2005 - 2006 - Pinsent Masons Water Yearbook 2012

PART 4: APPENDIX 2: PRIVATE SECTOR PARTICIPATION
Contract Stage Information placed in the public domain
Announcement of terms Explain any changes to original bid criteria
Announce regulatory process Criteria and current performance data
Contract commences Performance prior to PSP
Quarterly/half year key criteria Critical issues highlighted
Annual review Regulatory returns & independent reviewing
Outstanding issues highlighted Performance against targets, new targets
In each case, the idea is to release information to interested parties in an open, consistent and
controllable manner. Once final bids are in, competitive secrecy is of historic importance. If preaward
negotiations need to take place, stakeholders need to have confidence in this process.
The entire process can be extended into making clear to all parties the criteria that are to be
material when bringing the re-negotiation process into play.
Communicating best practice
This calls for a holistic approach to countering corruption. The regulatory climate in England and
Wales may be onerous, but no stakeholder could reasonably complain about being deprived of
data. Comparative data of increasing accuracy (and methodological rigour) at all operational
levels not only creates an unrelenting drive towards ‘ideal’ operational efficiency; it also makes it
increasingly hard for financial malpractice to take place.
Windows of transparency (2): Eliminating malpractice, rewarding efficiency
National/regional database for:
Best practice – specific examples of utility performance and their replicability
Benchmarking – developing comparative criteria (avoiding Ofwat’s ’cult of the comparator!)
Operational efficiency – knowing what a system can deliver under given circumstances
Global database for (PPP weighted, as appropriate):
Cost of technology – ballpark figures for widely used technology
Cost of construction – what it costs to build/install units of infrastructure
Cost of professional services – general range of expected costs
The latter will prove particularly contentious. In reality, this refers to hourly rates and so on,
since flexibility and experience is essential in professional services, especially when dealing
with more inexperienced clients.
Engaging NGOs and stakeholders
NGOs (Non Governmental Organisations) need to be made part of the reporting process.
Attacking corruption is in their interest and as it is also in the interest of reputable PSP players,
they have little to fear from each other. One of the reasons for faltering levels of ODA (Overseas
Development Assistance) in recent years, especially in water and sanitation, is the feeling that
money is not being spent where it ought to go.
Giving NGOs access to information through the mechanisms outlined in 3.3–3.5 above, will
allow confidence in the process to be built. They also have a role to play in whistle-blowing at all
levels of malpractice. It is essential that the private sector have a formal set of procedures to
protect people within their companies who wish to expose corruption.
Stakeholders, especially customers also need to be formally involved within this process.
Therefore, a reporting mechanism needs to be set up for reporting their concerns about
corruption (and other concerns about service delivery). The NGO community has a role to play
385 Pinsent Masons Water Yearbook 2005-2006