Iimi, Atsushi2012-05-252012-05-252008-01https://hdl.handle.net/10986/6457In public-private partnership transactions in the water sector, one of the alleged concerns is that there is little market competition at the auction stage. This paper casts light on a tradeoff between the competition effect at the auction level and potential economies of scale in service operation. If the authorities design a large-scale public-private partnership water transaction, it is expected to exploit operational scale economies. But the competition effect may have to be sacrificed. The paper shows a risk that the selection of the contract size could be a very restrictive condition that excludes many prospective bidders. Moreover, the paper quantifies the optimal size of public-private partnership contracts in the sector by estimating a cost function. The analysis shows that economies of scale exist but tend to diminish quickly as production increases. When the amount of water sold exceeds about 40 millionCC BY 3.0 IGOACCESS TO WATERACCESS TO WATER SUPPLYCOMMUNITY WATERCOMPETITION IN WATERCOMPETITIVE BIDDINGCOMPETITIVE BIDDING PROCESSCONSTRUCTIONCUBIC METERSCUBIC METERS OF WATERLARGE URBAN AREASLATIN AMERICANLOCAL COMMUNITIESLOCAL WATERMARGINAL COSTMIDDLE EASTMUNICIPAL WATERMUNICIPAL WATER SUPPLYNORTH AFRICANUMBER OF CONNECTIONSNUMBER OF WATERNUMBER OF WATER CONNECTIONSPOWER GENERATIONPRIVATE PARTICIPATIONPUBLIC WATERPUBLIC WATER UTILITIESREGIONAL DEVELOPMENTSANITATIONSANITATION PROGRAMSANITATION SECTORSANITATION SERVICESANITATION SERVICE PROVIDERSSANITATION SERVICESSERVICE AREASERVICE PROVISIONSEWERAGESEWERAGE CONNECTIONSSEWERAGE OPERATIONSSEWERAGE SECTORSEWERAGE SERVICESEWERAGE SERVICESSMALL CITIESSMALL-SCALE WATERSUB-SAHARAN AFRICAURBAN AREASURBAN WATERURBAN WATER SERVICESURBAN WATER SYSTEMUTILITY SERVICESUTILITY SIZEWATER COMPANIESWATER CONNECTIONSWATER DISTRIBUTIONWATER DISTRIBUTION NETWORKWATER DISTRICTSWATER OPERATORSWATER PRODUCTIONWATER SALESWATER SECTORWATER SERVICEWATER SERVICE OPERATORSWATER SERVICESWATER SUPPLYWATER SUPPLY SERVICESWATER SYSTEMWATER SYSTEMSWATER UTILITIESWATER UTILITYWATER VENDORSWorld Bank10.1596/1813-9450-4459