This study reviews the outcomes of the Bill and Melinda Gates Foundation (BMFG)/UK Department of International Development (DfID) initiated partnership to promote private sector engagement in non-networked sanitation and improve capabilities of sanitation service authorities to govern these partnerships.
In 2013, the Bill and Melinda Gates Foundation (BMGF) and the UK Department of International Development (DfID) initiated a partnership based on a shared vision of universal use of sustainable sanitation services. Six cities in South Asia with demonstrated evidence of long-term commitment to improving sanitation service outcomes were selected to benefit from this opportunity. With technical assistance from grantees, these city governments were expected to engage the private sector using service-level agreements (SLA) that are governed on the basis of clear performance measures linked to service provision. This project is a rapid review of the outcomes of this partnership portfolio, with particular focus on to what extent each city project has contributed to the development and implementation of SLAs and what challenges and good practices emerge from cities during the SLA process which can be applied to future projects and in cities’ future investments in sanitation services.
The review framework was broadly guided by the Organization for Economic Cooperation and Development’s (OECD’s) Development Assistance Committee (DAC), which lays down specific criteria for evaluating development assistance with the broader aim of improving the development effectiveness of aid. The review employed qualitative approaches, drawing on both primary and secondary data collection methods and sources for generating comprehensive evidence around the key review questions and synthesis of findings.
City experiences suggest that private sector can be attracted to deliver onsite sanitation services at scale under PPPs. But the conditions under which private sector can yield better value for money in comparison to public provision or can complement public funding remains to be proven. Considering the innovative nature of onsite sanitation service models, enabling factors for private sector engagement will include – a clear rationale for PPP; early engagement with potential service providers; improved public sector capacities to structure and execute balanced PPPs and undertake the necessary due diligence for this purpose; concessions relative to the economic viability of projects and guaranteed revenue streams; flexible procurement processes to allow for emerging private sector capacities; optimum risk allocation and flexible contract design that allows for fair and balanced renegotiations if necessary; improved regulations that are critical for project viability.
The study highlights the potential for and challenges in engaging the private sector in non-networked sanitation service provision. It also highlights the desired institutional pre-conditions for effectively engaging private sector in sanitation services. Insights from the review can be used to capture good practices as well as assess barriers that arise during the SLA process, which can be further applied to future projects.