Working with private sector to meet challenges of non-sewered sanitation

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  • paresh
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  • Budding researcher, interested in governance, public policy, finance, its politics and social justice. Urban planner by training, Ex. C-WAS, India. I am the patient one
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Working with private sector to meet challenges of non-sewered sanitation

Dear All,
This post summarises contents of first of the 4 thematic papers from the FSM 5 conference, authored by Kathy Eales Isabel Blackett and titled Working with private sector to meet challenges of non-sewered sanitation. The thematic papers are available on the SuSanA Library here .

I have tried to use the same words as used by the authors; summary below

Regards
paresh
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Working with private sector to meet challenges of non-sewered sanitation

Partnership was a big theme at FSM5. Nearly half the presentations gave examples of public authorities working in partnership with private sector, NGO and other role-players to strengthen non-sewered sanitation city-wide. This paper summarises the key messages from these presentations. 

Where is the private sector active 
- Diverse entities; vary in size, form and revenue streams
- Size and Form - sole (individual) traders, small enterprises, franchisees, large firms, social enterprises that operate on commercial       principles, some receive grants to test innovations and business models
- Revenue streams- direct customer payments, paid by local authority through taxes, mix of previous two, sale of products
-  Engagement - in one or more components or the entire service chain
-        Types of collaborations - formal contractual PPPs, delegated management arrangements, partnerships based on
collaboration and common interests

What public sector gains?
-         Extends their reach
-         Access to scarce skills and expertise(assuming the private  sector possesses the required expertise) 
-         Achieve efficiency improvements through private sector’s potential ability to move fast and efficiently;
potential to translate into more affordable services
-         Innovative problem solving - Pvt sector is more flexible, willing to experiment, better placed to respond to opportunities
and less constrained by cumbersome procedures
-         Raise finance for capital projects - The key is balancing the interests of the local authority and the concessionaires,
with risk-sharing on both sides, while incentivising good performance

What the public sector needs to do to engage private sector?
-         Provide a conducive enabling environment by 
 o  recognising private sector as a partner rather than a rival or irritant,  a clear and common understanding of goals among
      all stakeholders and their role
 o  clear and supportive institutional framework -decisions through dialogue

-         Develop a regulatory system to provide standards and protection against unfair competition (more in thematic paper 2)
 o   balancing  interests of all parties
 o   Get rid of fear of harassment, confiscation of equipment, solicitation of bribes
 o   enforce regulations including imposing sanctions to motivate compliance and protection from unfair competition

-         Through dialogue, develop partnering arrangements that balance the interests of all parties 
 o   Performance based contracts
 o   Social franchising

-         Support the emergence of viable FSM businesses
 o   Provide business training and support in transition from informal to formal 
 o   Provide access to credit
 o   Lower the cost of service provision
 o   Lower the price of services
 o   Provide payment safeguards by ring-fencing sanitation budget or through escrow account mechanism
 o   Build customer demand through ongoing marketing and communications campaigns (more in thematic paper 4)
 o   Enforce regulations to protect compliant service providers

Engaging the private sector takes time

-         due to lack of prior experience of working with each other
-         It takes a while to overcome mutual suspicion and building trust

Remaining challenges and more lessons learned

-         Strong champions of partnership are needed in the public sector to facilitate dialogue and to overcome limitations of tendering process
-         There is currently limited support capacity -most current engagements forged through efforts of NGOs, academic institutions
or development partners. Scaling- up such arrangements will be challenging
-         Monitoring private service providers is resource intensive
-         Commercial viability is essential for any successful private venture and may require supplementary funding

Conclusions

-         Partnerships can offer mutually beneficial relationships, but engaging the private sector is not a panacea
-         The public sector needs to drive policy, co-ordinate multiple stake-holders and regulate and ensure enforcement
-         “Where government sees a challenge, theprivate sector sees opportunities” - Ibra Sow (President, Pan African Association of Actors for non-sewered Sanitation)in their plenary address. 
Paresh Chhajed-Picha
Researcher at Indian Institute of Technology - Bombay, India
This email address is being protected from spambots. You need JavaScript enabled to view it. Twitter: @Sparsh85

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(Funded via internship contract with Skat Foundation funded by WSSCC)
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  • CharlotteM
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  • Marketer by profession. Expertise in sanitation social marketing targeting behavior change and positive uptake of water and sanitation projects for sustainability and maximum impact.
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Re: Working with private sector to meet challenges of non-sewered sanitation

Dear Paresh,

Thank you for your post. Indeed, the private sector comes into play to support and push the agenda of non-sewered sanitation. Some of the inventions that have been recently floated have more so been provided by the private sector which more often takes its time to review the necessary market and the beneficiaries and come up with a product or solution that is viable and sustainable (this you have mentioned can be achieved by the flexibility and willingness to experiment).

However, it is keen to reiterate that, in as much as there are the public private partnerships, the following that was quoted in the document is true:
  “…It is not a quick fix to partner with the private sector and it does not let the designated authority off the hook; authorities retain a central role as driver, co-ordinator, enabler, and enforcer, and it can take several years of dialogue and interaction to build the trust, respect and partnering mechanisms needed to make the relationship work…”

Once the private sector understands this, all activities that they implement should always involve the public sector. This will promote ownership and sustainability.
Thanks for highlighting this document. 

Regards
Charlotte




Charlotte Mong'ina Maua
Water and Sanitation Consultant

M +254 (0) 723 571 463
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