PPP in urban water: lessons from Yerevan, Armenia

Recent literature on public-private partnerships (PPPs) in urban water supply and sanitation (WSS) services tends to concentrate on distressed projects, especially when high-profile concessions are cancelled. Successful projects get comparatively little attention, contributing to the impression that water PPPs do not work. The management contract in Yerevan, Armenia is one example in which private sector participation in WSS service provision has brought benefits to the population, and has been endorsed satisfactorily by the government and national stakeholders. This paper discusses the process and outcomes of Yerevan's management contract (2000-2005), and highlights important lessons for policy-makers and reformers. Based on available data, the authors find evidence of improvements in the quality of services, collections, and energy efficiency, but only modest improvements in technical efficiency. The case study holds valuable lessons for other developing countries, as some challenges had to be faced during implementation. It shows ultimately that, to realise benefits from a management contract, both parties must be willing to make it work, and build over time a true partnership.