Public-private partnerships to improve urban environmental services

Abstract

Public-Private Partnerships (PPPs) are most usefully viewed as a tool, not a religion. The 2030 Agenda for Sustainable Development introduces ‘partnership’ as one of the five critical dimensions of sustainable development, and lays emphasis on encouraging and promoting effective public, public-private and civil society partnerships. Within this larger context, the purpose of this chapter is to offer some thoughts on: (i) The reasons PPPs have generated such interest in the urban environmental arena; (ii) A way to understanding PPPs; (iii) The key features of successful PPPs; (iv) The current trends in and debate over PPPs in the urban water sector; and (v) Ways to make the best use of PPPs to help improve urban water services. The fact that private capital flows have remained above the Official Development Assistance flows since 2005—except 2015 and 2016, has sustained the interest of many parties in searching for profitable and impactful investment opportunities in urban environmental services. PPPs often start with questions vis-à-vis their goals, strengths and weaknesses, structure and processes. Successful PPPs often feature individual champions who address the tensions at the heart of many partnership efforts; partnership space or the context in which PPPs are formed; and optimized structures and processes that would respond to different urban environmental problems. Our analysis of the data (1990–2013) obtained from the World Bank’s Private Participation in Infrastructure Project Database shows that whilst the number of water projects steadily increased from 1990 to 2007, the private capital flows to urban water sector declined from US$37 billion during 1990–2000 to US$25 billion between 2001 and 2010. The reasons for this decline in international private investment are many and varied: (i) functioning of public sector and political systems; (ii) private sector and commercial realities; and (iii) opposition to private sector involvement. Moving forward will require action on at least two important and interrelated fronts: first is addressing the mayors’ dilemma about the choice of PPPs to improve urban environmental services, and second is assessing the performance of all partners.