There are both benefits and drawbacks to private sector involvement in service delivery. In order to formulate positive partnerships that are beneficial to the poor, municipalities must see that benefits are maximised and problems mitigated - all in relation to well-considered and prioritised municipal objectives. The approach presented here draws on the opportunities offered by the formal private sector but recognises that the capacity of the formal private sector is limited and that adverse impacts may be produced. It is necessary to ensure that these are each enhanced and mitigated as appropriate through partnership mechanisms. The formation of a partnership that extends the benefits of the formal and informal private sector, supplements these with the skills and resources of other actors, and places all resources in a focused partnership framework, forms the basis of the following chapters.