Strategic Moves - Regional Environmental Center for Central and ...

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C H A P T E R 6
WAT E R A N D WA S T E U T I L I T I E S I N S E E — S TAT U S A N D R E F O R M
TABLE 18: Conditions for the successful implementation of private sector options
CONDITION SERVICE MANAGEMENT LEASE BOT CONCESSION DIVESTITURE
CONTRACT CONTRACT (BULK) (RETAIL)
Stakeholder Unimportant Low to moderate Moderate to high Moderate to high High levels High levels
support and
political
commitment
levels needed levels needed levels needed needed needed
Cost-recovering Not necessary Preferred but Necessary Preferred Necessary Necessary
tariffs in the short not necessary
term in the short term
Autonomy of
the utility
Unimportant Important Very important Unimportant Very important Very important
Good system Possible to Sufficient Good Good Good Good
information proceed with information information information information information
only limited required to required required required required
information set incentives
Developed Minimal Minimal Strong capacity Strong capacity Strong Strong
regulatory monitoring monitoring for regulation for regulation regulatory regulatory
framework capacity needed capacity needed and coordination and coordination capacity capacity
needed needed needed
Good country Not necessary Not necessary Not necessary Higher rating Higher rating Higher rating
credit rating (limited will reduce will reduce will reduce
relevance) costs costs costs
Source: Toolkit for Private Participation in Water and Sanitation, World Bank, 2000 (adjusted)
S T R AT E G I C M O V E S
Risks:
• The lack of an adequate waste fee collection structure may result in insufficient
financial means to conclude a contract.
• Local politicians should accept a certain level of independence on the part of
solid waste management services: ongoing influence over collection activities is
no longer possible.
• If an insufficient number of private companies are interested, the competition
may not be optimal, resulting in a less than optimum price/quality ratio.
• If the municipal organisation is not developed — due, for example, to various
changes in the number of municipalities in the past — the control function of
the municipality may be insufficient.
• Poor-quality tender documentation may result in the need for additional
arrangements. The private company that already has a contract may misuse its
position and impose unfavourable conditions for the additional services.