Urban Water Infrastructure Development in the Third World: Quo Vadis PPP?

Abstract

For the last couple of decades, developed as well as developing countries have relied on procurement models such as public-private partnerships (PPP) to finance, develop, manage and operate water infrastructure facilities. However, as in the case of other public infrastructure projects, not all PPPs in the water sector have been successful. Using cases of both successful and failed PPP projects from selected countries in Latin America, Africa and Asia, this paper discusses the effectiveness and outcomes of PPPs under different contractual models and local scenarios. Moreover, an interesting trend that has been noted recently in some developed countries is the remunicipalization of water facilities where public sector entities, mostly local authorities, have begun to reclaim control of water utilities from the private sector. Given this trend, a key issue examined in this paper is whether developing countries have blindly followed developed countries in procuring water infrastructure projects with private sector participation and whether PPPs have a future in water infrastructure development in developing countries.