SUCCESSFUL IMPLEMENTATION OF PUBLIC-PRIVATE PARTNERSHIPS TO LOCAL COMMUNITIES (Providing water supply services in Sub-Saharan Africa)

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ABSTRACT

The following thesis examines the issue of water scarcity and Public-private partnerships (PPPs) build to overcome this challenge. PPPs are risky projects but beneficial when succeeding. This re-search focuses on implementing the partnerships to local communities since implementation and involving locals to the process of building partnerships are crucial factors in successful PPPs. The paper aims to examine several factors and issues behind PPPs to provide beneficial information about the partnerships. The research was made by using several databases and researches from international organizations: United Nations, World Bank and African Development Bank, because the focus area of the research is Sub-Saharan Africa. To examine the implementation practically, the paper presents two case examples: one from Ghana and other one from South Africa. Wide range of different kind of articles, books and journals were read through to find the answers to the research questions and beside the databases the research was made in libraries in Helsinki, Finland and in Krems an der Donau, Austria.


TABLE OF CONTENTS

1   Introduction
1.1       Research Objectives and Structures
1.2       Research Methodology
1.3       Research Questions and Limitations

2   Water
2.1       Water distribution
2.2       Water as a good
2.2.1    Public goods
2.2.2    Private goods
2.3       Demand and supply, perfect competition and monopolies

3          Water scarcity
            3.1       Physical water scarcity
            3.2       Economic water scarcity

4   United Nation’s Millennium Development Goals 2015

5          Public-private partnerships
            5.1       Actors in PPPs
            5.2       Types of contracts
            5.3       Implementation of PPPs
            5.4       Risks in PPPs
            5.5       Benefits of PPPs
            5.5.1    Public sector
            5.5.2    Private sector
            5.5.3    Wider community
            5.6       Comparison between traditional procurement and PPPs
            5.7       Comparison between privatisation and PPPs

6          Sub-Saharan Africa
            6.1       Education
            6.2       Population growth
            6.3       Climate change
            6.4       Economic development
6.5       Agricultural development

7          Case examples
            7.1       Ghana
            7.2       South Africa

8          Conclusion
9          References 


1       Introduction
Water is a need for all the living organs: no water, no life. Water supply services are important part of humans’ lives and in high income countries people are used to having daily, easy access to clean water through a water tap. It is a startling matter when one begins to wonder what it means to have direct access to water source, since it is not reality for all the people in the world. According to WHO, in year 2014 700 million people did not have access to clean water re-source, and these people were all in developing areas. The population growth and a growing need for water makes providing pure water more challenging. Water flows unequally in nature and some areas are naturally drier, but some areas face lack of water because of the economic situation.

Poverty, climate change, educational inequality and agricultural issues also affect the water supply. To overcome these challenges poor states must develop ways to build water services. Shiva (2002) argues that the water business is a tempting idea for multinational corporations; already in the beginning of 2000 century the World Bank estimated that the potential value of the water market would be over $1 trillion. The value of this market is increasing when the competition on clean water resources is accelerating and population keeps on growing. Howev-er, privatisation is not the only option for securing water services in a state.

Public and private actors may work together as partners. This can be seen as a better option than pure privatisation, since most of the partnership types retain part- or whole ownership by the state and it is possible to build the projects in a way that the locals are included in the process. In ideal situations PPPs work in a way they were meant to: to succeed in helping poor states to provide to their citizens water or other scarce re-sources, such as electricity. The efficiency and success of the project is dependent on many aspects, including acceptance and participation of the local population.

Public-private partnerships hold a lot of potential, and the effect of these in certain areas is huge, but they also hold risks and possibilities for failures. The idea behind this re-search is to scan and reveal the possibilities and risks behind these kinds of partnerships. The main focus is on the area of Sub-Saharan Africa, since based on the research it is mainly water scarce area because of economic situation and many states use PPPs to provide services to citizens. The topic of water supply is important because at the moment water supply is on an unstable basis and unclean water is a global safety risk; for example, the National Ground Water Association (2015) ranked water as a first global risk last year. The idea of this research is to gather information about PPPs and examine successful ways to implement them to local communities.


1.1        Research Objectives and Structures

The author aims to provide as logical a structure as possible when identifying the research topic and answering to the research questions. The paper begins with providing information about water and examining the current global situation with respect to water. After that the general model of water distribution is introduced and water as a good is explained as well as the demand for water. The next chapters are about water scarcity and United Nation’s Mil-lennium Development Goals and their role when trying to achieve water security.

When water and water challenges are fully examined, the author describes the PPPs, what are they, how do they work, who are the actors within, what are the benefits and risks, what are the important issues when implementing them and involving citizens to the projects, how do they differ from privatisation and traditional public services and under what kind of con-tracts do they operate. After in-depth analysis about the partnerships is provided the last part of paper is explained.

The last part is about Sub-Saharan Africa and it explains why was it chosen, what kind of is-sues the area faces in relation to water scarcity; its population growth, agricultural and eco-nomic development important, how climate change affects water scarcity and water supply services, the importance of educational development, and what the African Development Bank does in relation to these agreements. The whole research is finished with case exam-ples from Ghana and South Africa.


1.2        Research Methodology

The research methodology of this Bachelor’s thesis is founded upon the secondary research method. This means research based on already published knowledge, such as books, jour-nals, articles. (Driscoll, Brizee, 2016) The method was chosen because the topic is widely re-searched and many organisations, companies and banks work on PPPs, so many in-depth re-searches, books and articles are accessible in many databases and libraries.

The research material was searched from libraries in Finland and in Austria as well as from online research centres and databases. Scientific articles about the topic were used, as well as...


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