One of the main objectives behind promotion of PPPs is to achieve efficiency gains in project operation and service delivery. However, often the existing condition in a sector is not conducive to create a multi-operator competitive environment, which is a necessary condition to achieve this objective. It may be pointed out here that while transfer of ownership to the private sector and/or private operation may bring some improvements but these actions alone may not be sufficient to bring the desired level of improvement in efficiency. Changes in current policies, legal and regulatory regimes and practices may also be required to allow multiple operators operating in a truly competitive environment to generate and provide the services.
The major issues in creating a multi-operator competitive environment conducive to private investment can be categorized in three broad groups, which are:
| • Reforms aiming at structural changes of the sector through breaking down of state (or private) monopolies, and removal of sector inefficiencies to create a multi-operator competitive environment conducive to truly sustainable development on economic as well as ecological considerations; | Broad groups of issues |
| • Issues that arise due mainly to an multi-operator environment such as network expansion, inter-connection and inter-operability (operational issues); • Physical/natural characteristics of the sector, particularly those related to the optimum use of the natural endowment such as land, water, mineral and mining resources, and radiofrequency spectrum. |