Water and sanitation PPP reforms: best practices for integrity and accountability

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Integrity Talk 14

October 21, 2025

“Integrity in the water sector isn't just about preventing corruption, it's about building trust, enabling innovation, and ensuring every drop of investment delivers value for people and the planet. And, there are three critical aspects: transparency in the water sector remains essential; strong PPPs thrive on openness and accountability; and integrity is everyone's responsibility.”

-Olive Kabatwairwe, CoST International

Public-Private Partnership are promoted as a solution to water and sanitation financing gaps—but they're controversial. Recent reforms in Kenya, South Africa, Brazil, Tanzania, and Zambia have expanded private sector participation in different ways for service and infrastructure, generating debate about risks and benefits.

Across the spectrum of views, one thing is clear: PPPs require strong accountability, effective regulation, and robust public financial management to deliver fair and sustainable outcomes. This Integrity Talk examined what this means in practice for different stakeholders, with practitioner insights from South Africa, Kenya, and Tanzania.

Dr. Sean Phillips, Director General Water and Sanitation Department, South Africa, our keynote speaker, presented South Africa's water sector reforms as primarily performance-driven rather than PPP-motivated. He focused on a dramatic municipal service deterioration caused by structural problems: lack of ring-fenced revenue, fragmented management control, and insufficient expertise. The solution centres on the development of a utility model approach within municipalities, with or without private sector involvement.
Olive Kabatwairwe, Africa Regional Manager, CoST – The Infrastructure Transparency Initiative presented empirical findings from CoST's 2024 survey of 219 private sector respondents across Africa and Latin America, revealing pervasive mistrust, attributing corruption to private and public actors, and highlighting systemic capacity deficits affecting all actors (with only 16% having had ethics training). She prescribed three pillars for improvement: rebuilding trust through dialogue and transparency, ensuring quality procurement, and building capacity.
Malesi Shivaji, CEO, KEWASNET emphasized the State's non-transferable obligation to fulfil the human rights to water and sanitation and the need for radical transparency on service levels and contract terms. He called for civil society to evolve into "rights-based accountability partners" for both state and private actors by building expertise in finance, regulation, and contract law while shifting narratives on business interests.
Eng. Exaudi Fatael Maro, Director of Water and Sanitation, EWURA; explained that despite Tanzania developing PPP guidelines in 2017, private participation remained minimal until recently due to three barriers: lack of water sector expertise in PPP design, misconceptions equating PPPs with failed privatization, and limited private sector awareness of water opportunities compared to more visible sectors like mining and telecoms. He shared insights on the Tanzanian model – with dedicated water and sanitation sector PPP regulation, and incentives for improved financial management of utilities, including the submission of mandatory business plans with targets, to be reviewed by EWURA before tariff approvals.

The debate was moderated by Barbara Schreiner, WIN’s Executive Director.

Highlights

WATER AND SANITATION PPP: WHAT TO REMEMBER

Integrity is shared responsibility and rebuilding trust requires dialogue: Public sector, private sector, and civil society must all contribute and constructive engagement between historically adversarial groups is essential.

The money will not just follow: Enabling PPPs in water and sanitation is not just about procurement and specific deals, there are broad implications for multi-stakeholder dynamics, financial architecture (and questions related to cost recovery, ring-fencing of revenue, and pricing), utility models, and institutional frameworks and regulation in and beyond the water sector.

Regulation with integrity, regulation for integrity: South Africa, Kenya, Tanzania have enabled very different PPP opportunities (some for service provision, some for infrastructure) and have very different regulatory frameworks to match – some more centralised than others. There is no one-size fits all reform. Learning from regulatory experience with PPPs in other sectors is key.

Capacity for PPPs is inadequate, capacity for integrity even more so: All panellists insisted on the need for better capacity at all levels – for procurement officers and water sector institutions to set up projects, for private sector players (and especially smaller enterprises) to participate and invest, as well as for civil society on contracts and financing to ensure accountability. They also highlighted the crucial role of good quality data.

Zoom in on water and sanitation sector regulation: Examples from South Africa, Kenya, and Tanzania

OPEN QUESTIONS AND CHALLENGES

Is there a capacity catch 22? Everyone agrees on the need for better capacity to design and monitor PPPs, but it's not clear how such capacity building can be financed and organised.

Various factors play into making regulation effective. We need more research on which regulatory models are most effective, what integrity risks are inherent in each model, and how to strengthen corrective measures to stop impunity. Professionalisation of certain functions is relevant but possibly insufficient on its own. Dedicated anti-corruption measures and integrity training are also key, but unfortunately often poorly resourced.

Data and information are the next challenge. First data and information need to be available. Open procurement and full transparency on service-level agreements, financial terms, debt, technical performance, and monitoring or auditing is the goal, but, in practice, this competes with commercial confidentiality. We need clear priorities and backing from regulators for maximum transparency. Second data and information need to be reliable. Here integrity controls are also key.

Share your thoughts in the polls and comments!

"We are in a context that we must become experts in finance, in regulation, and in contract law, because these are the spaces within which, as civil society, we must now bring in the human rights proof for how finance is delivered, how regulation ensures compliance, and how the different actors, both the state actors and private actors, fulfil the human rights through their contracts."

-Malesi Shivaji, KEWASNET

In your experience, when do corruption risks in water and sanitation PPPs tend to be HIGHEST?