Getting water from public private partnerships
The paper explores contractual types of public private partnerships that would deliver maximum value in the Indian context. Under incomplete contracts social institutions, tailored to the specific context, can contribute to effective governance. We first draw out some implications of contract theory, then examine recent international experience with PPP in water supply, and finally draw upon all these to illustrate how services from public utilities, specifically from Mumbai's water supply, can be improved, with cost saving through the reduction of waste. While assets should continue to be in public hands, well-designed service contracts would improve coverage, consumer orientation and low level accountability which is missing in public provision; reduce wastage; encourage competition and entrepreneurship; achieve financial viability; and develop a thick network of low-risk credit-customers for banks and financial institutions. They would, however, require support from price reform, independent regulators, and user groups. Citizen groups can use voting power to motivate politicians to shift from direct subsidies and hidden costs to the delivery of quality services. Some specific issues in water supply reform are that the easy availability of quantity rationing in public water supply perpetuates low quality and distorted prices, and heavy use of non-transparent taxes and fixed charges lowers efficiency and welfare. It follows that re-balancing between fixed and volume charges would contribute to welfare and improve quality.
|Date of creation:||2004|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Claude Ménard & Stéphane Saussier, 2000. "Contractual Choice and Performance the Case of Water Supply in France," Revue d'Économie Industrielle, Programme National Persée, vol. 92(1), pages 385-404.
- Tirole, J., 1993.
"The Internal Organization of Government,"
93-11, Massachusetts Institute of Technology (MIT), Department of Economics.
- Klein, Michael, 1996. "Economic regulation of water companies," Policy Research Working Paper Series 1649, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:27788. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.