Basic Services: Local Businesses for Equitable Cities

Mathieu Lefevre, Executive Director of the New Cities Foundation, opened the session by noting that half of all urban dwellers lack access to basic services. Colombia's Vice Minister of Water, Natalia Trujillo Moreno, described some of Colombia's recent innovations regarding basic services, including an important law and the "Connect to Water" program, which ensures that low-income homes are properly outfitted to receive public services, like having full bathrooms. She noted the three biggest remaining challenges for her country in terms of basic services: managing residual wastewater, analyzing and preventing risk, and solid waste management.

Juan Esteban Calle Restrepo, the President of Public Enterprises of Medellin (EPM), a notable public utilities company here in Colombia, presented his company's interesting model. EPM, the second largest corporation in Colombia, is completely public, and yet is managed using a business model and is financially sustainable. Mr. Calle considers EPM to be quite successful, citing high coverage rates of basic services like water and electricity, at a "first world" level (for example, water is completely potable). Mr. Calle noted seven factors explaining EPM's success since its establishment in 1955: (1) Complete independence, since the beginning. (2) Value-based, focusing on hard work and transparency. (3) A superior business model. (4) Merit-based, recruiting the best and brightest employees (EPM receives 100 to 500 applicants for each open position). (5) Innovation, finding better ways to offer services. (6) Social and environmental commitment. (7) The company is owned by the citizens of Medellin. Mr. Calle concluded by noting the tenets of EPM's commitments to their strategy: full coverage, excellence in operational practices, social financing to provide services to low-income households at an affordable rate, and corporate responsibility.

Patrick Magebhula of SDI opened by noting the importance of this topic: "There is no freedom if you still don't have sanitation, basic services." He noted the importance of active citizenship through savings collectives, as is being done by SDI. "The provision of free housing will never be sustainable." Instead, citizens save and contribute to governments' assistance to achieve access to basic services. Mr. Magebhula also noted that women usually manage these collectives, increasing equality between genders.

"Urbanization is an unprecedented challenge," said Joachim Prey, the Director General of the Sectoral Department at GIZ. Urbanization is "a good thing," but the current models of service delivery will not be sufficient. Mr. Prey noted that service provision is local by nature, so it should be dealt with as close to the consumers as possible. He emphasized the importance of learning and innovation, collaboration, and the need for increased capacity and talent in public municipalities and public services. Mr. Prey concluded by remarking on the need to collaborate across stakeholders, including the innovative and fast-moving informal private sector.

A definition of basic services in terms of inequality was given by Mahendra Subba, the Joint Secretary of the Ministry of Urban Development in Nepal: it hinges on physical systems, affordability, and free-of-charge services for the poorest. Mr. Subba described the access to basic services situation in Nepal, noting that in Kathmandu, only 26 percent of water demand is being met by formal system. He identified the lack of transparency and the length and complexity of the service provision process in Kathmandu as barrios to service provision – innovations are needed to help with efficiency and affordability.

Sarah Rosen Wartell, the President of the Urban Institute in United States, started by asking questions about how the private sector can help the government provide public services, and how the government can help empower the private sector to do so. She highlighted that the availability of data can make the delivery of public services more effective, detailing three types of data:

  • Information the public already has (or should). For example, data helped provide information about purchasing power in low-income areas in the U.S. that were lacking healthy food options. Once the data had been presented to the private sector, they were able to set up supermarkets in these neighborhoods.
  • Citizen-generated information, which will be of growing importance in the coming decade.
  • New information that the private sector can provide.

She noted three important lessons for effectively using data in basic service provision: establishing an open data culture, having respect for an evidence-based policy climate, and creating a norm of openness and transparency. Ms. Wartell concluded optimistically: developing countries have a great opportunity to "leapfrog" the entrenched patterns of the developed world.

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