[ASQ10_Form_2]

Module Specification Form

Code Title Faculty Credit rating Aims CP52028 GOVERNANCE OF PUBLIC AND PRIVATE WATER SERVICES PROVISION Law and Accountancy Level Volume The primary objective of this course is to provide an overview of the development of private sector involvement in the provision of water services, and why. A running theme will be the development of regulatory frameworks and legal instruments that have been implemented in an attempt to govern what has until recently always been considered a public good. In parallel the course will also be concerned with economic and commercial aspects of water, which have changed dramatically over the years, affecting how water services are now governed. On completion of this course, the student will be able to demonstrate a sound understanding of the following concepts: o The functional nature of water services provision supply, distribution, sewerage and treatment; o the fundamental principles and objectives of Public, Public-Private Partnerships (PPP), and Private water services provision, and apply these to specific representative case studies and projects in action; o key issues and considerations related to provision of a public good, with economic and commercial considerations, particularly by the private sector; o regulatory frameworks and legal instruments, and other enabling tools and environments, conducive to successful water services provision; and o the contractual issues and considerations from both a public and private viewpoint, and the current global concern of contract enforcement. General introduction to water services provision and operations; including current models, objectives, legal/economic/social/political issues, criteria for success, best practices, and current governance issues. Theoretical and practical sessions on: (i) legal instruments and frameworks that govern water services provision; (ii) development of economic and commercial issues/considerations in the water sector; (iii) whether or not private sector involvement is indeed the answer. 60% 40% Coursework (%) Exam (%) No. & duration of exam(s) Lectures, and practical sessions involving power point presentations, and interactive case studies with students being prompted to take Government and Industry positions. * Face to face. Power point presentations. Interactive case studies. Blackboard VLE.

Intended learning outcomes

Indicative content

Assessment

Teaching & learning When taught Modes of delivery & student participation Pre-requisites of entry requirements Accessibility for students with disability Corequisites Antirequisites

None

None None

See Guide notes on Module Specification http://www.dundee.ac.uk/learning/qau/taught/prog/m_spec_gn.htm Version and status: Approved AS Comm 4Nov02, L+T Comm 20Nov02

Module Outline for: GOVERNANCE OF PUBLIC AND PRIVATE WATER SERVICES PROVISION
SOCAT Value: Level: Pre-requisite modules: Module Organiser and Lecturer: 20 postgraduate None Dr. P.K. Wouters and Mr. R. Dhillon (IWLRI, Dept. of Law, Scrymegeour Building, email: p.k.wouters@dundee.ac.uk)

AIMS
The main objective of this course is to provide an overview of the development of private sector involvement in the provision of water services, in what has always been considered until recently solely the public domain. A running theme will be the development of regulatory frameworks and legal instruments that have been implemented in an attempt to govern what is essentially a public right. In parallel the course will also be concerned with economic and commercial aspects of water, which have changed dramatically over the years, affecting how water services are now governed. The course will begin with an overview of the functional nature and fundamental models and principles of Public, Public-Private Partnerships (PPP) and Private water services provision. All units will consider the specific context of current legal issues and the contentions therein, applicable to water services provision. At the end of the module, students are expected to be able to identify the problematic legal issues and possible solutions for addressing and implementing effective and sustainable water services provision.

INTENDED LEARNING OUTCOMES

On completion of this course, the student will be able to demonstrate the following skills: o Identify the fundamental functionalities, principles and objectives of Public, PPP, and Private water services provision, and apply these to specific representative case studies and projects in action; Understand and analyse key issues and considerations related to provision of a public good, with economic and commercial considerations, by the private sector; Understand and analyse regulatory frameworks and legal instruments, and identify enabling tools and environments required; Understand and identify the contractual issues and considerations from both a public and private viewpoint, and identify current global problems such as contract enforcement. Identify and analyse the law and frameworks that govern water services provision; Provide solid legal and economic and commercial opinions on issues related to PPPs; Prepare and write a (legally orientated) postgraduate level research paper on the provision of water services, within a Governance orientated context.

o o o o o o

Conduct postgraduate level research (including internet research) aimed at collecting current and relevant international documents.

MODULE CONTENT AND STRUCTURE

Unit 1: Introduction Basic principles of the water utility sector, 02/05/2005 (David Johnstone)

Detailed overview of the 4 core functions that constitute water services provision water supply, water distribution, sewerage and sewerage treatment. Overview of Specialist functions Finance, Administration, Engineering, Scientific etc. Nature of organisations providing water services management of the functions and the different forms. Providing for the regular urban environment and the rural and peri-urban environment importance of this distinction in water services provision; the different considerations and requirements involved. The Health Issues achieving MDGs. Brief discussion of waterborne diseases, waterrelated diseases, and water-washed diseases, and their different meanings and implications for water services provision.

Unit 2: Public and Private Water Services Provision, 03/05/2005 (David Johnstone)

Introduction to Public, PPP, and Private Models operating today in the provision of water services: Existing models. The practical experience with PPP in the water, electricity, heating and roads sector over last 30 years. Why the particular difficulty with water. Water services provision objectives: Service for all; Sustainable service; Efficient Service; Clear Performance Indicators; Best Practices; MDGs, Demand Management/Driven; Pricing policies economical, efficient and recover cost; Universal metering; Improved billing and collection; Political will. Introduction of Legal issues in the provision of water services, particularly in PPPs (ownership questions, legislation, contractual etc).

Unit 3: Does the Public Sector really need Private Sector Involvement?, 04/05/2005 (Jacques Labre)

The need for Private Sector Involvement (PSI): challenge of financing world-wide. Analysis of Public & Private Sector provision of water services: case studies. The Problem of Existing PPP models in water why have they worked/ not worked? The option a government chooses should depend on the problems it wants to address, what it is prepared to do to create an environment in which the private sector would be willing to address these problems, and the countrys attractiveness to private investors. Criteria for analysis: legal, political, economic, financial, social, cultural and institutional. Specific considerations to examine: Public-Private Risk Sharing, Sector Regulation, Pricing policies, Public communication, Accountability to users, Poverty alleviation etc. Practical examples to the fair Balance of Power, Profit sharing and liabilities. The basic questions before embarking down the PSP road: What do want the private sector to do for us? What will the service improvements that we want mean for the tariffs that consumers will have to pay? Does the existing regulatory framework provide sufficient support for the private sector so that it will take on commercial risks? Do the stakeholders support or at least not oppose PSI?

Unit 4: Analysis of current models: criteria for success, 05/05/2005 (Ranji Dhillon)

The need for effective governance in water services provision, and how can it be obtained. Fundamental principles of Effective and Sustainable Water Resources Management; Legislation, Contracts and Regulation. Predictable and enforceable legislation/regulatory frameworks detailed overview and analysis on legal system(s) required, contractual and commercial considerations (public and private), and conducive and effective regulatory frameworks. The Regulator and his required role. Best Practices: examples from the field i.e. Public Participation and Communication, Transparency, Incentive based contracts, strong and effective regulators, and enforceable contracts. Presentation from Steve Malacek on ongoing PhD research - Franchising in Water: A new model for public-private partnerships.

Unit 5: Governance Issues: Legal Instruments and Regulatory Frameworks, 23/05/2005 (Ranji Dhillon / Dr. Wouters) Enabling Legislation and Effective Regulation should be in place before any form of water services provision is in operation, particularly where the private sector is involved. Development of International Law in the water sector Attempts at regulating (development of legal instruments) the water sector; treaties, conventions and other sources of international law: The 1997 UN Watercourses Convention, 1998 Aarhus Public Participation Convention, 1999 Protocol on Water and Health: rational water management, sustainable water-resources management, public awareness, public participation, education, access to information. 1992 Rio Conference and Agenda 21: Integrating environment and development in decision-making; Protection of the quality and supply of freshwater resources: application of integrated approaches to the development, management and use of water resources; International legal instruments and mechanisms. The 2000 EU Water Framework Directive: cost recovery - social, environmental and economic effects of the recovery; river basin management plans; environmental objectives, programme of measures, public information and consultation. 2001 Bonn Conference; 2002 World Summit on Sustainable Development (Johannesburg); 2003 World Water Forum (Kyoto). Current Governance Issues of particular interest in the water sector: Accountability, Economic, Political and Social issues, Equity, Participation, Predictability, Sustainability, Transparency, and Efficiency.

Unit 6: Governance Issues II: Legal Instruments and Regulatory Frameworks, 24/05/2005 (Ranji Dhillon / Dr. Wouters) Regulator required: Transparency, Independence, Accountability, Consultation, Resources, and Information. Where do / should new regulators come from, and how are they to be trained? Regulatory Framework required: Price; Service; Decision Making process; Independence; social, cultural and political demands; Transparency; Predictable.

Regulatory Frameworks: legal instruments / governance tools most conducive to successful and satisfactory water services provision, particularly where the private sector is involved. Case studies: examples of countries with and without enabling legislation and effective regulation - Comparative analysis of current regulatory regimes.

Unit 7: Contracts, 25/05/2005 (Ranji Dhillon) Comparative analysis of current working models/contracts in the provision of water services. Comparative analysis of The Transaction Process, from tendering to implementation competitive tendering versus negotiated contracts. Appointment and role of transaction advisers (legal, economic, technical etc), contract preparation, bidding process, due diligence, bid evaluation, form of contract (targets, penalties, flexibility, regulation), award. Experts required before contracts are finalised and their roles: engineers, financial analysts, economists, lawyers, HR experts, and public relations experts. Structuring contracts attractively, examples from private and public viewpoint/considerations. The current models used including Incentive Based Management Contracts, BOO, BOOT, BOT with Management, Concession and Lease elements. Commercial Issues: Scope, Duration and Exclusivity, Investment, Incentives and Penalties, Flexibility (variations and changes), Employment, Credit Risk, Consumer care, Information, Termination. Class Exercise: Role-play scenario, theoretical PPP contract negotiations situation, class members to assume private and public roles to argue respective yet wholly conflicting cases/requirements to be addressed by PPP contract.

Unit 8: Conclusions / Outlook / Preliminary paper presentations, 26/05/2005 (Ranji Dhillon)

Class exercise continued. Case studies: how to deal and overcome difficulties that exist (adherence / application / enforcing) in long-term contracts in water services; local and national governance issues/problems; why impossible to enforce contracts in certain countries. Case Studies of recent failures and successes, and current issues: Examining representative cases of original and evolved objectives of WSSS projects and actual levels of achievement. Lessons to be learned from Public, PPPs, and Private water services provision. The issue at hand: Determining what models and tools are best suited in the different circumstances and situations. Course assessment: Student preliminary presentations/discussion of research paper topics.

READINGS
There is no specific text for this module as all of the material will be handed out in the form of lecture notes, and prepared exercises. A detailed list of supplementary reading materials and recommended readings, will be suggested in lectures, and will include:

General Reading Primary Sources

Convention on the Law of the Non-Navigational Uses of International Watercourses, 21 May 1997, reprinted in 36 ILM 700 (1997) (open to signature). Aarhus Convention on Public Participation Convention on access to information, public participation in decision-making and access to justice in environmental matters (25 June 1998, Aarhus). Protocol on Water and Health to the 1992 Convention on the Protection and Use of Transboundary Watercourses and International Lakes (17 June 1999). Treaty of Amsterdam amending the Treaty of European Union, 1999 O.J. (C 340) 1. Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy, 2000 O.J. (L327) 1. Ministerial Declaration of the Hague on Water Security in the 21st Century (22 March 2000, The Hague), The Water Law and Policy Programme, Training Seminar 2000, Volume II Documents, Equitable and Sustainable Access to water, 10 14 July 2000, CEPMLP, University of Dundee, Dundee, Scotland. DIRECTIVE 2000/60/EC Of The European Parliament And Of The Council Of 23 October 2000 (EU Water Framework Directive Opinion of the Economic and Social Committee on Integrating environment and sustainable development into economic and development cooperation policy, 2001 O.J. (C 14) 87. Opinion of the Economic and Social Committee on the Strengthening of the Law Governing Concessions and Public/Private Partnership Contracts, 2001 O.J. (C 14) 91. Communication from the Commission: The Challenge of Environmental Financing in the Candidate Countries, COM (2001) 304 Final, ELLIS Publications.

Secondary Sources Barberis J., The Development of International Law of Transboundary Resources, 31 NRJ 167 (1991). Brook Cowen and N. Tynan, Private Sector Participation in the Water Sector: Designing an Appropriate Reform Option, Proceedings of an International Water Seminar, June 8-11, 1998, University of Dundee, Scotland. Brook Cowen, P., Competition and Regulation in Water and Sanitation, Proceedings of an International Water Seminar, June 8-11, 1998, University of Dundee, Scotland. Clarke, G. and Wallsten, S., Univeral(ly Bad) Service: Providing Infrastructure Services to Rural and Poor Urban Consumers (World Bank Policy Research Paper 2868, July 2002) Cook & Kirkpatrick, Privatisation, Enterprise Development and Economic Reform, (Cheltenham, Edward Elgar Publishing, 1998). J. Delmon, Privatisation, (London, Sweet & Maxwell, 2000). Gleick, Peter H., The World Water Biennial Reports on Freshwater Resources. Washington: Island Press, 2003; 2000; and1998. Hall & Lobina, Private to Public: International lessons of water remunicipalisation in France, IWLRI & AWRA International Water Conference Globalisation and Water Resources, Conference Proceedings, 6-8 August 2001, University of Dundee, Scotland. Johnstone, N., Private Sector Participation in Urban Water and Sanitation, 23 NRF 287 (1999). Legge, D., The Water Industry in a Regulated Environment, (Journal of Environmental Law, Vol. 12, No. 1, 2000). McCoy-Thompson, S., Public-Private Partnerships, 22 NRF 87 (1998). Pargal, S., Regulation and private sector investment in infrastructure: Evidence from Latin America (World Bank Policy Research Paper 3037, 2003)

Rees, J., Regulation and Private Participation in the Water and Sanitation Sector, 22 NRF 95 (1998). Robinson, N.A., (ed.), Agenda 21 and the UNCED Proceedings (Oceana Publications, 1992) Teclaff, L.A., Abstraction and Use of Water: A Comparison of Legal Regimes (New York: United Nations, 1972). Wouters, P. (2000) National and International Water Law: Achieving Equitable and Sustainable Use of Water Resources, Water International 25. Wouters, P., Salman Salman and P. Jones (2001) The Legal Response to the Worlds Water Crisis: What Legacy from the Hague? What Future in Kyoto? University of Denver Water Law Review 4. International Conference on Freshwater: 2001 Bonn Conference; http://www.water2001.de/ 2002 World Summit on Sustainable Development (Johannesburg); http://www.johannesburgsummit.org/ The Third World Water Forum, 2003 (Kyoto): http://www.world.water-forum3.com/ OECD Principles of Corporate Governance, 1999: http://www.oecd.org/dataoecd/47/50/4347646.pdfarrsid2758276 Camdessus, M., Financing Water for All: Report of the World Panel on Financing Water Infrastrucure, http://www.gwpforum.org/gwp/library/FinPanRep.MainRep.pdf OED Review of World Banks Assistance to Water Supply and Sanitation: Efficient, Sustainable Service for All? (Report No.26443, Sept. 2003) The New Economy of Water: The Risks and Benefits of Globalization and Privatization of Fresh Water, Gleick, P., http://www.pacinst.org/reports/new_economy_of_water.pdf ADB: Developing Best Practices for Private Sector Investment in Infrastructure.http://www.adb.org/documents/books/developing_best_practices/water_sup ply/default.asp UNDP Working Paper, Public-Private Cooperation in the Delivery of Urban Infrastructure Services, http://www.undp.org/ppp/gln/publications/working1.htm World Bank Toolkits, Is the Regulatory Framework Conducive to Private Sector Participation, http://www.worldbank.org/html/fpd/wstoolkits/Kit1/kitone25.html World Bank Toolkit 1, Selecting an Option for Private Sector Participation, http://www.worldbank.org/html/fpd/water/wstoolkits/Kit1/frame.html World Bank Toolkit 2, Designing and Implementing an Option for Private Sector Participation, http://www.worldbank.org/html/fpd/water/wstoolkits/Kit2/frame.html World Bank Toolkit 3, What a Private Sector Arrangement Should Cover, http://www.worldbank.org/html/fpd/water/wstoolkits/Kit3/frame.html Asian Development Bank Report, Private Sector Participation, http://www.adb.org/documents/books/private_sector_participation/default.asp

NETWORK INFORMATION
Lecture notes, tutorial handouts, reading lists, further reading, upcoming relevant events, meetings, developments etc. will be made available on the internet via Blackboard VLE.

ASSESSMENT

The assessment for this module will be based on two methods: a sit-down written examination to test the knowledge of pre-agreed areas of the subject matter taught, and a research paper on a topic mutually agreed by the student and the lecturer. The written examination will carry 40% weight and the research paper will carry 60% weight. The research paper should be between 3000 and 4000 words and has to be submitted on a specified date. Papers submitted without good cause after the due date will not be marked. The written examination will consist of answering 3 differently weighted questions, and shall run over a 2 hour period.