Why Do Water Sector Public-Private Participation Projects (PPPs) Fail?
I found a recent paper from the Department of Civil and Environmental Engineering at the Hong Kong University of Science and Technology that I believe is excellent primer on water sector Public-Private Participation (PPPs). Although there are many types of PPP, it is sometime challenging to find papers on this topic that are not ideologically biased for or against private sector participation in the water sector. I’ve always believed that water PPP debates are really missing the point.
This report reviews 16 PPPs over the past 25 plus years and lists the following main reasons for failure:
- Rising Tariffs
- Lack of Bill Payment/Collection
- Insufficient Public Sector Capacity
- Private Sector Technical Capacity Gaps
- Macroeconomic Instability
- Exchange Rate Instability
- Public-Private Sector Conflict
- Social or Political Opposition to PPPs.
- Lack of Transparency
- PPP Legislation or Enabling Environment Issues
I’ve researched many PPP successes and failures (including doctoral-level study on the water utility in Dar es Salaam, Tanzania), and found this report to have fair and reasonable characterizations. I’ve found that affordability of connections and water, sanitation, and hygiene (WASH) sector enabling environments to play a large part in the failure of water sector PPPs.
What are your thoughts on this?
