By Feizal Samath
COLOMBO, Jun 30 1999 (IPS)

Mayors from 11 Asian countries are meeting with Asian Development Bank (AsDB) officials here to discuss the “privatisation” of water services in cities hamstrung by inefficient and bureaucratic municipalities.

“The policy of the Bank is to encourage responsible privatisation of services,” Preben Nielsen, AsDB’s manager of water supply, urban development and housing, told IPS at the three-day ‘Asian Mayors Forum’, which is due to close Wednesday.

Among the participants are mayors of 28 cities in Bangladesh, China, India, Indonesia, Malaysia, Nepal, Pakistan, Laos, Philippines, Sri Lanka and Vietnam, representing a 100 million people in Asia.

Municipalities across Asia are struggling to cope with a multitude of problems like burgeoning populations, unplanned economic growth, urban migration, inefficient administrations and lack of financial resources.

“The second Mayor’s Forum is an important initiative in building practical skills among leaders in the Asian region to cope with their large and growing challenges in improving municipal services to the general population at large,” a statement released at the conference said.

This is the second in the series of meetings between Asian mayors which is sponsored by the bank under a 15-month programme that was launched last September. The first meeting was in Cebu, Philippines, in December last year.

AsDB provides municipalities with assistance to set up regulatory bodies, prepare management or lease contracts with World Bank assistance and formulate guidelines for bidding documents.

Nielsen said that while water supply in Manila (population 11 million) and Kathmandu were handled by private firms, the AsDB was working on doing the same in Colombo and Negombo (Sri Lanka) and Karachi, which has been delayed due to civic unrest.

Only five or six international contractors have the expertise to set up water supply projects, and the AsDB each time negotiates with them to run it for one or two years, and then hand over operations to local partners.

Often the municipalities regain control under Build, Operate & Transfer terms (BOT). When the project is a lease contract, it could be privately managed for up to 25 years.

Generally, the decision to privatise water supply has been taken only after extensive feasibility studies are carried out but in the Kathmandu case, water services were so badly maintained by the municipality that private firms were called in without any reservation, Nielsen said.

The AsDB has also helped set up an efficient public sector water supply scheme in Ho Chi Minh City.

Two of its other success stories, Colombo and Penang (Malaysia) were shared with the conference. The private sector teamed up with community groups to improve basic services like water supply, sewerage, garbage and waste disposal.

Karu Jayasuriya, former Mayor of Colombo, spoke of a number of partnerships between the Colombo Municipality and the business community, professional organisations, non governmental groups (NGOs) and civil society.

“NGOs and private sector joined us in the maintenance of dispensaries, of roundabouts, traffic lighting systems, provision of common amenities to the poor, street name boards and so on,” said Jayasuriya, who stepped down as mayor last month.

As a result of the breakdown of public services, these were handed over on a contractual basis to the private sector.

“Although there was initial criticism and objections, it proved a successful venture. Today, many services such as janitorial, security, garbage collection is carried out on contracts by the private sector,” he told the meeting.

In much the same vein, Rhina Bhar of the municipal council of Penang, spoke about the ‘Sustainable Penang Initiative’, which championed initiatives and explored partnerships between civil society, state and business.

Bhar said that the local government in Penang, a state of 1,031 sq km with a population of 1.28 million, set up a think- tank called the Socio-Economic & Environment Research Institute (SERI) which provided a forum for all stakeholders in the city.

She said partnerships were built between the Malaysian Nature Society, the Penang government water authority, business and

industry for a public campaign on water conservation while another was set up between pedestrians, users and cycle groups to promote cycling and infrastructure in two pilot areas.

Other partnerships were built to help disadvantaged groups as well as for environment protection, Bhar noted.

Elsewhere like in Mandaluyong, a small city in the Philippines, its mayor Benjamin Abalos said that when local authorities had no money to replace the city market that was destroyed in a fire, it turned to private firms.

In a pioneering move, Abalos offered state land for development under BOT terms to the private sector and quickly raised millions of dollars for the local authority.

“We were not only able to generate large revenues but also construct a new mall free of charge,” he said. By turning an experiment into a successful venture, Mandaluyong became the first municipality in the country to implement a BOT arrangement, and make privatisation pay.

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