Session Governance - Principles for ppp april 2010
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 />
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.
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 Partnership (PPPs)?<br /><ul><li>Public-Private Partnerships (PPPs): Form of legally enforceable contracts between the public & private sectors
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 sector</li></ul>PPPs are output-based<br /><ul><li>Publicly-provided services, the Govt decides the inputs
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 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 />
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)
2004: Community management is recognised as a failure based on a specific extensive field survey ( over 30% of facilities non functional)
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;
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 />
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
Job creation ( water saler, fontainers & technicians, water meter readers)
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
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
Establishment of an effective regulatory framework.
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
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
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.
Government’s major challenge is to improve on their Regulation (which is under way) and regular audits.
Growing number of Small Towns calls for clustering to enhance economies of scale.
Higher levels of PPP are now being piloted, in partnership with GPOBA, 10 schemes are being implemented, with pre-financing by the PO.
Key consideration include selection of appropriate type and size of PSP interventions, stakeholder consultation and effective Regulation.
Use of community score cards & citizens report cards is being piloted to improve service delivery
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
From 1984 tp 1996, all the boreholes managed by committees, including fixed charges
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
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 />
General benefits of PPP in the 3 Countries<br /><ul><li>Improved quality of service – functionability
Increased access to services (connections) – Expansion
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
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
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
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
Gradually move to higher levels of PPP -= e.g. Build- operator and transfer contracts
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
Set up/strengthen regulation and audit functions
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 />
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
Build capacity of the actors in their respective roles – Including governance.
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 />