Small Piped Water Networks: Helping Local Entrepreneurs to Invest

Focus Area: 
Servicing the Urban Poor
Organization: 
ADB

This book is about small-scale private water providers in Asian cities and the entrepreneurial potential of small piped network operators. It proposes that city officials, city water utilities, and local banks should work with small network entrepreneurs who can bring water supplies to the poor and disadvantaged immediately, on an agreed interim basis until the water utility is able to.

The study examines small piped networks through case studies: how and who starts these operations; who they supply, with what, at what cost, and using what technologies; their business and risk management approaches; and what hinders their development. Their relationships with city hall, the city water utility, and the local banks are examined—and are shown to be difficult and limiting. Most important, the case studies show that it is the poor who benefit most when local entrepreneurs invest risk capital and build and operate piped networks in unserved urban slums and low-income neighborhoods that have been failed by the city water utility.

The study finds strongly in favor of small piped networks, as short- and medium term providers until the city water utility can expand services to the area.

The book offers practical recommendations to city governments and utilities for getting local water network entrepreneurs to invest. Small piped networks should be included in city development strategies, utilities should work with local entrepreneurs, small networks should be "formalized" with licensing and exit strategies and takeout agreements, minimum standards should recognize risk and pay-back requirements, enabling legal and contractual conditions should be created, and small operators should be integrated into the water supply chain to the extent possible.

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