A number of fundamental principles underlie the feasibility and sustainability of partnerships involving the private sector. It is particularly important that they are transparent, that the participants are appropriately accountable, that key stakeholders consider them legitimate, and that procurement is fair and competitive. At the same time, private sector participation (PSP) in service delivery must be adaptable and flexible. A major consideration in developing countries is that partnership outcomes are equitable - that poor people should benefit substantially from the shift in approach. Failure to adhere to these principles in the partnership framework is likely to result in a number of negative effects - discouraging investors, costing local governments too much to achieve their objectives, creating a volatile political context, and ultimately undermining the sustainable delivery of services.