A Check-list for Public Action has been developed by the OECD and its partners to assist governments considering engaging with the private sector in the water sector. It is organised around the OECD Principles for Private Sector Participation in Infrastructures–some 24 principles grouped under five points that highlight sector-specific features, government considerations and available tools and practices:
1. Decide on the nature and modalities of private sector participation;
2. Assure a sound institutional and regulatory environment for infrastructure investment;
3. Ensure public and institutional support for the project and choice of financing;
4. Make sure the co-operation between the public and private sectors works in the public interest;
5. Encourage responsible business conduct.
The check-list also makes four general recommendations to governments and provides policy directions with notes on country practices to assist in their implementation.
The first general recommendation is to clarify the ultimate objectives for service provision and the contributions that the private sector can make. This involves clearly defining the roles and responsibilities of the diverse private partners and how they should be involved. This helps to ensure partnerships meet specific local needs, and that the public interest is safeguarded.
Second, governments should develop an enabling framework based on high quality regulation and political commitment, including fighting corruption. The allocation of roles across responsible authorities and co-ordination mechanisms should be clearly defined to support effective implementation of regulations and contractual provisions. This is valid regardless of whether the water operators are from the private or public sectors.
Third, root the partnerships in strong accountability mechanisms, with clear and consistent contractual arrangements based on outputs; monitoring should be based on information-sharing and on consultation with stakeholders.
Fourth, the public sector should urge their private partners to do all they can to make the partnership last. They should show commitment and act in good faith, promote integrity, communicate with consumers and manage the social and environmental aspects of their operations to good effect. They should be mindful that their contributions can make a difference to the lives of millions of people.
Where are we in the current economic crisis?