Municipal partners are in a unique position in partnership arrangements for service delivery. On the one hand they are very dependent on the private sector for investment, cost efficiencies and/or know-how, and on the community for its willingness to play the game, pay its tariffs and participate in operations and maintenance. On the other hand, as the initiators of potential partnerships, municipalities have enormous power. At the outset they are able to determine and direct strategy. They determine, for instance, the extent, nature and scope of the partnership, the actors involved, and the requirements for consultation and community participation. They determine how much of the service mandate to delegate, for how long, in what manner and to whom. While the private sector inevitably builds a stronger presence, at the later stages the municipality oversees the implementation process. The municipality determines the requirements for expansion and service standards, and sets the initial agenda for a pro-poor framework.
Evidence also suggests, however, that municipalities behave very differently with different kinds of partners (e.g., established international operators versus informal small-scale providers), and thus assume very different roles in different service sectors. They exhibit much more self-assurance in working with private enterprise in low-technology activities such as solid waste or septic-tank cleaning than in network service arrangements such as water supply, where they often lack the confidence and skill needed to perform allocated roles (see Box 6.1).
Box 6.2(b) illustrates the different roles that may be played by the municipality in service partnerships. Some roles are obligatory and should be performed by the municipality; others may be dependent on the competencies and comparative advantage of other actors that may become involved.
• Strategic planning A primary role of the municipality in a poverty-focused partnership is to ensure that activities are integrated, efforts converge and investment is targeted. While it is necessary to have collaborative processes, ultimately this planning role cannot be delegated.
• Management and monitoring The management and monitoring role of a municipality will vary according to the service, the type of arrangement and the contract. It is likely that its operational role will be reduced, but it needs to redirect its skills and time towards monitoring the performance of other partners.
• Financing The municipality is likely to be responsible for the development of a financial strategy for raising both operating and capital costs, and for executing the strategy.
• Regulation Where the external operating context does not provide an adequate regulatory framework, municipalities will need to decide how the arrangement is regulated and facilitate these arrangements. (For a detailed discussion on regulation, see Chapter 10.)
In the poverty-focused approach to service partnerships, these four roles are extended (see Box 6.2(c)) to include roles that are vital in ensuring effective and sustainable benefit to poor households and communities.
• Coordination The municipality must ensure that appropriate stakeholders are involved, that their roles are clear, and that as disputes arise there is a process for resolving them.
• Consultation and participation Municipalities have a responsibility to lead a process of consultation and encourage the active participation of all primary and secondary stakeholders.
• Social guardian The municipality has an important role in ensuring that equity concerns are addressed. One of the primary municipal responsibilities is to facilitate a supporting mechanism for the poor, so that their voice is heard within the partnership. A municipality may draw on the services of an NGO, depending on the local situation.
• Capacity building Typically, all actors will require some capacity building to work effectively in a partnership. Municipalities will have to decide how this capacity building will be achieved and ensure that the partnership arrangement accommodates it.
• Integration with municipal activities Many established partnerships address only one specific service. A key municipal role is to establish linkages and integration with other poverty responses and urban management functions.
A municipality will need to clearly identify the key municipal roles that cannot be delegated, those that - on balance - are best played by them, and those that can be delegated with ease.
Box 6.3 The Changing Municipal Role in Solid Waste Management | ` |
The municipality in Hyderabad, Andhra Pradesh, India, has established itself as a well-run organisation able to work effectively in community development, and to work with the district to resolve land tenure issues and to create sustainable improvement in the low-income areas of the city. Although the city does not at this time have a democratically elected council, the municipal corporation has successfully embarked on a process of contracting-out solid waste management in the city, radically changing its role from that of service provider to one in which it works with small-scale private sector organisations to manage waste within the city. The Municipal Corporation of Hyderabad (MCH) has a sound history of drawing in private sector resources to resolve urban management issues. In the 90s, innovative land-sharing initiatives undertaken with the MCH and poor communities assisted the municipality in resolving some difficult tenure and service problems in core areas of the city. In this exercise, the municipality took on the role of facilitator, aiming to bring together the disparate interests of a private landowner with those of a poor community, to bring about a sustainable solution to squatting in the city. In 1994 the MCH attempted its first initiative with private sector contracting in the vast task of covering a city where 2000 metric tons of waste are generated daily. The process of shifting from 'provider' to 'monitor' has not been straightforward. Early efforts proved unsuccessful because the municipality did not provide the supervision necessary to ensure contractors met performance standards without attempting to cut corners. The municipality has undergone a steep learning curve, learning lessons through mistakes and experience. This underlines the importance of monitoring and of establishing contracts that can be effectively monitored. In 1994, the MCH opted for a system that required the contractor to fix its rates for sweeping, collecting and transferring waste. This approach - covering 10% of the city - resulted in the contractors simply bidding low to win contracts, and then employing insufficient staff to carry out the work. As a result, the MCH altered its approach in 1996 to enable easier monitoring. This system was based on a payment per load, which was thought to constitute an incentive for the private sector to clean the area to a higher standard. This system covered 25% of the city. Contractors bid per load (per ton), and the contract was awarded to the tenderer with the lowest bid. Keen to increase the quantities of garbage collected, contractors picked up rubbish from areas outside their allocated zones. In 1998 the MCH introduced a new programme - which they called the 'unit system' - in which 55% of the municipal area was to be the responsibility of private contractors working on one-year service contracts. For its part, the municipality introduced a process of systematic monitoring . This is carried out twice daily by the conservancy department (assistant medical officers and the sanitary inspectors) of the MCH and the local communities. A public complaints line was established and the council thus continues its role in customer management. Yet despite the success of this system, the MCH has struggled with its new role in relation to labour. In the midst of strikes, squats and absenteeism, senior municipal officials entered into lengthy negotiations with the unions. Although the MCH was flexible in some respects to change, in the main, little room was given to the union. The MCH relied on its status, and its reputation for strict tactics, to establish union support. While the contract stipulates that workers are to be employed in accordance with the Minimum Wages Act, this has been difficult to enforce. The MCH is aware that contractors attempted to underpay staff (approx 800-900 rupees fewer than the unit rate established by the MCH) in order to increase their own profit. Therefore, the MCH introduced severe penalties to discourage this practice across the city. The lack of feedback from workers is obviously a drawback, so senior officials have introduced random checks and have cancelled numerous contracts when they established beyond doubt that the practice of underpaying was taking place. | |
Source: personal Interview, June 2000; Zerah, 1999 | |