Region: Latin America and Caribbean
Sector: Water and Sanitation
The note explains that a number of considerations embedded in the contract and the Government's continuous commitment to make the Salta Water Public-Private Partnership (PPP) sustainable in the long-term have contributed to its survival when others in Argentina failed. Coordination across government levels and ministries, practical pro-poor measures to expand service and a flexible contract were major reasons why this concession succeeded. The Provincial Government's stability and continuous finance of subsidies and the investment program have also been factors in the concession's success. The authors point out the lessons learned from the Salta Water PPP.
The 1990s saw a big drive to increase private sector participation in water services especially in Latin America. While there is currently less enthusiasm for the use of concessions and other public-private partnerships (PPPs), it is still instructive to inquire as
to why certain partnerships succeeded where others did not. The case of a water concession in the province of Salta, Argentina provides an example of a successful PPP that survived despite its location in a poor province and a severe economic crisis. This paper posits that the Salta Water PPP’s longevity is at least in part due to the spirit of cooperation between various levels of the government and the private operator. That cooperation is embodied by three contributing factors including: coordination across government levels and ministries, practical measures to extend service to the poor and a flexible contract. Stable financing from the Provincial Government was another key factor. Most notable is that this approach is in direct contrast to the 1990s trend where reforms focused on improving sector efficiency and reducing the drain on public resources. The use of a local private operator instead of a large international firm is also of interest. These lessons can be applied to future PPP schemes or other interventions in the water sector.
Updated: June 23, 2022