IEEM gGmbH - Institut für Umwelttechnik und Management an der Universität Witten/Herdecke

Franchising with Local Service Providers

A World Bank project

Projekttitel: Franchise Concepts for W&S with Local Service Providers,
South Africa
Projektleiter: Prof. Dr. mult. Karl-Ulrich Rudolph
Projektpartner: Biwater Johannesburg
Förderer: Weltbank
Kennzeichen: 1539
Projektlaufzeit: September 2006 - Juni 2008


The bottleneck to sufficient water services to the people is sustainable operations and maintenance. That is why people in many countries often have only restricted access to water supply - despite of existing water infrastructure.

There are many reasons for poor operations and maintenance of water utilities but the most frequent are limited public budgets and lack of experienced staff.

One way to address such problems would be to transfer operations and maintenance to a private company (Public Private Partnership). But this solution often encounters severe resistance from the public, NGOs and politicians.

This is the advantage of the franchise approach. In a franchise scheme it will be Local Service Providers who operate and maintain water utilities (and no "anonymous" pri-vate international company) with the training and administrative of an experienced company.

Another advantage of this concept is that Local Service Providers are cheaper than the staff of an international company.

In the Upper Olifant Region, IEEM and Biwater SA are intending to implement the first franchise concept in the water sector world-wide by recruiting local craftsmen, plumbers, etc. These franchisees will then operate and maintain the water utilities in the Project area.

The franchisees will get paid by the regional Water Management Agency who in return gets paid by the customers via their water bill (as today).

Biwater SA as franchisor will receive a percentage share of the franchisees' turnover.