Socially sensitive regulation for water services

The provision of essential services such as water and sanitation may be considered a first step towards social inclusion. The overall sustainability of water and sanitation services also depends on social considerations. This paper explores the relationship between the regulator and the utility in the context of service provision for low-income users. It presents a general background to regulation in the water sector, along with some of the challenges faced by governments and regulators when implementing private sector involvement. Drawing upon the authors’ experience of water services management including regulation and private sector participation (PSP) in the water sector, the paper is based on a review of the literature, discussion with relevant professionals and an examination of a number of projects. The authors detail the role of the regulator and identify recurring themes relating to regulation and the poor. The shortcomings of specific projects are highlighted not as criticisms, but in the interest of sharing of knowledge and improving services to the poor in the long run. The paper includes suggestions on how regulation of water services could be undertaken in a low-income environment. The authors conclude that if water utilities are to perform in a socially sensitive manner, appropriate regulatory regimes are necessary.