In Asia about one billion people live in poverty and 250 million poor living in cities suffer from inadequate services such as water provision and sanitation. As public intervention has failed to improve their living standards, what are the alternatives to public sector initiatives to combat poverty? What should the role of the private sector be in delivering basic services? This study from the Asian Development Bank explores these issues drawing on examples from several Asian countries. Some of them provide successful examples of partnerships between public and private sector in the provision of urban services, mostly with the participation of NGOs and community-based groups.
The book rests on two assumptions, that water supply, sanitation and solid water collection are crucial in any poverty reduction strategy and that, in the face of the failure of public intervention, the private sector must play a leading role in the provision of these services. The case studies in the book illustrate four scenarios:
- When the public sector fails to provide urban services to the poor, the void is usually filled by NGOs who act as intermediaries between the communities and government service agencies.
- One form of private sector participation in providing urban services is contracting, where private operators provide services to previously unserved informal settlements.
- Private sector participation can also be in the form of long-term concessions, where the private operator has the time and autonomy to implement reforms and reach the poor more successfully.
- Public-private community partnerships allow the private sector to extend services in several ways for example expanding networks and giving connections to poor households.
However, many Asian private operators face serious constraints in participating in urban service delivery, which poses questions about their sustainability. For private sector participation to be strengthened, the following conditions need to be achieved:
- Public-private partnerships must be pro-poor because this type of intervention does not necessarily ensure that services reach the poor.
- The roles of the different stakeholders involved must be clearly specified because they have different skills and strengths.
- Universal service coverage must be the overarching principle as it allows the private sector to be creative and innovative in extending services to the poor.
- A regulatory framework must be in place to monitor service provision arrangements.
- A viable tariff must be introduced because it is an important instrument in understanding the value of water as an economic good.
- Governments need to support NGOs and community groups as they fill the service void in urban poor communities.
