Public-private partnerships: evaluation of ADB’s performance in infrastructure

The Asian Development Bank’s support for public-private partnerships (PPPs) in infrastructure development in general was rated “successful,” a special evaluation study concludes [1].  There are, however, areas for improvements for both, public sector and ADB’s Private Sector Operations Department (PSOD) operations, as implied by lower performance ratings in some specific areas and sectors.

For the water sector, the report recommends the PPP modalities that improve systems performance should be promoted. This means that the ADB should promote performance-based management contracts and affermages/leases, at least as strongly as the build-operate-transfer (BOT) type interventions. Decisions should be guided by the overall objective of minimizing investment and operating costs of the entire system and need to be sensitive to local political conditions and aspirations. Attracting private capital rather than achieving gains in technical, managerial, and allocative efficiencies is often wrongly perceived as the primary purpose of PPPs.

Since the 1990s, there is an increased use of PPP schemes that involve fiscal support to facilitate private sector participation (PSP) in water projects, which have had problems attracting private investment due to difficulties associated with predicting demand and charging cost-reflective tariffs.

ADB has implemented PPP in the water sector in many countries, including Bangladesh, India, Nepal, Pakistan, and Sri Lanka in South Asia, and in Cambodia, China, Indonesia, and the Philippines in East Asia. ADB’s support has included technical assistance and policy dialogue for sector reforms and commercialisation of water utilities.

The report notes that two-thirds of approved PSOD water transactions had to be cancelled due to disputes between project promoters and authorities, limitations of the BOT modality, and unresolved tariff issues. This highlights PSOD’s particular difficulties in identifying viable transactions in this sector despite numerous attempts to become more engaged.

Opposition to change and fear of consequences (job losses, higher tariffs, loss of political control) and resistance by non-governmental organisations (NGOs) opposed to private sector entry have thwarted many attempts to introduce PPP, particularly in the water sector. The development of PPPs was also derailed in several countries, e.g., Indonesia, Nepal, and Sri Lanka, due to changes in (local) government commitment. Sustained political will and support of key stakeholders is therefore seen as the ultimate determinant of PPP success.

[1] Feig, H. and Finlayson, B. (2009). ADB assistance for public-private partnerships in infrastructure development : potential for more success : evaluation study. Manila, The Philippines, Asian Development Bank. ix, 65 p. : fig., tab. 15 ref.
Download full report [PDF file]

Municipal service delivery: new accounting software improves transparency in Kerala, India

The financial transparency of urban local bodies (ULBs) in the south Indian state of Kerala has increased thanks to an Asian Development Bank (ADB) project. The municipal corporations of Cochin and Trivandrum now publish their financial accounts online.

The ADB technical assistance (TA) project “Capacity Building for Municipal Service Delivery in Kerala” (2006-2008) assisted municipal corporations and selected municipalities to (i) improve their capacity to organize, record, update, and manage financial and other information on a routine basis; (ii) increase the efficiency and integrity of the data being collected; and (iii) promote good governance in relation to financial management. The TA project aimed to help ensure the sustainability of the investments under the Kerala Sustainable Urban Development Project (Loan 2226-IND), a $221.2 million loan approved by ADB on 20 December 2005 and which became effective on 19 March 2007.

The TA project successfully installed and implemented municipal accounting software in five municipal corporations and two municipalities. As a result of continuous recording, updating and managing financial information on a routine basis using accrual-based double-entry accounting, they managed to publish their financial statement regularly.

Some of the major lessons are:

• Accounting system alone does not do anything – it is just software. It became meaningful when the necessary financial information is entered in accordance with the new accounting policy, which had to developed. The necessary financial information includes the past income and expenditure, assets and liability, and cash flow statement for the last five years. In ULBs, there are backlogs in accounts for four to five years. Recovery of the backlogs and data entry tasks absorbed enormous amount of ULB staff’s and consultants’ time.

• Feeding income and expenditure information can be computerized by connecting the accounting system with the Payroll module and the demand collection balance (DCB) module. Staff salary is the largest expenditure item in the ULB and computerization by the payroll module will bring efficiency in accounts work. The DCB module compares (a) demand: how much to be collected, (b) collection: how much actually collected, (c) balance: how much is still due. This will help ULB in capturing the amount of the uncollected in tax and charges for urban service delivery, which is a good start for ‘management accounting.’ However, the amount of data entry is the same as the number of households in one ULB—again, this requires enormous amount of time and labour.

Read the full Technical Assistance Completion Report

Lessons from implementing water supply, sanitation and hygiene promotion activities in the coastal belt of Bangladesh

A new document [1] describes the key lessons learned from the large Coastal Belt Project, which was supported by Danida and the Government of Bangladesh during 1997-2009. The document highlights the processes, achievements and challenges of providing more than 12 years of extensive assistance to rural and small towns water supply, sanitation and hygiene promotion in the coastal regions of Bangladesh. During the years the project gradually changed its implementation modalities towards a high degree of alignment with national institutions and systems, including use of national planning and budgeting processes and public procurement rules.

The Project was largely successful in achieving its physical targets of more than 30,000 arsenic-free deep hand tube wells (DHTWs) and promoting construction of over 300,000 household latrines, construction of piped water supply in core areas of nine pourashavas, albeit with delays and additional costs.

The Project was implemented as a bilaterally-executed project. This gives rise to inherent differences resulting from parallel management structures, multiple sets of roles and rules and differing personal and institutional loyalties.

Following the devastating cyclone Sidr (“The Eye”) in November 2007, the Project constructed 1,050 additional tube wells, 1,000 household latrines and other infrastructure in storm-ravaged areas.

Photo from the Danida report

The sustainability of DHTWs and household latrines in rural areas is seen as high. Additional management and technical support is required to ensure the long-term sustainability of piped water supplies in pourashavas and mini-piped systems in rural areas, as well as public toilets and school latrines.

The Project’s efforts to assist pourashavas to improve solid waste management and drainage was less than successful. The situation in pourashavas in these areas remains unsatisfactory. There are serious difficulties locating sanitary dumping sites, which pose a potentially serious environmental hazard.

Following the Paris Declaration on Aid Effectiveness in 2005, the Project’s planning process and management has been more closely aligned with GOB and DPHE’s systems and procedures.

During its long life, the Project produced a wealth of documentation; manuals, guidelines, training and IEC/BCC materials. This material constitutes an important part of the Project’s contribution to the sector. Some of the most important and useful of these materials are listed in the publication.

In spite of its long life, the Project leaves behind unmet demand and a number of unresolved issues which will to a large extent determine the long-term impact of the Project’s many achievements.

A number of factors are seen as contributing to the Project’s successful achievements.

1. Conducive policies, strategies, regulations, rules and procedures adopted and practiced in implementing organizations
2. Experienced and dedicated professional/technical staff
3. Responsibility, commitment and accountability for results at all levels
4. Firm commitment to guidelines and procedures for poverty targeting, social mobilization and siting of facilities
5. Rate and quality of DHTW construction
6. Social mobilization/customer briefings supported by high quality IEC materials
7. Adequate cost-sharing to promote ownership
8. Cooperation from DPHE and local government (pourashava mayors and UP chairmen)
9. Appropriate and adaptable technologies to suit various hydrogeological conditions
10. Thorough documentation, accurate reporting, MIS and database updated and used
11. Baseline data, effect monitoring and impact assessments
12. Post-construction technical and managerial support for urban and school WSS facilities

The Project has helped to produce a number of competent sector professionals who continue to make important contributions to the sector. Outside the coastal belt, this may prove to be one of the Project’s most important and lasting legacies.

[1] Pendley, C.J. and Minhaj Uddin Ahmad, A.J. (2009). Learning from experience : lessons from implementing water supply, sanitation and hygiene promotion activities in the coastal belt of Bangladesh. Dhaka, Bangladesh, Royal Danish Embassy. 27 p.
Download full document [PDF file]

Web sites:

• Danish Embassy Bangladesh – Water & Sanitation
• Bangladesh – Department of Public Health Engineering
• GoB-Danida WSS Policy Support Unit

Contact persons:

• Dr. Guna N. Paudyal, Danida Senior Adviser, Bangladesh. (e-mail: guna [at] hysawa.org)
• Dr. Niaz Chowdhury, Programme Officer, Embassy of Denmark (e-mail: niacho [at] um.dk)
• Mr. Jan Møller Hansen, Deputy Head of Mission, Embassy of Denmark, Dhaka. (e-mail: janmha [at] um.dk)

Hygiene promotion: lessons from Save the Children’s Bangladesh programme

Save the Children’s School Health and Nutrition (SHN) program (2002-2008) in Nasirnagar, Bangladesh, provided water, sanitation, and hygiene facilities in 127 schools, reaching over 33,500 children. In 2006, the SHN programme integrated PHASE (Personal Health and Sanitation Education program) into its approach. PHASE, a hand-washing program targeting school-aged children, was developed and funded by research-based pharmaceutical company GlaxoSmithKline. The programmes also helped to improve access to and use of household water and sanitation facilities.

School wall murals showing good health and hygiene practices. Photo: Save the Children

Despite its achievements, the SHN program encountered a number of challenges [1,2]:

• 13 percent of households continue to practice open defecation due to lack of funds for a latrine, lack of space for construction, or lack of knowledge;
• hand-washing habits were more difficult to change at the household-level than at the school-level;
• 57 percent of households still do not properly dispose of their waste, due to a lack of facilities away from households and the belief that children’s faeces is less harmful than that of adults;
• handwashing facilities were sometimes vandalised and replacement parts and repairs are costly and rely on external support;
• as there was not always enough time to provide school health and hygiene promotion lessons, Save the Children recommends adding a weekly health class to the national curriculum;
• the success of health and hygiene promotion depended largely on the participation of school management committees; and
• mothers’ gatherings and courtyard meetings needed to be held at convenient times in women’s daily schedules—usually between breakfast and lunch, and have the support of husbands and family members.

[1] Save the Children (2009). Improving water and sanitation in schools and communities : successes and lessons learned from Nasirnagar, Bangladesh. 6 p. Download here

[2] Save the Children (2009). Changing hygiene behavior in schools and communities : successes and lessons learned from Nasirnagar, Bangladesh. 5 p. Download here

Contact: Save the Children, Ikhtiar Uddin, ikhtiar@savechildren.org or Natalie Roschnik, nroschnik@savechildren.org

Web sites: Save the Children ; Schools & Health ; WASH in Schools

Urban sanitation: putting people at the centre of informal settlement upgrading in Pakistan

The Orangi Pilot Project (OPP) has transformed sewage systems in low income, informal settlements (‘katchi abadi’), where 60 percent of Karachi’s population lives. OPP has challenged development approaches, which are very technical and overly-dependent on government and donor support. Such approaches treat poor communities as objects, rather than drivers, of development.

A report for the International Institute for Environment and Development, in the UK, explores how OPP has expanded from a focus on the ‘katchi abadi’ of Orangi to become an important voice on issues related to sewerage, drainage sanitation and informal settlement upgrading across Karachi.

[...] OPP has achieved credibility over years of rigorous mapping and documentation. [...]. OPP’s model of low-cost sanitation gives residents the responsibility of building household and lane-level sanitation infrastructure. Municipal authorities are responsible for building and maintaining secondary infrastructure. [...] Infant mortality rates have declined dramatically.

[...] In order to ensure individuals are driven by ideals, not [...] financial reward, OPP salaries are lower than those of other NGOs.  [...] OPP does not seek large-scale funding from donors. High standards of openness and financial transparency are central to building relationships. Staff numbers are kept low by training community members as activists and mappers, and encouraging them to work themselves.

OPP rejects all form of subsidy, believing it inevitably leads to dependence [and] increases costs and causes waste. When the community contributes towards a project – [..] costs are immediately cut: designs are simplified, methods of construction are cost-efficient, and profiteering, kickbacks and professional fees for contractors, engineers and supervisors are eliminated.

OPP’s experience shows that:

• It important to work on a single issue – or only a small number of issues – comprehensively before taking on related issues.
• In order to influence government it is vital not to be confrontational: it is necessary to work patiently over a period of time with department staff and build trusting relationships with civil servants.
• Meticulous documentation of findings, observations and processes, leading to the preparation of alternatives is critical to being taken seriously by decision-makers.

Source: id21, 01 March 2009

Urban sanitation: Changing the Sanitation Landscape in Bangalore, India

The residents of Sudhamnagar, a slum community in Bangalore, made the big leap from defecating in the open until 2007 to having household latrines in 2009, proving that once people understand what they’re missing, they will find ways to get it.

The community’s efforts easily demystify many myths about sanitation: that sanitation requires expensive and high-tech solutions, that the poor have more important needs than sanitation, or that governments and utilities do not have access to financing for sanitation.

Sudhamnagar comprises 300 households of mostly daily wage earners. For a long time residents had no access to safe water supply, no basic sanitation facility in their homes, limited educational opportunity for children, and very little hope for a better quality of life.

“Everything changed when AVAS [Association for Volunteer Action and Services] stepped in and helped us by constructing a community toilet,” says Josephine, a local resident and member of the WATSAN committee.

In a dialogue faciltated by AVAS, residents identified basic facilities like housing, water, sanitation, and electricity as their most urgent needs. The dialogue later branched out to wider grounds-from education to health to land tenure to livelihood.

After ensuring that the community had stable land rights, AVAS and the WATSAN Committee negotiated with the local government and the Bangalore Water Supply and Sewerage Board (BWSSB) for the installation of water connections and construction of public toilets.

The public toilets were so popular that frequent use led to maintenance and cleanliness problems. As a result residents began constructing household latrines with technical guidance from AVAS, a little financial assistance, and the support of the WATSAN Committees.

“The poor are willing to pay if they have access to the service,” says Anita Reddy, AVAS’ Managing Trustee. “Accessibility, affordability, and participation in decision making are the critical ingredients that helped the residents change their lifelong habits,” she added.

See also: Water rights: access to water means access to education in the slums of Bangalore, India, Source South Asia, 19 Nov 2007

Contact: Association for Voluntary Action and Service (AVAS), No. 9, 5th Cross, Puttaiah Compound, Ashwath Nagar, Bangalore 560094, India, Ph: +91-80-23516227, Email: avas [at] vsnl.com

Source: Ma. Christina Dueñas, ADB, Feb 2009

Corruption prevention: lessons from a community management sanitation programme in Kerala, India

An estimated 20-30% of funds and materials are diverted from sanitation programmes in South India due to corruption, experts have estimated. The Socio-Economic Unit Foundation (SEUF) has successfully employed a number of anti-corruption strategies in a participatory and community-based household sanitation programme, serving more than 200.000 families in 200 Panchayats (communities). It has become a model for many other regions in India.

Learning from experience, using different strategies, including all stakeholders, using preventative measures, reserving enough time and resources for participation and capacity building and focusing on quality assurance rather than anti-corruption are among the lessons SEUF has learned from the programme.

Read more in the Water Integrity Network (WIN) best practice information sheet on the project written by Kochurani Mathew.

See also the project case study and corresponding list of tools used in the project here.

Twinning: boosting performance in Asian water utilities

The Asian Development Bank (ADB) has adopted twinning as part of its Water Operators’ Partnership (WOPs) Program. The WOPs program promotes knowledge sharing and builds the capacity of water operators and utilities in the Asia and the Pacific region. Among its key initiatives is the twinning of 20 water utilities and operators.

Whereas most twinning arrangements pair off entities with similar characteristics on the assumption that they will share similar problems and solutions, ADB’s approach is to match a stronger water and sanitation utility (expert) with a developing utility (recipient). The aim is to enable the latter to improve service coverage and delivery, financial sustainability, and other aspects of its performance.

With the exception the Phnom Penh Water Supply Authority (Cambodia) and Binh Duong Water Supply Sewerage Environment Company (Viet Nam) partnership, which commenced in July 2007, ADB has completed six of eight currently operational twinning arrangements between November 2007 to June 2008. The latest partnership between Karachi, Pakistan and Selangor, Malaysia began in September 2008. The eight twinnings in progress as of September 2008 were:

Expert	Recipient
Malé Water and Sewerage Company Pvt. Ltd. (Malé, Maldives)	Thimphu City Corporation (Thimphu, Bhutan)
Jamshedpur Utilities and Services Company Ltd. (Jamshedpur, India)	National Water Supply and Drainage Board (Colombo, Sri Lanka)
Korea Water (Daejon, Korea)	Dhaka Water Supply and Sewerage Authority (Dhaka, Bangladesh)
City West Water (Melbourne, Australia)	Metropolitan Cebu Water District (Cebu, Philippines)
Ranhill Utilities Berhad (Johor Baru, Malaysia)	Davao City Water District (Davao, Philippines)
Phnom Penh Water Supply Authority (Phnom Penh, Cambodia)	Binh Duong Water Supply Sewerage Environment Company (Binh Duong, Vietnam)
Haiphong Water Supply One Member Company Ltd. (Haiphong, Viet Nam)	Da Nang Water Supply Company (Da Nang, Viet Nam)
Puncak Niaga Holdings Bhd. (Selangor, Malaysia)	Karachi Water and Sewage Board (Karachi, Pakistan)

Focus Areas of Twinning Work Programs

Utility location	Nonrevenue water	Water quality	Distribution system design, maintenance	Management practices, including human resources	Energy saving	Metering
Binh Duong, Viet Nam	x		x			x
Thimphu, Bhutan	x	x		x
Dhaka, Bangladesh				x
Da Nang, Viet Nam	x			x
Davao, Philippines	x			x		x
Cebu, Philippines	x		x	x
Colombo, Sri Lanka	x				x

Making Twinnings Work

Both parties pour in time, knowledge, and financial resources to make sure the twinning works. While it is too early to judge what works best, it is possible to discern conditions that could contribute to this end. Obviously, the recipient twin’s commitment to implement the improvement programs that will result in the partnership is a must. But other factors also contribute, among them the following:

• Creating choices for the twins
• Matching the personal/organizational chemistry
• Ensuring easy flow of communications
• Facilitating the diagnostic stage
• Knowing what the expert twin wants from the association

Read the full ADB water brief  “Power of Two-Boosting Performance Through Twinning” (Sept 2008)

Output-based aid: community water project in Andhra Pradesh, India

A project supported by the Global Partnership on Output-Based Aid (GPOBA) is piloting a project providing safe drinking water to 12,500 poor households in 25 villages in three coastal districts of Andhra Pradesh: Guntur, Krishna, and West Godavari.

Each village will have a water treatment plant connected to a water distribution point from which users will purchase water in jerry cans.

The scheme involves a public-private partnership between the Naandi Foundation, a local Indian NGO, Water Health International, a water purification technology provider, and the village councils.

As of September 2008, four Community Safe Water Schemes (CSWSs) have been constructed and verified, three in Krishna and one in West Godavari. The remaining 21 villages have been selected and 10 are in the process of making their community financial contributions. The GPOBA subsidy has made it easier for Naandi to borrow funds from commercial banks. The OBA approach is also promoting participatory community involvement and building capacity in the villages for managing and delivering efficient services. The grassroots fee-for-service model coupled
with a sense of community engagement and ownership will help ensure the long-term sustainability of the water supply schemes.

It is anticipated that the lessons learned and methodology developed for each CSWS can readily be applied to other villages in the State of Andhra Pradesh and ultimately in other parts of India. GPOBA, Naandi, and WHI believe that scaling up is possible, as the demonstration effects of each pilot will motivate adjoining villages to engage in similar projects, accelerating demand and willingness to pay for clean water through user fees. Lessons from this project may also assist in the design of national programs aimed at achieving the Millennium Development Goals for water
and sanitation.

Project web site: GPOBA – India: Safe water shouldn’t be a luxury (includes slideshow)

Source: Mandri-Perrott, C. (2008). Output-based aid in India : community water project in Andhra Pradesh. (OBApproaches note ; no. 21). Washington, DC, USA, Global Partnership on Output-Based Aid (GPOBA), World Bank. 4 p. Download here

Institutional reforms: introducing a customer charter and quality circles in Sri Lanka

To improve customer service,  Sri Lanka’s National Water Supply and Drainage Board (NWSDB) introduced a customer charter and quality circles.

“Water Champion”, M.A.M.S.L. Attanayake, Deputy General Manager for the Regional Support Centre- Central of NWSDB explains how these innovations came about and what they have achieved.

Read more:  Ma. Christina Dueñas, ADB, Dec 2008