Utility consolidation and regionalization

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Sector Resources Policy topics Utility consolidation and regionalization

  

Good Practice review

2008

Pdf file available in:

(4.0/1)

Water Sector Board of the World Bank Group

Aggregation of Water and Sanitation Provision: Finding the Optimal Scale for Operations

When several municipalities unite in a single administrative structure—a process known as aggregation—they can lower the cost of utility services through economies of scale. Aggregation
of water supply and sanitation (WSS) services is established practice in some countries and is likely to spread, as decentralization policies leave some service providers too small to be efficient or sustainable.

In 2005, the World Bank studied 21 instances of aggregation
of WSS services aggregations, looking for innovative models and factors that contributed to success. The practices they identified may help other countries aggregate municipal utilities.

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, , 21 February 2017


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Contributed by Christoph Leitner on 15 April 2016

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Regional analysis

2009

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(3.0/1)

Kommunalkredit Public Consulting

Report on measures to cope with over-fragmentation in the water supply and sanitation sector

The report is structured as follows: The chapter to follow discusses the issues to be analysed in more detail by identifying and assessing the main topics covered in the report. Chapters 2 to 6 discuss the current state of affairs in the water sector in Austria, France, Poland, Romania and Ukraine. The focus of these country-based case studies is to highlight the current situation in the water sector in these countries, concentrating mainly on issues linked to the questions of whether inter-municipal cooperation exists in these countries and, if so, how has this has developed over time.


Chapter 7 summarises the findings of the country-specific case studies, focusing on discussion of the potential of inter-municipal cooperation in the water sector. It has to be stated that the country-based experiences are unique and therefore cannot simply be compared and/or transferred between countries. Additionally, it is impossible to draw generally accepted recommendations with regard to issues relating to decentralisation. For instance, the situation in the water sector in Austria is stable and therefore differs completely from that in Romania where the legal framework and institutional set-up still regularly face major revision. The issue of time is also of great significance as the water sector in older EU member states has developed over quite a long time horizon as opposed to in new EU member states. This aspect is of especial interest and concern as all EU member states are required to fulfil the same EU water policies objectives and regulations, and the new EU member states must comply both within a relatively short timeframe and from a different starting point. The focus of the final chapter is on discussion of the findings with regard to developments in the water sector, particularly with reference to the decentralisation and fragmentation in the sector. In addition, the chapter  reveals the factors driving the process of the formation of inter-municipal cooperations as identified in the individual country case studies and in the literature. The report ends with a typology highlighting some of the dimensions of inter-municipal cooperation.

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Contributed by Christoph Leitner on 15 April 2016

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Background or theoretical study

2005

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ERM in association with Stephen Meyers Associates and Hydroconseil; William D. Kingdom

Models Of Aggregation For Water And Sanitation Provision

This study analyzes when WSS service aggregation may be considered as a way to improve service effectiveness and what are the main drivers and constraints to such processes. The study has been developed in the context of the World Bank “Town Water Supply and Sanitation Initiative,” which seeks to identify innovative service models for water and sanitation services, particularly in towns. The study was developed in three distinct phases. The first phase consisted of exploring issues relating to aggregation in a series of short notes and identifying examples of aggregated structures that could potentially be analyzed in more detail in the second phase. Seven case studies were researched in more detail in the second phase, including aggregation processes in France, the Philippines, Hungary, Brazil, Italy, the Netherlands, and England and Wales. The third phase of the study consisted of extracting the lessons learned from the case studies and the analysis conducted in the first phase into this final report. Taken together, the work will assist governments in reaching decisions about whether aggregation may be needed, and in which form, and will provide guidance on how aggregation processes can be run to increase the chances of a successful outcome.

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Contributed by David Michaud on 22 April 2016

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Background or theoretical study

2017

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World Bank Group

Joining Forces for Better Services? When, Why, and How Water and Sanitation Utilities Can Benefit from Working Together

This global study was initiated to provide evidence-based guidance to policy makers and practitioners regarding when, why, and how water and sanitation utilities can work together (“aggregate”) to successfully deliver specific policy outcomes, such as better services or lower costs. This work does not advocate for or against aggregations but rather presents and reviews global evidence, analyzes specific aggregation case studies, and identifies the key characteristics that successful aggregations have in common, depending on their purpose and the context in which they occur. Acknowledging that it is
challenging to make “before aggregation” and “after aggregation” cost comparisons because the levels of service are changing, this work focuses on proposing recommendations for successful aggregation, shaping lessons learned into a checklist of key questions to ask, and pointing out key decision points. The recommendations are based on evidence and observed experiences rather than theoretical considerations and sometimes run counter to conventional
wisdom on aggregation practices.
This study consists of a review of literature and an analysis of both qualitative and quantitative evidence—including a statistical analysis based on IB-Net data covering 1,306 utilities
from more than 140 countries; a review of global aggregation trends, collecting data for 111 countries; and 14 case studies from seven countries, providing a deep dive narrative of
aggregation experiences.

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Contributed by Katerina Schilling on 04 October 2017

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