□ The nature and diversity of the private sector

The term 'private sector' can be used to mean many things. In discussions of PPPs, the term 'private sector' often implicitly refers to multinational companies - large, profit-oriented organisations that operate across borders and report to shareholders. However, the development of private sector involvement in poverty-focused service delivery can and should denote a far broader vision of the private sector - one that includes a range of actors delivering services. The primary characteristic of the private sector is not size, scope or capacity. The key distinguishing characteristic is that individuals, organisations, businesses or enterprises act in the pursuit of profit.

With regard to the delivery of municipal services, it is useful to consider three different types of enterprise: international, national and small-scale (formal or informal) local enterprise. Although all of these types involve the pursuit of profit, their scales of operations are almost always associated with the distinct competencies and benefits that they bring to a partnership. Within each typology there is undoubtedly further diversity; the categories are not discrete but operate as a continuum, and PPPs may include one or all of these categories in a collaborative effort. The categories are summarised in Box 6.4.

The term 'private sector', in relation to municipal service delivery, therefore covers a vast range of profit-making organisations - large and small, formal and informal, in a range of sectors. One end of the private sector spectrum is represented by large international water companies such as Ondeo-Lyonnaise des Eaux, Vivendi and Thames Water. The other end is represented by the water-vendor with a cart, selling water by the container. In the solid waste sector, the national operators with compactors and large-scale landfill and recycling facilities are contrasted with the small-scale rag-picking cooperatives or itinerant waste-buyers, whose self-employed recycling activities are the basis of their livelihoods. In between these extremes lies a set of profit-making enterprises/organisations whose capacities and interests are all potentially relevant to the different types of water and waste services.