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Module 13: Financing (cost recovery)
13.3. Who is involved?
Public, private and non-governmental sectors are involved
in the cost recovery stage. Each sector typically enters
a partnership with a different set of strengths and weaknesses
[overview in Tool 13-2]
(Source: Business
Partners for Development: partnership frameworks for financially
sustainable water and sanitation projects by Linda Stalker
Prokopy and Kristin Komives. November 2001. <http://www.bpd-waterandsanitation.org>]:
1. The public sector
is traditionally responsible for providing and
administering services for the poor. It often lacks the necessary capital
for the large investments water systems require. When government partners
with the private sector, financial and technical burdens are delegated.
With the involvement of the private sector, the government role often
shifts to a regulatory one, to set or approve tariffs, monitor operations
and ensure that political goals, such as a reliable service for the poor,
are achieved.
2. The private sector
is proficient at maintaining both good
consumer relations and functioning systems. When the public
and private sector work together more realistic, responsive and flexible
tariff structures can be established.
3. Civil society organisations
are considered to have an
advantage over both the government and the private sector
in working with the community and incorporating the community’s
needs and preferences into a project. Such organisations are represented
by:
– Non-government organisations (NGOs), which promote fairness in
allocating costs, service sustainability and determining what
is affordable. Frequently, an NGO is the most appropriate actor to work with
communities to develop a culture of willingness to pay for a service to ensure
sustainability.
– Community-based organisations (CBOs), which provide an increasing
focus on payment from the poor for services, as well as the
decision making about how the poor can and do pay for their services; CBOs also
influence cost-recovery approaches and promote a livelihoods agenda.
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