Water and Sanitation Operating Contracts

Overview

This library presents key documents from a USAID workshop “Making Cities Work: Operating Contracts for Water and Wastewater Services,“ held in March 2008 in Cairo, Egypt. The workshop was attended by USAID staff and local partners from Afghanistan, Egypt, India, Jordan, Montenegro, and Mozambique.

The workshop focused on a range of operating agreements: performance agreements (e.g., agreements between national and regional water authorities and local water utilities); service contracts; management contracts; leases and affermage agreements; and concessions. A priority of the workshop was to have participants understand the importance of performance targets and associated incentives in operating contracts, regardless of the specific contract form. Presentations made at the workshop are provided below.

Presentations

Designing Operating Contracts

A key objective of the workshop was to equip USAID and partner organizations, water supply and sanitation professionals, with the tools needed to design contracts to procure the services of experts to manage various aspects of water and sanitation operations. To this end, workshop participants were provided with tools to design an operating contract. A template (download Word file) was provided that participants could use to organize the process of designing a water and sewerage operating contract. The Word template included four design aspects/sessions intended to guide the user through major questions that need to be answered in designing an effective contract strategy, including:

  1. Target Locations and Objectives;
  2. Key Design Problems and Challenges;
  3. Operator Compensation, Performance Targets, and Incentives; and
  4. Basis for Tendering and Award.

Next, workshop participants were provided with another template (download PowerPoint file) to develop the terms of their operating contract.

The operating contracts that were designed by USAID Missions during the workshop are presented below:

Sample Contract and Tender Documents

References