Local government service partnerships : a background (key note commissioned paper)

There has been much discussion in recent years about the potential benefits of involving the private sector in the delivery of urban services previously regarded as the domain of the public sector. Many cities in the developing world have begun to follow this trend in spite of a very different operating context where service coverage is restricted and tariffs heavily subsidised. Whilst it may be useful to learn from the experience of partnerships in the developed world it is clear that to make such partnerships effective requires that they be moulded to the specific context within which they are to be located. In many Commonwealth countries that context is one where public institutions are chronically weak, infrastructure coverage is limited or poorly maintained, the private sector is unproven and often informal, rates of cost recovery are low, and regulatory rules and agencies have little impact. Here, the service delivery problem is most often concerned with the need for substantial network expansion to new, informal and marginal settlements as well as the rehabilitation of the existing network. Many customers have had limited access to services and are unfamiliar with formal delivery systems and regular payment. In contrast, the context of the north is one of power and plenty: strong institutional capacity, extensive service networks and infrastructure, a mature private sector superior in efficiency and management capacity, and appropriate and enforceable regulatory frameworks. Shifting from public provision of local services to public-private partnership was, in the main, a process of transferring functioning universal services within an established cost recovery system. The aim of private sector involvement is to introduce greater efficiencies in service delivery and generating additional investment, but it is is noteworthy that there is no necessary correlation between improved efficiency and private ownership per se, and it is equally possible top argue that improved performance is the result of improved competition. These differences underscore the importance of country or regional specific analysis and action within a broad framework of options and arrangements. Although this paper discusses experiences, issues and challenges in partnerships more generally it highlights the particular context of developing countries where one of the main issues concerns the participation of the poor and the impact of service delivery arrangements – including partnerships – on the poor. This pro-poor focus aims to contribute to an understanding that would assist targeting partnerships at poor communities to ensure that benefits are more evenly distributed and equitably managed in situations where the poor comprise a significant proportion of the total urban population.