Argentina - The Salta Water Public-Private Partnership

Abstract

The note explains that a number of considerations embedded in the contract and the Government's continuous commitment to make the Salta Water Public-Private Partnership (PPP) sustainable in the long-term have contributed to its survival when others in Argentina failed. Coordination across government levels and ministries, practical pro-poor measures to expand service and a flexible contract were major reasons why this concession succeeded. The Provincial Government's stability and continuous finance of subsidies and the investment program have also been factors in the concession's success. The authors point out that lessons learned from the Salta Water PPP include: 1. A water PPP can successfully use a local private partner which, in turn, can increase its capacity through the partnership. 2. Expansion of services to the poor requires practical measures such as targeted subsidies, flexible regulation and government (provincial and/or federal) participation in the funding for the investment programs. 3. Flexible service quality regulation is useful in avoiding interminable disagreements while still expanding the network especially to unprofitable or poor areas. 4. Municipal Government and user involvement is strongly correlated with successful results.