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Published by: adbwaterforall on Jan 31, 2013
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file:///C|/Users/Rx/Documents/Water/champions/SCRIBD-COMM100%20For%20Posting/paniagua.html[10/3/2012 11:19:34 AM]
Country water actions are stories that showcase water reforms undertaken by individuals,communities, organizations, and governments in Asia-Pacific countries and elsewhere.
Water ChampionMaria Paniagua: Small Steps, Big Impacts
June 2003
Knowledge Management Officer 
Why was it imperative to study Small ScaleIndependent Private Water Providers (SSPWPs) now?
Millions of poor families in Asian cities buy their water fromprivate local sellers. Our study shows that it can even go upto 40% of the population. Yet when donor agencies talkabout private sector participation in water supply projects,they normally just refer to large water companies. Fewpeople pay attention to the other private sector-- theSSPWPs that were already serving the people with littlelegal recognition. Also, there were so many myths aboutSSPWPs that needed to be clarified.We thought we could definitely help by bringing moreinformation about SSPWPs to the table, and exploring waysto improve their services to the poor.
What are some of the significant findings of yourstudy?
We can start with the many myths about SSPWPs thatwe’ve debunked. For instance, many see these local waterproviders as taking advantage of the poor, providing badquality water, uncaring about their clientele and more. Wefound that this is not always the case. They are small familybusinesses that are well integrated in the community. Theyprovide service at competitive prices. The poor families whoconsume their water also know what quality of waterthey’re getting, and pay for it accordingly.Another myth is that SSWPWPs are temporary phenomena.Many think it’s better to concentrate efforts on securing aconnection to the water utility. Unfortunately, given thecurrent expansion rate of the utilities, such connection won’tbe possible for a lot of poor people in the next 15 or 20years. During these years, the poor will have to buy theirwater from the local sellers.We also found that the quality of services the SSPWPsprovide is strongly related to their business environment. If we can improve those conditions, we hope to have animpact on their services. For instance, in
, some SSPWPs were able to provideservices that are comparable to water utilities’-- houseconnections with 16-24 hour service. That, of course,involved appropriate investment conditions and significantinvestments on the part of SSPWPs. Unfortunately, localsellers generally have limited access to long-term creditsand borrow at high interest rates (5-10% per month) sotheir cost of doing business remains relatively high. 
Maria Paniagua is an Urban Development andPlanning Specialist in the Social SectorsDivision (SASS) of the South AsiaDepartment (SARD).She managed the study on small scaleprivate water providers and is now workingon integrating the study’s recommendationsinto ADB operations.
Project Brief
This study was part of a bigger project on Water in Citiesconducted under the Regional Technical Assistance 6031:Promoting Effective Water Management Policies and Practices.The study gathered and analyzed information about small-scaleprivate water providers (SSPWPs)—the types of services theyprovide, their profiles, their constraints and potentials. SSPWPoperators are characterized as followsSmall scale: small company according to the number of employeesPrivate: they invest in the business and their activitiesare driven by profitWater provider: provision of water accounts for a bigpart of the business (>75%)The study covered 8 cities: Cebu, Delhi, Dhaka, Ho Chi Minh,Jakarta, Kathmandu, Shanghai, and Ulan Bataar. It recognizedthe significant and continuing role of SSPWPs in providingwater services to poor urban areas. It also advocated the needto legitimize the SSPWPs participation in the water sector,thereby enabling them to expand their capacity and offer lowertariffs.

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