Examination of Witnesses (Questions 28
- 39)
THURSDAY 30 NOVEMBER 2006
MR JACK
MOSS AND
MR UMESH
PANDEY
Q28 Chairman: Can I thank both of
you for coming in and for being patient enough to sit through
the first evidence which I hope you found as interesting as we
did. Having heard the conversation we have just had, the role
of non-state providers is clearly an interesting aspect. As you
will see, the Committee is more interested in what works than
who does it which is inevitably what matters when the scale of
the challenge is so large. I wonder if both of you could perhaps
indicate where your organisations can add value. What do you bring
to the table? What do you do or what do you think you can do that
the public providers cannot do?
Mr Moss: Perhaps I should, for
the benefit of the Committee, just explain a little bit about
the organisation that I am working for and its members because
from the conversation I heard earlier on I think it is not totally
clear what people refer to when they are talking about private
sector operators. Aquafed is the International Federation of Private
Water Operators. It is a very young organisation and it is in
the process of growing. We represent formal private operators,
those who extend from the size of companies that are delivering
water and sanitation to tens of thousands of people up to those
who are delivering to hundreds of thousands, millions and tens
of millions of people. We represent a fairly wide range. It is
extremely difficult to qualify in a general way what our members
can and cannot do. I would also say that the problem is enormous,
as Mr Watkins said. Everybody needs to make a contribution and
our organisation is not promoting the private sector as the only
solution. We believe that the private sector has a role to play;
we believe it can act in some cases as a stimulant for others,
but we also recognise that our members have very distinct limits
as to what they can do. What our members do are operational activities
and I would like to draw the distinction between operational activities
and government activities. That distinction is equally important
if you are a private sector operator, a public sector operator,
a community operator. We need, I think, to be very clear of the
roles of the public and the roles of the operator and then to
segment within the operator on the kind of operator and the scale
of that operator. I was talking yesterday with one of our smallest
members, a two person woman-led company, and getting to understand
the difficulties that a small company like that in Africa has
in meeting the international financing community and the level
of interest (on loans) and so on that really impact at that level.
They are very, very different from the constraints that affect
some of the very big companies. We have a great deal of flexibility
within our members; we have practical difficulties, practical
challenges as a result of the lack of clarity of the interface
between the public, governmental issues on the one hand and operational
issues on the other.
Q29 Chairman: We have a note here
that there is a view that the private sector has not been particularly
successful in delivering coverage to the urban poor. We have had
that discussion, but our note says that very few of the contracts
are required to benefit the poor. Are you implying that if the
contractual arrangements were better constructed then the private
sector would be able to deliver that outcome and the reason you
have not is that the contracts have not been right?
Mr Moss: I would say yes to that
but I would like to come back on your supposition. There is a
great deal of talk about the private sector having failed. I think
this is a total misconception. Private sector operators operate
under contracts and it is perfectly normal that the principal
to a contract can end that contract whenever he sees fit. If you
turn the question and say, "What do you mean by success?"
and if, as I think this debate is all about delivering water and
sanitation services to communities and improving the standards
of service, then almost all of the contracts that have been prematurely
terminated have in fact met that prime objective. I would like
just to quote a few figures for you. I am talking about delivery
by the larger part of the private sector, that part that is visible
and is to some extent measured today, because there is a huge
part of it which is not. Our estimation is that well over 20 million
people have been served by the private sector in the last 10 years,
people who were not served before. One of our member companies
has been trying to measure its performance specifically in relation
to the MDGs and it has calculated that over the last 12 years
it has delivered 10 million water connections to people around
the world. It has done far less well in sanitation; it has delivered
4.5 million there. It has compared its rate of progress with what
appears to be the norm for the rate of progress in the countries
in which it is working and so the figures it has produced are
things like a year on year percentage improvement in coverage
of ratio in Africa of 4.3% compared to 1.9% in the rest of the
country; 7.46% in Asia compared to 1.6% in the rest of the country.
What I am trying to say to you is that there is a bit of a myth
about this idea that the private sector has failed; I think I
have just indicated that it has not.
Q30 Chairman: That is fair enough.
I think in any case what has already been said is that the scale
of the challenge is such that we are going to need all the players
to be in there. What we are really trying to explore is what works
and what does not work for either sector and any of that factual
information in addition to what you have said would be very useful.
Mr Moss: I would be happy to send
the rest of the details that I have not read out yet.[5]
Q31 Chairman: Mr Pandey, you are
a national NGO delivering a service and I guess the same question
applies. What do you feel you can bring that is different to the
government or the state providers?
Mr Pandey: First of all I would
like to thank you for giving me this opportunity to present evidence
in front of this Committee. I represent Nepal Water for Health,
an agency established in 1992, principally working in the remote
areas of Nepal to provide water and sanitation to the people.
Basically we do not implement projects directly but we support
local NGOs and CBOs[6]
to implement projects and we are working in 50 out of 75 districts
in Nepal. We are working throughout, from the high mountains to
the mid-mountains, the mid-hills and then to the plains bordering
India, so there is a diversity of technologies and a diversity
of approaches that we apply. The main approach that we have been
applying in water and sanitation is the community management approach.
For the last few years we have been bringing out these issues
about gender and poverty. We have already been promoting the concerns
of women and the poor. They are the main groups who have been
left out from the services so far. Basically if we look into the
issues of gender, that is something we can bring into the sector;
understanding gender issues. Women are spending two to four hours
every day collecting water in our country. The situation girls
face is they have to be out of school because there are no sanitation
facilities in schools. The situation that women and girls have
to face specifically with regards to water and sanitation is largely
unaccounted for. What we can bring to address these issues is
there have to be different mechanisms of understanding to address
these issues. The roles and the issues of women and girls are
different. That has to be understood and that is largely not understood
so far. That is something we can bring to the sector. The second
thing is that basically along with the gender issues we also bring
the realities of working with the poor and excluded groups because
their needs and their issues are very different from the other
groups. That very much came up in the previous discussion about
how to reach out to the poor. The knowledge is lacking and so
we need to have different sorts of interventions to address the
issues of the poor and excluded groups, and that is the sort of
knowledge that we can bring to the sector. Another issue that
we have is about sanitation. In our country the water supply currently
is 82% as compared to 39% in sanitation. We can already see that
sanitation is lagging far behind. Sanitation is not receiving
the attention that it requires. In that context what we see is
that there is a role for us to bring up all these issues. The
financing gap is there for sanitation. Just to achieve this, the
resource gap is estimated to be $6 million per annum. That is
only to achieve latrine facilities, and looking into the broader
role of environmental sanitation, it comes to $24 million, so
there is still a big resource gap that we still have in sanitation.
There are different models of sanitation that have been piloted
and that have been tested but there are issues of taking this
to a larger scale. What we can bring ultimately is that we can
feed back to the governments, based on the consultations with
the people in the communities, the concerns the people have, and
we can help bring about some improvements along these issues.
Q32 Chairman: Would it be fair to
say that in a way you are doing something which the government
should be doing but is not; you are creating a kind of bottom-up
infrastructure to help inform the process. You are filling a gap.
We have the example of Chile where there is a highly developed
society and an institutional framework which would work. Because
of that gap your organisation is effectively stepping in and doing
it.
Mr Pandey: Basically that is right.
As we have already said, water and sanitation is a basic human
right and it is the responsibility of the state to ensure that
everyone has access to water and sanitation services. In a country
like Nepal in the present situation—we have been going through
the armed conflict for the past 11 years—the government
is almost non-existent in remote areas. There has been no people's
representative for the last four years and four months and there
is no way for the government to deliver these services. If there
had not been these CBOs, NGOs and non-state providers, the people
would not have received the services they have received so far.
There was some space for NGOs, CBOs and non-state providers to
play some role even during this situation and provide the services
to the people.
Q33 James Duddridge: I am interested
in how responsive both your organisations are to people who are
currently not served and specifically how you liaise with other
providers to serve those currently unserved communities and individuals.
Mr Moss: Speaking for our members
our organisation does not do anything. We help other people talk
to one another but certainly what a lot of our members are doing
is engaging with organisations like that of Mr Pandey to make
sure that the full spectrum of services can be offered in the
most effective way using an approach which is founded on bottom-up.
That is relatively easy for a small provider like the one I mentioned
in Uganda just now; it is not quite so obvious for some other
big companies but some of the very big companies are taking a
very much market-driven bottom-up approach. They consider the
people have to be served as customers and try to treat them as
customers with distinct needs, to segment their customers' needs
and to find ways to meet those needs. I am very impressed to have
read the paper this morning on Nepal because that illustrates
exactly the kinds of things that can be done in complement from
one kind of organisation to another. I am sure we could find many
examples of collaboration between the formal part of our membership
and organisations such as the one we have just heard about.
Mr Pandey: What we are doing is
also helping communities to obtain water supply systems. We are
providing technical support and then we are also channelling funds
that we receive from different donors. We have so far helped over
900 schemes to be completed and helped about one million people
with water and sanitation services throughout the country. That
has been our achievement. All the experiences we have had we are
using to get to the poor. If you look at our national water supply
policy of 1998, it talks about the demand responsive approach
so the product has to go to those who can demand it. When we looked
into the whole process there was still a lack where many people
who did not have a voice were left out of this process, they could
not demand these services. That is how we adopted a proactive
approach and we worked to identify those communities where the
poor people were living and identifying those people and providing
solutions for those people and bringing their voices forward to
bring about improvements within the government as well. That is
our contribution in the rural part and now we are gradually involved
in urban areas because the issues in urban areas are coming up
in water supply There the government has decided to bring in a
private operator. If everything goes well they think that the
private operator will be in place by 15 January 2007. It was imposed
on the government by the donor bank that they must have private
operator to set up the water supply system. This is one of the
problems we have, the conditions imposed by the donors, which
largely neglected the issues of the poor. Is this service really
going to deliver the services to the poor in those urban areas?
We started an NGO forum bringing some like-minded NGOs together
and started to look into these issues. Even the Asian Development
Bank was proposing to bring in private operator and the government
has largely neglected the issue of our poor with this arrangement.
We were able to bring it to the attention of the government and
bring about some changes on some of the main points like the connection
service previously was something like from £70 to almost
£200. The poor were almost all left out of this set of services.
Because of our lobbying the government has now reviewed it and
brought it down to nearly £20. That is how there has been
some access for the poor to get those connections. Similarly,
we did a study in collaboration with the Nepal Water Supply Corporation
to do some mapping out of the unconnected poorer urban areas and
that helped identify 974 stand-posts to be located. As already
discussed by David Satterthwaite in the previous discussion, there
will be community tap stands now, whereby the community will be
using them and the community will be responsible to pay back the
tariff on those tap stands. That process has come about as part
of our lobbying. Similarly because of our lobbying the government
was forced to establish a low-income consumer support unit which
was a sort of institutional complaint mechanism to listen to the
complaints of the poor, so that mechanism has now been set up
within that process. Similarly, there are a couple of things that
we were able to bring ideas about such as forcing the government
to have some sort of monitoring mechanisms on the quality of water
that is being provided. Basically our role is looking into issues
of the poor and making sure that we have delivery mechanisms that
address these concerns. Firstly, what we have been trying to promote
is that there are two different sorts of delivery mechanisms currently
in Nepal. In the rural areas there are already NGOs delivering
the services and the rural areas do not require any sort of high
technology where the government needs to get involved whereas
in the urban areas there are public utilities set up by the government.
The issue is now that government should look into the sort of
existing mechanisms and of course the government should be in
the forefront and be able to finance, to monitor and regulate
but then allow those other delivery mechanisms to go ahead. Then
sometimes what happens is that without looking into the existing
delivery mechanisms, the conditions that are imposed by donors
are sometimes making our government confused as to what role they
should be playing. This is one of the issues that we have in the
sector.
Q34 James Duddridge: I would like
to return to Mr Moss in relation to the mechanisms that are put
in place to allow transparency of information, particularly between
the key stakeholders, be those the companies, the government,
the communities and individual consumers. What can the private
sector do to improve that transparency in the sector that is really
fraught with difficulties in terms of understanding the costs
and also a sector that has been associated with corruption?
Mr Moss: I will do my best but
those are massive questions that you ask there. I think some of
the answer comes back again to what I said earlier on, getting
a clear separation between the government role and the operational
role and also to something which the Chairman said earlier on
about the quality of contracts and what was really partially said
here just now, the need to have clear policies as to what the
operators—public, private, informal—are being asked
to do. I think if you do not have clear policy you cannot have
clear objectives. You cannot communicate clearly what you are
doing if your objectives are not clear. Part of the answer to
your question is getting the relationship right in the first place.
Once you have that fundamental set of objectives in place then
it is possible to have reporting systems built into contracts
which talk about the ways in which things formally should be reported
and to whom they should be reported. That is on the formal side
of setting the arrangement up. The other side of the question
is that the private sector is the private sector and it has to
think about its reputation and it has to think about its relations
with the customers as I mentioned earlier on. There is a strong
motivation for the private operators actually to be transparent,
except that there are also difficulties when they are put into
situations of having to compete with other operators and so sometimes
they have to make some careful judgments between what they let
out to their competition and what they want their clients and
their customers to know about. So we find often that there is
a bit of a tension between the objectives and realities. The second
part of your question was about corruption. I think it is very,
very important not to generalise about corruption but to start
to analyse what goes on and really understand it. The analysis
of the realities of corruption in the water industry is only just
beginning I would say. There has been a certain amount of work
done and I am very pleased to say that our organisation has joined
into that and there is an organisation called the Water Integrity
Network which has just been founded and I have the privilege of
being on the steering committee of that organisation. One of the
things that we hope to do is to research the realities of corruption
in the various different transactions that occur in the very,
very complicated pattern of stakeholders that are involved in
the water sector. I think what really happens is wherever there
is a transaction there is potential for corruption of some kind
and this can be from the macro-corruption at one end—the
sort of thing that was recently reported in the Lesotho Highlands
Project for example; what I call meso-corruption which goes on
in the middle—transactions between the public sector and
the private sector or the public sector and private pipe suppliers,
manufacturers, material suppliers—which are very similar
to the kinds of problems that go on in the construction industry;
and transactions that go on in some way between the operator and
the beneficiary of a service—you have probably heard the
expression "speed money" and all those sorts of things.
Corruption is a very complex issue and if I could give you all
the answers now I would be delighted to do so. I cannot, but I
can assure you that our members are very determined indeed—we
had some very interesting discussions about this only last night
with a group of members—to play their part in eliminating
corruption from the sector.
Q35 Joan Ruddock: On this question
of transparency, do you think it is a wise use of aid money to
pay for consultants who promote private sector solutions to water
to local people?
Mr Moss: We have heard a lot about
the importance of the local decision-makers and there is a complex
relationship—as you undoubtedly know better than I do—between
the local people and the local decision-makers. I think it is
extremely important that those people get good advice on the range
of options they can look at and perhaps some of the key decisions
that they need to make when narrowing down their options. I am
very suspicious as to whether some consultants are actually the
best form of advice but on the other hand the transparency issue
comes up and it is not always very obvious that members of our
organisation, for example, should also be giving that advice.
However, members of our organisation actually do the work on the
ground whereas consultants tend to consult about it. I can give
you an example of this and this is one of the contracts that would
be held up as being a failed contract in most senses, but it did
actually give something to the population. This is a contract
in Puerto Rico. Puerto Rico, as you know, has an odd relationship
with the United States and it has had private sector involvement
in its water supply for quite some time and the contract was re-bid
two or three years ago. The bidding documents were written in
American by American lawyers; the engineering designs and objectives
were set by American engineers. The conditions in reality on the
island of Puerto Rico are those of a Hispanic speaking developing
nation. The conditions imposed both contractually and in engineering
terms were a million miles away from what was really needed on
the ground. There is an example, if you like, of how the consultation
process perhaps did not deliver the best advice to the decision-makers
in that particular situation and at the end of the day probably
everybody lost out. The point you make is extremely important.
Again, like all these things, there is actually no quick fix and
no easy answer and I think one of the issues is that while we
have to hurry because the problem is enormous and pressing, on
the other hand, we do need to make sure that we move at a speed
that enables things to be got right. Consultants can play a role
in that.
Q36 Joan Ruddock: Paid for by aid
monies?
Mr Moss: In many of these cases,
if they are not paid for by aid money, who is going to pay for
them?
Q37 Mr Singh: I have already had
some of the answer to the question I am asking really. I can see
how NGOs like yourself, Mr Pandey, are motivated with a desire
to get water and sanitation to the poor. I cannot see how the
private sector has any motivation to get water to the poor. I
might be wrong but I would like your response in a moment to that.
Surely whether it is NGO or private sector where we have weak
governance and weak governments is it really possible for them—especially
with big water contractors—to organise contracts in the
interests of their population, to monitor those contracts, to
regulate those contracts, to make them the most efficient and
practical way to bring the most benefit to sections of their society
which they prioritise?
Mr Moss: This is really an absolutely
fundamental problem and in our submission we have highlighted
the problems of governance quite clearly. The pre-conditions being
right is one of the reasons why it is being said that many of
the private operators are withdrawing from this sector.
Q38 Mr Singh: Does this particular
state of affairs not suit some of your members?
Mr Moss: I do not think it suits
our members at all.
Q39 Mr Singh: Why not?
Mr Moss: How could it suit our
members?
5 Ev 130. Back
6
Community-based organisations. Back
| 
