PPP Development Stage – Defining Parameters (Scope)

7.5 What are the key parameter issues for pro-poor PPPs?

For some time traditional forms of PPPs have neglected to address the needs of poor communities in the service scope defined as at the outset, even though the government may have been well aware of the key issues affecting service delivery to the poor.

The poor is the most vulnerable segment of the population in terms of infrastructure reform. Of course, many poor people will benefit from a geographical expansion in service provision where the expanded coverage allows them to avoid the high costs of alternative services (having to buy water from vendors, for example). On the other hand, the proposed level of the service to be provided might appear to be unaffordable for the poor community so might not improve access in any meaningful way.

To optimise the cost-benefit ratio for the poor, clear parameters for the PPP should be defined and developed, taking account of how the scope of the PPP can affect access for the poor.

The process of setting PPP parameters for poor areas will include the following factors:

current access of the poor to the services;
primary (physical, financial, social) constraints to better access;
the access available for the vulnerable groups of population, such as women, children, etc.;
the proportion of the service bill of the household income of the poor;
the implications of the poor services, such as queuing times, the additional burden on women, as a constraint on access to education.

In particular, the role of existing, sometimes informal, providers could be extended or complemented in terms of service expansion, instead of being substituted altogether by the private contractor. The role of existing providers will depend of the affordability of the service they provide and the standards of service that are regarded as being acceptable by the community. Here an important indicator would be the proportion of income that poor households currently spend on service charges.