PPPs supporting LatAm governments
Private operators are working successfully in partnership with governments of Latin American countries to expand access to water and sanitation services.
AquaFed President, Frederic Van Heems, gave specific examples of PPPs in LatAm countries, during the Sanitation and Water for All (SWA) 'Cause for Hope' Webinar. This was a follow-up from the Lat Am Finance Ministers Meeting webinar earlier this year.
PPPs in Africa, Asia and LatAm have brought coverage from 70% to near 100% despite all urban planning difficulties. Progress is even bigger on the sanitation side, in Chile, Colombia and Ecuador for example In particular, Fred explained how private sector participation is successful when there is strong governance – with regulation that provides operators with stability and clarity. For example, an explicit law in Colombia, make clear the governance and how operators will be managed and regulated. In Chile, laws and regulation enable innovation, particularly in addressing climate change.
Some countries have PPP units which have officials that understand the types of business models and PPP arrangements that can be appropriate. They can also manage the various processes with the operator, from tendering to monitoring of performance.
Fred noted that preparatory studies and initial technical assistance are crucial. Development banks are one type of organization that can assist governments with these activities, as is the OECD. AquaFed is also available to provide assistance and guidance.
Three PPP case studies were also presented by Fred on the webinar:
Cartagena de Indias, Colombia: one of many PPPs in Latin America that work and ensure more people’s human rights to water and sanitation are achieved. At the beginning of the contract in 1995, some households received water supply less than 8 hours a day and on average water was running at the tap for only 14 hours a day. The rehabilitation and replacement of the existing network means supply is continuous in almost all the city (99.3% of the time on average).
Ecuador, Aguas del Sinai: where a strong partnership and commitment between operator and municipality can do even more to reduce inequality. Outside the service area, in “Monte Sinai”, more than 160,000 inhabitants live in conditions of poverty or extreme poverty, without access to essential goods and services and water supply informally by tanker trucks. The private operator, and the municipal water and sanitation company of Guayaquil, collaborate to supervise the existing trucks, reducing the price charged to residents by at least 25% and establishing a single rate.
La Farfana ‘biofactory’, Santiago, Chile: A partnership that goes well beyond basic services and Chile is an example to the world of technology and innovation to address climate change impacts. The wastewater treatment plant is an energy self-sufficient infrastructure, which not only produces biogas and fertilizer for crops, but in the future can be a source of regenerated water production that will guarantee the supply to the population seriously threatened by the increasing droughts due to climate change.
This development is happening after the initial plan was achieved when the PPP first started – to go from just 3% of wastewater treated, to 100%. This was achieved in just 10 years.
