ABSTRACT

Regulators or agencies in charge of overseeing the delivery of water and sanitation services must have a good understanding of the water and sanitation market if they are to counterbalance its imperfections. As the case studies have shown, in lower-income countries, this market is not limited to a monopoly provider supplying a largely homogeneous customer base with a fairly standard package of services. Inadequate infrastructure, underinvestment and the continuous pressures of rapid population growth and rising poverty levels far exceed the capabilities of conventional public service provision. The result is an irregular, fragmented market with a variety of agents, including a vibrant informal sector composed of dynamic private entrepreneurs. This ‘other’ private sector (Solo, 1999) occupies the many gaps left vacant by the utilities, and in particular (but not exclusively) caters for lower- and lowest-income households. This chapter investigates these alternative providers and their customers, their operations, the many problems and constraints they are facing along with their survival mechanisms. Having identified arguments for and against small-scale independent provision or utility cooperation with private intermediaries, it then seeks to explore the potential for incorporating alternative providers into the regulatory framework. The term ‘alternative providers’ is used throughout, encompassing all varieties of small-scale private provider, for which there are many terminologies, often used inconsistently by different authors.