The National Water Policy of 1995 opened the way towards private sector participation. Still assumed at the time however was that a single private operator within one sector would be cheaper, less complex and more marketable. In 1998 the management of urban/municipal water supply was decentralized within the National Water Policy, resulting in e.g. the creation of FIPAG and CRA. This has enabled the municipalities to develop regulations and by laws regarding municipal water supply, sanitation and solid waste management.
Although the AdeM as private sector provider can determine how to operate and manage its activities, the CRA and FIPAG protect consumers and operators, and are responsible for investment planning and decide upon the tariff system.
The national water policy includes regulations, which make it possible within the municipalities to subcontract standpipe operations to private operators, who will be billed on the base of the quantity of water consumed in each standpipe. At the same time, although the National Water Tariff Policy of 1998 creates the basis for cross-subsidization and the tariff is based on minimum wage, there is no clear and consistent policy approach as yet for social issues in water services delivery.
The existing policy in general has a macro-level approach with little attention and priority for the neighborhood level. This has led to large-scale investments open for the private sector at overall city level, as is the case in the water sector, where AdeM is the sole water provider. This approach does not facilitate the implementation of pro-poor PPP's, providing the poorest neighborhood with basic services. The pilot PPP project did result however in a municipal by law creating a framework for contracting small business and informal sector to carry out waste collection.