Task Group on Performance Based Contracts for Improving Utility Efficiency
Supporting the improvement of utility efficiency is a key area of interest for IWA and its members. Within the range of options for achieving efficiency gains for utilities, the role of the private sector has long been established, yet widely debated. What is recognised after decades of experience, is that there needs to be a broader, more flexible and equitable form of public-private partnerships.
In this context, the opportunities for performance based contracts (PBCs) – linking the payment for services delivered to the verifiable accomplishment of improvements against pre-determined performance indicators - appears to be appealing for a variety of operational and managerial matters related to water and wastewater services in a range of circumstances.
The market for PBCs in the water sector is relatively immature and experience from other sectors – energy, road and highways infrastructure etc – suggest that mainstreaming this type of contract can be a very useful addition to the portfolio of options for improving utility performance , particularly in Low and Middle Income Countries (LAMIC).
The aim of the task group is to improve understanding and undertaking of effective PBCs to improve utility efficiency and mainstream the application of PBCs as a concept for investment. To achieve this, key stakeholders – such as utilities, consultants, international finance institutes and bi-lateral donor agencies - need to be engaged in a process of testing and maturing the market. This requires the identification of technical expertise, institutional frameworks and financial mechanisms to support long-term uptake of PBCs in the water sector.
The initial TG committee includes below members: : Philippe Marin (France, Chair); Dominique Demessence (Spain); Udo Kachel (Jordan); Jan Janssens (Switzerland); Didier Carron (France); Gerhard van den Top (The Netherlands); Tami Gaoni-Feldman (Israel)
