Performance-based Contracting in Sanitation Delivery

Research Team: Sujatha Srinivasan
LEAD Centre: Centre for Development Finance (CDF)
Focus Area: Infrastructure and Governance
Project Geography: India
Status: Ongoing


This research paper is motivated with the question of what are certain preconditions for improving the effectiveness of performance-based contracting approaches in sanitation service delivery. Based on empirical evidence on performance contracts implemented across the world, the paper provides a framework incorporating the key factors governing the design and effectiveness of performance-based contracts and how they can be applied to the sanitation context. To this end, the paper will review select performance agreements executed between public entities and private companies towards service delivery in sanitation and related sectors such as water supply and solid waste management and discuss their effectiveness in achieving desired goals with respect to access, quality, reliability, equity and sustainability. With these case examples, the paper complements existing literature on the imperatives for strengthening performance-based contracts.