A global review of private operator experiences in rural areas : private operator models for community water supply

In cities and towns, private firms and individuals receive contracts to build, operate, and maintain municipal water supplies as an alternative to day-to-day management by local government or user organizations. A literature review has uncovered a wide variety of approaches from around the world for establishing such Public-Private Partnerships (PPP) in rural areas as well. Within the past seven years, several authors have completed reviews on private operators managing rural water supplies and other public services. In Aguateros, Paraguay, a consensus was found among these reviews that: markets exist for high quality services in rural areas; policy changes in support of private operator models can follow from successful pilot projects, if at the outset there exists a legal basis for contracting a private operator to supply water services; contracts using local government and communities to monitor private operator compliance are a more practical approach to regulation than utilizing a dedicated regulatory body; and financing and subsidies will almost surely be necessary for capital investment in the short to medium-term. These early lessons learned have led the Water and Sanitation Program (WSP) to conceptualize a more comprehensive approach to PPP in the rural context. The concept is surprisingly simple. A private firm or individual would receive a long-term government-let contract to design, build or rehabilitate, operate and/or maintain water supplies within a defined geographical area. This aggregated service area would include both small towns and remote villages. This concept has coined the acronym FRUGAL, for Forming Rural Utility Groups and Leases. [Authors' abstract]