Policy Note: The Role of Supplementary Service Providers in Urban Water Supply

摘要

Unless new policy approaches are adopted, by 2030 about 1 billion people in the Global South will be relying on informal, highly fragmented, and expensive off-utility water services. The off-utility water sector is stuck in a low-level equilibrium trap, and SSPs confront a hostile policy, institutional, regulatory, and financial environment. Policymakers need to recognize the importance of SSPs in meeting the SDGs and commit to improving the performance the off-utility sector. We argue in this paper that three main actions are needed:1. Government needs to accept responsibility for providing service to non-utility customers and acknowledge that current arrangements are inadequate. Governments, utilities, and donors need to cooperate and collaborate to proactively improve the quality and affordability of such services.2. Policymakers need to create a conducive operating environment for off-utility provision and amend the framework at the national and/or city level to reduce SSP business risks, improve affordability for better services, and create incentives to deliver better services to the non-utility households.3. Government, donors, and water utilities need to develop and implement demonstration models that will simplify transactions and reduce oversight costs; which will deliver professional services with better quality and affordability; and which will be replicable at scale.Once the political will for such change has been mobilized, there is potential to build alternative, entrepreneurial solutions to deliver affordable, high-quality water to all households. New models exploiting economies of scale and scope in the off-utility sector, when facilitated by supportive and evolving regulatory and policy frameworks and financing, can complement the provision of water by utilities to ensure that all households have access to a clean and affordable water supply.In this paper, we suggest a model based on the granting of concessions to provide off-utility services for all or parts of urban areas. The concession approach would provide legitimacy and scale to allow for improvements in efficiency, the mobilization of investments for better services, and to facilitate professionalizing of the provider. In addition, such a model will significantly reduce transaction and oversight costs making it more attractive to both governments and donors. Finally, a formalized concessioning process will provide governments with a vehicle through which to consider providing subsidies to the non-utility sector - something which will create many new opportunities for investment to deliver better services and/or improve affordability for users who are predominantly the poor and vulnerable.