• Public-Private partnerships

Public-Private partnerships

This paper describes an alternative service delivery institutional concept, namely, the franchising of local entrepreneurs, to increase the coverage and reliability of water services in South Africa. The authors claim that the concept, a PPP model, is especially suited to developing countries.

The concept is being developed with the intention of making it available to emerging entrepreneurs as the basis of a viable business. The franchise would be in respect of components of the water supply value chain that are suitable for small business in that they can be readily systematised. The twin driving forces of the franchising concept are:

• incentives, in the form of focused and quantifiable outcomes (returns, profits, dividends or surplus)
• a successful business model that can be replicated widely.

The key elements of the franchise process are:

• identifying components of the value chain that are simple enough to systematise
• discovering best practice
• systematising the business
• selecting franchisors and franchisees and training
• preparing operations manuals
• undertaking research and development
• continuing support, control and discipline of the ongoing business

A South African Water Research Commission (WRC) study of the concept of franchising found many characteristics which could, in appropriate circumstances, alleviate problems encountered in water services delivery.

The authors say that while franchising is not suitable for investment in new water services infrastructure, it can be suitable for its ongoing operation and maintenance. However there is little experience of the franchising of water services anywhere in the world and no experience in South Africa, although many existing public-public and public-private partnerships have some characteristics of the franchise approach.

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