Water services operated under commercial principles

It is a commonly shared vision that the water services (like other service provisions previously operated under public administrations) will improve if commercially sound operational principles are applied. It is, however, also clearly understood that public services by its virtue cover aspects beyond the industrial element of the services, such as social welfare and employment opportunities. On the other hand, governments worldwide experience growing pressure in financing these services under the state budget because of the other aspects respectively uncontrolled change of focus. One example is the commonly experienced over-staffing of services without increasing the quality of the services.

Application of commercial principles in public services, namely implementing processes and control functions comparable with those that are standard in private businesses, do not require significant investments and can be implemented with almost immediate effect. As a result, the commercially run public business will dispose of the means to clearly identify strengths and weaknesses and therewith open the path for corrective and target oriented measures. The public sector may, however, experience difficulties in
implementing adequate countermeasures because of legal constraints (e.g. civil servants regulations), which was frequently taken as starting point for “privatization” activities – however with mixed results.

MWI and WAJ embarked on the track of commercialization and private sector involvement already since several years. The management contract for the water and wastewater services in Greater Amman was a milestone in 1999 as well as formation of the Water Company in Aqaba and the outsourcing of billing and revenue collection in the Madaba Governorate administration. The decentralization and merger of four Governorate administrations into the Northern Governorates Administrations (NGWA) and the engagement of a Management Consultant for NGWA follows the “commercialization principle” and is seen as preparatory step for a higher level of a more business driven set-up.

Along this line a broad number of project results have been formulated in the
financing agreement with the intention to cover the entire service area of the Kingdom.

Please select the following text links that will take you to briefly described tasks that are in context with commercial operations
• Management Contract and successor utility Greater Amman
• Aqaba Water Company
• Northern Governorates
• Other Governorates in Jordan