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Public-Public-Partnerships have the future

Evert-jan Quak | 25 October 2011

"We do not know the value of water as long as the well isn’t dry," wrote British intellectual Thomas Fuller in 1732 in his book Gnomologia: Adagies and Proverbs. Times have changed as most of the earth’s population knows exactly how much he or she has to pay for water usage just by reading the water bill. But Fuller is still right about the way we look to water. Where water and especially clean water is abundant people will not value it as high as people who live in areas with shortage of it.

In this way the market mechanism seems to do its job by pricing water as a normal commodity. But water isn’t just a tradable commodity as a pencil is. Without water we cannot live. We must drink water to survive on a daily base. But that’s not all. Everything around us needs water as well, and we need those organisms for our own survival too. Clean water in other words is a global public good. However, this public good became a commodity for the benefit of private water companies.

Scarce water

Access to water still isn’t a full human right. And water isn't seen by all as a public good, like the air we breathe. Who can assume the right to open or close the water tap? That is a fundamental question as clean water is getting scarce and water conflicts are rising all over the world. A drinking water crisis has the same dimensions and presents the same potential threats than climate changes.

So do we leave the right to access drink water in the hands of the population (for example municipal authorities or governments) or the invisible hand of the market? There are lots of studies on this issue that conclude that the privatization wave, which had started in the eighties and got its highest level in the nineties, is now diminishing.

Modest price

The advocates for the privatization of water supply services assume that only the private sector can finance the investments needed to guarantee quality and supply for a modest price. Especially in developing countries the lack of investments was the main argument for privatisation programmes mostly financed with loans of the World Bank.

Several examples show that private water companies have no concern about backing out of their commitments when gains do not meet their expectations. It is then the State who is forced to pay the consequences. And for that reason public-private partnerships, which are praised in developing programmes, but without sufficient results from evaluation or monitoring yet, are doubtful to do better.

Some striking examples of deprivatisation of water utilities come from the Transnational Institute in Amsterdam. Famous example is the capital of France, hometown of the biggest water corporations in the world, where during the privatisation phase water tariffs raised dramatically, promised investments were delayed or partly financed, but profit rates increased scandalous. Finally in 2009 after ten years of talks water came in the hands of the city of Paris.

Performance contract

In January 2010 newborn Eau de Paris officially starts to operate. Only the billing has been let to the private sector for a short period of time, to wait for the new public system to be set up. The Paris municipality commits to a performance contract with the Paris population, a moral contract. Although the public water utility isn’t working in all ways perfect, the public management made Eau de Paris save close to 50 million euros a year, which means that in 2011 prices went down. Another interesting achievement is that Eau de Paris started a renewed interest in protecting the water resources, establishing partnerships with farmers around water catchment areas to have them use organic agriculture methods.

Same examples come from all over the world and show the difficulties and long negotiations of remunicipalisation or deprivatisation, like in Buenos Aires or Dar el Salaam. However, in the end public utilities also show progress in efficiency and leadership. And luckily not all water utilities were privatised during the eighties and nineties, so there are still all around the world lots of public owned water “companies”.

Slums

I say luckily because public water utilities have a huge advantage as they can easily share information between each other. This can help improve significantly the services, management and investments. The United Nations’ Water Operators’ Partnership (WOPs) program, as this peer to peer cooperation is called, can also help improve water access to safe drinking water in rural areas and in slums, where the interest of private suppliers was minimal.

And the WOP concept generates several beneficial side effects. For example public water operators become more attractive organizations for young and high potentials to be employed. Water becomes sexier for job seekers with cross border attention and responsibilities. And the WOP concept has proven that it creates economical spin off - a spin off in the region of the supporting partner and in the region of the recipient country as well. So after the main objective of capacity building, compassion and economic spin off are going hand in hand.

This blog will focus on the experiences of different WOPs and how public-public-partnerships instead of solely private or public-private-partnerships can be strengthened to help the poorest people on the earth to access safe and clean drinking water. And water finally becomes a real public good.

Photo credit main picture: Photo by Pulpolux!!