The Role of the Private Sector in Sanitation

The conference was opened by Prof. Meine Pieter van Dijk – professor of Water Services Management at UNESCO-IHE - who reviewed the advantages and disadvantages of both private- and public-run activities. Concepts such as legal security, general interest, profitability, fondness to change, efficiency, accountability, political responsibility, reliability and quality service were discussed.

In an analysis of the current state of the sanitation sector, two statements from the participants contributed to the considerations for further discussions. First, the fact that, while water supply is considered a human right, nobody talks about sanitation in such a way, although proper sanitation is fundamental to attain health standards as the basis for sustainable development. Secondly, due to a looser correlation between the public sector – as human rights warrantor – and sanitation, more space is given to private companies to run sanitation activities.

Not only are service-providing companies more welcome in the sanitation sector than in water supply, but they see sanitation becoming a very profitable sector due to the huge margins/opportunities for growth. The director of international relations for Suez Environment, Jacques Labre, who spoke at the conference, said that the private sector sees wastewater treatment and wastewater management as “a promising business”.

Although the debate on the ability of private companies to properly serve the world's poorest is still a hot issue, private participation in water and sanitation is increasing via public-private partnerships. There are stories of successful public-private collaboration in South Africa and India, and well-known stories of failure, such as in Argentina, where Suez withdrew in 2006 because of tariff conflicts with the Government of Buenos Aires, a city of 11 million people.

Successful stories are based, according to the cases reviewed during the conference, on good planning, clarity and comprehensiveness of the contract, a good regulatory framework, technical proficiency, cost recovery, accountability, clear performance criteria, trust and flexibility of the parties involved. There have been reports of extraordinary mismanagement and failings in this sector in developing countries, but with good investments, increasing awareness, appropriate incentives and clear targets, an essential foundation for sustainable development can be set.