PPP Development Stage – Financing (Cost Recovery)
13.3 Who is involved?
Public, private and non-governmental sectors are involved in the
cost recovery stage. Each sector typically enters a partnership
with a different set of strengths and weaknesses [Tool
1. The public sector…
…is traditionally responsible for providing and administering
services for the poor. It often lacks the necessary capital
for the large investments water systems require. When government
partners with the private sector, financial and technical burdens
are delegated. With the involvement of the private sector, the
government role often shifts to a regulatory one, to set or approve
tariffs, monitor operations and ensure that political goals, such
as a reliable service for the poor, are achieved.
2. The private sector…
…is proficient at maintaining both good consumer relations
and functioning systems. When the public and private sector
work together more realistic, responsive and flexible tariff structures
can be established.
3. Civil society organisations…
…are considered to have an advantage over both the government
and the private sector in working with the community and
incorporating the community’s needs and preferences into a project. Such
organisations are represented by:
- Non-government organisations (NGOs) which promote fairness
in allocating costs, service sustainability and determining
what is affordable. Frequently, an NGO is the most appropriate
actor to work with communities to develop a culture of
willingness to pay for a service to ensure sustainability.
- Community-based organisations (CBOs) which provide an increasing
focus on payment from the poor for services, as well
as the decision making about how the poor can and do
pay for their services; CBOs also influence cost-recovery approaches
and promote a livelihoods agenda.