Le programme des Nations Unies pour le Développement, PNUD, a décidé au sommet de Rio de 1992 de produire un « World Development Report » et d’organiser sur une base régulière un « sommet mondial de l’eau ». Cet événement a eu lieu trois fois, à Marrakech (mars 1997), à La Haye (mars 2000) et à Kyoto (mars 2003). De nombreuses activités se déroulent dans ces sommets. Parmi elles, le « World Water Forum », organisé par deux structures associatives qui fonctionnent comme des structures de lobbying, ou des Think Tanks : le Global Water Parnership et le World Water Council (voir encadré). Ce « Forum mondial de l’eau » est un grand moment dans la vie de ce milieu professionnel. S’y rencontrent les membres des administrations, des agences de développement, des firmes, les experts, les médias et… les ONG opposées à l’entrée du secteur privé. Notre collègue Karen Bakker a été témoin de ce forum et nous en offre un compte rendu.

The Third World Water Forum was organized by the Global Water Partnership and the World Water Council as simultaneous public and ministerial conferences (see www.worldwaterforum.org). This briefing note summarizes two of the most prominent themes : Financing Water Infrastructure (Kyoto, March 20, 21) and Public Private Partnership (Osaka, March 18, 19). Background information, session summaries, highlights, and a listing of related sessions are provided.

Theme Organizers : World Water Council, Global Water Partnership, Third World Water Forum

The World Health Organization estimates that 1,1 billion people worldwide do not have access to safe drinking water, and that 2,4 billion are without access to adequate sanitation (WHO 2000). Globally, the proportion of the world’s population receiving « improved » water supply and sanitation services has increased over the past few decades, but the absolute numbers of individuals lacking access to improved supplies has also increased (a statistical artifact of population growth). Attention of the international community has been focused on increased expenditure on water supply and sewerage services since the International Water and Supply Sanitation Decade in the 1980s (WHO 1990). Water supply and sanitation expenditures, as a proportion of total aid (or « cooperation ») budgets in OECD countries, have increased steadily since the 1980s, to 6,6 % in 1996 (WHO 2000).

As summarized below, the sessions were structured around different types of financing mechanisms, proposed by distinct groups (including investment banks, bilateral aid agencies, venture capital firms, NGOs, bond financing advisers) :

Organized by the Association of Dutch Water Boards, this session focused on community initiatives in Indonesia, South Africa, Holland and Egypt. The focus on the local level was thought to be merited, insofar as « the local level is where national policy meets community needs » (as stated in the Bonn Declaration). Drawing on the Dutch case, details of governance and financial models necessary for self-financing of water supply management were discussed ; emphasis was placed on the « interest-pay-say » approach, in which « who benefits will pay, but also gets a say ». Challenges to generalizing this approach to developing countries were discussed, with particular reference to the South African case, where after several years of attempting to implement a « user pay » principle, a cholera epidemic in Kwa-Zulu Natal forced the Department of Water Affairs to acknowledge that lack of affordability (despite willingness to pay) was preventing consumers from accessing water supplies ; accordingly, the South African government has now implemented a « lifeline » water policy, with a free basic minimum amount for all consumers. In response to audience questions, the difficulty of reconciling affordability with self-financing approaches was acknowledged by panelists, with suggestions that transfers/subsidies from other levels of government might still be required.

Representatives of « Projet Solidarité Eau - France » presented information on various initiatives around the world seeking to meet water and sanitation needs in developing countries through international solidarity mechanisms. For example, a levy on water bills in England and Wales is used to fund WaterAid, the largest UK-based charity dedicated towards improving access to water and sanitation supplies in developing countries. The PS Eau proposal focused on generalizing this approach, with levies on consumers’ water bills in the First World being directed towards investment in the water and sanitation sector in the developing world. Audience members questioned the degree to which this model could realistically generate the financial flows required, and raised questions about oversight and ring-fencing of funds, while asking the panel to distinguish between capital expenditure and operating expenditure requirements.

The organizers, the US Environmental Protection Agency in cooperation with USAID, emphasized the fact that the cost of providing and replacing basic urban environmental infrastructure far exceeds likely private investment and international aid flows combined ; creating and accessing local public capital markets is one means of sourcing required finance. Panelists presented case studies from developing countries (including India and Mexico) of local public capital market development. The panel addressed the positive aspects of local finance (e.g. avoidance of currency risk ; greater accountability ; the catalytic role of bond finance in broad-based urban governance reforms), as well as means of surmounting potential hurdles and barriers (e.g. legislative barriers ; small scale of many urban infrastructure projects ; lack of local bond rating capacity).

The organizer, USAID, presented case studies of successful public financing mechanisms, drawing on experience in the USA with State Revolving Funds for urban infrastructure investment. USAID has been involved in adapting and extending this model to developing countries ; case studies were discussed. The benefits of using the SRF model as a means of leveraging finance were emphasized ; institutional barriers were discussed, as were the respective roles of donors, local governments, and national governments. Audience members raised questions regarding the applicability of the US model to other countries, and distinguished between Middle Income Countries (with relatively high rates of savings and availability of domestic capital), and Low Income Countries ; the applicability of the model to HIPC countries, in particular, was questioned.

The organizers, representatives of the International Water Resources Association, emphasized the need to consider alternative technologies as a means of meeting water supply and sanitation needs, allowing communities to adopt « least cost » approaches where appropriate, thereby reducing financial requirements. Implicit in much of this discussion was a challenge to traditional engineering models (large-scale reticulation networks, individual household connections), and also to the financing estimates contained in documents such as the Camdessus Panel report (Winpenny 2003). The organizers emphasized the need to take local water use practices into account, and to develop locally sensitive, appropriate technology solutions.

Price WaterHouse Coopers, a firm with extensive experience in the water sector, presented an outline of an ongoing project intended to develop private capital markets and financing mechanisms for public-private partnerships in the water sector. The session examined the socio-economic drivers for the feasibility of PPPs, the feasibility of various contractual models, new project financing mechanisms, and means of reducing investment costs through project design and management strategies. Audience members challenged the narrow focus of the session on PPPs, and queried the organizers as to why a diversity of business models, as advocated by the Global Water Partnership (see section 2, below) and other Financing Water Infrastructure session organizers, had not been considered.

Commissioned by the organizers of the Third World Water Forum, the Panel, chaired by Michel Camdessus (former General Manager of the IMF), brought together the Presidents of major multilateral development banks (IADB, ADB, EBRD, WB), and representatives of the IFC, Citibank, US Ex-Im Bank, private water companies (Suez, Thames Water), government representatives (from Mexico, Ivory Coast, Pakistan, Egypt, and France) and two NGOs (Transparency International and WaterAid).

Theme Organizers : Global Water Partnership (www.gwpforum.org) and Council of Canadians (www.canadians.org).

Spread over two days, the Public Private Partnership theme was one of the most high-profile sessions at the conference, attracting a diverse audience from academic, government, international financial institutions, and NGOs. The organizers provided the following background on their motivation for organizing the session :

Organized by the International Water Association, this session brought together case studies of successful examples what the organizers termed the four main business models for water supply provision : municipal public ; corporatized public ; private sector partnership ; and privatized utility. Emphasis was placed on the viability of each of these models, under the appropriate conditions ; the strengths and weaknesses of each model were explored by the case study panelists, from the USA (Seattle, municipal public), Australia (Melbourne, Brisbane and Adelaide, corporatized public) ; France (Marseille, private sector partnership) ; and England (Thames region, privatized utility). The importance of good governance, robust regulation, and community participation and oversight was emphasized by all panelists.

Organized by academics from the Ecole polytechnique fédérale de Lausanne, this session explored the likelihood of water liberalization, and forms which water liberalization may take around the world. Focusing on liberalization of the water supply sector, panelists discussed the pros and cons of liberalizing the water sector, and outlined emerging market dynamics of the sector, including the emergence and consolidation of « public services TNCs ». Panelists distinguished between different modes of « private sector involvement » : the impact of private sector management techniques ; the impact of private finance ; and the direct involvement of the private sector in production of provision of services. A representative of the Pacific Institute presented a recent report on the ethics and impacts of private sector participation in water supply (Pacific Institute 2002).

The concept of PPCP received attention in many sessions at the conference (see section 2.3, below). Advocates of PPCP begin from an acknowledgement of performance failure of conventional urban water supply to the poor, and emphasize the actual and potential contribution of small scale private enterprise and NGOs in service provision – particularly to the urban poor. Emphasis is placed on developing not just Public Private Partnerships, but also Public Private Civil Society Partnerships. At this session, examples of PPCP from Manila, Jakarta, and England and Wales were given. A representative of the ADB presented findings of a recent report (ADB 2003), emphasizing the policy gaps and failures on the part of multilateral agencies, which have emphasized traditional engineering solutions and large-scale private sector partnerships (usually led by MNCs), and have failed to focus on pro-poor contracts, to sufficiently incentivize coverage expansion in contracts, and to adequately support the development and application of regulatory frameworks necessary for well-functioning utilities (whether public or private).

Organized by the International Water Association, this session brought together case studies of successful examples of « alternative » approaches to water supply provision. Of particular interest was the case study of DMAE, the municipally owned water supply utility for the city of Porto Alegre, Brazil (population : approx 1.5 million). Fully self-financed with a progressive tariff structure (increasing block tariffs, but with cross-subsidies and a « social tariff » for poor families), with nearly 100 % coverage for water supply despite rapid recent population growth, and a non-payment ratio of only 8 %, and high approval ratings (consistently over 80 %) for its services, DMAE performs well above the average for public utilities in developing countries. Emphasis was placed upon democratized workplace structures, selective use of the private sector for out-sourcing while retaining full municipal control over strategic decisions, and the importance of the « participatory budget » planning process, in which citizens vote to determine budget allocations by the municipality for increasing social solidarity and support. The second case study focused on Rand Water, the largest corporatized water utility in South Africa, operating in the Johannesburg region supplying bulk water to several municipalities with a total population of 10 million. Emphasis was placed upon the management autonomy and financial strength of Rand Water, which borrows on the public capital markets and has a BBB + credit rating. South Africa’s experience with « lifeline » water tariffs — in which a free basic minimum water supply is supplied to consumers, to ensure public health needs in a context of high rates of poverty — was discussed.

At this session, organized by the Council of Canadians, the focus was on examples of community-controlled water supply systems. Case studies included :

The intention of the organizers of the Third World Water Forum was to collate views from participants through the production of « theme statements », which were in some cases shared by theme organizers at the wrap-up plenary sessions. In the case of the « public private partnership » theme, no consensus was reached by the two organizers (the Global Water Partnership and the Council of Canadians). The GWP emphasized the viability of different business models (public and private) and the importance of accountability, transparency, strong regulation, and citizen input for all water utilities. The Council of Canadians agreed but emphasized the failures of private sector partnerships, and the importance of meaningful community control through participatory democracy of a reformed public sector.