15.1  Public–private partnerships

In the major towns and cities of Ethiopia water is supplied by water utilities (also known as Town Water Supply Enterprises) but public–private partnerships (PPPs) can be helpful. A public–private partnership is any collaboration between public bodies, such as a municipality or even the government, and private companies. The belief is that private companies are more efficient and better run than bureaucratic public bodies, and the management skills and financial acumen that they bring will create better value for money for customers. The incentive for the private companies is the profit that can be generated. PPPs have become popular, to the extent that the number of people served by private water operators in developing and former Communist countries increased from 94 million in 2000 to more than 160 million in 2007 (Marin, 2009). Philippe Marin’s report, Public–Private Partnerships for Urban Water Utilities, which was a review of PPPs in urban water utilities in developing countries, was undertaken because of the interest generated in these arrangements. At the time of the report (2009), about 7% of the urban population in the developing world was served by private water operators. There are different ways in which PPPs can be set up (described later in this study session) but the sections that follow now briefly consider the factors that Marin covered in his report.