Public Water Services

01 May 2006

Innovative approaches based on citizens' engagement have substantially improved public water and sanitation services in developing countries. Olivier Hoedeman, Satoko Kishimoto and Philipp Terhorst, who edited the recently published book Reclaiming Public Water, discuss specific democratic utility reforms that have led to improved services, and the political and financial hurdles that hinder public utilities from achieving success.


Public Water Services
Reversing the tide against public water utilities
By Olivier Hoedeman, Satoko Kishimoto and Philipp Terhorst
Water & Wastewater International, Vol. 20, No. 3, May 2005

Innovative approaches based on citizens' engagement have substantially improved public water and sanitation services in developing countries. Olivier Hoedeman, Satoko Kishimoto and Philipp Terhorst, who edited the recently published book Reclaiming Public Water, discuss specific democratic utility reforms that have led to improved services, and the political and financial hurdles that hinder public utilities from achieving success.

A wave of water privatisation, accelerated by pressure from international financial institutions and other donors, swept through developing countries in the 1990s. Private water companies were expected to bring greater efficiency and lower prices, attract large volumes of investment, and extend water and sanitation to the unconnected poor.

The actual experience with "public-private partnerships" (PPPs) and "private sector participation" (PSP) has been very different. Almost without exception, global water corporations have failed to deliver the promised improvements and have, instead, raised water tariffs far beyond the reach of poor households. Even after the water multinationals started withdrawing from developing countries due to disappointing returns, the World Bank and other donors remain reluctant to provide support to public water utilities. Public operators are responsible for more than 90% of the world's water and sanitation services.

The negative attitudes toward public sector water are partly explicable by the disappointing experiences of the 1980s. During the International Decade for Clean Drinking Water (1981-1990) when development banks made loans available, public operators failed to deliver sufficient extensions to water services. This result was used to justify the privatisation policies of the 1990s, although the cause of the 1980s public sector failures was primarily a lack of democratic process, rather than an inherent problem with the public sector. Not only was the context of rapid population growth, urbanisation and deepening impoverishment not an easy context to succeed in, many developing countries in this period were subject to dictatorships and corrupt regimes with contempt for human rights and democratic processes and little interest in expanding water and sanitation. Without accountability, services to the poor suffered while the corrupt regimes benefited from the loans intended for water.

Democratic Utility Reforms

Virtually unnoticed by an international water debate obsessed with private sector promotion, a wide range of innovative approaches to urban public water delivery has been set in motion in developing countries in recent years. Diverse forms of enhanced citizen involvement have sparked major improvements in the effectiveness, responsiveness and social achievements of water utilities. The politics of urban water delivery in developing countries is often an intense battleground where the interests of economic elites clash with those of the poorest. Experiences in cities across Latin America show that when democratisation means increased political control by the poor, it boosts the likelihood of their needs being met. These comprehensive forms of democratisation of water management should not be confused with the far more limited concepts of participation promoted by international donors.

In Porto Alegre and a growing number of other Brazilian cities, public water has been transformed through democratic reforms including participatory budgeting, a model often described as "social control." Like many other areas of public life in these cities, the population directly decides the budget priorities of their water utility through a process of public meetings. In Porto Alegre, this has played a key role in ensuring that 99.5% of the population, including those living in poorer neighbourhoods on the periphery, today have access to clean water. Citizens are also involved in monitoring the effective implementation of decisions and projects, which has helped reduce costs of new construction works. Cross-subsidisation and "stepped tariffs" means that larger consumers pay proportionately more. The generated surplus goes into an investment fund that finances new water and sanitation infrastructure. Other examples of Porto Alegre-style democratic water management in Brazil can be found in the northeastern city Recife, Caxias do Sul in the state of Rio Grande do Sul, and Santo André, Jacareí and Piracicaba, all in the state of Sao Paulo. Porto Alegre and Recife both have far more than one million inhabitants, which shows that scale is not necessarily an obstacle to participatory water management.

In Caracas, Venezuela, a different model of far-reaching user engagement in water management has been under development since 1999. The population in areas needing improved water delivery is involved very intensively in planning and decision- making in addition to actual construction and maintenance work. Local communities, the water utility and elected officials co-operate in communal water councils to identify needs and priorities for improvements, allocate available funds and develop joint work plans. The users exert democratic control over their utility and hold it accountable to implementing work plans. One of the first tasks of communal water councils was to map existing water networks in the sprawling informal settlements of Caracas, with pipes often constructed by the local population without any co- ordinated planning. Five years later, almost all public water operators in the country have adopted this model of participatory planning and management. While there is still a long way to go before the goal of clean water and sanitation for all has been achieved in Venezuela, the improvements are significant. National coverage of drinking water has increased from 81.57% in 1998 to 89.27% in 2003, whereas sewage collection went from 63.77% to 71.69%.

Public-Public Partnerships

Many cities in developing countries suffer from weak local public administration capacity. The public-public partnership is a promising method to overcome this problem. In South Africa, a not-for-profit, public-public partnership between the local government in Harrismith and Rand Water, a large public water utility that supplies water to Johannesburg, has achieved substantial improvements under very difficult socio-economic circumstances. The Harrismith experience shows that sharing management and technical skills can contribute to rapid improvements in public water delivery, but the three-year experiment has not managed to overcome the enormous backlog in access to clean water that exists in the impoverished townships. Indeed, it is hard to see how water for all can be achieved without far more ambitious policies to fight poverty and redistribute wealth nation-wide.

Public-public partnerships, in which ailing utilities learn from the operational methods and management structures of successful operators, are high on the agenda of anti-privatisation coalitions in many developing countries.

In Indonesia, for example, civil society groups reject the government's plans for large-scale privatisation of water utilities as being driven primarily by ideology. Instead, they point to the utility of the city of Solo as an example of best practice in public water delivery that needs to be amplified. The water utility in Solo is financially healthy, has excellent conservation policies and one of the highest coverage rates in the country, partly as a result of its constructive relations with an active and critical local consumer group.

Not only in Indonesia do anti-privatisation campaign coalitions go far beyond mere resistance. These movements have often very elaborate visions and concrete proposals for public sector alternatives based on real-world experience. Indeed, citizen coalitions are often more than eager to actively engage in implementing improved public options for water and sanitation.

For example, the Bolivian city of Cochabamba attracted international attention in April 2000 when the privatised concession - jointly owned by construction multinationals from the USA (Bechtel), Italy (Montedison) and Spain (Abengoa), with minority shares held by some Bolivian private companies - was terminated due to citizens' protests over dramatic price increases and mismanagement. Far less known are the intense efforts that have taken place since then to restructure the re- municipalised utility SEMAPA to more effectively serve the citizens, particularly the poorest. As a concrete result of a democratisation process that aims to overcome bureaucratic tendencies, citizens elected three out of seven SEMAPA board members in April 2002. SEMAPA works in a public-collective partnership with the pre-existing water committees in peri-urban areas in order to expand access to piped water into unconnected poor communities. The partnership will use the unique capacities of these committees to administer services in their local communities, while SEMAPA supplies bulk water.

Lack of support from the local political elite and a range of other factors still endanger successful outcomes of this new model of community involvement and democratic control. Access to finance for investments in expansion and improvement of water delivery is a very immediate obstacle. The Inter-American Development Bank (IADB) has offered SEMAPA a loan, but with conditions that hamper the transformation of the utility and, in fact, endanger popular support by delaying visible improvements in water delivery.

That citizen's movements should be considered central actors in the process of ensuring clean water and sanitation for all remains poorly understood. A recent example is El Alto, Bolivia, where the government recently terminated the water concession of French water giant Suez, after citizens protests following seven years of privatisation that had failed to deliver the promised improvements. The local population envisages a public utility with citizens` participation, but German aid agency GTZ refuses to provide loans unless Suez remains involved in the management. This is a stark example of the continued widespread bias against public water among donors and international financial institutions (IFIs). The privatisation conditionalities attached to development aid and loans are among the worst obstacles to improved public water and sanitation delivery.

The question is not "Can public water work, but how can it work?" This article has introduced just a small selection from the full range of workable options that exist, from reformed municipal utilities, over users co-operatives and workers co- operatives, to community-utility partnerships and other forms of public-public partnerships. The political, financial and other hurdles that prevent public water delivery from achieving its full potential are by no means insurmountable. Essentially what is needed is political will to overcome outdated ideological prejudices and create more enabling environments to help public water improvements to succeed.

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