilities ...
2004: Decision to move from community O & M to towards PPP. </li></ul>	New Approach: A PPP approach introduced to shift ma...
Association of POs formed: Weak technical and financial management skills in WSS schemes management</li></ul>-	Rwanda on t...
Results of PPP - Rwanda<br /><ul><li>42 POs now manage over 25% of the RWSS in Rwanda.
A forum for POs has been established – Association
Functionality of RWSS increased from 30% to 75% by 2007
Improved efficiency of the systems: POs able to control water losses, pay maintenance costs and create jobs
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Session Governance - Principles for ppp april 2010

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Session Governance - Principles for ppp april 2010

  1. 1. Governance Principles for successful introduction of PPP in rural water Sector<br />Experiences from Rwanda, Uganda and Senegal<br />Rural Water Symposium, April 13 – 15, 2010<br />Kampala, Uganda <br />Water and Sanitation Program (WSP)<br />Samuel Mutono and Madio Fall<br />
  2. 2. Presentation outline<br /><ul><li>Good Governance – Why / Key Principles
  3. 3. What are the PPPs and Why
  4. 4. Experiences of Public Private Partnerships (PPPs) in Rwanda, Uganda, and Senegal
  5. 5. Benefits of PPP in the 3 countries
  6. 6. challenges
  7. 7. Lessons and Recommendations;</li></li></ul><li>Good Governance<br />What is Good Governance<br />-Process in government actions and how things are done<br />-Quality of institutions and their effectiveness in implementing policies.<br />Why:<br /><ul><li>Important for economic development. Service delivery to the poor/vulnerable/less privileged.
  8. 8. Corruption increases costs, reduces efficiency and threatens the ability to deliver required results.
  9. 9. Effective water provision depends more on the quality of governance.
  10. 10. To deliver services to the poor, PPPs have to take into account Good Governance</li></li></ul><li>What are Public-Private Partnership (PPPs)?<br /><ul><li>Public-Private Partnerships (PPPs): Form of legally enforceable contracts between the public & private sectors
  11. 11. Require new investments by the private contractor (time/expertise, technology, money, reputation, e.tc)
  12. 12. Transfer risks to the private sector ( operation, service delivery, design, construction, e.t.c.),
  13. 13. Payments are made in exchange for performance for the purpose of delivering a service traditionally provided by the public sector</li></ul>PPPs are output-based<br /><ul><li>Publicly-provided services, the Govt decides the inputs
  14. 14. PPP the private operator is told the outputs to meet
  15. 15. Value comes from telling the operator “WHAT needs to be achieved” and NOT “HOW to achieve</li></li></ul><li>Overview of Reasons for PPPs<br />Improving the value for money that end-users receive from their services<br />Additionality: More public services are available than without PPPs<br />Avoided Public Borrowing: Attracting new private investments into public services sectors<br />Improved management, technology, & performance: clear standards and force of contracts<br />But, the private sector is NOT always more efficient & effective than the public sector.<br />
  16. 16. Reform of the management of the RWSS - Rwanda<br /><ul><li>2002: First experience of Public Private Partnership developed spontaneously by Districts (in Byumba districts)
  17. 17. 2004: Community management is recognised as a failure based on a specific extensive field survey ( over 30% of facilities non functional)
  18. 18. 2004: Decision to move from community O & M to towards PPP. </li></ul> New Approach: A PPP approach introduced to shift management from communities to the local private sector.<br /><ul><li>2007: 30% of the RWS piped systems (#172) are managed through PPP by 21 operators;
  19. 19. Association of POs formed: Weak technical and financial management skills in WSS schemes management</li></ul>- Rwanda on track to transfer the management of 50% of the systems to the private sector by 2012<br />
  20. 20. Results of PPP - Rwanda<br /><ul><li>42 POs now manage over 25% of the RWSS in Rwanda.
  21. 21. A forum for POs has been established – Association
  22. 22. Functionality of RWSS increased from 30% to 75% by 2007
  23. 23. Improved efficiency of the systems: POs able to control water losses, pay maintenance costs and create jobs
  24. 24. PPP contributing to sustainability
  25. 25. Increased number of connections
  26. 26. Job creation ( water saler, fontainers & technicians, water meter readers)
  27. 27. Fiscal revenue to districts & benefits to the PO (monthly rent)</li></li></ul><li>Uganda reforms in small towns Water Supply systems <br /><ul><li>Previously, Central & Local Governments used to run small towns WSS using own staff, but this was found to be not sustainable and efficient
  28. 28. Reforms were initiated to improve efficiency and effectiveness and reduce burden on government.</li></ul>The Reforms early (2000) emphasized the need for:<br /><ul><li>Separation of asset ownership and operations
  29. 29. Commercialization of service delivery
  30. 30. Establishment of an effective regulatory framework.
  31. 31. Engagement of most appropriate form of PSP</li></li></ul><li>Framework of operation Uganda<br />Ministry of Water & Environment <br />Performance Contract<br />Assets Delegation<br />Water Authority<br />(Assets Management)<br />5 Member WSS Board<br /><ul><li>Town clerk
  32. 32. Chair Social Services Committee
  33. 33. Rep of domestic consumers
  34. 34. Rep of institutional consumers
  35. 35. Rep of Other Consumers</li></ul>Management Contract<br />Private Operator<br />(Management of Technical, Financial and Commercial Operations)<br />Customer Contract<br />Users/Clients<br />
  36. 36. Results of the reform- Uganda<br />
  37. 37. Challenges & Emerging Issues - Uganda<br /><ul><li>Rapid increase of small towns WSS, hence increased problems of monitoring & regulation
  38. 38. High rate of urbanisation, increased pressure on available capacities/need for system expansions.
  39. 39. Equipment is growing old, need for a budget for assets renewal.
  40. 40. Growth and changing environmnet, need review of Performance & Management Contracts
  41. 41. Low capacities especially of the WA and POs
  42. 42. Sanitation & Hygiene issues need appropriate attention</li></ul>Baseline Survey on integrity in WSS:<br /><ul><li>Private Operators: -High levels of political interference in selection of POs, -10% of contract value estimated to be lost to corruption
  43. 43. Water Authorities: - Only 50% had business plans</li></li></ul><li>Conclusions - Uganda<br /><ul><li>POs are established, their role is clearly understood and appreciated by all stakeholders.
  44. 44. Government’s major challenge is to improve on their Regulation (which is under way) and regular audits.
  45. 45. Growing number of Small Towns calls for clustering to enhance economies of scale.
  46. 46. Higher levels of PPP are now being piloted, in partnership with GPOBA, 10 schemes are being implemented, with pre-financing by the PO.
  47. 47. Key consideration include selection of appropriate type and size of PSP interventions, stakeholder consultation and effective Regulation.
  48. 48. Use of community score cards & citizens report cards is being piloted to improve service delivery
  49. 49. Association of Private Water Operators (APWO) set up</li></li></ul><li>Reforms in Senegal<br />RWS PPP experience from Pilot<br />The GoS promoted a phased approach:<br /><ul><li>Up to 1984 water supply was free of charge
  50. 50. From 1984 tp 1996, all the boreholes managed by committees, including fixed charges
  51. 51. From 1996 Pilot project (REGEFOR)
  52. 52. Precondition for borehole construction
  53. 53. To pay water by volume
  54. 54. To form an ASUFOR (water user association)
  55. 55. To open a bank account
  56. 56. Plus To transfer of maintenance activities to a private operator.</li></li></ul><li>Current situation of RWSSS management, the players – Senegal <br /><ul><li>Public:
  57. 57. ASUFOR (Water User association): Responsible for water supply management
  58. 58. DEM (operating & Maintenance directorate) for borehole maintenance
  59. 59. Private sector: .
  60. 60. Borehole operator
  61. 61. EQUIPLUS (REGEFOR) for borehole maintenance
  62. 62. The public standpipe keeper + meter reading person</li></li></ul><li>Stakeholder Capacity building – Senegal <br />Training; organisation of users for ASUFOR:<br /><ul><li>Democracy & transparency in management
  63. 63. Implication of different types of users
  64. 64. Collective decision making</li></ul>Training: Financial management for ASUFOR:<br /><ul><li>Financial autonomy of ASUFOR
  65. 65. Saving account opened in local banks,
  66. 66. Transparency in expenses allocation and use of money
  67. 67. Follow-up balances by users during regular meetings</li></ul>Training: Maintenance for ASUFOR, Maintenance Operator and GERANT<br /><ul><li>Technical documents
  68. 68. Operation oif equipment
  69. 69. Contract managment.</li></li></ul><li>RESULTS : Improved maintenance of 80 RWSS serving about 240,000 people - Senegal<br />Rest of the Country:<br />-Borehole functionability rate of 80%<br />-Waiting time for borehole repair # 4 days<br />-Average savings by each Water Committee or ASFOR of # $ 5000 to $ 0.000<br />Effective PPP in the REGEFOR area enabled<br />Better quality of services,<br />-Borehole availability rate of 98%<br />-Waiting time for borehole repair< 48 hours<br />2. Enhancement of ASUFOR’sfinacial capacity<br />- Average saving per ASUFOR # $ 10,000<br />
  70. 70. General benefits of PPP in the 3 Countries<br /><ul><li>Improved quality of service – functionability
  71. 71. Increased access to services (connections) – Expansion
  72. 72. Improved financial standing of WSS
  73. 73. Better management and at lower levels.
  74. 74. Enhanced participation of users
  75. 75. Job creation
  76. 76. Greater opportunity for checks and balances </li></li></ul><li>Key challenges of water PPPs – 3 countries<br /><ul><li>Water’s key role in public health, a “public good” - should be provided free
  77. 77. Water as a “local-level” service:</li></ul>- Limited local funds to prepare PPPs<br /> -Limited local-level capacity to administer PPP contracts<br /><ul><li>Attracting long-term private investment will require more risk-sharing ($) by Govts. Water user-fees will not be enough
  78. 78. Benchmarking & monitoring sector performance
  79. 79. Funding environmental challenges</li></ul> - The need to pay for more water treatment<br /> - Limited water resources available<br /> -The need to pay for water source catchment protection<br /> -The need to pay for more wastewater treatment<br /><ul><li>Improving Hygiene and sanitation.</li></li></ul><li>Lessons and recommendations for PPP from the experience of the 3 countries<br /><ul><li>An enabling policy and legislation is required
  80. 80. Start on a pilot basis
  81. 81. Build capacity of the actors in their respective roles – Including governance.
  82. 82. Promote POs association – Codes of conduct
  83. 83. Set up/ stregthen Monitoring and evaluation systems
  84. 84. Benchmarking, performance indicators & clear targets
  85. 85. Set up/stregthen regulation and audit functions
  86. 86. Strengthen consumer voices
  87. 87. Gradually move to higher levels of PPP -= e.g. Build- operator and transfer contracts </li></li></ul><li>Lessons and recommendations for PPP from the experience of the 3 countries<br /><ul><li>An enabling policy and legislation is required
  88. 88. Take time to consult with stakeholders
  89. 89. Promote POs association – Codes of conduct
  90. 90. Encourage each RWSS to have a business plan
  91. 91. Benchmarking, performance indicators & clear targets
  92. 92. Plan for Incentives and sanctions
  93. 93. Plan for Clustering for economies of scale
  94. 94. Gradually move to higher levels of PPP -= e.g. Build- operator and transfer contracts
  95. 95. Assist POs to access financing for improving and expansion of service delivery</li></li></ul><li>Good Governance – Key principles<br />Accountability: the extent to which political actors are responsible to society for what they say or do <br />- An enabling policy and legislation is required<br /><ul><li>Benchmarking, performance indicators & clear targets
  96. 96. Set up/strengthen regulation and audit functions
  97. 97. Plan for Incentives and sanctions</li></ul>2. Transparency: the degree of clarity and openness with which decisions are made:<br />- Set up/ strengthen Monitoring and Evaluation Systems<br />3. Participation: Degree of involvement of all stakeholders<br /><ul><li>Take time to consult with stakeholders</li></ul>4. Fairness: the degree to which rules apply equally to everyone in society; and<br />- Strengthen consumer voices<br />
  98. 98. Good Governance – Key principles<br />5. Efficiency: the extent to which human & financial resources are applied without waste, delay or corruption or without prejudicing future generations.<br /><ul><li>Start on a pilot basis
  99. 99. Build capacity of the actors in their respective roles – Including governance.
  100. 100. Encourage each RWSS to have a business plan
  101. 101. Plan for Clustering for economies of scale
  102. 102. Assist POs to access financing for improving and expansion of service delivery</li></ul>6. Decency: degree to which information & stewardship of the rules is undertaken without harming or causing grievances to people.<br />
  103. 103. Thanks<br />

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