Public-Private Partnership in WASH Opportunities and Challenges

The project aims to serve 275,000 population through safely managed water supply services and capacity building of the local government department and municipal committee Jacobabad. Under an Activity Agreement signed with the Government of Sindh, USAID is aiding and investing under the Sindh Municipal Services Program to improve water and sanitation service delivery through the construction of infrastructure facilities at the city of Jacobabad. The Government of Sindh has entrusted Jacobabad Municipality through an official notification to operate and manage the USAID-funded water project. HANDS, under a previous USAID grant, undertook formative research on the thematic area of water and sanitation in 2017. The research revealed major findings, including unclear institutional roles and lack of political vision, which hinder the development of viable and safe water supply systems in the area. The supply of adequate and quality drinking water has not been a political priority, and the local governments have not made commendable investments in the construction of technically sound water supply schemes. The Jacobabad Municipality employs 864 staff, most of whom are sanitation workers, and there is a shortage of technical staff. The staff has not received in-service training in the last 7 years, and there is a need for focused capacity building and training on financial management, planning for new development schemes, management information systems, communication, monitoring and evaluation, and citizen involvement. The municipality has the legal responsibility for the provision of services, but the transition period in local government has weakened its capacity, making capacity building essential. The Sustainable Development Goals have set targets for the water sector, including achieving universal and equitable access to safe and affordable drinking water for all, achieving access to adequate and equitable sanitation and hygiene for all, and substantially increasing water-use efficiency across all sectors. Public-private partnerships (PPPs) can be a mechanism to help the government fund much-needed investment and bring technology and efficiency to improve the performance and financial sustainability of the water sector. Governments are increasingly using PPPs to finance and operate bulk water supply and wastewater treatment facilities, and to introduce new technology and innovation where traditional sources are scarce. The concept of PPP is evolving in Pakistan, with awareness of its scope for the procurement of infrastructure increasing. However, the country's legislation and political instability deprive it of receiving required foreign investment, leading to local organizations relying on PPPs. The largest beneficiary of PPP in Pakistan is the road infrastructure sector, mainly procured through the Build-Operate Transfer (BOT) model. Existing PPP projects are dominated by government funding, mainly in the form of Viability Gap Funds (VGFs) and other funding. The driving forces behind PPP in Pakistan include the need for efficient management by line ministries, while restraining forces include a lack of understanding of the PPP mechanism, revenue issues, longer concession periods, and resistance to change. A comprehensive policy framework is necessary to specify and prioritize PPP scope and mechanism, check for market potential, and test value-for-money through precise financial analysis.