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Lu Shen's Pr...

CS59: Why Public Utilities Should Go the Corporate Way

  • Author: ADB Water for All
  • Create Time: 02/24/2012 09:36:27
  • Last Update Time: 03/07/2012 16:14:06   Issue 59, February 2012 
Welcome | Hot Topics | News | Knowledge Pool | Water Calendar
All in an Hour's Catch




Water CoP Chair Amy Leung welcomed members and guests to the 64th session of the Water CoP Catchment Series. The day's topic—public utilities’ adoption of commercial principles and business practices to become sustainable—is an advocacy of ADB's Water Operational Plan 2011-2020.


Amy introduced PSOD’s Lu Shen, who has experience at both ADB and the Inter-American Development Bank, to share her experiences on the corporatization of public utilities in Latin America.


Before giving the floor to Lu, Amy emphasized that corporatization does not mean privatization. What is being promoted is the infusion of corporate principles into the operation of state-owned utilities.

Hot Topic




Why Public Utilities Should Go the Corporate Way

Lu explained her presentation is based on experience with the Inter-American Development Bank (IADB) on projects that support the corporatization of public utilities. Lu narrated how the IADB organizes annual sector forums or meetings each year in a different country, gathering all stakeholders in the sector under one roof, to share experiences on emerging issues and solutions to various problems in the sector.


These gatherings served as the backdrop of corporatization processes in the region.


Lu’s presentation focused on two cases:


  • Saneamento Basico do Estado de Sao Paulo (SABESP)
  • Empresa Publica de Medellin (EPM)


Lu narrated how both the SABESP and the EPM embraced corporate principles and practices over an extended period of time. SABESP, for one, has turned from a less than efficient state-controlled utility in 1994 into a utility with a high level of corporate governance by 2002. Meanwhile, EPM, has set its sights to increase turnover from $1.5 billion to $5 billion per year. Lu highlighted the socio-political challenges and changing financial environment both SABESP and EPM had to go through and the key success factors unique to each as they become model public utilities.


Lu concluded with a summary of important points in the corporatization process:


  • Maintaining balance between political interest, social obligations and operational sustainability (market discipline, value proposition, strong regulation, diversification)
  • Retaining support from the state, municipality or central government for concessionary lending
  • Assess local conditions
  • Gage the appetite of markets
  • Engage governments on regulation


Hopefully, the Water CoP can draw lessons and inspiration from these cases to consider supporting corporatization of water utilities in the region.


Sundance Showcases Film on ADB Water Champion Jack Sim
“Meet Mr. Toilet,” a short documentary on Jack Sim and directed by Oscar-winning filmmaker Jessica Yu, premiered at the Sundance Film Festival in January. Sim, an ADB sanitation partner and World Toilet Organization founder, uses humor to raise sanitation awareness. Ellen Pascua, 5243


Preparations for Asian Irrigation Forum in Full Swing
About 200 participants, including farmers, irrigation and water experts, donors, and private sector partners, are expected to attend ADB’s Asian Irrigation Forum on 11-13 April in ADBHQ. Prabhu Pingali of the Bill and Melinda Gates Foundation will speak. Ian Makin, 6163


Pasig River Forum to Revitalize River Cleanup
Stakeholders of Manila’s Pasig River will meet on 24 April in ADBHQ to ensure a common view of plans and progress in its cleanup. Key issues for implementing actions and leveraging off experiences of other cities and countries will be discussed. Marc Ebarvia, 70371


New PDA Approved for Nepal’s Water Users Associations
A new PDA aims to make pragmatic contributions towards institutionalizing Nepal’s multifunctional water users associations (WUAs) to enhance agricultural productivity. This after-care PDA builds upon the results of a prior pilot that helped evaluate WUAs potential for managing irrigation systems. Ellen Pascua, 5243


WaterLinks Forum Reports WOPs Positive Impacts
About 65 twinning partners  have been established in the Asia-Pacific under the Water Operators Partnerships (WOPs) Program, benefitting about 700,000 people, according to the 2011 WaterLinks Forum report. The Korea–Thailand and Malaysia–Indonesia twinning partnerships received the second WaterLinks Awards. Read the forum report. Yolanda Gomez, 70255


ADB Meets with WFPF Partners in Annual Consultation
OCO leads the preparations for the 5th Annual Consultation Meeting with Water Financing Partnership Facility (WFPF) partners on 12-14 March 2012 at ADBHQ. Following the Water Operational Plan 2011-2020, ADB continues its resource mobilization to replenish the WFPF’s resources. Ellen Pascua, 5243


ADB Delegation to attend 6th World Water Forum
The 6th World Water Forum, on 12-17 March, in Marseilles, France, will launch an online platform for solutions on issues of access to water and sanitation. An ADB delegation will attend to facilitate the groundwork for the next forum in Korea in 2015. Yolanda Gomez, 70255


River Basin Organizations Explore Corporate Governance Models
Senior managers of Indonesia’s Brantas, Solo, and Citarum basins and the Philippines’ Laguna Lake shared experiences in corporate model organizations for water resources management in a seminar on 8 February at ADBHQ. The Water, Governance, and Environment CoPs organized the seminar. Dennis Von Custodio, 6970

Knowledge Pool


Sector Briefing on Climate Change Impacts and Adaptation: Water Supply and Sanitation
This brochure provides quick information on the climate change impacts on water supply and sanitation investments and their climate vulnerability to help identify risks and priority adaptation responses.



Deep Words, Shallow Words: An Initial Analysis of Water Discourse in Four Decades of UN Declarations
The document examines the changing discourse of water and related issues in high-level declarations from UN conferences in the past forty years.

Water Calendar
12-14 Mar   5th Annual WFPF Partners Consultation Meeting (Manila, Philippines)
12-17 Mar   World Water Forum (Marseilles, France)
22 Mar   World Water Day 
11-13 Apr   Asian Irrigation Forum (Manila, Philippines)
24 Apr   Pasig River Forum (Manila, Philippines)

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