This report discusses the rise in donor support for water privatisation, with a particular emphasis on the Public Private Infrastructure Advisory Facility (PPIAF). The report argues that donor support for privatisation is based on ideology and promoting corporate interests rather than being open to all the options. The report advocates for an international facility to support public-public partnerships (PUPs) in the water and sanitation sector.
This report is divided into the following sections:
- a background on the creation of PPIAF in 1999, and the political forces at play
- an explanation of what PPIAF is, who funds it, how it works, what activities it carries out, and its links with other donors
- a critique of the PPIAF and an analysis of its ideology, its activities on the ground in developing countries, and the wider role it plays within the donor-supported global development framework
- case studies of PPIAF’s work in Zambia and Kenya
- an outline of the PUPs approach, its potential, its advantages and how donors could contribute to scaling-up such arrangements.
The primary conclusions of the report include:
- PPIAF is designed to promote the outdated pursuit of water privatisation which has been shown to fail the poorest communities
- private investments, new connections and an improved water service for the very poorest communities have not materialised
- PPIAF has been directly involved in promoting, facilitating and/or developing privatisation in the water and sanitation sectors of 37 countries
- PPIAF plays a significant role in undermining the choice of poor country governments to decide their own development path and contributing to the pressure to privatise water and sanitation services
- PPIAF ignores the good practice in public water provision already underway in developing countries
- PPIAF’s operations are not transparent, despite it being responsible for spending public money and developing countries have little say in how PPIAF is run
- PPIAF’s focus on poverty reduction is ineffective, as its own review of operations has indicated.
The report calls on donor governments to:
- set up a facility to exclusively support PUPs in the water and sanitation sector
- increase individual donor support for PUPs within bilateral funding programmes
- develop research programmes to maximise the effectiveness of PUPs
- recognise the ongoing role of conditionality within the international aid system in pushing water privatisation policies
- recognise the primary role of governments and their public water and sanitation providers in meeting the Millennium Development Goals (MDGs).