The management contract for water and sanitation services in the Venezuelan state of Monagas, awarded in early 1997 to a Spanish firm, is one of very few signed and active management contracts in the water sector. Management contracts pose design challenges. Their built-in incentives do not include equity at risk, so surrogate incentives must be designed, such as a performance bonus.
This document starts with an overview of the water sector in the PPP, trends in different parts of the world, and an analysis of contracting out and outsourcing. Then the study goes in depth on cases of contracting out (services and management contracts in the water sector) in countries such as Chile, Mexico, Trinidad and Tobago, Haiti, African, India, Indonesia, and the USA.
Tracking Number: The Management Contract for Johannesburg Water_2009_EN
The brief explains how the IFC in coordination with other development partners, helped to bring private sector participation into the power sector in Liberia by structuring a partnership between the government of Liberia and a private partner. As there was a lack of market appetite for a fully private option, in April 2010, IFC concluded the design and tendering of a five-year management contract for the Liberia Electricity Corporation (LEC), the electricity utility in the capital city of Monrovia.
The World Bank has developed a Standard Form Management Contract together with Bidding Document and Technical Note recommended for use on water and energy projects. Go to the General Conditions in the Bidding Documents for the contract itself.
Public private partnerships in water require various agreements, or contracts, to outline the relationships and responsibilities between various stake holders. The agreements below are specific to the water and sanitation sectors.
The World Bank has developed a Standard Form Management Contract together with Bidding Document and Technical Note recommended for use on water and energy projects the Bank is funding, together with a technical note discussing management contracts and their preparation. go to the General Conditions in the Bidding Documents for the contract itself.
Public-private partnerships (PPPs) take a wide range of forms varying in the extent of involvement of and risk taken by the private party. The terms of a PPP are typically set out in a contract or agreement to outline the responsibilities of each party and clearly allocate risk. The graph below depicts the spectrum of PPP agreements.