Options and Critiques for Private Participation In Infrastructure

Note: Readers should cross-reference this section with chapters on Market Structure and Competition, Financial Analysis, Pricing, and Regulatory Process for information on these issues as they relate to public enterprises.

Core References

The Challenge of Reducing Non-Revenue Water (NRW) in Developing Countries. How the Private Sector Can Help: A Look at Performance-Based Service Contracting
World Bank: Water Sector Board Discussion Paper Series, Paper No. 8, March 2007.

Examines a number of case studies, taken from some of the largest and most recent performance-based NRW contracts. Lessons learned from the case studies are analyzed, showing the potential benefits of NRW performance-based service contracting with the private sector.

Charting the Diffusion of Power Sector Reforms across the Developing World
Washington, D.C.: The World Bank, 2017.

Examines the timing and scope of power sector reforms adopted by 88 countries across the developing world over 25 years. Considers the uptake, diffusion, packaging, and sequencing of power sector reforms promoted by the World Bank, and the extent to which they were affected by the economic and political characteristics of the countries. Only a small minority of developing countries fully implemented the reform model as originally conceived. For the majority, reforms were only selectively adopted according to ease of implementation, and often stagnated at an intermediate stage. Country characteristics such as geography, income group, power system size, and political economy all had a significant influence on the uptake of reform. Many countries experienced reversals of private sector participation, or were unable to follow through with reform plans.

The Impact From Management And Lease/Affermage Contracts
Washington, D.C.: Public-Private Infrastructure Advisory Facility (PPIAF), 2006.
Ringskog, Klas Mary-Ellen Hammond and Alain Locussol

Reviews results from contracts with the private sector in water. Examines risk allocation, impacts on performance, and cost and financing of the contracts.

Regulatory Requirements Under Different Forms of Utility Service Delivery
Macroconsulting, 2007.
Rodriguez Pardina, Martin, and Richard Schlirf Rapti

Examines forms of contracts with private sector participants. Draws lessons from examination of case studies from Mali (electricity production and distribution, concession), Senegal (water production and distribution; affermage), Niger (water production and distribution; affermage), Argentina (electricity distribution; concession) and Peru (water production and distribution; concession).

Sectoral References

WATER

Engaging Local Private Operators in Water Supply and Sanitation Services: Initial Lessons from Emerging Experience in Cambodia, Colombia, Paraguay, The Philippines, and Uganda
World Bank: Water Supply and Sanitation Sector Board Working Note, Paper No. 12, December 2006.

Explains that developing effective partnerships between government institutions and local private operators of water supply and sanitation services poses a number of challenges with respect to contract design, selection criteria and procedures, financing arrangements, risk mitigation instruments, performance improvement measures to develop technical skills and promote efficiency, and the regulatory and monitoring framework. Assesses how governments in five countries supported by World Bank projects have gone about addressing these challenges.

Getting the Assumptions Right: Private Sector Participation Transaction Design and the Poor in Southwest Sri Lanka
World Bank: Water Supply and Sanitation Sector Board Discussion Paper Series, Paper No. 7, October 2006.

Investigates how a set of basic assumptions on service coverage, service levels, tariffs, and subsidies in the proposed transactions in Southwest Sri Lanka held up against consumer preferences.

Innovative Contracts, Sound Relationships: Urban Water Sector Reform in Senegal
World Bank: Water Supply and Sanitation Sector Board Discussion Paper Series, Paper No. 1, January 2004.

Analyzes a successful reform process in Senegal. Describes how several years of hard work reforming the sector resulted in considerable improvements in services for existing customers and expansion to new customers.

Key Words

Private Sector, Contract, Public, Private Partnership

Case Studies

Energy Stalemate: Independent Power Projects and Power Sector Reform in Ghana
Working Paper, Management Program in Infrastructure Reform & Regulation, University of Cape Town Graduate School of Business, 2008.
Malgas, Isaac

Through the Fire: Independent Power Projects and Power Sector Reform in Côte d’Ivoire
Working Paper, Management Program in Infrastructure Reform & Regulation, University of Cape Town Graduate School of Business, 2008.
Malgas, Isaac, and Katherine Nawaal Gratwick