Changing Ownership Structures in the Water Supply and Sanitation Sector

Abstract

The development over time of the water supply and sanitation sectors in four countries is analyzed to reveal the changing role of the private sector. In some cases, local, small-scale private water supply and sanitation systems have been able to develop progressively into large-scale official systems, which may later be privatized. In other cases, foreign capital has been more significant in the development of modern water supply and sanitation systems, particularly where privatization has occurred much earlier in the national development process. In much of the developing world, domestic water supply and sanitation is dominated not by the official water supply and sanitation companies but by independent operators who function without subsidies but with enormous variability in terms of quality of service and prices offered. However, they are constrained generally by the absence of appropriate institutional and legal frameworks, including the lack of independent regulatory authorities. There is a need, where appropriate, to continue to encourage large-scale private sector involvement in the official water supply sectors of the developing world. At the same time though, it is only by promoting policies that also further the development (where appropriate) of the independent water supply and sanitation providers that access to water supply and sanitation services can be maximized since better use of local resources in many developing countries, both local human resources and capital, provide a key means for improving access to water supply and sanitation.