Using the alliance form for operation and maintenance of privatized infrastructures

Abstract

A significant number of privatizations utilized to operate and maintain critical networked infrastructures have failed to meet contractual expectations and the expectations of the community. The author carried out empirical research exploring four urban water systems. This research revealed that of the four forms of privatization the alliance form was particularly suited to the stewardship of an urban water system. The question then is whether these findings from urban water can be generalised to O&M of infrastructure generally. The answer is increasingly important as governments seek financial sustainability through reapplying the contestability strategy and outsource and privatise further services and activities. This chapter first examines the issues encountered with O&M privatisations. Second the findings as to the stewardship achieved by the four case study water systems are unpacked with particular focus upon the alliance form. Third the key variables which were found to have distinct causal links to the stewardship-like behaviour of the private participants in the Alliance case study are described. Fourth the variables which may be crucial to the successful application of the alliance form to the broader range of infrastructures are separated out. Fifth this chapter then sets the path for research into these crucial features of the alliance form.