Public Services International Research Unit

(PSIRU) www.psiru.org
The Business School
Public-Public Partnerships as a catalyst for
capacity building and institutional
development !essons from Stoc"holm
#atten$s e%perience in the &altic region
by
Emanuele Lobina and David Hall
PSIRU, Business School, University of Greenich
!ld Royal "aval #olle$e, Par% Ro, London SE&' (LS, U)
e*lobina+$re*ac*u%, d*-*hall+$re*ac*u%
Date. &/
th
0u$ust 1''2
Pa3er 3resented at IR# and U"ES#!4IHE Sym3osium on
Sustainable 5ater Su33ly and Sanitation. Stren$thenin$ #a3acity for Local Governance
Delft, the "etherlands, 12416 Se3tember 1''2
PSIRU' &usiness School' University of (reenwich' Par" Row' !ondon S)*+ ,!S' U.-.
Website: www.psiru.org Email: psiru@psiru.org Tel: +44-(0)208-331-9933 Fax: +44 (0)208-331-8665
Director: D!i" #$$ %eserc&ers: '(e )et&bri"ge* +,(ue$e )obi(* -te!e .&o,s* /$"i,ir 0opo!* /io$et 1orr$
Public Services International Research Unit (PSIRU) is prt o2 t&e &usiness School t t&e University of
(reenwich (www.gre.c.u3). 0-4%56s reserc& is ce(tre" o( t&e ,i(te((ce o2 ( e7te(si!e "tbse o( t&e
eco(o,ic* po$itic$* soci$ (" tec&(ic$ e7perie(ce wit& pri!tistio( (" restructuri(g o2 pub$ic ser!ices wor$"wi"e* o(
t&e ,u$ti(tio($ co,p(ies i(!o$!e"* (" o( t&e i,pct o2 t&e po$icies o2 i(ter(tio($ 8((ci$ i(stitutio(s (" t&e
+urope( 5(io(* especi$$9 i( wter* e(erg9 (" &e$t&cre. .&is core "tbse is 8((ce" b9 Public Services
International (www.wor$"-psi.org)* t&e wor$"wi"e co(2e"ertio( o2 pub$ic ser!ice tr"e u(io(s. 0-4%5 is t&e
coor"i(tor o2 t&e .atertime pro:ect (www.wterti,e.org)* 2u("e" b9 t&e )uropean /ommission reserc&
"irectorte u("er ;05: +(erg9* +(!iro(,e(t (" -usti(b$e De!e$op,e(t* 1o(trct <o: +/=4-2002-0095.
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ABSTRACT........................................................................................................................................................................3
KEYWORDS......................................................................................................................................................................3
INTRODUCTION..............................................................................................................................................................4
THE EXPERIENCE WITH PPPS OF THE LAST 15 YEARS IN DEVELOPING COUNTRIES: THEORY AND
PRACTICE.........................................................................................................................................................................5
PUBLIC-PUBLIC PARTNERSHIPS (PUPS: A TYPOLOGY AND DEFINITIONS................................................!
STOCKHOL" VATTEN#S EXPERIENCE WITH PUPS IN THE BALTIC REGION.............................................$
7HE HEL#!8 #!88ISSI!" 0S 7HE E"0BLI"G I"7ER"07I!"0L #!"7E97*******************************************************************6
S7!#)H!L8 :077E";S 0PPR!0#H 7! PUPS I" )0U"0S, LI7HU0"I0 0"D RIG0, L07:I0********************************************(
S7!#)H!L8 :077E";S PUP I" )0U"0S, LI7HU0"I0***************************************************************************************************&'
S7!#)H!L8 :077E";S PUP I" RIG0, L07:I0***************************************************************************************************************&&
!:ER0LL 0SSESS8E"7 !< 7HE 75! PUPS********************************************************************************************************************&1
DISCUSSION OF FINDINGS: PUPS AS PARTNERSHIPS FOR CAPACITY BUILDING AND
INSTITUTIONAL DEVELOP"ENT............................................................................................................................13
P!LI7I#S, PUBLI# SE#7!R E7H!S 0"D "!74<!R4PR!<I7 REL07I!"SHIP 07 7HE HE0R7 !< SU##ESS*****************************&=
7HE R!LE !< 7RUS7 0"D I7S I8PLI#07I!"S******************************************************************************************************************&>
7R0"SP0RE"#? 0"D 0##!U"70BILI7?*************************************************************************************************************************&2
7R0I"I"G 0"D HU80" RES!UR#ES DE:EL!P8E"7*******************************************************************************************************&@
#!S7 E<<E#7I:E"ESS !< PUPS**************************************************************************************************************************************&6
I"S7I7U7I!"0L 0"D !RG0"IS07I!"0L DE:EL!P8E"7*************************************************************************************************&(
7HE R!LE !< BIL07ER0L D!"!RS 0"D I"7ER"07I!"0L <I"0"#I0L I"S7I7U7I!"S AI<ISB*******************************************1'
7HE <E07URES !< PUPS I" 7R0"SI7I!" 0"D DE:EL!PI"G #!U"7RIES. 0 7?P!L!G?**************************************************1&
THE UN INITIATIVE ON WATER OPERATOR PARTNERSHIPS (WOPS AND PRACTICALITY OF PUPS
............................................................................................................................................................................................%%
I"7ER"07I!"0L #!!PER07I!" 0"D P!LI7I#0L 80"D07E <!R PUPS***************************************************************************11
7HE I"I7I07!RS !< PUPS 0"D L!#0L DE#ISI!" 80)I"G D?"08I#S***************************************************************************1=
7HE SUPP!R7I"G P0R7"ER;S #0P0#I7? 0"D 0D8I"IS7R07I:E I"<R0S7RU#7URE I" SUPP!R7 !< PUPS**********************1=
E"H0"#I"G 7HE P!7E"7I0L <!R )"!5LEDGE 7R0"S<ER********************************************************************************************1/
RE70I"I"G )"!5LEDGE 0"D #0P0#I7? 5I7HI" 7HE SUPP!R7ED P0R7"ER 0"D SURR!U"DI"G I"S7I7U7I!"0L
SE77I"G**************************************************************************************************************************************************************************12
CONCLUSIONS...............................................................................................................................................................%!
REFERENCES.................................................................................................................................................................%$
NOTES...............................................................................................................................................................................3&
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Abstract
!ne mechanism for addressin$ the 3roblems of a lac% of institutional ca3acity is that of 3ublic43ublic
3artnershi3s APUPsB, hereby established 3ublic sector o3erators are used to assist the develo3ment of local
mana$erial, financial, and accountability ca3acity* Drain$ on em3irical evidence on to PUPs beteen
Stoc%holm;s munici3ally4oned ater com3any and its counter3arts in )aunas, Lithuania and Ri$a, Latvia
and eCtra3olatin$ from the available literature, this 3a3er loo%s at the differences beteen the dynamics of
PPPs and PUPs and at the develo3mental 3otential of PUPs*
7he dynamics of PUPs are radically different from those of PPPs, in terms of the underlyin$ ob-ectives and
motivations, the basis of the 3artnershi3 and the confi$uration of accountability netor%s, ris% mana$ement,
3romotion and im3lementation of institutional chan$e and in terms of %noled$e transfer and ca3acity
buildin$* Institutional and or$anisational chan$e associated ith PPPs is systematically informed by the
3rivate o3erator;s commercial ob-ectives, hich re3resents an element of ri$idity and 3otential conflict as
3rofit4see%in$ mi$ht and often does diver$e from develo3mental ob-ectives* 7he anta$onistic character of
PPPs and the Dshoc% thera3yE a33roach of related 3olicies have encountered ides3read social and 3olitical
o33osition on an international scale* #onversely, as a result of their not4for43rofit basis and retainment of
3ublic onershi3 and mana$ement of o3erations, PUPs rely on a more $radual and collaborative a33roach to
chan$e hich can facilitate socio43olitical acce3tability and local commitment*
7he develo3mental 3otential of PUPs de3ends on the establishment of clear ob-ectives, in li$ht of the
3olitical mandate, ith the collaboration bein$ stimulated by mutual trust and understandin$ and 3ublic
sector ethos* Unfettered by any conflict of interest inherent to 3ublic ater o3erations, the 3rinci3al4a$ent
relationshi3 beteen the PUP;s 3olitical and financial s3onsors and the 3artners can be stren$thened by
introducin$ trans3arency and accountability reFuirements in terms of re3ortin$* Disci3line in the
im3lementation 3hase can be further instilled throu$h 3lannin$ and the thorou$h structurin$ of the 3ro-ect*
PUPs are intrinsically about ca3acity buildin$ and trainin$, than%s to their advanced ability to transfer
%noled$e treated as a 3ublic $ood rather than as a 3rivate, mar%etable asset* Hoever, their cost4
effectiveness and lon$4term develo3mental im3act can be enhanced by incor3oratin$ investment and in4
house restructurin$ 3ro$rammes into 3artnershi3 desi$n* 7he inclusion of civil society and community
re3resentatives amon$ the 3artners mi$ht favour the success of PUPs as local commitment is facilitated and
ca3acity is develo3ed for local $overnance, ith hi$hly interconnected accountability netor%s actin$ as
catalysts for %noled$e transfer and reinforcin$ the ability to ta%e decisions and actions* Bilateral donors and
I<Is should consider su33ortin$ PUPs as a viable conduct for inducin$ sustainable ater sector reform
3rovided their focus is on 3romotin$ conteCt relevant D$ood $overnanceE 3rinci3les rather than chan$es in
the onershi3 of 3ublic o3erations hich have 3roved counter3roductive in the 3ast* Indeed, the
effectiveness of PUPs is to be 3romoted by fosterin$ their 3ublic4ness and enhancin$ their distinctive
characteristics rather than relyin$ on mechanisms, such as the com3etitive selection of 3artners and
mimic%in$ of commercial contracts, hich ris% to 3re-udice the dynamics on hich the success of PUPs
rests*
Keywords
Public4Private Partnershi3s APPPsB, Public4Public Partnershi3s APUPsB, Public Sector, #a3acity Buildin$,
Institutional Develo3ment, Governance, #ontracts, 7innin$ 0rran$ements, 8illennium Develo3ment
Goals A8DGsB, 7rainin$, )noled$e 7ransfer, International <inancial Institutions AI<IsB, Investment
<inance, #om3etition, 7rust, Human Resources Develo3ment, Public Sector Ethos
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Introduction
In the last &/ to 1' years, the international debate on the reform of the urban ater su33ly and sanitation
sector has 3rimarily revolved around the 3rivatisation of o3erations throu$h Public4Private Partnershi3s
APPPsB or Private Sector Partici3ation APSPB* 0s considerable resources have been devoted to PPPs as the
favourite o3tion of International <inancial Institutions AI<IsB, bilateral donors and 8ultinational #or3orations
A8"#sB, alternative a33roaches to the reform of ater services have been lon$ overloo%ed* 7he reform of
3ublic ater o3erators throu$h in4house restructurin$ and 3artnershi3s 3reservin$ 3ublic onershi3 and
control and the 3ublic4ness informin$ o3erations feature 3redominantly amon$ such alternatives* Em3irical
evidence increasin$ly 3oint to the develo3mental 3otential of this ne $eneration of 3artnershi3s, often
identified as Public4Public Partnershi3s APUPsB AHall et al., 1''/, Hall G Lobina, 1''=, Hall, 1''', 8iranda,
1''2, Reclaimin$ Public 5ater, 1''2, Hall et al., 1''1, Davis, 1''>, Lobina G Hall, forthcomin$ in
Develo3ment StudiesB*
7his 3a3ers loo%s at the eC3erience ith a limited number of PUPs, aimin$ at drain$ lessons on the factors
conducive to the success of such 3artnershi3s in enhancin$ $overnance structures and build local ca3acity, as
ell as the 3racticalities associated ith their im3lementation* It does so by drain$ on em3irical evidence
on to PUPs established beteen Stoc%holm;s munici3ally4oned ater com3any Stoc%holm :atten and its
counter3arts in )aunas, Lithuania and Ri$a, Latvia and eCtra3olatin$ findin$s from the available literature
on PPPs, PUPs and 3ublic sector reform* <indin$s obtained from the in4de3th analysis of the eC3erience ith
a s3ecific ty3e of PUP in a $iven $eo$ra3hical conteCt are related to the em3irical observations contained in
literature in order to elicit ad-ustments and stren$then their $enerality*
0 first section 3rovides an overvie of the 3roblems associated ith the introduction of PPPs in transition
and develo3in$ countries and the failure of the 3olicy relyin$ on PSP as a driver for sectoral reform at a
$lobal level, in order to establish the rationale for the analysis of PUPs and their 3romotion* 7he revieed
literature allos for the systematisation of com3etin$ and concurrent ar$uments aimin$ at eC3lainin$ the
failure of PPPs to deliver the eC3ected benefits in urban ater su33ly and sanitation* In turn, this 3rovides
the basis for the develo3ment of an analytical frameor% for the identification of the essential characteristics
of PPPs* 7he same frameor% can be a33lied to other 3artnershi3s such as PUPs, for a com3arative
evaluation of the differences in the underlyin$ dynamics and im3lications for sectoral reform*
0 second section briefly illustrates the conce3t of PUP and the various ty3es of 3artnershi3 hich have been
develo3ed in 3ractice* 7his is folloed by a detailed account of Stoc%holm :atten;s eC3erience ith PUPs in
the to Baltic countries, set on the bac%$round of the international initiative hich s3urred reform and
ca3acity buildin$ efforts in the re$ion* 7he emer$in$ findin$s are discussed in relation to fundamental
as3ects of the observed 3artnershi3s. ob-ectives and motivation, relationshi3 beteen 3artners and
accountability netor%s, ris% mana$ement, transaction costs and cost4effectiveness, %noled$e transfer,
ca3acity buildin$ and trainin$, institutional and or$anisational chan$e and the role of donors and I<Is*
0lthou$h the analysed 3artnershi3s consist of to tinnin$ arran$ements beteen 3ublic ater o3erators,
the literature on PUPs and in4house restructurin$ is sufficiently eCtended to allo for formulatin$
considerations on stren$thenin$ of local ca3acity and $overnance throu$h community involvement*
<urthermore, observations and recommendations relevant to the 3romotion and scalin$ u3 of PUPs as a
vehicle for reform are 3ut forard ith 3articular reference to the 3ro3osed $lobal mechanism bein$
develo3ed by the U" Secretary General;s 0dvisory Board AU"SG0BB* 7hese 3ertain to the mobilisation of
3olitical illin$ness to su33ort PUPs internationally, the analysis of actor behaviour leadin$ to local
initiatives culminatin$ in PUPs, the contribution of adeFuate resources to the ado3ted PUPs, overcomin$ the
limited ca3acity of "orthern 3ublic o3erators by 3romotin$ South4South and domestic 3artnershi3s, and the
elaboration of strate$ies aimed at locally retainin$ %noled$e transferred and the develo3ed ca3acity*
<inally, conclusions address the differences in terms of dynamics beteen PPPs and PUPs, the 3otential
develo3mental im3act of PUPs, and areas for further 3olicy relevant research*
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The experience with PPPs of the last 15 years in developing countries: theory and
practice
<or the 3ur3ose of this essay, e constrain our analysis of PPPs to those 3artnershi3s envisa$in$ the transfer
of mana$erial control over ater su33ly and sanitation o3erations to a 3rivate o3erator, usually a 8"#* Such
arran$ements ran$e from mana$ement contracts, to lease Aalso %non as Dafferma$eEB and concession
contracts, to full divestiture* 0lthou$h the lar$est ma-ority of urban ater o3erations around the orld
remains under 3ublic mana$ement Au3 to ('H $loballyB, heavy 3romotion of PPPs in the last &/ years has
meant that there has been a relatively considerable increase in PSP, 3articularly so in the lar$est cities hich
are commercially more attractive ALobina G Hall, forthcomin$ in Pro$ress in Develo3ment StudiesB*
7he international ater community came to see PPPs as the solution to the 3roblems of the ater sector in
li$ht of dissatisfaction ith the 3erformance of 3ublic utilities, 3articularly in transition and develo3in$
countries* 0s summarised by Braadbaart A1''&. /B, DBy &((' the develo3in$ country ater industry as
ready for a radically ne solution to its mana$ement 3roblems* 7hat year mar%ed the end of the 5ater
Su33ly and Sanitation Decade, a ten4year effort to achieve universal covera$e in develo3in$ countries
A5orld Health !r$aniIation &((1B* 7he Decade effort failed to reach this tar$et but im3ressed on ater
industry 3rofessionals the seriousness of service delivery 3roblems and the fact that no amount of ca3ital
investment seemed able to solve themE* Roth A&(6@. 1='41=&, 12=B attributed 3oor 3erformance in Fuantity
and Fuality of ater o3erations in develo3in$ countries to 3oor mana$ement of the 3ublic sector, and ur$ed
the introduction of PSP as a faster solution to the ma$nitude of the $lobal ater crisis. D8ana$ement in the
3ublic sector can often be im3roved, but the involvement of the 3rivate sector can brin$ Fuic%er results, and
the dimensions of the various 3roblems cry for Fuic% resultsE* <ranceys A&((@. 2B refers to the limited results
of 3ublic sector reforms as 3art of the rationale for resortin$ to PPPs. D#a3acity buildin$ in the urban utilities
has been attem3ted ith institutional develo3ment 3ro$rammes hich have 3roved their orth durin$ the
lifetime of a 3ro-ect Aor a 3articular leaderB but have $enerally not achieved the brea%4throu$h into self4
sustainin$ $rothE*
7here is a broad literature on the 3ur3orted benefits of PPPs in the ater sector, hich can be summarised as
the folloin$ three ar$uments. aB 3rivate sector;s $reater efficiency and fleCible, 3roactive mana$ement
leadin$ to enhanced service levels and im3roved o3erational ca3acity, bB 3rivate sector;s financial ca3acity,
leadin$ to increased access to investment finance, cB fiscal benefits for local $overnments as their bud$ets
are relieved from the burden of investment finance AHall G Lobina, forthcomin$ in Geoforum, Hall G
Lobina, 1''2. (4&'B* 0s a matter of fact, the reality of PPPs has in many cases fallen short from such hi$h
eC3ectations in the last &/ years* 7he 3ercenta$e of 3rivate o3eratin$ contracts under$oin$ 3roblems ran$in$
from termination to ides3read o33osition to 3rivate o3erators; 3ricin$ and o3erational 3olicies is alarmin$ly
hi$h, at an estimated >>H for the cities of more than one million inhabitants ALobina G Hall, forthcomin$ in
Pro$ress in Develo3ment StudiesB* <urthermore, the number of ne household connections to the 3i3eline
netor% realised ith 3rivate finance in re$ions such as Sub4Saharan 0frica and 0sia AeCcludin$ #hinaB has
been dismal AHall G Lobina, 1''2. =@4=(B* 7his ne$ative outcome has been com3ounded by a decrease in the
financial contribution of multilateral and bilateral develo3ment a$encies to develo3in$ countries;
infrastructure due to overo3timistic eC3ectations on 3rivate investment financin$ AHall G Lobina, 1''2. >64
/'B* <aced ith disa33ointin$ results, the 5orld Ban% and other or$anisations hich have been 3romotin$
PPPs in infrastructure and ater have recently ac%noled$ed the limitations of the 3rivate sector ALobina,
1''/. 61, 8iranda, 1''2B*
0 number of com3etin$ and concurrin$ ar$uments mi$ht contribute to eC3lain the failure of PPPs to deliver
the eC3ected benefits in urban ater su33ly and sanitation*
H'() *+,-.,/*'0- /0.*.
7his ar$ument refers to the transaction costs associated ith the introduction of PPPs in the ater sector as a
determinant of costs transferred to consumers in the form of tariffs and taC3ayers in the form of
$overnmental eC3enditure* Such transaction costs corres3ond to the le$al, consultin$ and financial costs of
structurin$ an infrastructure 3ro-ect and include the identification, allocation and miti$ation of the
3erformance and 3olitical ris%s involved for the 3rivate o3erator and its shareholders, as ell as the 3ro-ect
financiers* 7hese costs are hi$h and can amount to &'H of the total costs of a 3ro-ect, as the future
3rofitability of the 3ro-ect de3ends on successful ris% mana$ement* !ther transaction costs mi$ht relate to
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the introduction of a re$ulatory a$ency, hose structure ill have to be su33orted by consumers throu$h
tariffs or the $overnment, or the com3etitive selection of the 3rivate o3erator* Even relatively hi$h
transaction costs mi$ht not 3rovide $uarantees that they ill achieve their intended $oal ALobina G Hall,
1''=. 11B*
C0-*+,/* 1,'23+4
7his ar$ument 3osits that contracts are inadeFuate to re$ulate com3leC relationshi3s such as the 3rinci3al4
a$ent relationshi3 beteen local authorities and 3rivate ater o3erators, due to the im3ossibility of
foreseein$ all the variables that mi$ht affect the im3lementation of contractual obli$ations under PPPs,
3articularly so in develo3in$ countries* 0s summarised by Braadbaart A1''&. &2B, D7he contract instrument
sim3ly cannot co3e ith the combined challen$e of a lon$ time horiIon, hi$h uncertainty, difficult to define
service and 3roblematic environment* 5hat results are soft tar$ets, sFuishy out3uts, and endless
ne$otiationsE*
D5-,6'/ '-*4+4.* .447'-(
7his a33roach identifies the dynamic interest4see%in$ behaviour of 3rivate o3erators as the cause of
discre3ancy beteen the theory and 3ractice of ater 3rivatisation* 8"#s ould rely on their su3erior
resources in terms of information, but also technical eC3ertise and le$al resources and 3olitical clout in
res3ect of host $overnments and other sta%eholders to 3ursue their commercial considerations* D7he most
im3ortant factor drivin$ outcomes a33ears to be continual 3rofit4see%in$ and ris%4avoidin$ behaviour of
international ater com3anies, in interaction ith local and national $overnments A3ursuin$ miCed 3olitical
and fiscal $oalsB, 3olitical and community movements, and international donors and institutions 3ursuin$
their on $oals* 7he results of this 3rocess are stron$ly affected by the uneFual distribution of resources and
s%ills beteen the 3arties and by the limited com3etition in this sector* It is these dynamics, e ar$ue, hich
eC3lain the actual AmisBallocation of ris%, the AinBeffectiveness of $overnance, and the content Aand constant
revisionB of the contracts themselves, as ell as the actual outcomes in terms of investment finance,
eCtension of systems Aor failure to eCtendB, 3ricin$ 3olicies, and trans3arencyE ALobina G Hall, 1''=. =4>B*
7his inconsistency ould be observable on 3ricin$ levels, the delivery of eC3ected investment 3ro$rammes
and $eneral im3lementation of contracts, includin$ the delivery of services to the 3oor ALobina G Hall, 1''=.
(4==, Hall G Lobina, forthcomin$ in GeoforumB* 0 corollary of this ar$ument is that the international 3rivate
sector is characterised by a limited ris% ta%in$ ca3acity hich eC3lains 8"#s; ithdraal from develo3in$
countries in the face of currency ris% or other unforeseen occurrences* It is this intrinsic aversion to ris%
hich ould ma%e it unsuitable to address the lon$ term needs of develo3in$ countries in relation to ater
services AHall G Lobina, 1''>. 1@&41@1B*
0nother corollary, and one more relevant to ca3acity buildin$ and local $overnance, is that ater 8"#s
ould tend to retain their %noled$e at mana$erial level in that its transfer to local actors ould undermine
the very raison d;Jtre of PSP* 7hey ould instead transfer more limited technical and o3erational %noled$e
to local staff, local community members and other sta%eholders should that 3rove instrumental to the
enhancement of the PPP;s 3rofitability ALobina G Hall, forthcomin$ in Pro$ress in Develo3ment Studies,
Hall G Lobina, forthcomin$ in GeoforumB* 7his ould contribute to eC3lain hy meanin$ful and effective
3ublic 3artici3ation or community involvement in decision ma%in$ on and monitorin$ of PSP a33ears to be
eCtremely uncommon ALobina G Hall, 1''=. 1'41&B*
S0/'0-802'*'/,2 24('*'6,/5 ,-9 80832,+ +4.'.*,-/4 *0 PPP.
7his ar$ument 3ostulates that, contrary to the 3ublic sector, the 3rivate sector and 3articularly so the
international 3rivate sector do not en-oy the socio43olitical le$itimacy hich is a 3recondition for the
acce3tation of reforms by local communities across develo3in$ countries* DBoth critics and su33orters of
3rivatisation have noted the im3ortance of 3olitical resistance to 3rivatisation as a ne$ative factor ma%in$ the
economic viability of 3rivate o3erators more ris%yE and thus underminin$ the viability of PPPs AHall, Lobina
and de la 8otte, 1''/, Lobina G Hall, forthcomin$ in Pro$ress in Develo3ment StudiesB*
In li$ht of the above, e offer the folloin$ analytical frameor% to identify the essential features of PPPs,
althou$h this can be a33lied to other ty3es of 3artnershi3s so that com3etin$ a33roaches to the reform of
urban ater systems and their im3lications can be com3ared* 7he characteristics of the 3artnershi3 are
Fualified from the 3ers3ective of the eCternal or su33ortin$ 3artner, so that in the case of PPPs their
descri3tion is based on the 3rivate o3erator;s a33roach to the 3artnershi3*
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T,:24 1. P,+*-4+.)'8 14,*3+4. 01 PPP. '- *+,-.'*'0- ,-9 94;4208'-( /03-*+'4. (1+06 *)4 84+.84/*';4 01
*)4 .3880+*'-( 8,+*-4+
F4,*3+4 01 8,+*-4+.)'8 D4./+'8*'0-
Primary ob-ective Profit maCimisation, in li$ht of mandate from shareholders
8ain incentive 4 Short term. mar%et 3enetration
4 8edium to lon$ term. eC3loitation of ca3tive mar%et and contribution to mother com3any;s $roth
Relationshi3 ith local
3artner
Princi3al4a$ent relationshi3 beteen local authoritiesKdecision ma%ers and the 3rivate o3erator
Institutional chan$e 4 Reform of institutional frameor% is reFuired before the be$innin$ of PPP Ae*$* ith introduction of
re$ulatory a$ency, reform of 3ricin$ structureB
4 !r$anisational chan$e of local underta%in$ to be carried out by 3rivate o3erator, in line ith
commercial im3eratives
4 Institutional reforms introduced reflect established DmodelsE of PPPs Ae*$* <rench, U) DmodelsEB or
hybrid Ae*$* <rench DmodelE ith re$ulation, see <oster, 1''/B
4 Shoc% thera3y a33roach, 3ossibly toards local decision ma%ers Ae*$* in case of conditionality on
3rivatisationB, more often toards local or%force and community as 3rofitability de3ends on 3ace of
internal reor$anisation Ae*$* layoffsB and move toards full cost recovery Ae*$* tariff increasesB
4 8eanin$ful community involvement and 3ublic 3artici3ation are severely limited by 3rivate
o3erator;s control over o3erations and commercial im3eratives of the 3artnershi3
Ris% mana$ement Ris% to be allocated to 3arty better 3laced to miti$ate it, usually 3erformance ris% to be allocated to
3rivate o3erator and 3olitical ris% to local authorities, de3endin$ on ty3e of PPP* 7he eCce3tion is ith
mana$ement contracts, hereby 3erformance ris% rests ith the 3ublic o3erator
#a3acity buildin$ and
%noled$e transfer
4 Local mana$erial ca3acity is not built as 3ublic mana$ement is re3laced by 3rivate mana$ement,
loyal to 3rivate shareholders not local authorities
4 Local or%force retrained and reoriented to 3ursue commercial ob-ectives AHall G Lobina,
forthcomin$ in GeoforumB
4 Local community trained and involved in service delivery if that 3roves instrumental to commercial
viability of contract AHall G Lobina, forthcomin$ in GeoforumB
4 )noled$e as a 3rivate $ood means that %noled$e is transferred selectively to sta%eholders, if that
3roves instrumental to on commercial ob-ectives ALobina G Hall, forthcomin$ in Pro$ress in
Develo3ment StudiesB
0ccountability 0ccountability to on shareholders and financiers, more than local authorities* Relationshi3 ith
local authorities is of anta$onistic nature* #onflict resolution is based on conventional Ae*$* resort to
arbitrationB or unconventional Ae*$* sus3ension of concession fees 3aymentB sanctions if eC3ected
3rofitability is threatened ALobina G Hall, 1''=. &=4&2B
Public-Public Partnerships P!Ps": A typology and definitions
0 revie of eCistin$ literature shos that there is no sin$le consistent use of the conce3t of LPublicMPublic
Partnershi3s; APUPsB* It a33ears to have ori$inated as a res3onse to the conce3t of LPublicMPrivate
Partnershi3s; APPPsB, and its meanin$ also de3ends on the conteCt in hich it is used* Des3ite these
uncertainties, PUPs can conveniently be classified accordin$ to the different ty3es of 3artners involved, and
the ob-ectives of the PUPs* 7he narroest definition of the conce3t of LPublicMPublic Partnershi3s; APUPsB is
the one most commonly used in "orth 0merica and Euro3e, hich refers to any collaboration beteen to
or more 3ublic authorities in the same country* 7his collaboration may occur beteen 3ublic authorities of
the same ty3e and level Ausually inter4munici3al consortiaB or it may occur beteen different ty3es or levels
of 3ublic authorities, for eCam3le beteen 3rovincial and local authorities* Hoever, this narro use of the
conce3t of PUPs has been broadened to include 3artnershi3s beteen 3ublic authorities A$overnmentB and
any 3art or member of the $eneral 3ublic* <or eCam3le, a recent definition of PUPs in South 0frica includes
LL$overnmentMcommunity 3artnershi3s, $overnmentM"G! 3artnershi3s, as ell as $overnmentM$overnment
3artnershi3sE A)itchen, 1''=B, in other ords, 3artnershi3s ith "G!s, community or$anisations and trade
unions* In addition, there are 3artnershi3s ith an international dimension. Ldevelo3ment 3artnershi3s;,
hich 3artner a 3ublic authority from a hi$h4income country ith a 3ublic authority in a lo4income
country, and cross4border 3artnershi3s beteen authorities from different countries, includin$ international
associations of 3ublic authorities AHall et al., 1''/. /B*
<or the 3ur3ose of this 3a3er, e loo% at a s3ecific cate$ory of PUPs consistin$ of not4for43rofit
arran$ements hereby a 3ublic sector ater authority or com3any in one country hel3s a 3ublic sector ater
authority in another country to build ca3acity, e*$* by consultancy, trainin$, mana$ement services, financial
redesi$n or -oint 3ro$rammes of investment etc* Such lin%s are sometimes 3art of Dtinnin$E arran$ements
beteen local authorities in different countries AHall, 1'''. =B* 7he number of such ty3e of PUPs is certainly
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hi$h, althou$h to date no definitive survey has been carried out, and it encom3asses a ide variety of
su33ortin$ and su33orted 3artners in various re$ions* Des3ite some miCed 3ast eC3eriences ith tinnin$
arran$ements in the ater sector A8iranda, 1''2. /@, Lariola G Danielsson, &((6. /B, the eC3eriences
revieed in different re$ional conteCts varyin$ from #entral and Eastern Euro3e A#EEB to 0frica and 0sia,
su$$est that the develo3mental 3otential of PUPs is hi$h AHall, 1''', Hall G Lobina, 1''=B but that remains
lar$ely unta33ed*
#toc$hol% &atten's experience with P!Ps in the (altic region
7he eC3erience of Stoc%holm;s munici3ally4oned ater su33ly and sanitation com3any Stoc%holm :atten
as a su33ortin$ 3artner in the Baltic area is of 3articular interest in li$ht of the institutional and o3erational
issues addressed throu$hout the &(('s; in collaboration ith the local 3artners in )aunas, Lithuania and
Ri$a, Latvia, the substantial investment 3ro$rammes realised and the lon$ term 3ositive im3act $enerated in
terms of ca3acity buildin$* 7he identification of Baltic Sea 3ollution as a 3roblem shared by "ordic and
Baltic countries 3rom3ted an international initiative, the HEL#!8 #ommission, aimed at findin$ solutions
throu$h coo3eration* Internationally coordinated efforts attracted the human and financial resources reFuired
to address underinvestment in and 3oor Fuality of ater su33ly and sanitation services in countries
under$oin$ transition from communist re$imes* <urthermore, financial su33ort offered by a number of
international a$encies and bilateral donors shos that PUPs mi$ht re3resent vehicles for ta33in$ investment
finance* Both PUPs have en-oyed im3ortant financial su33ort from the EBRD, hile a number of other PUPs
in the re$ion sa the 5orld Ban% as main financier*
The )*+,-. co%%ission as the enabling international context
7he Helsin%i #ommission AHEL#!8B is an international body set u3 to im3rove the Baltic Sea environment
and o3erates a Baltic Sea Noint #om3rehensive Environmental 0ction Pro$ramme AN#PB* 7his provides an
environmental management framework for sustained cooperation among the Contracting Parties to the
Convention, other governments within the region, international financial institutions, and nongovernmental
organisations for the long-term restoration of the ecological balance of the Baltic Sea, through a series of
preventive and curative actions to be undertaken in a phased manner in the region..

7he N#P has or%ed 3artly throu$h identifyin$ 3ollution Lhots3ots; in the Baltic basin, and directin$
financial and technical resources to solve the 3roblems in those and other 3laces, es3ecially in ater and
asteater systems* 7he result has been an international 3ro$ramme of ca3acity4buildin$ and investment
throu$hout the basin. Programme activities to support strengthening of water and wastewater utilities have
focused on rehabilitation, upgrading and!or e"pansion of infrastructure in municipalities in the countries in
transition# $epresentative pro%ects include& 'aapsalu, P(rnu, )allinn and )artu in *stonia+ ,augavpils,
-iepa%a and $iga in -atvia+ .aunas, .laipeda, Siauliai and /ilnius in -ithuania+ and 0dansk, 0d1nia-
,ebogor2e, )orun and other cities in Poland. Pro%ect preparation is being undertaken in .aliningrad and
implementation of selected activities has started in St. Petersburg in the $ussian 3ederation. #. 4n addition,
in the $ussian 3ederation, a national water and wastewater programme that will address issues in 5-67
cities throughout the countr1 is being developed. 8echanisms have also been established and funded for
interventions to support medium and small municipal s1stems in *stonia, -atvia, -ithuania and Poland. )he
*uropean Bank for $econstruction and ,evelopment 9*B$,: supported Small 8unicipalities *nvironment
Pro%ect in *stonia provides an e"ample of a pro%ect to address a number of smaller cities.
International fundin$ in the form of loans, soft loans, $rants and other ty3es of assistance has been im3ortant
in acceleratin$ the rate of N#P im3lementation in the countries in transition* 7he 3ro$ramme has found that
there is $reat effectiveness in cofinancing that blends loans from 434s and grants from the *uropean ;nion
and bilateral donors M this hel3s ma%e investments more affordable for countries in transition, reduced
3ro-ect 3re3aration and su3ervision costs, the siIe of the 3ro-ects can be lar$er, alloin$ $reater im3acts and
reducin$ the effective cost, and the use of $rants also reduces the impact of ad%ustments to tariffs for
services to pro%ect beneficiaries, thus decreasing potential adverse impacts on populations with low or fi"ed
incomes AHall, 1'''. 6B*
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#toc$hol% &atten's approach to P!Ps in Kaunas/ +ithuania and 0iga/ +atvia
Stoc%holm :atten;s PUPs have been ty3ically lin%ed to s3ecific investment 3ro$rammes ith technical
assistance and ca3acity buildin$ ta%in$ 3lace in order to su33ort the concurrent institutional reform of the
local ater o3erators, chan$e of their o3erational 3ractices and investment im3lementation* 7he schemes
3rovided for the 3artial recovery of Stoc%holm :atten;s costs and did not contem3late the 3ossibility of
ma%in$ 3rofits out of the PUPs*
7he costs of Stoc%holm :atten;s human resources devoted to the tinnin$ ere covered by the Sedish
International Develo3ment #oo3eration 0$ency ASidaB, hile the investment 3ro$ramme carried out by the
local ater o3erators ith the assistance of Stoc%holm :atten received fundin$ from the EBRD, EIB ad other
multilateral and bilateral a$encies and as co4financed by the host $overnments and su33orted 3artners* 7he
International <inancial Institutions AI<IsB su33ortin$ the PUPs also defined the ob-ectives of the tinnin$s,
hich $enerally included the achievement of environmental $oals throu$h enhancin$ the Fuality of ater
services and the o3erators; restructurin$* 8ore 3recisely, Stoc%holm :atten;s su33ort as aimed at
enhancin$ Dfinancial 3erformance throu$h im3roved mana$ement, o3erational efficiency, full cost recovery
and institutional develo3ment, transformin$ the local tinnin$ 3artner into an autonomous, self4financin$
and self4$overnin$ com3any ithout munici3al or $overnmental subsidies in the futureE AB-er$$aard, 1''2.
=B*
In both )aunas and Ri$a, Stoc%holm :atten 3rovided technical assistance to the local 3artners Ares3ectively,
)aunas 5ater #om3any and Ri$a 5aterB by 3rovidin$ a limited number of resident advisers, ho ere
res3onsible for %no4ho transfer in a number of technical and o3erational areas and for 3rovidin$ su33ort
to the in4house restructurin$ of the to underta%in$s* 7he main resident adviser as also res3onsible for
coordinatin$ visits by short4term eC3erts to meet ith their 3rofessional counter3arts in the host or$anisation
and arran$in$ short term visits of 3ersonnel from the host or$anisation to Stoc%holm :atten;s headFuarters*
)noled$e transfer has ta%en 3lace from the mana$erial level to ran%4and4file 3ositions and has also
interested local decision ma%ers* It has been conveyed throu$h on4the4-ob trainin$ and other means includin$
or%sho3s, 3ersonal contacts and demonstrations, visits, etc* ECchan$es and %noled$e transfer has
continued after the end of the tinnin$ a$reement, althou$h more s3oradically* Stoc%holm :atten;s a33roach
also 3rovided for the Destablishment of 3rofessional netor%s and coo3eration forums beteen the ater
com3anies in the area and their forei$n tinnin$ 3artnersE AB-er$$aard, 1''2. 1B*
7he tinnin$ arran$ements ere divided into to 3hases, ith the first one lastin$ no more than one year
devoted to 3re3aration for the various com3onents. institutional reform, o3erational chan$e, investment
3ro-ects Aas re$ards access to investment financeB* 7his im3lied the develo3ment of a number of 3reliminary
studies and documents and the delivery of trainin$ sessions aimed at %ey 3ersons* Pro-ect Im3lementation
Units APIUsB hich ere to ta%e res3onsibility for 3rocurement and 3ro-ect mana$ement, ere established
and trained in this 3hase AB-er$$aard, 1''2. =, &&B*
7he second 3hase focussed on im3lementation of the established 3ro$ramme durin$ a 3eriod of four to five
years* It included the develo3ment of a com3rehensive #or3orate Develo3ment Pro$ramme, from the
identification of cor3orate strate$y to lon$ term 3lannin$, and 3rovision of su33ort to or$anisational chan$es
and human resource develo3ment, as ell as financial, o3erational and environmental 3erformance, ith the
introduction of "ordic and Euro3ean standards* Investment im3lementation too% 3lace in 3arallel to
institutional and or$anisational chan$es* <inally, a DPublic Information Pro$ramme aimed at customers, end4
consumers, oners, and other sta%eholders as established in order to im3rove the $eneral ima$e of the
tinnin$ 3artner and his o3erations* 7he strate$y as to hi$hli$ht the environmental en$a$ement, the
im3ortant investment 3ro-ect attractin$ forei$n financin$ and the relatively lo tariff for the eCistin$
servicesE AB-er$$aard, 1''2. 1, =46B*
D7he ater com3anies in )aunas and Ri$a stand today as successful role models for tinnin$ arran$ements
beteen 3ublic ater entities, here $oals ere met timely and ithin bud$et* 7he com3anies are no
im3lementin$ their second ma-or investment 3ro-ects ithout tinnin$ assistance and the financiers are very
satisfied ith the enhanced and sustainable ca3acity of these com3aniesE AB-er$$aard, 1''2. 1, 6B*
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#toc$hol% &atten's P!P in Kaunas/ +ithuania
#oo3eration beteen "ordic and Baltic ca3ital cities started in &((1 and, Du3on reFuest of EBRD and ith
the su33ort of SidaE a tinnin$ arran$ement beteen Stoc%holm :atten and )auno :andenys started in
&((>* Hoever, it should be noted that Stoc%holm :atten had already established contact ith the Baltic
utilities as early as &(6(* )aunas A3o3ulation of >=','''B had been identified by HEL#!8 as one of the five
3riority hot4s3ots in Lithuania since it as not endoed ith a asteater treatment 3lant and re3resented
('H of the collected, untreated sea$e in Lithuania* 7he )aunas 5ater and Environment Pro-ect A)5EPB
relied on a total investment bud$et of USO &'& million, 6'H of hich as devoted to asteater treatment
and the remainder to ater su33ly* <orei$n $rants accounted for &>H of total 3ro-ect costs, ith Sida
3rovidin$ fundin$ of SE) &2*> million AUSO 1*1@ millionB to su33ort both 3hases of the tinnin$
arran$ement ALariola G Danielsson, &((6. =4>B* 7he investment 3ro$ramme as financed by the EBRD,
"E<#!, EUKPhare, the <innish and Sedish $overnments and as co4funded by local sources from )aunas
and Lithuania ALariola G Danielsson, &((6. &B*
)5EP as based on a feasibility study hich, under the initiative of the EBRD and the Sedish technical
assistance a$ency BI7S, started in 03ril &((=* Phase & of the tinnin$ a$reement aimed at 3re3arin$ the
investment 3ro-ect for financin$ and the chan$es to be introduced at institutional level* Phase & lasted from
!ctober &((> to December &((/ and cost SE) >*& million* 0 3riority Investment Pro$ramme, Procurement
Plan, Im3lementation Schedule, Loan 0$reements and State Guarantee 0$reements ere defined amon$
other documents* In this 3hase, the Pro-ect Im3lementation Unit APIUB as also established ALariola G
Danielsson, &((6. 6B*
7he Loan 0$reements ere made of loan covenants ith the EBRD and "E<#! and, a3art from s3ecifyin$
the terms of 3ro-ect eCecution, defined the reforms hose ado3tion as conditional u3on the fundin$ of the
investment 3ro-ect* 7hese included tariff increases, the establishment of a <inancial 8ana$ement De3artment
o3eratin$ under International 0ccountin$ Standards, the amount of internal funds to be reinvested in netor%
rehabilitation each <iscal ?ear, tar$ets for the reduction of o3erational costs and a 3lan for reduction of bad
debt* #onditions eCtended to re3ortin$ freFuency and the content of the re3orts to be submitted* 7he Loan
0$reements ere accom3anied by a Pro-ect Su33ort 0$reement ith the city of )aunas and a Guarantee
0$reement ith the Lithuanian $overnment* 7he loan covenants sha3ed the content of the or% 3ro$ramme
to be carried out under the tinnin$ arran$ement and ere described as re3resentin$ a Dde facto terms of
reference for the tinnin$ arran$ementE ALariola G Danielsson, &((6. (4&'B*

7he institutional chan$es initially foreseen included the establishment of a -oint venture beteen the local
ater o3erator )auno :andenys, "E<#! and Stoc%holm :atten, but this as not 3ossible due to local
3olitical o33osition* 0lso, the rules $overnin$ the activity of both Sida and BI7S 3revented them from
financin$ a -oint venture* 7he institutional reform of )auno :andenys as thus limited to its transformation
into a holly 3ublicly4oned PL# APublic Limited #om3anyB ALariola G Danielsson, &((6. 6B*
7he four4year Phase II ent from Nanuary &((2 to the end of &((( and its bud$et totalled SE) &1*= million*
7his 3hase sa the introduction of a ne #om3any Board of @ members, the ado3tion of a ne
or$anisational chart, a 1'H reduction in staff from &'11 in December &((> to 6>& in 8arch &((6 ALariola G
Danielsson, &((6. 1&B and a Human Resources Develo3ment 3lan* Such chan$es too% 3lace in 3arallel to
im3rovements in financial mana$ement, in the effectiveness of bill collection, administration and o3erations,
as ell as a com3rehensive %no4ho transfer 3ro$ramme ALariola G Danielsson, &((6. (B*
)auno :andenys; Board as established folloin$ Dmuch lobbyin$E by "E<#!, the EBRD and Stoc%holm
:atten on the merits of this solution* 7he Board as com3osed of @ non4eCecutive members, = of hich
re3resentatives of the rulin$ 3olitical 3arties, & of the #ity 0dministration, & of the )aunas Re$ion, and &
each for the local ener$y utility and the university* 7here ere also 3lans to eCtend 3olitical re3resentation on
the Board ould be eCtended to the leadin$ o33osition 3arty ithin the city council* #onsiderable tinnin$
resources Ai*e* Stoc%holm :atten advisers; timeB ere devoted to 3ersuadin$ the munici3al decision ma%ers
to im3lement 3ro-ect reFuirements and introduce the ne tariff structure ALariola G Danielsson, &((6. &@B*
Stoc%holm :atten Ddelivered some &/ man years of assistance to the )aunas tinnin$ arran$ements,
includin$ 6' man months for three resident lon$4term advisors and some &'' man months for 6 short4term
eC3ertsE AB-er$$aard, 1''2. 6B*
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7he 3artners; commitment and the unleashed %noled$e transfer a33ear to lie at the core of the PUP;s
success* DBoth AStoc%holm :attenB and A)auno :andenysB too% the tinnin$ a$reement very seriously* P
7here has been an eCchan$e of %noled$e and eC3erience on all levels M beteen the Boards, beteen the
trade unions, the mana$ement teams and of course beteen all %inds of s3ecialistsE ALariola G Danielsson,
&((6. &=B*
7he consultants commissioned to revie the tinnin$ arran$ement for Sida summarised the achievements of
the PUP as follos. DA)auno :andenysB faced an enormous 3ressure to 3re3are and im3lement the bi$$est
investment 3ro-ect of its history and, at the same time, transform 3rofoundly its le$al status, $overnance and
or$anisation structure, mana$ement systems and 3ractices, customer relations, financial mana$ement and
information systems* It has succeeded amaIin$ly ell, lar$ely due to AStoc%holm :attenB assistanceE ALariola
G Danielsson, &((6. &2B*

#toc$hol% &atten's P!P in 0iga/ +atvia
5ith a 3o3ulation of 6'',''', Ri$a is the lar$est city in Baltic countries and $enerates around 2'H of
Latvia;s total munici3al asteater load ALariola et al., 1'''. iB* Before &((&, all of Ri$a;s asteater
underent no ty3e of treatment ALariola et al., 1'''. 1>B, hile asteater collected from #entral Ri$a
Aith 1'',''' inhabitantsB as dischar$ed untreated until the ince3tion of the tinnin$* 0 recently
constructed asteater treatment 3lant as in need of ma-or rehabilitation hile 2'H of the distribution
netor% as re3orted to be in bad condition ALariola et al., 1'''. iB*
Stoc%holm :atten started coo3eratin$ ith Ri$a 5ater in &((1 and in &((> the Ri$a 5ater and
Environmental Pro$ramme AR5EPB as launched to im3rove ater su33ly and sanitation services in Ri$a
and the environment of the Dau$ava River and the Baltic Sea* Ri$a 5ater 3re3ared a feasibility study for the
investment 3ro-ect ith assistance from Stoc%holm :atten and the Siss <ederal !ffice of <orei$n Economic
0ffairs A<!<E0B* Ri$a 5ater Dturned toE Stoc%holm :atten and <!<E0 for further assistance in 3re3arin$
for the financin$ and im3lementation of the 3ro-ect and in Se3tember &((/ the three 3arties si$ned the
a$reement for Phase I of the tinnin$ 3ro$ramme, hich as financed by Sida and <!<E0 ALariola et al.,
1'''. 14=B* Phase I of the tinnin$ lasted for 2 months from &((/ to &((2 and Stoc%holm :atten assisted
Ri$a 5ater in vie of accessin$ international finance from the EBRD and EIB and $rants from bilateral
sources, as ell as ith the 3re3arations for the im3lementation of R5EP ALariola et al., 1'''. (B*
Phase II too% 3lace from "ovember &((2 to December 1''' ALariola et al., 1'''. (4&'B* 7he a$reement
beteen Ri$a 5ater and Stoc%holm :atten identified the folloin$ ob-ectives. aB the 3romotion of
environmental sustainability and infrastructure develo3ment aimed at im3rovin$ the environmental
conditions of the Dau$ava river, the Gulf of Ri$a and the Baltic Sea by reducin$ the environmental im3act of
Ri$a;s asteater, bB im3rovin$ the Fuality and reliability of ater su33ly and asteater services in Ri$a,
cB Denhancin$ the financial 3erformance throu$h im3roved mana$ement, o3erational efficiency, cost
recovery and institutional develo3ment transformin$ Ri$a 5ater into an autonomous, self4financin$ and self4
$overnin$ enter3riseE ALariola et al., 1'''. =B*
Li%e in the case of Stoc%holm :atten;s tinnin$ ith )auno :andenys, Phase II of the Ri$a tinnin$
a$reement as made u3 of an institutional develo3ment com3onent and an investment im3lementation
3ro$ramme ALariola et al., 1'''. (4&'B* 7he tinnin$ a$reement identified the sco3e of or%, the freFuency
and content of re3ortin$, administrative matters, the to 3artners; res3ective duties, the terms of reference
for the PIU and a time chart for the im3lementation of the investment 3ro$ramme ALariola et al., 1'''. (4&'B*
Li%e in the case of )aunas, the Loan 0$reement beteen the EBRD and Ri$a 5ater sha3ed the content and
im3lementation of the tinnin$ 3ro$ramme, reFuirin$ a number of s3ecific actions at institutional,
mana$erial, financial and o3erational level contained in a #or3orate Develo3ment Plan and s3ecifyin$ %ey
financial indicators in terms of tariff increases, reserve account and debt service covera$e ALariola et al.,
1'''. &&B*
>2H of the 3ro-ected USO &'>*@ million investment 3ro$ramme as to be co4financed by the #ity of Ri$a
and Ri$a 5ater, hile the EBRD and EIB ould to$ether fund =(H and the remainder as to be 3rovided by
the $overnments of Latvia, <inland, Seden and SitIerland* Sida a$reed to finance Phase II of the tinnin$
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a$reement, the 3urchase of eFui3ment for the rehabilitation of the biolo$ical treatment unit and the
3re3aration of tender documents for the asteater treatment 3lant, for a total SE) =@*& million A Lariola et
al., 1'''. =B* !f this sum, SE) 1'*= million ere devoted to the 3urchase of eFui3ment for the asteater
treatment 3lant, hile SE) &2*6 million AUSO 1*> millionB ere allocated to Phase II of the tinnin$ and the
3re3aration of tender documents ALariola et al., 1'''. (B* 7he timely im3lementation of the investment
3ro$ramme, ith the connection of the inhabitants of #entral Ri$a to the asteater treatment 3lant, resulted
in a considerable environmental benefit for the hole re$ion ALariola et al., 1'''. 1@B*
0s re$ards institutional and or$anisational chan$es, Stoc%holm :atten;s 5ater Utility 8ana$ement 0dvisor
actively 3artici3ated in the 3rocess and influenced both Ri$a 5ater;s to3 mana$ement and Ri$a;s local
authorities ALariola et al., 1'''. &@B* 0imin$ at stren$thenin$ the ater o3erator;s autonomy from munici3al
authorities, chan$es ithin the $overnance frameor% of Ri$a 5ater included the introduction of a
Su3ervisory #ouncil althou$h its activities remained under the close scrutiny of a munici3al committee
ALariola et al., 1'''. iiB* 0lso, the EBRD reFuired and obtained the establishment of a re$ulatory unit
su3ervisin$ Ri$a 5ater;s tariffs and o3erations, actin$ as Dan interface beteen the consumers and the
utilityE ALariola et al., 1'''. &@B*
0s re$ards or$anisational chan$es, the installation and consolidation of the 3lannin$ 3rocess as described
by the consultants reviein$ the tinnin$ as Da ma-or achievementE ALariola et al., 1'''. &(B* D7he ARi$a
5aterB mana$ement and staff are no able to mana$e the 3lannin$ 3rocess inde3endently, ith su3ervisory
assistance from AStoc%holm :attenB onlyE ALariola et al., 1'''. iiB* Stoc%holm :atten;s o3erational su33ort to
Ri$a 5ater;s mana$ement as valuable ALariola et al., 1'''. ii, 1&41=B and the established PIU 3roved Dfully
com3etent for handlin$ the 3rocurement of the investment 3ro-ects* P PIU has $ained much eC3erience
from AStoc%holm :attenB, and is no able to act inde3endently in most fields* 7oday, there is little need for
su33ort from AStoc%holm :attenBE ALariola et al., 1'''. 1&41=B* 0 customer database softare as installed
and efforts ere made at im3rovin$ the reliability of meterin$ and meter readin$ and the effectiveness of bill
collection ALariola et al., 1'''. 1'41&B*
Im3ortantly from the social 3oint of vie, Ri$a 5ater and Stoc%holm :atten 3ersuaded Dthe munici3ality to
establish a social su33ort facility for the families and individuals that cannot afford to 3ay for ater* 0 visit
to AStoc%holm :attenB ins3ired ARi$a 5aterB financial staff to im3lement the chan$e ALariola et al., 1'''. 1'4
1&B*

0 staff reduction 3lan as devised to enhance efficiency, hich 3ro-ected a reduction in the or%force from
&/=@ in &((6 to &='2 in 1''=* Hoever, the 3lan alloed for the recruitment of ne staff due to the
introduced technolo$ical innovations Afor a total of 1/4=' or%ers in late &(((B and cuts ere not
indiscriminate* 0 test had been carried out to evaluate hether services 3reviously 3rovided by the 7rans3ort
and 5or%sho3 De3artment could be outsourced but this as re-ected as in4house 3rovision 3roved more
efficient than resort to the mar%et ALariola et al., 1'''. 1'B*
0ll the tinnin$ modules included trainin$ com3onents and the transfer of %no4ho too% 3lace on a ide
front* DStudy tours to AStoc%holm :attenB, and on4the4-ob trainin$ 3rovided by AStoc%holm :attenB eC3erts,
have been the most useful form of trainin$E ALariola et al., 1'''. 1&B* Stoc%holm :atten Ddelivered some (
man years of assistance to the Ri$a tinnin$ arran$ements, includin$ @/ man months for three resident lon$4
term advisors and => man months for &2 short4term eC3ertsE AB-er$$aard, 1''2. 6B*
-verall assess%ent of the two P!Ps
Revies and evaluations of these 3rocesses have been consistently enthusiastic, hatever their critical
observations on s3ecific as3ects* 7he SID0 revie of its overall munici3al tinnin$ 3ro$ramme described it
as Da successful eC3erimentE , the revie of the )aunas eC3erience in &((6 described it as Doverhelmin$ly
3ositiveE
1
, the revie of the Ri$a tinnin$ set out a stri%in$ summary of ma-or technical, environmental,
financial, mana$erial and $overnance achievements. S<C =Stockholm <ater Compan1> has assisted $<
=$iga <ater> in the preparation and implementation of an investment programme 9$<*P: for improving the
cit1?s water suppl1 and wastewater treatment. )he $<*P has promoted!will promote environmentall1
sustainable management and improved municipal infrastructure in the Baltic region. )he effluent load from
$iga to ,augava $iver, and further to the Baltic Sea, has been essentiall1 reduced. @s a direct result of the
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pro%ect, the Aualit1 and reliabilit1 of water suppl1 and wastewater services has improved in $iga. )he
twinning arrangement has essentiall1 stimulated and supported the process of transforming $< into an
autonomous, self-financing and self-governing enterprise. )here is a better understanding and appreciation
on a political level of the reAuirements for arriving at an administrativel1 and financiall1 independent water
compan1. $< is ver1 satisfied with the twinning arrangement and wishes to continue close cooperation with
S<C be1ond the current twinning agreement. $< currentl1 complies with all the covenants of the
financiers.
B
AHall G Lobina, 1''=. &&4&1B*
7he main financier;s satisfaction ith the results of the to PUPs is demonstrated by the fact that, after the
termination of the to tinnin$ a$reements, the EBRD a$reed to issue loans to both Ri$a 5ater and )aunas
5ater #om3any on a non4soverei$n based* In "ovember 1''', the EBRD decided to issue a EUR =(m loan
to the munici3ally4oned Ri$a 5ater #om3any, hich became the first Latvian utility to receive a direct
cor3orate loan from an international financial institution* 7he loan as 3rovided ithout any financial
$uarantee from the city council, in the li$ht of Ri$a 5ater #om3any;s ability to self4finance its o3erations*
Instead, the loan as su33orted by a limited munici3al underta%in$, Dincluding the cit1?s adherence to
agreed tariff schedules and other ke1 obligations of the municipalit1 towards the utilit1E
>
*
Ri$a 5ater #om3any ould use the loan to finance the construction of slud$e de3osits for its asteater
treatment 3lant, installation of ater meters to consumers and eCtension of ater su33ly and seera$e
netor%s* 0lso, the loan ould allo Ri$a 5ater #om3any to re4finance outstandin$ soverei$n4$uaranteed
debts, hich the com3any used to finance u3$radin$ of its asteater treatment 3lant and rehabilitation of
the seer netor% under a tinnin$ arran$ement ith Stoc%holm;s munici3ally4oned ater com3any
Stoc%holm :atten*
In Nuly 1''&, the EBRD decided to issue a EUR &>*@m loan to )auno :andenys A)aunas 5ater #om3anyB to
hel3 finance an ambitious EUR >&*=m investment 3ro$ramme* 7his as the first loan to a local utility in
Lithuania to be 3rovided ithout any soverei$n or munici3al financial $uarantee and the EBRD eC3ected it
ould Ddemonstrate to other cities and banks that it is possible to finance well-run municipal services
without such guaranteesE
/
*
7he 3ro-ect as desi$ned to remove iron from the main ater su33ly, su33ort the rehabilitation and
eCtension of the ater 3i3eline system and finance secondary asteater treatment facilities* 7he 3ro-ect,
%non as Phase 7o as it folloed another loan 3rovided by the EBRD in &((/ to u3$rade )aunas ater
su33ly and sanitation, ould be co4financed by )auno :andenys and the city council a33lied for fundin$
from the EU;s 3re4accession instrument ISP0* In !ctober 1''&, the EU #ommission a33roved a EUR
&/*(2m ISP0 $rant to finance a ater 3urification 3lant, hich ould allo to increase the de$ree of
3urification of the "emunas river, the bi$$est river in Lithuania, from @'H to (/H as reFuired by EU
le$islation* 7he total cost of the 3urification 3lant as estimated at EUR 16*1m, ith )auno :andenys
obtainin$ a EUR (*/@m EBRD loan and the Lithuanian $overnment contributin$ EUR 2*=6m
2
ALobina,
1''&. &/4&2B*
1iscussion of findings: P!Ps as partnerships for capacity building and institutional
develop%ent
7he analysis of Stoc%holm :atten;s eC3erience ith tinnin$ arran$ements in the Baltic re$ion allos for
drain$ broader lessons on the factors conducive to the success and the 3ositive develo3mental im3act of
this ty3e of PUPs*
Politics/ public sector ethos and not-for-profit relationship at the heart of success
7he revieed PUPs 3roved successful in buildin$ local ca3acity at various levels, from munici3al decision
ma%ers to the local 3artner;s mana$ement and staff, as ell as facilitatin$ institutional and or$anisational
chan$e* <irm reliance on 3ublic sector resources on both sides of the 3artnershi3, ith its not4for43rofit basis
functionin$ as a catalyst for effective interaction, have alloed to achieve the intended ob-ectives in terms of
3ublic interest* In fact, the absence of commercial considerations in terms of 3rofit4see%in$ has alloed for
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the concentration of resources on %noled$e transfer aimed at ca3acity buildin$ and local $overnance,
ithout deviations from the intended reform 3ath*
7he 3rocess as initiated at the 3olitical level, first ith an international initiative aimed at coordinatin$
multilateral and bilateral coo3eration, then ith the 3olitical mandate instructin$ Stoc%holm :atten to act as
a su33ortin$ 3artner to its to Baltic counter3arts ALariola G Danielsson, &((6. &', &/B* <urthermore, it as
the concerted munici3al, national and international 3olitical initiatives that attracted international finance and
bilateral $rants so that the im3act of the reFuired investment 3ro-ects could be more socially sustainable for
the beneficiary communities AHall et al., 1''/. ==B* <inally, 3ublic sector ethos acted as a vital source of
motivation for the mana$ers and staff ho 3artici3ated in the to PUPs for the su33ortin$ and su33orted
3artners* 0ccordin$ to Lariola G Danielsson A&((6. &=B, Stoc%holm :atten Dta%es $reat 3ride in its
international assi$nments and in its 3ossibility on a ider ran$e to contribute to the im3rovements of the
environment of the Baltic* 7he vision behind S5#;s AStoc%holm :atten;sB involvement in international
3ro-ects is the firm belief that S5# AStoc%holm :attenB is successful in runnin$ an efficient ateror%s and
that its %noled$e and eC3erience can be transferred to other ateror%s* 7his vision seems to be shared by
most of the staff at S5# AStoc%holm :attenBE ALariola G Danielsson, &((6. &=B* 7he commitment and 3ublic
sector ethos of Stoc%holm :atten;s staff is even more 3atent hen considerin$ that or%ers 3artici3atin$ as
short4term advisors ere DreFuired to or% hard in difficult conditions, in addition to their duties at S5#
AStoc%holm :attenB* 7innin$ often means lon$er or%in$ hours to co3e ith both S5# AStoc%holm :attenB
duties and tinnin$ res3onsibilities ithout additional com3ensationE ALariola et al., 1'''. ='B*
It is hi$hly unli%ely that a PPP, based on the 3rivate o3erator;s commercial considerations, could have
achieved the same develo3mental ob-ectives in terms of ca3acity buildin$ and investment im3lementation so
effectively and at such lo cost* In 7allinn, Estonia, a PUP ith Helsin%i 5ater actin$ as su33ortin$ 3artner
and similarly structured to Stoc%holm :atten;s tinnin$ arran$ements in Lithuania and Latvia as
Dconsidered successful in terms of service delivery, im3roved efficiency and financial mana$ementE* 7he
PUP as then re3laced by 7allinn;s ne munici3al ma-ority ith a controversial 3rivatisation* D7he
3rivatisation ra3idly became controversial due to the financial mani3ulations of the forei$n o3erator, hich
included demands for a surchar$e for ater draina$e, 3rice increases, eCtraordinary dividend 3ayments and
the remuneration of the su3ervisory council ALobina, 1''&, Hall, Lobina and de la 8otte, 1''=B* By the end
of 1''1, the com3any had cut a total of 1'' -obs Aabout ='H of the or%forceB and eCtracted from the
com3any dividends and re3ayments an amount eFual to (=H of hat they had invested to years
3reviouslyE AHall et al., 1''/. 1=41>, =14==B* 7he not4for43rofit basis of the 3artnershi3 a33ears to re3resents
the central distin$uishin$ feature beteen PUPs and PPPs* 7his 3oints to the fundamental differences
beteen the to a33roaches to ater reform and su$$ests that PUPs should not be treated as PPPs hen it
comes to desi$nin$ the rules $overnin$ the 3artnershi3*
The role of trust and its i%plications
D8utual trust, res3ect and understandin$ of our Athe 3artners;B different or%in$ environments are basic
features of the collaborationE accordin$ to a %ey 3rota$onist of Stoc%holm :atten;s PUPs in )aunas and Ri$a
AB-er$$aard, 1''2. 1B* Lariola G Danielsson A&((6. 1&, ='B identify the utility4to4utility relationshi3 as an
essential feature, Dincreasin$ the credibility and im3actE of the advice offered to both the su33orted 3artner
and local authorities, es3ecially in li$ht of the su33ortin$ 3artner;s re3utation for com3etence* In )aunas,
Stoc%holm :atten 3roved that dialo$ue can contribute to an institutional environment favourable to reform*
D7he investment 3ro-ect and the tinnin$ arran$ement as essentially im3osed on a sus3icious, reluctant
munici3ality, characterised by freFuent 3olitical chan$es A2 mayors in )aunas since &((/B, and fi$htin$ ith
the formidable financial 3roblems of 3ost4Soviet rebuildin$* P 8uch time as s3ent on 3ersuasion of
munici3ality 3oliticians to follo the contractual commitments* 7he bottlenec% in decision ma%in$ as not
inside )5# A)auno :andenysB, but on the 3olitical level of the munici3ality* 7he 3rocess of eC3lainin$ the
3ro-ect conce3t to the 3oliticians, and to ma%e them ta%e the reFuired tariff and other im3ortant decisions for
3ro-ect im3lementation accordin$ to the 3ro-ect a$reements has reFuired substantial tinnin$ resourcesE*
Stoc%holm :atten Dinfluence on )aunas 3oliticians at critical -unctures of the 3ro-ect as decisiveE A Lariola
G Danielsson, &((6. &@, 1'41&B* 0s re$ards Ri$a, D7he close coo3eration beteen S5# AStoc%holm :attenB
and R5 ARi$a 5aterB since &((1 has decisively influenced the transformation of R5 into a munici3al
enter3rise ith modern $overnance structures ABoard of Directors and Su3ervisory BoardBE A Lariola et al.,
1'''. 16B* D7he S5#;s AStoc%holm :atten;sB 5ater Utility 8ana$ement 0dvisor has actively 3artici3ated in
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this 3rocess and influenced both R5;s ARi$a 5ater;sB to3 mana$ement and Ri$a;s munici3al decision4
ma%ers in modernisin$ the $overnance structure and 3racticesE ALariola et al., 1'''. &@B* 7he centrality of
trust to the dynamics of the 3artnershi3 contributes to sheddin$ li$ht on the factors behind the success of
PUPs*
7ime re3resents an im3ortant element in cementin$ trust beteen the 3artners and sta%eholders such as local
authorities, thus eC3lainin$ the a33arently lon$ duration of the 3artnershi3s* <urthermore, Lariola G
Danielsson A&((6. 1=B note that D"e ideas and mana$ement a33roaches reFuire am3le time for di$estionE*
5hen considerin$ the hole 3eriod throu$h hich the collaboration stretched, includin$ the 3re3aratory
3hase of the tinnin$ arran$ements and any 3ause beteen the im3lementation of the various modules,
Stoc%holm :atten;s PUP in )aunas lasted from 03ril &((= to the end of &((( hile that in Ri$a eCtended
from &((1 to December 1''' ALariola G Danielsson, &((6. 64(, Lariola et al., 1'''. (4&'B* Indeed, a
com3rehensive revie of PUPs in the ater and health sectors found out that D!ne trend that emer$ed as
that the most effective PuPs had the lon$est lead4in timesE AHall et al., 1''/. 1>B* 7his seems to contradict
the assum3tion that the 3erceived lon$ time of 3artnershi3 develo3ment should be seen as a limitation of
3ublic sector reform in ater su33ly and sanitation ARoth, &(6@B* 0s a matter of fact, if time is commensurate
to the stren$thenin$ of trust and res3ect beteen 3artners, then the duration of the PUP can be seen as
contributin$ to the buildin$ of lon$ term ca3acity as it as the case in )aunas, here Dthe institutional and
mana$ement chan$es observed at )5# A)auno :andenysB are 3ermanent and sustainable* 7he to3
mana$ement has initiated a ma-or 3hysical and mental turnaround 3rocess, and is committed to its
com3letionE ALariola G Danielsson, &((6. 1>B and Ri$a ALariola et al., 1'''. 16B* <urthermore, the
stren$thenin$ of trust beteen the su33ortin$ 3artner and local decision ma%ers throu$hout time, in a conteCt
of retained local 3ublic control over o3erations, ill in turn contribute to the consolidation of a sense of local
Donershi3E for the institutional and or$anisational reforms introduced* 7his can be seen in contrast to the
ides3read social and 3olitical re-ection of PPPs in urban ater su33ly and sanitation orldide* 7he short4
termism and ri$idity associated ith the 3ursuit of commercial considerations has in fact been 3erceived as
alien to the delivery of an essential service and in conflict ith the achievement of develo3mental ob-ectives
such as eFuity AHall, Lobina and de la 8otte, 1''/, Hall et al., 1''/. 1>B* Incidentally, Lariola G Danielsson
A&((6. /42B reco$nise that tinnin$ as the 3referred choice, Dintellectually a33ealin$, and usually
acce3table to all sta%eholdersE* 0 cautionary note is nonetheless reFuired* 7ime alone cannot eC3lain the
success of any PUP as the suitability of the 3artners, and thus their selection, as ell as the effectiveness of
the accountability netor%s underlyin$ the 3artnershi3 are crucial factors*
7he im3ortance of trust and res3ect beteen 3artners, as ell as their 3ublic sector ethos, has im3lications on
the 3rocedures ado3ted for the selection of 3artners* Lariola G Danielsson A&((6. =&B and Lariola et al.
A1'''. iv4vB recommend the introduction of com3etition in order to enhance the cost4effectiveness of
tinnin$ arran$ements, for eCam3le in the form of submission of com3etitive bids from 3otential su33ortin$
3artners* 0lthou$h a Fualitative assessment of the suitability of various 3otential su33ortin$ 3artners can be
eC3ected to benefit the develo3mental im3act of the tinnin$, the idea that the choice of 3artners should
mimic the com3etitive selection of 3rivate o3erators under PPPs a33ears to be in contradiction ith the very
nature of PUPs and 3otentially counter3roductive* In fact, crucial factors such as the 3artners; trust, res3ect
and 3ublic ethos can be measured and com3aratively evaluated only ith considerable difficulty and at the
ris% of inaccuracy* <urthermore, -ud$in$ at the moment of the com3etitive 3rocedure ho trust and res3ect
beteen 3artners are to evolve or deteriorate across time mi$ht be eCtremely 3roblematic if not unrealistic* In
other ords, the a33lication of PPP4style com3etition to PUPs ould ris% to sitch the focus on the
containment of already limited costs Asee section on Cost effectiveness of P;Ps beloB and introduce the
limitations of contract mana$ement observed under PPPs Asee section on )he e"perience with PPPs of the
last 5 1ears in developing countries& theor1 and practice aboveB, hile de$radin$ vital but unFuantifiable
as3ects of the 3artnershi3 such as mutual trust, res3ect and commitment* Such considerations arrant a$ainst
the ado3tion of com3etition as an instrument for the identification of the ideal 3artners in PUPs* By contrast,
resort to the 3rinci3le of intuitu personae ith the choice de3endin$ on a Fualitative evaluation and
discretionary -ud$ment by the 3artners themselves, ith the su33ort of the PUP;s 3olitical s3onsors and
financiers a33ear to deserve more credit* Indeed, Lariola G Danielsson A&((6. 16B ac%noled$e that D7he
tinnin$ 3artners have not normally been selected by 3ro-ect s3onsors on the basis of biddin$. instead, they
have often been selected on the basis of earlier contacts and suitability considerations M hich has its
advanta$esE*
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Lariola et al. A1'''. iv, &(B also criticise reliance on Fualitative ob-ectives under Stoc%holm :atten;s
tinnin$ arran$ements and recommend that in the future Sida should structure a more robust contractual
frameor%, hereby terms of references should include D3re4determined, measurable tar$ets in technical,
environmental, financial and institutional 3erformanceE* 7he transformation of tinnin$ arran$ements into
mana$ement contracts is seen as a solution to enhance cost effectiveness* DIn tinnin$ arran$ements, the
3artners are eC3ected to s3ecify the 3erformance ob-ectives durin$ the tinnin$ 3rocess* In mana$ement
a$reements these ob-ectives are s3ecified in advance, and the financial com3ensation of the 3rivate sector
o3erator de3ends on achievement of the 3erformance ob-ectives* 7his is the ay to im3rove the effectiveness
of tinnin$ arran$ements, tooE ALariola et al., 1'''. ='B* Even this 3ro3osition a33ears incon$ruous to the
very nature of PUPs* In fact, contrary to mana$ement contracts and other ty3es of PPP, PUPs are not based
on a 3rinci3al4a$ent relationshi3 beteen local authorities and an o3erator motivated by commercial $ain,
but on a 3eer relationshi3 for$ed around common values and ob-ectives, hich eCclude 3rofit4see%in$,
hose merit is to encoura$e local commitment to sustainable chan$e* 7his im3lies that the success of the
3artnershi3 does not merely de3end on the ca3ability and efforts of the su33ortin$ 3artner but also on the
su33orted 3artner and decision ma%ers; rece3tiveness* In turn, this ill be determined by such factors as the
local or$anisational culture, institutional frameor% and socio4economic conditions* <or eCam3le, the
o3enness to estern ideas as an im3ortant factor of success in both )aunas and Ri$a tinnin$
arran$ements
@
* 0lso, Lariola G Danielsson A&((6. &/4&2, 1=B and Lariola et al. A1'''. 1>412B note that a
number of uneC3ected occurrences, includin$ delays in the munici3al decision ma%in$ eCacerbated by the
transitional conteCt and the difficulty in recruitin$ adeFuately Fualified staff for the PIU, affected the
allocation of tinnin$ resources and timin$ of ob-ective im3lementation in )aunas and Ri$a* In other ords,
the ability of 3artners to stic% to an a$reed timetable considerably de3ends on a number of inde3endent
variables fallin$ outside the control of the su33ortin$ 3artner* 8easurin$ its 3erformance on the basis of the
timely im3lementation of too narroly defined tar$ets mi$ht thus 3rove ina33ro3riate and conflict ith the
coo3erative s3irit of PUPs* In order to remedy the Dam3le timeE reFuired by local 3artners for the di$estion
of ne ideas and mana$ement a33roaches, Lariola G Danielsson A&((6. 1=B su$$est that D7he situation
ould be somehat different, if the forei$n eC3erts had actual mana$ement res3onsibility, as is the case in a
8ana$ement #ontract or in various forms of 3rivatisation Aa -oint venture Qith Stoc%holm :attenR as
3ro3osed, but re-ected in )aunasBE* 0s a matter of fact, it remains to be seen hether the direct involvement
of the su33ortin$ 3artner in the mana$ement of local o3erations ould 3roduce more immediate results in
terms of investment im3lementation* It is more li%ely that the removal of the collaborative a33roach and the
re3lacement of local mana$ers ith forei$n eC3erts ould reduce the absor3tive ca3acity of the su33orted
3artner and undermine its ability to internalise %noled$e for the lon$ term*
Transparency and accountability
Effectiveness in the use of tinnin$ resources can be enhanced by resort to systematic re3ortin$ so that the
su33ortin$ 3artner can be held accountable for its activities in front of the home country;s 3olitical s3onsors,
es3ecially if taC3ayers; money is bein$ committed, and the financiers su33ortin$ the 3artnershi3* In )aunas,
re3ortin$ on tinnin$ activities included the submission of annual bud$ets and Fuarterly and annual re3orts
ALariola G Danielsson, &((6. &>B* In Ri$a, Sida;s Grant 0$reement reFuested the submission of Fuarterly
3ro$ress re3orts, audited annual re3orts, Fuarterly tinnin$ re3orts, s3ecial and com3letion re3orts ALariola
et al., 1'''. &=B* In Ri$a, im3lementation of investments and the overall develo3ment of the local 3ublic
utility ere monitored by a Pro-ect Steerin$ #ommittee re3resentin$ the financiers ALariola et al., 1'''. &@,
12B* <inally, the to tinnin$ arran$ements ere broadly assessed by eCternal consultants a33ointed by Sida
leadin$ to the submission of to Evaluation Re3orts ALariola G Danielsson, &((6. &, Lariola et al., 1'''. 1B*
In li$ht of the not4for43rofit basis of PUPs, the relatively limited costs of such 3artnershi3s and the mar$inal
sco3e for reducin$ such costs Asee belo section on Cost-effectiveness of P;PsB, the introduction of
trans3arency a33ears to be an o3timal substitute for com3etition* 0s noted, the su33ortin$ 3artner enters a
3eer4to43eer relationshi3 ith the local 3artner, eCtended throu$h dialo$ue to local decision ma%ers* 7he
effectiveness of PUPs in terms of local ca3acity buildin$ is a result of the %noled$e transferred beteen
3artners, fostered by the not4for43rofit basis of the relationshi3 Asee belo section on )raining and human
resource developmentB, mutual trust and 3ublic sector ethos* #ost4effectiveness, in the form of the timely
im3lementation of a$reed ob-ectives ithin the allotted bud$et, is then to be ensured via monitorin$ from
financiers, 3olitical s3onsors and other sta%eholders* Under PPPs, com3etition is su33osed to unleash 3rivate
sector o3erators; efficiency ALobina G Hall, 1''=. /B* By contrast, the absence of a 3rofit motive under PUPs
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su$$ests that the focus in selectin$ the su33ortin$ 3artner should sitch to its suitability, in terms of acFuired
%noled$e, includin$ 3rior contacts ith the su33orted 3artner, rather than on cost reduction* 7rans3arency
and the ensuin$ accountability ould thus act as a safe$uard a$ainst rent4see%in$ from individuals or
or$anisations, and a com3lementary stimulus to en$a$e in the 3artnershi3*
<inally, trans3arency and accountability mechanisms of the %ind introduced in Stoc%holm :atten;s tinnin$
arran$ements a33ear to stren$then trust beteen the involved 3artners and the 3olitical and financial
s3onsors, in turn reinforcin$ their commitment to 3rovidin$ su33ort for 3ublic sector reform* 7his as
eCem3lified by continued EBRD financial su33ort to both )aunas and Ri$a;s munici3al ater o3erators even
after the com3letion of the to tinnin$ arran$ements*
Training and hu%an resources develop%ent
By definition, ca3acity buildin$ is an essential com3onent of PUPs so that an adeFuate trainin$ and human
resources develo3ment 3ro$ramme should be 3art of any such 3artnershi3* 7rainin$ is re$arded as an out3ut
of tinnin$ a$reements ALariola G Danielsson, &((6. 1'B* Hoever, it is also to be seen as an in3ut activity
aimed at stren$thenin$ lon$ term ca3acity instrumental to enhancin$, not only the technical and o3erational
as3ects of service 3rovision, but also investment delivery and chan$es in $overnance structure and
institutional frameor%* 7rainin$ 3rovided by Stoc%holm :atten in )aunas and Ri$a as aimed at the local
o3erators; mana$ement and staff, as ell as local decision ma%ers, accordin$ to needs* It too% 3lace throu$h
or%sho3s, on4the4-ob trainin$ and study tours to Stoc%holm :atten and as 3rovided by Stoc%holm :atten;s
lon$ term and short term eC3erts ALariola et al., 1'''. 1&, 16, Lariola G Danielsson, &((6. 1&B* 7rainin$
activities folloed an a$reed $eneral trainin$ 3ro$ramme, and 3ermanent or%$rou3s ere established for
ad4hoc trainin$ AB-er$$aard, 1''2. 64(B* In Ri$a, D0 Personnel 7rainin$ Pro$ramme for mana$ement and
em3loyees as started in &((6 P 7he Pro$ramme covers at 3resent to level ith a third level 3lanned to
be$in in year 1'''* !ver 1/' staff members have already 3assed throu$h the first level* Durin$ the first half
of &((( &&= staff ere 3artici3atin$ in level 1 trainin$E ALariola et al., 1'''. 1'B*
7rainin$ 3roved considerably beneficial in all areas AB-er$$aard, 1''2. (, Lariola et al., 1'''. 12, 16B* !n
the o3erational and technical side, trainin$ contributed to creatin$ D3reconditions for $ood mana$ement and
com3etent o3erationsE of the ne )aunas asteater treatment 3lant, ensurin$ com3liance ith Helcom and
EU standards ALariola G Danielsson, &((6. 1'B*
7rainin$ as s3ecifically tar$eted at stren$thenin$ the ca3acity of the Pro-ect Im3lementation Unit APIUB
res3onsible for 3rocurement and overseein$ im3lementation of the investment 3ro$ramme* Stoc%holm
:atten;s tinnin$ arran$ements not only resulted in the successful im3lementation of si$nificant investment
3ro$rammes, but led to the establishment of lon$ term, local ca3acity for ta33in$ investment finance and
carryin$ out ca3ital investment in the future* In )aunas, the PIU Dis no com3etent and ell staffed* Its
initial ineC3erience caused si$nificant delays in loan disbursement* 7he PIU is no ca3able of mana$in$ the
remainin$ biddin$ and 3rocurement 3rocesses ithout a resident 3rocurement s3ecialist from abroad* 7he
PIU o3eration as set u3 and staff trained ithin the tinnin$ frameor%E ALariola G Danielsson, &((6. 1'B*
Similarly, in Ri$a DPIU has $ained much eC3erience from S5# AStoc%holm :attenB, and is no able to act
inde3endently in most fields* 7oday, there is little need for su33ort from S5# AStoc%holm :attenBE A Lariola
et al., 1'''. 1=B*
0s re$ards institutional and or$anisational chan$e, a com3lete trainin$ 3ro$ramme as associated to the
#or3orate Develo3ment Plan
6
, a com3rehensive 3lan encom3assin$ strate$y and action to be ado3ted in all
cor3orate areas Dto transform the tinnin$ 3artners into autonomous, self4financin$ and self4$overnin$
enter3risesE AB-er$$aard, 1''2. >B* 7rainin$ as also 3rovided to 3re3are re3resentatives of local authorities
to en$a$e in their ne res3onsibility as non4eCecutive members of the Board of )auno :andenys* D7he
Board trainin$ in )aunas and in Stoc%holm for five Board members as considered crucially im3ortant to
$ive direction to the ne BoardE ALariola G Danielsson, &((6. 1&B* B-er$$aard A1''2. &'B recommends that
trainin$ su33ort in institutional and or$anisational develo3ment is arran$ed at an early sta$e of the 3ro-ect
for the benefit of the su33orted 3artner and local authorities to overcome the 3ossible lac% of familiarity ith
the conce3t of tinnin$*
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In terms of trainin$ effectiveness, tinnin$ arran$ements can rely on the 3ublic utility4to43ublic utility
relationshi3 ith the su33ortin$ 3artner offerin$ first4hand eC3erience hich consultants or other eC3erts
mi$ht hardly have ALariola G Danielsson, &((6. 1&B* 7he effectiveness of trainin$ and ca3acity buildin$ is
de3endent u3on the incentives to %noled$e transfer beteen the 3artners* In this sense, in li$ht of their not4
for43rofit basis, PUPs a33ear to be a more advanced vehicle for %noled$e transfer than PPPs* 0s noted Asee
above section on )he e"perience with PPPs of the last 5 1ears in developing countries& theor1 and
practiceB, 3rivate o3erators re$ard %noled$e at mana$erial level as a 3rivate $ood from hich de3ends their
ability to eCtract rent* Under PPPs, %noled$e transfer aimed the buildin$ of local mana$erial ca3acity is
thus inhibited by hat the 3rivate o3erator 3erceives as a ris% of losin$ is com3etitive advanta$e toards
3ublic mana$ers and undermine the rationale behind PSP* #onversely, 3ublic ater o3erators and 3articularly
so the su33ortin$ 3artner under not4for43rofit PUPs, vie their %noled$e as a 3ublic $ood characterised by
non4a33ro3riability, non4eCcludability, non4eChaustibility and non4tradability ALobina G Hall, forthcomin$ in
Pro$ress in Develo3ment StudiesB* 7his can eC3lain the 3ositive and lon$ term im3act 3roduced by
Stoc%holm :atten;s trainin$ activities in )aunas and Ri$a*
<inally, it should be noted that %noled$e transfer hardly ta%es 3lace eCclusive in one direction, for eCam3le
from the su33ortin$ to the local 3artner* 8ore 3recisely, by o3eratin$ in a different and difficult environment,
staff and mana$ers seconded from the su33ortin$ 3artner on a short or lon$ term basis en-oy o33ortunities to
Diden their horiIonsE and enrich their %noled$e and eC3erience as their established ay of thin%in$ is
challen$ed ALariola et al., 1'''. =', B-er$$aard, 1''2. (B
(
*
,ost effectiveness of P!Ps
!lesen et al. A1''&. 12B conclude in favour of the overall cost effectiveness of the Sida4funded tinnin$
3ro$ramme in the Baltic re$ion from &((2 to 1''&* 7he observed PUPs in )aunas and Ri$a a33ear to have
been cost4effective in many res3ects, for eCam3le hen considerin$ the im3act obtained in relation to the
cost of the tinnin$ arran$ements or hen com3arin$ their cost ith alternative ays of deliverin$ the same
3ro$ramme*
7he total cost of the to 3hases of the )aunas tinnin$ did not eCceed SE) &2*> million AUSO 1*1@ millionB,
eFual to a33roCimately 1*1H of the delivered investment 3ro$ramme of USO &'& million ALariola G
Danielsson, &((6. =4>B* 7he bud$et for 3hases I and II of the Ri$a tinnin$ amounted to SE) &(*6 million,
corres3ondin$ to 1*@H of the realised USO &'>*@ million investment 3ro$ramme ALariola et al., 1'''. &, (B*
0lthou$h such estimates do not consider the costs of the 3reliminary 3eriods, they also overloo% the
considerable lon$ term im3act in terms of ca3acity buildin$ and institutional and or$anisational chan$e
ALariola et al., 1'''. 16B, let alone the investment 3ro$rammes carried out after the com3letion of the to
tinnin$ arran$ements hich these made 3ossible*
Lariola G Danielsson A&((6. 11, 0nneC =B observe that the cost of the second 3hase of the )aunas tinnin$,
after discountin$ the amount of the relative investment 3ro$rammes and the siIe of the cities, as in line
ith that of / 5orld Ban%4funded tinnin$ arran$ements in the Baltic re$ion* !n the other hand, Lariola et
al. A1'''. =&B recommend that the number of lon$ term advisors should be reduced from = to one, ith more
intensive resort to short term advisors com3ensatin$ for the reduced resident team* 7his seems to su$$est
that, for a $iven level of Fuality in the delivery of the 3artnershi3;s 3ro$ramme, there mi$ht be limited sco3e
for cuttin$ costs*
7he bud$et for the second 3hase of the )aunas tinnin$, eFual to SE) &1*= million, favourably com3ared to
estimates for the same ty3e of or% 3roduced by to consultin$ com3anies* D!ne ay of chec%in$ the cost
effectiveness Aof the tinnin$B of is to see if someone else could have done the same Fuality service at a
loer cost* 5e therefore as%ed three senior consultants from to different com3anies Aone technical
consultant and to mana$ement consultantsB to ma%e a bud$et estimate for the 3ro-ect, based on the
tinnin$ a$reement* 7heir estimates of the costs for im3lementin$ the tinnin$ a$reement varied beteen
&/ and &6*/ million SE)E ALariola G Danielsson, &((6. 11B*
7his 3a3er does not directly address the cost effectiveness of PUPs as com3ared to PPPs* Hoever, e offer
the folloin$ observations on factors 3otentially affectin$ cost effectiveness under different a33roaches to
ater reform* <irst, under PUPs ris% mana$ement is confined to the conduction of feasibility studies as the
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hole set of 3erformance and 3olitical ris%s are retained by the local 3ublic o3erator and local authorities* By
contrast, ris% under PPPs has to be meticulously allocated in order to safe$uard the future 3rofitability of the
venture and that reFuires more substantial costs in terms of financial, le$al, consultin$ and other transaction
costs* It has been estimated that under 3rivate infrastructure 3ro-ects transaction costs alone can reach /H to
&'H of total 3ro-ect cost ALobina G Hall, 1''=. 11B* Second, the not4for43rofit basis of PUPs allos for the
maCimum reinvestment of the mobilised financial resources into the local system, ith no 3rofits eCtracted
in the form of dividends* 7his contrasts ith the im3act on 3ricin$ derivin$ from 3rivate shareholders;
demands in terms of remuneration and on investment im3lementation under PPPs* Problems freFuently
observed include resort to tactical resources to eCert u3ards 3ressure on tariffs, includin$ the use of
mana$ement fees to eCtract increasin$ revenues from o3erations, to$ether ith the recurrent reduction in the
value of investment 3ro$rammes realised under PPPs and 3ost3onement in their im3lementation ALobina G
Hall, 1''=. &'4&1, 1141(B*

Institutional and organisational develop%ent
7he to tinnin$ arran$ements in )aunas and Ri$a indicate that PUPs can not only 3rovide ca3acity
buildin$ and investment but also convey institutional and or$anisational chan$e* 7his is im3ortant,
institutional stren$thenin$ bein$ a develo3mental $oal in itself* <urthermore, local 3rotracted ability to retain
o3erational ca3acity and maintain investment de3ends in turn on $overnance structures* 0ccordin$ to
<ranceys A&((@. 2B, D#a3acity buildin$ in the urban utilities has been attem3ted ith institutional
develo3ment 3ro$rammes hich have 3roved their orth durin$ the lifetime of a 3ro-ect Aor a 3articular
leaderB but have $enerally not achieved the brea%4throu$h into self4sustainin$ $rothE* <ailure of ca3acity
buildin$ efforts alon$ the lines described by <ranceys A&((@. 2B can be 3revented if, in 3arallel to ca3acity
buildin$, the formal and informal accountability netor%s surroundin$ the 3rovision of 3ublic ater
o3erations are made effective* Lobina G Hall Aforthcomin$ in Pro$ress in Develo3ment StudiesB identify the
transformation of inefficient 3ublic ater underta%in$s as a 3assa$e from feeble D$eodesicE accountability
netor%s to effective, hi$hly inte$rated accountability netor%s, hereby netor%s are sha3ed by chan$es in
%noled$e transfer amon$ sta%eholders* 7he study of the dynamics of institutional reform leadin$ to
enhanced sustainability and the identification of hat ty3e of PUPs can su33ort the introduction of such
reform become thus relevant*
7he to cases observed su$$est that institutional and or$anisational chan$e associated ith PUPs is a result
of interaction amon$ the sta%eholders su33ortin$ and 3artici3atin$ in the 3artnershi3* 7he su33ortin$ 3artner
can be eC3ected to 3lay a considerable role since its eC3erience ill define to a lar$e eCtent the institutional
and or$anisational DmodelE to be ado3ted locally* Hoever, financiers; demands can alter such DmodelsE in
li$ht of their 3olicy and ob-ectives* In the case of )aunas, Dthe idea of tinnin$ as a tool to achieve the
institutional stren$thenin$ ob-ectives as chosen, because a more direct 3rivate sector 3artici3ation by
forei$n com3anies as neither acce3table to the local and national 3oliticians nor to the "ordic donorsE
ALariola G Danielsson, &((6. &@B* In )aunas and Ri$a, the local 3artner;s cor3orate $overnance as
restructured in line ith that of Stoc%holm :atten, a munici3ally4oned com3any, hich underent
cor3oratisation and rin$4fencin$ of finances in &(6( AStenroos G )at%o, 1''/. &'4&&, Gustafsson, 1''&. /B*
Hoever, also the EBRD informed institutional reform via loan covenants, one of hich reFuired the
establishment of a Re$ulatory Unit in Ri$a ALariola et al., 1'''. &@B, des3ite Stoc%holm :atten;s vie that
this as unnecessary in li$ht of the introduced accountability mechanisms toards the munici3al
authorities
&'
* Lar$ely focused on cor3orate $overnance, the reforms ado3ted in )aunas and Ri$a a33ear
ins3ired by D"e Public 8ana$ementE A"P8B theory* Hoever, the stron$ relationshi3s beteen the
su33ortin$ 3artner and local o3erators and decision ma%ers, built around mutual trust, res3ect and common
values, seem to confirm the assum3tion that the effectiveness of "P84style reforms is enhanced by
concomitantly ta%in$ into account local hierarchical and social values ADavis, 1''>. />4//, 2142=, 2242@B*
Davis A1''>. 2=422B shos that in the case of to 3ublic sector4community PUPs in 0hmedabad, India and
0Iad and Nammu, Pa%istan direct contact beteen 3ublic sector em3loyees and local communities created
reci3rocal commitment ith dis3lays of $ratitude resultin$ in 3rofessional 3ride and im3roved service levels*
7his su$$ests that, irres3ective of the ty3e of PUP and the develo3mental conteCt, establishin$ $enuine
bonds amon$ 3artners and sta%eholders based on reco$nition of the res3ective roles and shared ob-ectives, is
instrumental to the success of the 3artnershi3*
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7he outcome of institutional chan$e is hi$hly de3endent on the local conteCt AB-er$$aard, 1''2. (B, so that
the form of in4house restructurin$ associated ith the analysed tinnin$ arran$ements is not to 3rove
necessarily adeFuate or socially acce3table in a different environment* In certain cases, a33ro3riate, socially
and 3olitically acce3table institutional and or$anisational chan$e mi$ht reFuire the eCtension of the
3artnershi3 to actors re3resentative a broader set of interests than those carried by the relevant o3erators,
local authorities and financiers* 0s it is the case in Porto 0le$re, BraIil AHall et al., 1''1B, this could ta%e
3lace ith a more direct en$a$ement of other sta%eholders, such as local communities and civil society
re3resentatives, in the monitorin$ and conduction of 3ublic ater o3erations and the surroundin$ $overnance
structures* It is thus 3ossible to envisa$e the develo3ment of international 3ublic sector4community
3artnershi3s, a hybrid beteen domestic D$overnment4communityE 3artnershi3s and cross4border
develo3ment 3artnershi3s as cate$orised above Asee section on Public-Public Partnerships 9P;Ps:& @
t1polog1 and definitionsB, hereby the relationshi3 beteen the to 3ublic ater o3erators is enlar$ed to the
res3ective communities and civil society re3resentatives* 7his mi$ht entail the develo3ment of 3arallel
3artnershi3s beteen civil society and community re3resentatives related to the su33ortin$ 3artner and their
counter3arts in the su33orted city, aimed at buildin$ local ca3acity ithin the local community* Such cross4
border 3ublic sector4community PUPs mi$ht be suitable to develo3in$ 3ublic 3artici3ation mechanisms ith
the su33ort of 3ublic ater o3erators and their res3ective social 3artners, from such established cases as
Porto 0le$re, BraIil AHall et al., 1''1. &'4&&, &(B, #ordoba, S3ain A!bservatorio de los Servicios PSblicos,
1''/. 1', 1/, >@4>6B and Grenoble, <rance ALobina, forthcomin$ in ;tilities Polic1B* In )aunas, the tinnin$
arran$ement as eCtended beyond mana$ement and staff to include the res3ective trade unions ALariola G
Danielsson, &((6. &=B* 7his su$$ests that the success of the civil societal com3onent of any 3ublic sector4
community PUP ill de3end to a lar$e eCtent on the establishment of a relationshi3 of mutual reco$nition
and trust beteen the 3ublic o3erator and the community re3resentatives, as a 3recondition to the transfer of
conteCt relevant and a33ro3riate %noled$e*
The role of bilateral donors and International 2inancial Institutions I2Is"
Bilateral donors and International <inancial Institutions AI<IsB 3layed a central role in su33ortin$ the
analysed tinnin$ arran$ements beyond the mere 3rovision of $rants and investment finance* Sida and the
EBRD, in 3articular, oversa and accom3anied the im3lementation of the 3artnershi3s since their conce3tion
facilitatin$ the identification of the 3artners and closely monitorin$ 3ro$ress throu$hout* <urthermore, the
content of the tinnin$ arran$ements as informed by Sida;s 7erms of Reference and EBRD;s DeCtensive,
detailed loan covenants AhichB lar$ely directed institutional and mana$ement develo3mentE ALariola G
Danielsson, &((6. &/B* PUPs thus seem to derive 3otential benefits from the su33ort of bilateral donors and
multilateral a$encies $enuinely committed to the stren$thenin$ of 3ublic ater o3erations and the
develo3ment of local ca3acity* #onversely, donors and I<Is illin$ to 3romote the sustainable reform of
ater su33ly and sanitation o3erations mi$ht consider su33ortin$ PUPs as a viable instrument to induce
institutional and or$anisational chan$e* <or eCam3le, the 03ril 1''> !3erational Guidance for 5orld Ban%
staff state that D7he Ban% ill or% ith ell43erformin$ 3ublicly oned and 4o3erated utilities as ell as
those that 3ut in 3lace a credible 3ro$ram to im3rove 3erformance over timeE A5orld Ban%, 1''>. &>B*
Donor and I<I conditionality can be eC3ected to affect the outcome of su33orted PUPs to a considerable
eCtent* 7he eC3erience ith EBRD loan covenants in )aunas and Ri$a a33ears to confirm that, as it as the
case in Porto 0le$re ith the loan issued by the Inter40merican Develo3ment Ban% AI0DBB in &(2& ALobina
G Hall, forthcomin$ in Pro$ress in Develo3ment StudiesB, loan conditionality can re3resent an element of
3ositive 3ath de3endence $uidin$ local decision ma%in$ toards sustainability ob-ectives* 8ore 3recisely,
conditionality avoidin$ the im3osition of chan$es in onershi3 and o3erational control such as the
introduction of 3rivatisation and PPPs hich carry a hi$h ris% of resultin$ ina33ro3riate to the local conteCt,
and focusin$ on the ado3tion of $ood $overnance 3rinci3les mi$ht 3roduce a 3ositive develo3mental im3act*
In4house restructurin$ based on efficiency4aimin$ measures, such as the se3aration of the o3erator;s accounts
from those of the munici3ality, the rin$4fencin$ of its finances and the introduction of trans3arency and
accountability mechanisms in cor3orate $overnance, can lay the $round for incremental chan$e and further
reforms* 7his 3roved to be the case in Porto 0le$re, hereby sound mana$ement s3urred by conditionality
attached to the &(2& I0DB loan as cou3led ith enhanced democratisation at the be$innin$ of the &(('s*
"onetheless, the merit of any conditionality has to be -ud$ed in li$ht of its suitability to the local socio4
3olitical and economic conteCt* 7he social im3act of I<I conditionality on 3ricin$ 3olicy in )aunas and Ri$a
remains to be assessed, ith 3articular reference to the effects of the ado3tion of linear rather than ste33ed
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bloc% tariffs, the abolition of any cross4subsidies from commercial and industrial consumers to households
and avera$e billin$ amountin$ to /H of dis3osable household income
&&
*
Donors and I<Is can also 3lay an im3ortant role in 3artnershi3 desi$n* Lariola G Danielsson A&((6. 1, 1=41>B
com3are / 5orld Ban%4funded tinnin$ a$reements in the Baltic re$ion ith the )aunas and Ri$a PUPs and
observe that the main differences include the smaller bud$ets for tinnin$ su33ort and investment finance in
5orld Ban%4s3onsored schemes, to$ether ith stron$er focus on monitorin$* 0ll such features have
im3lications on the cost effectiveness of PUPs* 0lthou$h Lariola G Danielsson A&((6. 1=B note that the
relative bud$ets ere overall 3ro3ortionate to the siIe of cities and investment 3ro-ects, D7he bi$$er bud$ets
in )aunas and Ri$a have alloed a continuous 3resence of several forei$n eC3erts, hich has not been
3ossible in the 5orld Ban% 3ro-ectsE* It is 3ossible to assume that tryin$ to enhance the cost effectiveness of
PUPs by reducin$ the bud$et for tinnin$ su33ort mi$ht 3rove counter3roductive as this ill reduce
eC3osure to the su33ortin$ 3artner;s %noled$e and eC3ertise* In other ords, it is hi$hly li%ely that for a
$iven de$ree of 3artner suitability and a $iven level of 3artnershi3 Fuality a reduction in man3oer resources
devoted to the 3artnershi3 ill not translate into im3roved cost effectiveness of the PUP* In turn, this im3lies
that in order to achieve a $iven desired ob-ective in terms of ca3acity buildin$, investment im3lementation
andKor su33ort to institutional chan$e a minimum amount of tinnin$ resources ill be reFuired, hose
identification ill be crucial to the 3artnershi3 success*
The features of P!Ps in transition and developing countries: a typology
In li$ht of the above, e offer the folloin$ analytical frameor% to identify the essential features of the
revieed PUPs so that these can be com3ared to those of PPPs or other 3artnershi3s, includin$ other ty3es of
PUPs, alloin$ for an evaluation of com3etin$ a33roaches to the reform of urban ater systems and their
im3lications* 7he characteristics of the revieed PUPs are Fualified from the 3ers3ective of the eCternal or
su33ortin$ 3artner, in this case Stoc%holm :atten*
T,:24 %. P,+*-4+.)'8 14,*3+4. 01 PUP. '- *+,-.'*'0- ,-9 94;4208'-( /03-*+'4. (1+06 *)4 84+.84/*';4 01
*)4 .3880+*'-( 8,+*-4+
F4,*3+4 01 8,+*-4+.)'8 D4./+'8*'0-
Primary ob-ective #ontribution to develo3ment, in li$ht of mandate from 3olitical leaders of su33ortin$ 3artner;s home
country and 3artnershi3 financiers
8ain incentive Public sector ethos. 3ride in 3ublic sector;s mission and sharin$ of on ca3ability
Relationshi3 ith local
3artner
4 Peer relationshi3 3ublic utility4to43ublic utility based on trust and mutual understandin$
4 0dvisory role to local decision ma%ers, 3ossibly facilitated by local 3artner
Ris% mana$ement "o 3erformance or 3olitical ris% is assumed by the forei$n 3artner as the local 3artner remains fully in
char$e of o3erations* 7his im3lies that the effectiveness of ris% miti$ation de3ends on the institutional
and or$anisational reforms introduced in 3arallel to the 3artnershi3
Institutional chan$e 4 Possibility of institutional and or$anisational chan$e if the PUP is eCtended beyond mere transfer of
technical %no4ho
4 If institutional and or$anisational chan$e is 3art of PUP, this ta%es 3lace in 3arallel ith ca3acity
buildin$ and investment 3ro$ramme
4 Institutional and or$anisational reforms introduced tend to de3end on su33ortin$ 3artner;s
eC3erience and financiers; 3olicy
4 Gradual a33roach de3endin$ on su33ortin$ 3artner;s 3ersuasion ability and rece3tiveness of local
3artner and decision ma%ers
4 #ommunity involvement and 3ublic 3artici3ation de3end on 3artnershi3 desi$n, as in the case of
3ublic sector4community PUPs, and local institutional conteCt* 5hen this ha33ens, commitment to the
3artnershi3 and success thereof may be stren$thened
#a3acity buildin$ and
%noled$e transfer
4 Resources devoted to buildin$ local mana$erial ca3acity accordin$ to need and 3artnershi3 desi$n
Athus influenced by 3olitical mandate and financiers; 3olicyB
4 Resources devoted to trainin$ of local or%force accordin$ to need and 3artnershi3 desi$n Athus
influenced by 3olitical mandate and financiers; 3olicyB
4 Possibility of eCtendin$ 3artnershi3 to other sta%eholders Ae*$* trade unions4to4trade unions
relationshi3B accordin$ to institutional and or$anisational com3onent of PUP
4 0bsence of commercial ob-ectives means that all resources can be devoted to ca3acity buildin$ and
stren$thenin$ of local $overnance
4 )noled$e as a 3ublic $ood im3lies incentive for maCimum %noled$e transfer to local 3artner and
associated sta%eholders ALobina G Hall, forthcomin$ in Pro$ress in Develo3ment StudiesB
0ccountability 0ccountability to 3olitical DonersE and financiers, stren$thened by re3ortin$ on PUP;s activities*
0ccountability to local authorities is re3laced by collaborative a33roach* #onflict resolution is based
on 3ersuasion and informal amicable means
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The !3 initiative on 4ater -perator Partnerships 4-Ps" and practicality of P!Ps
7he United "ations Secretary General 0dvisory Board on ater AU"SG0BB is launchin$ a scheme hich
as ori$inally aimed at, and is still functional to, 3rovidin$ a $lobal mechanism for the 3romotion of PUPs
in ater su33ly and sanitation* Such mechanism could hel3 overcome the fra$mentation that often
characterises PUP initiatives orldide and facilitate scalin$ u3 of the most successful eC3eriences
A8iranda, 1''2. />4//, /(B*
DDurin$ the >th 5orld 5ater <orum A8eCico, &21= 8arch 1''2B, the U"SG0B announced its #om3endium
of 0ctions, hich aims to hel3 achieve the on ater and sanitation* 0mon$st others, the #om3endium of
0ctions 3ro3oses the creation and im3lementation of a $lobal mechanism to 3romote 5ater !3erator
Partnershi3s A5!PsB*
7he rationale behind the mechanism is sim3le. the $reatest ca3acity for im3rovin$ 3ublic ater and
sanitation o3erators is ithin the o3erators themselves* Given that most ater o3erators are local or
munici3al, $iven that even modest im3rovements in many of these o3erators ill $o a lon$ ay to meetin$
the 8DGs, $iven that no current or$anisations have the ca3acity to reach the many thousands of ater
o3erators, then the best source of ca3acity in 3rinci3le is directly from amon$st the o3erators themselves*
7he mechanism ill allo these o3erators to systematically communicate amon$st each other and ith any
other or$anisations or institutions that can be of hel3, ithout havin$ to ait for donors, I<Is or other
or$anisations to establish contacts and develo3 3ro-ects*
7he PUPs mechanism ould be mana$ed by a team ho ill 3rovide an internetbased 3latform hich ill
allo 3artici3ants to establish, of their on volition and initiative, the bases for 3artnershi3s* !3erators and
others ill re$ister on the internet site, usin$ set information screens hich ill allo them to describe their
situation* 7his system ill use database softare to create matches amon$ the re$istrants accordin$ to the
$eneral descri3tions of the 3roblems AdemandsB and eC3ertise AoffersB* 7hen, a list of 3ossible 3artnerAsB ill
be sent to the demander, ho ill be able to contact the offererAsB for details, and ill then be able to select
the most a33ro3riate 3artnerAsB*
8any of the 3artnershi3s ill be at a very lo cost* 5here there are si$nificant costs involved, a number of
o3tions can be considered.
T a fund could be created to be accessed by PUPs 3artners, based on a number of criteria,
T the PUPs finance demands could be 3resented systematically to donors or develo3ment ban%s for su33ort,
T the more ealthy PUPs 3artner may be able to finance out of their on solidarity funds* 7he 3artner costs
are to be, alays, on a notfor3rofit basis*
7he PUPs mana$ement team should be hosted by a le$itimate, credible, broadly acce3ted body M therefore,
trans3arency and accountability are essential, also because one of the functions of the PUPs mana$ement
team ill be to facilitate access to necessary financin$* 7he current 3ro3osal under debate in the U"SG0B is
to house a small PUPs mana$ement team ithin U" 5ater, hich ill allo the necessary lin%a$es and
netor%s amon$ other %ey international, re$ional and national actors* 7he PUPs should see% oversi$ht from
a ide ran$e of sta%eholders re3resentin$ the broad s3ectrum of $rou3s involved in the sectorE A8iranda,
1''2. /64/(B*
In li$ht of the above, it is 3ossible to dra a number of recommendations addressin$ the 3racticality of the
3ro3osed U"SG0B mechanism*
International cooperation and political %andate for P!Ps
7he to analysed tinnin$ arran$ements ere not s3oradic and isolated initiatives but ere 3art of a
re$ionally coordinated and structured coo3erative effort en-oyin$ international financial and institutional
su33ort* International commitments contracted around HEL#!8 3rovided the momentum for 3olitical
mobilisation to achieve an internationally shared environmental and social ob-ective ALariola G Danielsson,
&((6. &/B* Such international commitments induced the Lithuanian central $overnment to instruct the
munici3ality of )aunas to carry out the a$reed investment 3ro$ramme ALariola G Danielsson, &((6. &2B,
hile the #ity of Stoc%holm instructed Stoc%holm :atten to involve in develo3ment activities in the Baltic
re$ion, hich led to the 3re3aration of 3olicy and $uidelines for international coo3eration and re$ional
assistance 3olicies ALariola G Danielsson, &((6. &'B*
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It remains unclear hether the $eneral commitments ado3ted by heads of state and $overnments ith the U"
8illennium Declaration AUnited "ations, 1'''B and the ater4related tar$ets contained in the 8DGs Ae*$*
8DG @ M Ensure environmental sustainabilityB ill 3rovide the 3olitical momentum needed for catalysin$
national and munici3al resources around U"SG0B;s $lobal mechanism on a $lobal scale* 8uch ill de3end
on U"SG0B;s 3romotional efforts and the demonstrational effect of the first PUPs s3urred by the $lobal
mechanism* Hoever, there mi$ht be advanta$es in launchin$ inter4$overnmental initiatives at an
international or re$ional level aimed at identifyin$ concrete, concerted actions relyin$ on PUPs as an
instrument for the achievement of develo3mental $oals in ater su33ly and sanitation*
The initiators of P!Ps and local decision %a$ing dyna%ics
Decision ma%in$ dynamics around the initiation of PUPs may be difficult to 3redict* In the relatively uniform
conteCt of the Baltic re$ion, actors; behavioural 3atterns behind the initiatives leadin$ to the ado3tion of
PUPs in )aunas and Ri$a ere o33osite* In )aunas, it as the 3ublic ater o3erator to ta%e the lead in the
launch of the tinnin$ arran$ement after contacts ith Sedish consultancy )4)onsult ere established in
&(6( and )auno :andenys re3resentatives visited Stoc%holm to ascertain the ty3e of su33ort they could
obtain* 0fter )4)onsult elaborated a feasibility study, the EBRD as%ed directly Stoc%holm :atten to become
the tinnin$ 3artner of )auno :andenys ALariola G Danielsson, &((6. &'4&&B* D7he investment 3ro-ect and
the tinnin$ arran$ement as essentially im3osed on a sus3icious, reluctant munici3ality, characterised by
freFuent 3olitical chan$es A2 mayors in )aunas since &((/BE ALariola G Danielsson, &((6. &@B* D7he
freFuent chan$es in )aunas munici3al $overnance, not observed in the same scale in other munici3alities,
caused P frictionE in the relationshi3 beteen the munici3ality of )aunas and )auno :andenys ALariola G
Danielsson, &((6. &2B, hich 3roved 3roblematic for the im3lementation of the tinnin$ arran$ement
&1
* By
contrast, in Ri$a the local decision to enter a 3artnershi3 ith Stoc%holm :atten ori$inated at 3olitical level
hile Ri$a 5ater as initially reluctant to en$a$e
&=
*
7his su$$ests that there are advanta$es in ma%in$ the U"SG0B mechanism fleCible enou$h to allo for
maCimum interaction ithin a broader set of sta%eholders from different cities, ith 3articular reference to
munici3al $overnments hose involvement is vital to the success of PUPs* Hoever, it cannot be eCcluded
that initiatives could not stem from other sta%eholders, such as trade unions, civil society and community
re3resentatives* "ot only should the U"SG0B mechanism be 3romoted amon$ sta%eholders and the
res3ective national, re$ional and international associations orldide, but their free access to the mechanism
should be fully $ranted so that they can 3rovide enhanced stimulus to PUPs, includin$ 3olitical 3ressure
locally eCerted from bottom4u3* Sta%eholders; involvement beyond o3erators mi$ht facilitate the inclusion of
institutional and or$anisational develo3ment com3onents in the 3ro$ramme underlyin$ the 3artnershi3, so
that this is not confined to technical ca3acity buildin$ or investment im3lementation* <urthermore, broader
sta%eholder involvement could facilitate 3ublic sector4community PUPs instead of strict ater o3erator
3artnershi3s*
The supporting partner's capacity and ad%inistrative infrastructure in support of P!Ps
<or tinnin$ arran$ements to be effective, it is im3ortant that they should be develo3ed as ell4structured,
3rofessional 3ro-ects ith clear ob-ectives
&>
and adeFuate resources* <ailin$ hich, the ris% is that the
3artnershi3 mi$ht translate into a loose Dfriendshi3 cityE ty3e of coo3eration ALariola et al., 1'''. ='B*
7he su33ortin$ 3artner;s ca3acity, in terms of human resources to be devoted to the 3artnershi3 and
administrative or$anisation bac%in$ the initiative, is a crucial element for the success of PUPs* 7he
su33ortin$ 3artner;s human resources mi$ht include resident advisers, ho should be hi$hly Fualified
3rofessionals accordin$ to Lariola G Danielsson A&((6. 11B, and short4term eC3erts en$a$in$ ith their
counter3arts in the tinnin$ 3artner durin$ eCchan$es* Even an internationally re3uted and ell or$anised
3ublic ater o3erator as Stoc%holm :atten faced some difficulty contributin$ adeFuate human resources to
the to tinnin$ arran$ements, hich ere carried out simultaneously from &((/ to &(((* 5hile the
recruitment of suitable eCternal eC3erts seems to have been successful in )aunas, the first of the to
tinnin$ arran$ements to start ALariola G Danielsson, &((6. &6B, remedial action had to be ta%en in Ri$a*
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0t least initially, the Ri$a resident team as entirely made u3 of individuals recruited from outside the
Stoc%holm :atten or$anisation, hich 3roved 3roblematic* 7he first 5ater Utility 8ana$ement 0dvisor as
a33ointed in December &((/ but left in 8ay &((2 due to Dco4o3eration 3roblemsE ith the mana$ement of
Ri$a 5ater* Des3ite lon$ eC3erience in international 3ro-ect mana$ement in the construction sector, the first
5ater Utility 8ana$ement 0dvisor had Dlittle eC3erience from or% ith administrative and or$anisational
chan$e and develo3ment hich as the ma-or tas% for this 3ositionE ALariola et al., 1'''. &>B* Stoc%holm
:atten decided to re3lace the first Ri$a 5ater Utility 8ana$ement 0dvisor ith the 0dvisor or%in$ ith
the )aunas tinnin$ 3ro$ramme, ho had -oined Stoc%holm :atten in &((>* Lariola et al. A1'''. &(, 16, =&B
3raise the ne Ri$a 5ater Utility 8ana$ement 0dvisor for his effectiveness in li$ht of his %noled$e of
both tinnin$ 3artners and eC3erience in a transition environment* 7he im3act of the other to resident
advisors, the Pro-ect Im3lementation 0dvisor and <inance 0dvisor, as limited due to their lac% of 3rior
eC3erience in the ater sector, lac% of 3revious collaboration ith Stoc%holm :atten and former eC3osure to
Eastern Euro3ean transition ALariola et al., 1'''. &>B* D7his evidently as a crucial handica3, hich as not
com3ensated by their otherise ide eC3erience* P A7heyB couldn;t effectively facilitate contacts beteen
AStoc%holm :attenB and ARi$a 5aterB, because they didn;t %no AStoc%holm :atten;sB or$anisation ell
enou$hE ALariola et al., 1'''. &/B* Lariola et al. A1'''. ='B conclude that DSub4contracted core resources
contradict the ori$inal tinnin$ ideaE*
7here seem to be advanta$es in encoura$in$ su33ortin$ 3artners 3artici3atin$ in the U"SG0B mechanism to
carefully select in4house human resources to be contributed to PUPs in li$ht of their s3ecific com3etence and
%noled$e of the mother or$anisation* Suitability to carry out the tas%s identified under 3artnershi3 desi$n
mi$ht 3rove to be more im3ortant than 3rior eC3erience ith or%in$ in tinnin$ arran$ements or or%in$
in the relevant develo3mental conteCt* 0lthou$h the eC3erience acFuired in )aunas by the ne 5ater Utility
8ana$ement 0dvisor D3roved to be very useful in Ri$aE, the fact that Stoc%holm :atten had Dlittle eC3osure
to technical assistance in the ater utilities of central and eastern Euro3eE before the )aunas and Ri$a
3ro-ects did not 3revent the success of the to PUPs ALariola et al., 1'''. &(, Lariola G Danielsson, &((6.
&1, &/B*
De3endin$ on the ob-ectives aimed at, 3artnershi3 desi$n mi$ht envisa$e different combinations of human
resources contributed by the su33ortin$ 3artner in terms of resident advisors and short term eC3erts* Heavy
resort to resident advisors mi$ht be affected by the limited availability of Dhi$hly Fualified resources for
lon$4term tinnin$ assi$nmentsE* 0 3ossible solution is to retain Done eC3erienced in-house resident advisor
at the tar$et utility Avery much the 3rofessional 3rofile and sco3e of or% of the current 5ater Utility
8ana$ement 0dvisorB* He ould concentrate on hi$h level consultations ith utility mana$ement, and on
connectin$ the ri$ht 3eo3le in the to or$anisations* 7he resource allocations beteen lon$4term and short4
term advisers should conseFuently be reconsidered, de3endin$ of course on s3ecific 3ro-ect reFuirementsE
ALariola et al., 1'''. =&B*
7he full costin$ and fundin$ of all human resources contributed by the 3artners a33ears to be an im3ortant
element of a 3rofessionally structured PUP* D7he staff members of the utilities, 3articularly of the Sedish
tinnin$ 3artner, should be 3rovided incentives Afinancial and non4financialB for 3artici3ation in the tinnin$
arran$ement* P 7hey are reFuired to or% hard in difficult conditions, in addition to their duties at
AStoc%holm :attenB* 7innin$ often means lon$er or%in$ hours to co3e ith both AStoc%holm :attenB
duties and tinnin$ res3onsibilities ithout additional com3ensationE ALariola et al., 1'''. ='B* 7he ris% is
that, due to eCcessive or%load in the absence of any remuneration or incentive, the sustained commitment
of the su33ortin$ 3artner;s em3loyees mi$ht be affected*
<inally, there seem to be advanta$es in 3rovidin$ 3rofessional administrative su33ort to the 3artnershi3,
based at the su33ortin$ or$anisation* D0lthou$h the centre of activity in the tinnin$ arran$ement is very
much in the field ARi$a in this caseB, an efficient 'ome Cffice AH!B su33ort is necessary for coordination,
3ro-ect administration and re3ortin$* AStoc%holm :attenB has a small H! unit in the !3erations De3artment*
7he freFuent chan$es in the H! staff have affected continuity, and the H! su33ort has not been very
effective* 7his has been adversely reflected in the Fuality of systematic 3lannin$ and re3ortin$E A Lariola et
al., 1'''. ='B* Similar considerations ere eC3ressed in relation to the )aunas tinnin$ ALariola G
Danielsson, &((6. 11B, as Dthe home office at AStoc%holm :attenB as at the be$innin$ rather limited in its
sco3e M mainly due to lac% of resources* 0n im3ortant 3rinci3le for AStoc%holm :attenB hen or$anisin$ the
tinnin$ at its side as that the Baltic 3ro-ects should be treated as other 3ro-ects at A Stoc%holm :attenB*
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7hey should be 3art of the ordinary structure and ell inte$rated into the day4to4day runnin$ of o3erations*
P 7he to tinnin$ a$reements brou$ht a considerable strain on the or$anisationE ALariola G Danielsson,
&((6. &1B* 7he effectiveness of PUPs mi$ht thus be enhanced by su33ortin$ 3artners develo3in$ 3artnershi3s
as any of their on 3ro-ects, from 3lannin$ to im3lementation and follo u3, full financial covera$e for the
human resources em3loyed in terms of resident advisors, short term eC3erts and 3rofessional administrative
su33ort*
*nhancing the potential for $nowledge transfer
7he relative difficulties encountered by Stoc%holm :atten in contributin$ human resources to the to
tinnin$ arran$ements in )aunas and Ri$a 3oint to the limited ca3acity of "orthern 3ublic ater o3erators
to satisfy the reFuirements of the 8DGs on a $lobal scale throu$h PUPs* 0 3ossible solution mi$ht be
re3resented by the simultaneous 3romotion of "orth4South 3artnershi3s, to$ether ith South4South and even
domestic PUPs or PUPs entered into by 3artners from the same country* In that sense, 8iranda A1''2. />B
notes that Dthere is enormous advanta$e and 3otential for south4south coo3eration, mostly ithin the same
continent, 3erha3s beteen close cultures and ithin a common lan$ua$eE* Successful domestic PUPs can
be observed in various continents from Latin 0merica to 0frica and 0sia, and involve not only ater
o3erators but also trade unions and local communities*
In !di, South 0frica, 3arastatal Rand 5ater #om3any acted as a ca3acity4buildin$ 3artner to 3eri4urban
munici3alities ith the su33ort of trade union S085U* 0 similar 3artnershi3 has been initiated in
Harrismith, South 0frica AHall et al., 1''/. &1, 16, Hall, 1''&. ='B* In Indonesia, 3ublic ater com3any
PD08 7irtanadi has su33orted other smaller utilities in "orthern Sumatra throu$h an !3erational #ontract
AReclaimin$ Public 5ater, 1''2. (B* In the Phili33ines, the Local 5ater Utilities 0dministration AL5U0B has
3rovided su33ort to the 5ater Districts o3eratin$ over >6' munici3alities includin$ urban and 3eri4urban
areas* 7he L5U0 has 3layed an im3ortant role in enhancin$ the technical and financial 3erformance of the
5ater Districts as technical su33ort a$ency, develo3ment ban% and informal re$ulator ABraadbaart et al*,
&(((B* In Honduras, state ater o3erator S0"00 has delivered trainin$ and technical assistance to
community4based or$anisations and "G!s runnin$ rural ater system AHall, 1''&. ='B* S0"00 itself had
under$one in4house restructurin$ ith the su33ort of trade unions ALobina G Hall, 1'''. >@4>6B* In the
3rovince of Buenos 0ires 0r$entina, folloin$ a failed 3rivatisation, ater or%ers too% over o3erations in
1''1 hile consumers associations ere re3resented both in the re$ulatory a$ency and the mana$ement of
ater com3any 0BS0* In to years, ater su33ly covera$e increased from 26H to @&H hile seera$e
covera$e $re from >=H to >/H* 0lso, over &'')m of 3i3es have been re3laced, ater 3ressure
stren$thened and asteater treatment 3lants reactivated A0morebieta, 1''/. &>(4&/@B* In Nuly 1''2, after
the termination of the 3rivatised concession to 0GB0, the 3ublicly4oned, or%ers4o3erated and socially4
controlled 0BS0 too% over o3erations in other @ munici3alities of the Buenos 0ires 3rovince ith almost >
million inhabitants
&/
*
7he effectiveness of PUPs can also be enhanced by levera$in$ on the %noled$e elicited from the various
PUPs, if this as to be $athered and disseminated by the or$anisation hostin$ the U"SG0B $lobal
mechanism* Hall G Lobina Aforthcomin$ in GeoforumB observe that the most far reachin$ innovative
a33roaches to eCtendin$ connections to the urban and 3eri4urban 3oor are more li%ely to come from local
communities, 3ublic authorities and 3olitical activity* Hoever, such innovations and the associated
%noled$e are li%ely to be transmitted to other 3ublic sector bodies only as a result of $eo$ra3hical
conti$uity, as shon by the case of SUo Paulo;s S0BESP benefitin$ from the eC3erience of #!BES, or
throu$h PUPs* Develo3ment coo3eration a$encies have also diffused this ty3e of %noled$e, for eCam3le in
the case of the DcondominialE seera$e systems hich ere initially develo3ed in BraIil* Benefitin$ from its
uniFuely strate$ic 3osition, the or$anisation hostin$ the U"SG0B $lobal mechanism mi$ht launch a $lobal
Learnin$ 0lliance across 3ublic ater o3erators, communities and other sta%eholders aimed at $atherin$ and
disseminatin$ %noled$e derived from PUPs beyond the involved 3artners* 8oriarty et al* A1''/. 6B 3rovide
the folloin$ definition of Learnin$ 0lliance. D0t its sim3lest a Learnin$ 0lliances is a series of lin%ed
3latforms, eCistin$ at different institutional levels Anational, district, community, etc*B and created ith the
aim of brin$in$ to$ether a ran$e of sta%eholders interested in innovation and the creation of ne %noled$e
in an area of common interest* 7he sta%eholders involved should have com3lementary ca3abilities hich,
hen combined, ill allo the ne %noled$e created in the innovation 3rocess to be brou$ht to scale*
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Some of the %ey ca3abilities reFuired are in. im3lementation, re$ulation, 3olicy and le$islation, research and
learnin$, and documentation and disseminationE*

0etaining $nowledge and capacity within the supported partner and surrounding institutional
setting
7he effectiveness of PUPs de3ends to a considerable eCtent on the lon$ term effects in terms of lon$ term
retainment of the transferred %noled$e and built ca3acity ithin the su33orted 3artner and the surroundin$
institutional settin$* 8oriarty et al. A1''/. &&B define %noled$e as Dthe intrinsic ability of individuals or
$rou3s to carry out actionsE* <ranceys A&((@. 2B su$$ests that 3ast failure of attem3ts to reform 3ublic ater
o3erations and institutions mi$ht be eC3lained in terms of failure to retain %noled$e beyond the lifetime of
a s3ecific 3ro-ect or the involvement of a 3articular leader* In this sense, it is 3ossible to identify the
folloin$ a33roaches to ensurin$ the lon$ term effects of PUPs, de3endin$ on hether %noled$e is
transferred ithin the institutional settin$ and thus the sta%eholders 3artici3atin$ in local decision ma%in$ or
ithin the tar$et or$anisation, and hether %noled$e is 3revalently treated as a 3ublic or 3rivate $ood*
0 first a33roach is to use PUPs to 3romote conteCt relevant and sustainable institutional chan$e, as it mi$ht
have been the case in )aunas and Ri$a, 3ossibly includin$ the involvement of the local community and civil
society* Hall et al. A1''/. 1>B observe that the most effective PUPs amon$ those revieed are those here
the local community as en$a$ed as a 3artner* 7his can be eC3lained in li$ht of enhanced %noled$e
distribution throu$h the hi$hly interconnected accountability netor%s ty3ical of advanced 3artici3atory
mechanisms ALobina G Hall, forthcomin$ in Pro$ress in Develo3ment StudiesB* Intense %noled$e
circulation amon$ the involved sta%eholders ould facilitate the mutual sharin$ and reinforcin$ of 3rinci3les
informin$ decisions and action, thus fosterin$ the entrenchment of locally acce3table and relevant
%noled$e*
0 second a33roach 3ertains to the consolidation of %noled$e and ca3acity at an or$anisational rather than
institutional level and, contrary to the first a33roach, is based on the conce3t of %noled$e as a 3rivate $ood*
8ore 3recisely, once transferred to the mana$ement and staff of the su33orted 3artner, %noled$e ould
become a 3ro3rietary $ood characterised by a33ro3riability and tradability in function of the scarcity of
Fualified human resources available throu$h the local -ob mar%et and the difficulty to re3licate the transfer of
%noled$e from the su33ortin$ to the su33orted 3artner* 0 classical a33roach to retainin$ 3ublic sector
mana$ement and staff folloin$ in4house restructurin$ and ca3acity enhancement is to offer com3etitive
remuneration 3ac%a$es and incentives ABaietti et al., 1''2, 8u$isha and Ber$, 1''2. &(B* Remuneration and
incentives offered to 3ublic mana$ers and em3loyees holdin$ relevant %noled$e should thus reflect the
o33ortunity costs of re3lacin$ them ithin the or$anisation, hich mi$ht be hi$h in develo3in$ countries*
Hoever, other factors are also to be ta%en into account* <or eCam3le, an observer has noted the loer
mobility of mana$ement in 3ublic ater o3erators as com3ared to 3rivatised com3anies, hich mi$ht thus be
eC3ected to contribute to the retainin$ of local %noled$e
&2
*
0n alternative or 3ossibly com3lementary a33roach to retainin$ ca3acity ithin the su33orted 3artner, is
based on the conce3t of %noled$e as a 3ublic $ood and on the assum3tion that %noled$e is transferred for
the benefit of the su33orted or$anisation rather than individual members of mana$ement and staff* In order
to foster the non4a33ro3riability characteristic of %noled$e as a 3ublic $ood ALobina G Hall, forthcomin$ in
Pro$ress in Develo3ment StudiesB, multi4level Personnel 7rainin$ Pro$rammes as develo3ed in Ri$a Asee
above section on )raining and human resources developmentB could be internalised beyond com3letion of a
$iven PUP so that %noled$e distribution can be 3er3etuated ithin the beneficiary or$anisation*
<urthermore, 3artnershi3s can be retained beyond the official com3letion of a $iven PUP throu$h loer scale
follo u3 3ro$rammes* Stoc%holm :atten;s eC3erience su$$ests that the eCtension of collaboration ith
su33orted 3artners mi$ht de3end on the mutual satisfaction of 3artners over results achieved throu$h the
initial PUP ALariola et al., 1'''. 16B* Hoever, the illin$ness toards and feasibility of continued
coo3eration also, and crucially, de3ends on the availability of sustainable levels of fundin$
&@
*
7here seem to be advanta$es for the or$anisation administerin$ U"SG0B;s $lobal mechanism to encoura$e
3artners and their 3olitical and financial s3onsors to address the maintenance of local ca3acity since 3ro-ect
desi$n* In doin$ so, an a33ro3riate combination of conteCt relevant solutions should be sou$ht ta%in$ into
consideration that the consolidation of a33ro3riate %noled$e a33ears to be an incremental 3rocess, not
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necessarily eChausted ith %noled$e transfer throu$h a s3ecific 3ro$ramme* In other ords, it is 3ossible
that none of the identified a33roaches to retainin$ local institutional and or$anisational ca3acity mi$ht
re3resent a Dsilver bulletE in itself and that a combined, sustained effort mi$ht be reFuired until %noled$e is
diffused enou$h ithin the tar$et institution or or$anisation to eCclude that any chan$es in %ey individuals
mi$ht 3re-udice the acFuired body of %noled$e*
,onclusions
5e offer the folloin$ sets of conclusions, res3ectively on the differences beteen the dynamics behind
PPPs and PUPs, the 3otential develo3mental im3act of PUPs and im3lications on their 3romotion and scalin$
u3, and areas for further research*
7he dynamics of PUPs are radically different from those of PPPs, in terms of the underlyin$ ob-ectives and
motivations, the basis of the 3artnershi3 and the confi$uration of accountability netor%s, ris% 3erce3tion
and mana$ement, the ay in hich institutional chan$e is related to ado3tion of the 3artnershi3 and in terms
of transferrin$ %noled$e and build local ca3acity* 7he introduction of institutional and or$anisational
reforms is in most cases a 3recondition to PPPs, hile the ado3tion of PUPs mi$ht be instrumental to 3ublic
sector reform de3endin$ on the instructions im3arted on the 3artners by the 3olitical and financial s3onsors*
Institutional and or$anisational chan$e associated ith PPPs is systematically informed by the 3rivate
o3erator;s commercial ob-ectives, hich re3resents an element of ri$idity and 3otential conflict as 3rofit4
see%in$ mi$ht and often does diver$e from develo3mental ob-ectives* 7he anta$onistic character of PPPs and
the Dshoc% thera3yE a33roach of related 3olicies have led to ides3read social and 3olitical o33osition to
PSP on an international scale* #onversely, as a result of their not4for43rofit basis and retainment of 3ublic
onershi3 and mana$ement of o3erations, PUPs rely on a more $radual and collaborative a33roach to
chan$e hich can facilitate socio43olitical acce3tability and local commitment*
7he develo3mental 3otential of PUPs de3ends on the establishment of clear ob-ectives for the 3artnershi3, in
li$ht of a 3olitical mandate from the res3ective $overnments, ith the collaboration bein$ stimulated by
mutual trust and understandin$ and 3ublic sector ethos* Unfettered by any conflict of interest inherent to the
conduction of 3ublic ater o3erations, the 3rinci3al4a$ent relationshi3 beteen the 3olitical and financial
s3onsors of PUPs and the 3artners can be stren$thened by introducin$ trans3arency and accountability
reFuirements in terms of re3ortin$* Disci3line in the im3lementation 3hase can be further instilled throu$h
3lannin$ and the thorou$h structurin$ of the 3ro-ect* PUPs are intrinsically about ca3acity buildin$, to a
considerable eCtent throu$h trainin$, in li$ht of the advanced ability to transfer %noled$e treated as a 3ublic
$ood rather than as a 3rivate, mar%etable asset* Hoever, their cost4effectiveness and lon$4term
develo3mental im3act can be enhanced by incor3oratin$ investment and in4house restructurin$ 3ro$rammes
into 3artnershi3 desi$n* 7he inclusion of civil society and community re3resentatives amon$ the 3artners
mi$ht favour the success of PUPs as local commitment is facilitated and ca3acity is develo3ed for local
$overnance, ith hi$hly interconnected accountability netor%s actin$ as catalysts for %noled$e transfer
and reinforcin$ the ability to ta%e decisions and actions* Bilateral donors and I<Is should consider su33ortin$
PUPs as a viable conduct for inducin$ sustainable ater sector reform 3rovided their focus is on 3romotin$
conteCt relevant D$ood $overnanceE 3rinci3les rather than chan$es in the onershi3 of 3ublic o3erations
hich have 3roved counter3roductive in the 3ast* Indeed, the effectiveness of PUPs is to be 3romoted by
fosterin$ their 3ublic4ness and enhancin$ their distinctive characteristics rather than relyin$ on mechanisms,
such as the com3etitive selection of 3artners and mimic%in$ of commercial contracts, hich ris% to 3re-udice
the dynamics on hich the success of PUPs rests* 7hose findin$s are of 3articular relevance to the 3ro3osed
$lobal mechanism for 5!Ps bein$ launched by U"SG0B* 5e recommend that, in order to more effectively
3romote PUPs throu$h such mechanism, the stren$thenin$ of international coo3eration and the motivation of
local actors behind 3artnershi3s are addressed, that 3artnershi3 desi$n 3rovides for adeFuate ca3acity and
resources devoted to the 3artnershi3, that the develo3mental 3otential of PUPs is enhanced throu$h
3romotion of South4South and domestic 3artnershi3s, and that retainin$ local ca3acity is ensured throu$h the
ado3tion of combined, conteCt relevant strate$ies based on institutional and or$anisational $overnance*
<inally, this 3a3er hi$hli$hts the need for further research in the folloin$ 3olicy relevant areas. aB the
institutional A3olitical, social and or$anisationalB determinants of success ith 3ublic sector reform, ith
3articular reference to the factors leadin$ to an enablin$ institutional environment for effective in4house
restructurin$, bB the motivations behind the initiatives ori$inatin$ PUPs to facilitate their systematic
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3romotion in the future, cB the causes of 3ast failures ith PUPs and attem3ts at 3ublic sector reform, so that
3artnershi3 desi$n can be im3roved and institutional and or$anisational develo3ment made more effective*
0eferences
0morebieta, G* A1''/B 0r$entina. 5or%ers; #o4o3erative 7a%es over Post4Enron, in BalanyV, B*, Brennan,
B*, Hoedeman, !*, )ishimoto, S* G P* 7erhorst Aeds*B $eclaiming Public <ater - @chievements, Struggles
and /isions from @round the <orld* 0msterdam, 7ransnational Institute A7"IB G #or3orate Euro3e
!bservatory A#E!B, Nanuary 1''/. &>(4&/@ Ahtt3.KK*tni*or$Kboo%sK3ublicater*3dfB*
Baietti, 0*, )in$dom, 5* and 8* van Ginne%en A1''2B #haracteristics of 5ell4Performin$ Public 5ater
Utilities* <ater Suppl1 D Sanitation <orking Eotes, "ote "o* (, 8ay 1''2* 5ashin$ton, D*#*, 7he 5orld
Ban% Ahtt3.KKsiteresources*orldban%*or$KI"75SSKResourcesK5or%in$note(*3dfB*
Braadbaart, !* A1''&B PrivatiIin$ 5ater* 7he Na%arta #oncession and the Limits of #ontract* Pa3er 3resented
at )I7L: Nubilee 5or%sho3 on D5ater as a Life4Givin$ and a Deadly <orceE ALeiden, the "etherlands,
&>
th
M&2
th
Nune 1''&B*
Braadbaart, !*, :illaluna, R*, #onti, P* G PestaWo, 0* A&(((B 7he Phili33ines; 5ater Districts, in Blo%land,
8*, Braadbaart, !* G SchartI, )* AEd*B Private Business, Public Cwners F 0overnment Shareholdings in
<ater *nterprises* Published for the 8inistry of Housin$, S3atial Plannin$ and the Environment of the
"etherlands. &/&4&26*
B-er$$aard, S* A1''2B 7he 7innin$ #once3t of Stoc%holm 5ater #om3any* Stockholm /atten $eports,
Nanuary 1''2 Ahtt3.KK*stoc%holmvatten*seK3dfXar%ivKen$lishKS:0BX7innin$Xconce3t*docB*
Davis, N* A1''>B #orru3tion in Public Service Delivery. EC3erience from South 0sia;s 5ater and Sanitation
Sector, in 5orld Develo3ment :ol* =1, "o* &, 33* /=M@&*
<oster, :* A1''/B 7en ?ears of 5ater Service Reform in Latin 0merica. 7oard an 0n$lo4<rench 8odel*
<ater Suppl1 and Sanitation Sector Board ,iscussion Paper Series, Pa3er "o* =, Nanuary 1''/
htt3.KK*orldban%*or$KhtmlKf3dKaterK3dfK5SSServiceReform*3dfB*
<ranceys, R* A&((@B, YPrivate Sector Partici3ation in the 5ater and Sanitation SectorY, U) De3artment for
International Develo3ment !ccasional Pa3er "o* =, DfID, London*
Gustafsson, N* A1''&B Public 5ater Utilities and Privatisation in Seden* PS4$; $eports, December 1''&
Ahtt3.KK*3siru*or$Ke3suconferenceKNan4Eri%PresentationPa3er*docB*
Hall, D* A1''&B 5ater in Public Hands M 3ublic sector ater mana$ement, a necessary o3tion* PS4$;
$eports, Nuly 1''& Ahtt3.KK*3siru*or$Kre3ortsK1''&4'24543ublic*docB*
Hall, D* A1'''B 5ater 3artnershi3s 4 3ublic43ublic 3artnershi3s and Ltinnin$; in ater and sanitation*
PS4$; $eports, Nuly 1''' Ahtt3.KK*3siru*or$Kre3ortsK1'''4'@454PUPs*docB*
Hall, D*, Lethbrid$e, N* G E* Lobina A1''/B Public43ublic 3artnershi3s in health and essential services*
*Auinet ,iscussion Paper "umber 1=, 8ay 1''/ Ahtt3.KK*eFuinetafrica*or$KbiblKdocsKDIS1=3ub*3dfB*
Hall, D* G Lobina, E* Profitability and the 3oor M cor3orate strate$ies, innovation and sustainability, in
0eoforum, forthcomin$*
Hall, D* G E* Lobina A1''2B Pi3e Dreams M 7he failure of the 3rivate sector to invest in ater services in
develo3in$ countries* PS4$; $eports, 8arch 1''2 Ahtt3.KK*3siru*or$Kre3ortsK1''24'=454
investment*3dfB*
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Hall, D* G Lobina, E* A1''>B Private and 3ublic interests in ater and ener$y, in Eatural $esources 3orum,
16, 33* 12641@@ Ahtt3.KK*blac%ell4syner$y*comKlin%sKdoiK&'*&&&&K-*&>@@46(>@*1''>*''&''*CK3dfB*
Hall, D* G E* Lobina A1''=B International Solidarity in 5ater 4 Public4Public Partnershi3s in "orth4East
Euro3e* PS4$; $eports, 8arch 1''= Ahtt3.KK*3siru*or$Kre3ortsK1''=4'=454"Eeuro3e*docB*
Hall, D*, Lobina, E*, :iero, !* 8* G H* 8altI A1''1B 5ater in Porto 0le$re, BraIil M accountable, effective,
sustainable and democratic, Asecond name, co4authored ith David Hall et al.B* Goint PS4$; and ,8@*
paper, 3resented at United "ations 5orld Summit on Sustainable Develo3ment, Nohannesbur$, South
0frica, 12*64'>*(*1''1 Ahtt3.KK*3siru*or$Kre3ortsK1''14'6454dmae*3dfB*
Hall, D*, Lobina, E* G R* de la 8otte A1''/B Public resistance to 3rivatisation in ater and ener$y, in
,evelopment in Practice, :olume &/, "umbers = G >, Nune 1''/, 33* 1624='&
Ahtt3.KK*3siru*or$Kre3ortsK1''/4'245E4resist*3dfB*
)itchen H A1''=B YPublicM3ublic 3artnershi3sY, Eewsletter H. 8cIntosh 9aba and 0ssociates. #ity*
December 1''=* htt3.KK*%s3*or$*IaKholonl&/*htm
Lariola, 8* G B* Danielsson A&((6B 7innin$ coo3eration beteen )aunas 5ater #om3any, Lithuania and
Stoc%holm 5ater #om3any* Sida *valuation $eports, (6K&(, commissioned by Sida ASedish International
Develo3ment #oo3eration 0$encyB, De3artment for #entral and Eastern Euro3e, Se3tember &((6
Ahtt3.KK*sida*seKsharedK-s3Kdonload*-s3Zf[utv(64&(*3dfGa[11((B*
Lariola, 8*, \hlund, S*, H]%ansson, B* G I* Emsis A1'''B 7innin$ coo3eration beteen Ri$a 5ater
#om3any and Stoc%holm 5ater #om3any* Sida *valuation $eports, ''K@, re3ort commissioned by Sida
ASedish International Develo3ment #oo3eration 0$encyB, De3artment for #entral and Eastern Euro3e,
8ay 1''' Ahtt3.KK*oecd*or$KdataoecdK/6K2'K=/&(>6&@*3dfB*
Lobina, E* 7he reform of ater su33ly o3erations throu$hout the institutional and or$anisational s3ectrum in
Grenoble, <rance, in ;tilities Polic1, forthcomin$*
Lobina, E* A1''/B Problems ith Private 5ater #oncessions. 0 Revie of EC3eriences and 0nalysis of
Dynamics, in 4nternational Gournal of <ater $esources ,evelopment, :ol* 1&, "o* &, 33* //46@*
Lobina, E* A1''&B 5ater 3rivatisation and restructurin$ in #entral and Eastern Euro3e, 1''&* PS4$; $eports,
"ovember 1''& Ahtt3.KK*3siru*or$Kre3ortsK1''&4&&454#EE*docB*
Lobina, E* G Hall, D* 7he com3arative advanta$e of the 3ublic sector in the develo3ment of urban ater
su33ly, in Progress in ,evelopment Studies, forthcomin$*
Lobina, E* G Hall, D* A1'''B Public Sector 0lternatives to 5ater Su33ly and Seera$e PrivatiIation. #ase
Studies, in 4nternational Gournal of <ater $esources ,evelopment, :ol* &2, "o* &, 33* =/4//
Ahtt3.KK*3siru*or$Kre3ortsK(('64454U4Pubalt*docB*
8iranda, 0* A1''2B Develo3in$ Public4Public Partnershi3s APUPsB M 5hy and ho not4for43rofit
3artnershi3s can im3rove ater and sanitation services orldide, in Papers prepared for a seminar on
$eforming public utilities to meet the water and sanitation 8illennium ,evelopment 0oal at the ;.?s
,epartment for 4nternational ,evelopment, > Nuly 1''2, or$anised by the 5orld Develo3ment 8ovement
and 5ater0id, 33* /142'*
8oriarty, P*, <onseca, #*, Smits, S* G 7* Schouten A1''/B Bac%$round 3a3er for the Sym3osium. Learnin$
0lliances for scalin$ u3 innovative a33roaches in the 5ater and Sanitation sector* In Smits, S*, <onseca, #*
and N* Pels Aeds*B A1''/B Proceedings of the s1mposium on -earning @lliances for scaling up innovative
approaches in the water and sanitation sector, Delft, the "etherlands, @4( Nune 1''/
Ahtt3.KK*irc*nlKcontentKdonloadK&2&=6K1'6'>'KfileKBac%$roundH1'3a3erH1'sym3osium
H1'Learnin$H1'0lliances*3dfB*
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8u$isha, S* and S* :* Ber$ A1''2B 7urnin$ around Stru$$lin$ State4!ned Enter3rises in Develo3in$
#ountries 4 7he case of "5S# U$anda, in Papers prepared for a seminar on $eforming public utilities
to meet the water and sanitation 8illennium ,evelopment 0oal at the ;.?s ,epartment for 4nternational
,evelopment, > Nuly 1''2, or$anised by the 5orld Develo3ment 8ovement and 5ater0id, 33* &&4=1*
!bservatorio de los Servicios PSblicos A1''/B D&@. 5ater7ime case study M #ordoba, S3ain, <ater)ime
,eliverable D&@, 1' Nanuary 1''/ Ahtt3.KK*atertime*netKdocsK5P1KD&@X#ordoba*docB*
!lesen, G*, Re%ve, P* G H* Permin A1''&B Sida Su33orted #ounty 7innin$ Pro$ramme in the Baltic
#ountries &((241''&* Sida *valuation $eports, '&K1=, re3ort commissioned by Sida ASedish
International Develo3ment #oo3eration 0$encyB, De3artment for #entral and Eastern Euro3e, Se3tember
1''& Ahtt3.KK*oecd*or$KdataoecdK/2K>/K=/&(@(&2*3dfB*
Reclaimin$ Public 5ater A1''2B Public 5ater for 0ll M the Role of Public4Public Partnershi3s* I$eclaiming
Public <ater? discussion paper, 8arch 1''2* Published by the 7ransnational Institute and #or3orate
Euro3e !bservatory Ahtt3.KK*tni*or$Kater4docsK3ubaterforall*3dfB*
Roth, G* A&(6@B )he Private Provision of Public Services in ,eveloping Countries, "e ?or%. !Cford
University Press APublished for the Economic Develo3ment Institute, 5orld Ban%B*
Stenroos, 8* G 7* S* )at%o A1''/B D=6. 5ater7ime case study M Stoc%holm, Seden, <ater)ime
,eliverable D=6, =& Nanuary 1''/ Ahtt3.KK*atertime*netKdocsK5P1KD=6XStoc%holm*docB*
United "ations A1'''B United "ations 8illennium Declaration* $esolution adopted b1 the 0eneral
@ssembl1, 0KRESK//K1, &6
th
Se3tember 1''' Ahtt3.KK*un*or$KmillenniumKdeclarationKares//1e*3dfB*
5orld Ban% A1''>B Public and 3rivate sector roles in ater su33ly and sanitation services, !3erational
Guidance for 5orld Ban% Grou3 Staff, 03ril A5ashin$ton D#. 7he 5orld Ban%B* 0vailable at
htt3.KK*orldban%*or$Katsan Aaccessed &6 !ctober 1''>B*
5orld Health !r$aniIation, &((1, 7he International Drin%in$ 5ater Su33ly and Sanitation Decade* End of
Decade Revie Aas at December &(('B* Geneva. 5H!*
3otes
12?10?2014 0ge 30 o2 32
&
7his and subseFuent Fuotes are from Baltic Sea Environment Proceedin$s "o. @1 A8arch 12, &((6B HELSI")I
#!88ISSI!" 7he Baltic Sea Noint #om3rehensive Environmental 0ction Pro$ramme. Recommendations for U3datin$
and Stren$thenin$ htt3.KK*helcom*fiK3itfKbse3@1*html 4 Beyond the N#P U3datin$
1 Sida Evaluation 98/19 Twinning Cooperation between Kaunas water Company, Lithuania and Sto!holm "ater Company# $ugust 1998
= Sida Evaluation %%/& Twinning Cooperation between 'iga "ater Company and Sto!holm "ater Company# (ay )%%%
> +A%D 0ress %e$ese* B+A%D re(ews co,,it,e(t to %ig Wter i( )t!iC* 20 <o!e,ber 2000.
.&e +urope( A(3 2or %eco(structio( (" De!e$op,e(t (+A%D) is $e("i(g D39 ,i$$io( to t&e %ig Wter 1o,p(9 to i,pro!e t&e ,u(icip$ wter (" wste-wter
s9ste,. 4t wi$$ be t&e 8rst $oc$ ser!ice uti$it9 i( )t!i to recei!e "irect corporte $o( 2ro, ( i(ter(tio($ 8((ci$ i(stitutio(. 5("er creti!e structure t&t cou$" be
be(c&,r3 2or ot&er ,u(icip$ borrowers* t&e $o( is bc3e" b9 ( u("ert3i(g ,u(icip$ o2 support* but (ot 8((ci$ gur(tee* b9 t&e cit9 o2 %ig. 4( ""itio(* it is
( e7,p$e o2 t&e eEecti!e pproc& t&e +A%D is t3i(g to &e$p i,pro!e t&e e(!iro(,e(t i( its cou(tries o2 opertio(s.
F.&e tr(sctio( s&ows t&t se$2-8((ci(g ,u(icip$ ser!ices i( )t!i c( be 8((ce" wit&out recourse to so!ereig( gur(tees*F si" .&o,s Gier* t&e +A%D6s Director
o2 Gu(icip$ (" +(!iro(,e(t$ 4(2rstructure. F.&e structure is i((o!ti!e* s t&e $o( is bc3e" b9 $i,ite" u("ert3i(gs 2ro, t&e cit9 o2 %ig. 4t $so $$ows %ig Wter to
,3e ""itio($ i(!est,e(ts suite" to its cs& How. .&e +A%D6s u(iIue cpcit9 to pro!i"e 2u$$ r(ge o2 8((ci(g pro"ucts to pub$ic sector borrowers beco,es
i(cresi(g$9 i,port(t s progress is ,"e b9 ,u(icip$ities (" i( $eg$ (" regu$tor9 prctices i( t&e regio(.F
.&e (ew +A%D $o( wi$$ pro!i"e 2u("i(g 2or t&e co(structio( o2 s$u"ge "eposits 2or %ig6s wste- wter tret,e(t p$(t* i(st$$tio( o2 wter ,eters i( t&e cit9 ("
e7te(sio( o2 sewerge (" wter (etwor3s i( two (eig&bour&oo"s. 4( ""itio(* 2u("s wi$$ be use" 2or t&e re-8((ci(g o2 t&e e7isti(g so!ereig(-gur(tee" co,,it,e(ts
o2 t&e co,p(9* w&ic& &!e bee( use" 2or t&e upgr"e o2 %ig6s wste-wter tret,e(t p$(t (" sewerge (etwor3 re&bi$ittio(. .&e cit9 o2 %ig wi$$ pro!i"e t&e +A%D
wit& ( u("ert3i(g o2 ,u(icip$ support* i(c$u"i(g t&e cit96s "&ere(ce to gree" triE sc&e"u$es (" ot&er 3e9 ob$igtio(s o2 t&e ,u(icip$it9 towr"s t&e uti$it9.
5$"is A,be* G(gi(g Director o2 %ig Wter* (ote" t&t t&e wste-wter e$e,e(t o2 t&e pro:ect wi$$ &!e sig(i8c(t e(!iro(,e(t$ be(e8t 2or t&e A$tic -e.
F.&ere2ore t&e pro:ect represe(ts ,:or ,i$esto(e i( our eEorts to co,p$9 2u$$9 wit& +5 e(!iro(,e(t$ st("r"s*F &e si".
/ +A%D 0ress %e$ese* B+A%D bri(gs c$e(er* s2er wter to )it&u(i - D14.@ A(3 $o( supports 0&se .wo o2 t&e =u(s wter (" wste-wter pro:ectC* 20 'u$9 2001.
J D14.@ ,i$$io( $o( 2ro, t&e +urope( A(3 2or %eco(structio( (" De!e$op,e(t to =u(s* t&e seco("-$rgest cit9 i( )it&u(i* wi$$ support wter (" wste-wter
progr,,e w&ic& s&ou$" bri(g c$e( "ri(3i(g wter to t&e $oc$ peop$e.
.&e +A%D $o(* prt o2 D41.3 ,i$$io( pc3ge* wi$$ co,p$e,e(t ( e7isti(g wter (" wste-wter $o( sig(e" i( 1995. .&is 0&se .wo $o( wi$$ 8((ce t&e re,o!$ o2
iro( 2ro, t&e ,i( wter supp$9 (" wi$$ support t&e re&bi$ittio( (" e7te(sio( o2 t&e e7isti(g wter pipe$i(e s9ste, i( t&e cit9. .&e pro:ect wi$$ $so 8((ce seco("r9
wter tret,e(t 2ci$ities t t&e cit9Ks wste-wter p$(t* bri(gi(g e!e( c$e(er wter to t&e cit9 (" its peop$e.
.&is is t&e 8rst $o( to $oc$ ser!ice uti$it9 i( )it&u(i wit&out so!ereig( or ,u(icip$ gur(tee. .&o,s Gier* Director o2 t&e Gu(icip$ (" +(!iro(,e(t$
4(2rstructure .e, t t&e +A%D si" t&e $o( wi$$ "e,o(strte to ot&er cities (" b(3s t&t it is possib$e to 8((ce we$$-ru( ,u(icip$ ser!ices wit&out suc& gur(tees.
-tre(gt&e(i(g t&e ,u(icip$ sector i( t&ese cities is (ot o($9 i,port(t 2or i,pro!e" $i!i(g co("itio(s* it wi$$ $so bri(g t&e cou(tr9 step c$oser to ccessio( to t&e
+urope( 5(io(* &e ""e".
.&e pro:ect is bei(g co-8((ce" b9 t&e =u(s Wter 1o,p(9* (" t&e cit9 &s sub,itte" 2u("i(g pp$ictio( to t&e +5Ks 4(stru,e(t 2or -tructur$ 0o$icies 2or 0re-
ccessio( (4-0J) progr,,e. Js we$$ s &e$pi(g to c$e( ri!ers rou(" t&e cit9* t&e pro:ect supports t&e cou(tr9Ks e(!iro(,e(t$ ge(".
.&e +A%D is $so &e$pi(g to rise "o(or 2u("s to ssist wit& i(stitutio($ "e!e$op,e(t 2or t&e =u(s Wter 1o,p(9 (" t&e cit9 o2 =u(s. .&e +A%D &s $re"9
co,,itte" bout
D1 bi$$io( i( 40 ,u(icip$ (" e(!iro(,e(t$ i(2rstructure pro:ects cross t&e regio(.
2 Jge(ce ;r(ce 0resse* B+5 gr(ts )it&u(i 15.96 ,i$$io( euros 2or wter puri8ctio( pro:ectC* Lctober 25* 2001.
.&e +urope( 1o,,issio( &s co(8r,e" 15.96-,i$$io(-euro (14.2-,i$$io(-"o$$r) gr(t to 8((ce wter puri8ctio( pro:ect i( )it&u(iKs seco("-$rgest cit9 =u(s*
t&e cit9Ks wter uti$it9 si" o( .&urs"9.
Aio$ogic$ wter puri8ctio( sttio(s to be i(st$$e" b9 2005 wi$$ i(crese t&e ,esure o2 puri8ctio( o2 t&e <e,u(s ri!er* t&e biggest ri!er i( t&e cou(tr9* 2ro, @0
perce(t to t&e +5-reIuire" $e!e$ o2 95 perce(t* =u(o /("e(9s wter uti$it9 si" i( stte,e(t. .&e ,o(e9 &s bee( $$octe" 2ro, t&e +5Ks 4-0J progr, 2or supporti(g
tr(sport (" i(2rstructure ,o"er(istio( pro:ects i( +5 c("i"te cou(tries.
.&e )it&u(i( go!er(,e(t wi$$ co(tribute 6.38 ,i$$io( euros to t&e pro:ect w&ic& is e7pecte" to cost 25 ,i$$io( "o$$rs (28.2 ,i$$io( euros)* (" =u(o /("e(9s &s $so
obti(e" 9.5@-,i$$io(-euro $o( 2ro, t&e +urope( A(3 2or %eco(structio( (" De!e$op,e(t (+A%D).
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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8arch 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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8arch 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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8arch 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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8arch 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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8arch 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
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8arch 1''2* Hall
et al. A1''/. 12B observe that DIt is advisable for 3artners enterin$ a PuP to have a clear statement of their on ob-ectives
and sho an understandin$ of other 3artners; ob-ectives* PuPs are most effective hen all 3artners have an understandin$ of
each otherYs $oals and are illin$ to or% to$ether to reach their shared $oalsE* In that sense, the identification of the
res3ective 3artners; ob-ectives seem to contribute to stren$thenin$ mutual trust*
&/
Source. D#ambia el 3roveedor de a$ua en siete distritos del conurbano bonaerense, #ambia el 3roveedor de a$ua en siete
distritos del conurbanoE, -a EaciJn A0r$entinaB, 1>th Nuly 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
st
8arch 1''2*
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Source. Intervie ith Steen B-er$aard, Director of International Pro-ects, Stoc%holm :atten 0B, 1&
st
8arch 1''2*