The welfare effects of private sector participation in Guinea's urban water supply
In 1989 the government of Guinea enacted far-reaching reform of its water sector, which had been dominated by a poorly run public agency. The government signed a lease contract for operations and maintenance with a private operator, making a separate public enterprise responsible for ownershipof assets and investment. Although based on a successful model that had operated in Cote d'Ivoire for nearly 30 years, the reform had many highly innovative features. It is being transplanted to several other developing countries, so the authors evaluate its successes and failures in the early years of reform. They present standard performance measures and results from a cost-benefit analysis to assess reform's net effect on various stakeholders in the sector. They conclude that, compared with what might have been expected under continued public ownership, reform benefited consumers, the government, and, to a lesser extent, the foreign owners or the private operator. Most sector performance indicators improved, but some problems remain. The three most troublesome areas are water that is unaccounted for (there are many illegal connections and the quality of infrastructure is poor), poor collection rates, and high prices. The weak institutional environment makes it difficult to improve collection rates, but the government could take some steps to correct the problem. To begin with, it could pay its own bills on time. Also, the legislature could authorize the collection of unpaid bills from private individuals.
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- Menard, Claude & Clarke, George, 2000. "Reforming water supply in Abidjan, Cote d'Ivoire : mild reform in a turbulent environment," Policy Research Working Paper Series 2377, The World Bank.
- Alcazar, Lorena & Lixin Colin Xu & Zuluaga, Ana Maria, 2000. "Institutions, politics, and contracts : the attempt to privatize the water and sanitation utility of Lima, Peru," Policy Research Working Paper Series 2478, The World Bank.
- Gisele Silva & Nicola Tynan & Yesim Yilmaz, 1998. "Private Participation in the Water and Sewerage Sector : Recent Trends," World Bank Other Operational Studies 11540, The World Bank.
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- Menard, Claude & Clarke, George, 2000. "A transitory regime : water supply in Conakry, Guinea," Policy Research Working Paper Series 2362, The World Bank.
- Alcazar, Lorena & Abdala, Manuel A. & Shirley, Mary M., 2000. "The Buenos Aires water concession," Policy Research Working Paper Series 2311, The World Bank.
- Dinar, A. & Subramanian, A., 1997. "Water Pricing Experiences," Papers 386, World Bank - Technical Papers.
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