Understanding Why Public-Private Partnership Cannot Fix Sewerage Services in Metro Manila, Philippines: a Network Perspective
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Understanding why public-private partnership cannot fix sewerage services in Metro Manila, Philippines: A network perspective Allinnettes Go Adigue June 2017 A thesis submitted for the degree of Doctor of Philosophy of The Australian National University © Copyright by Allinnettes Go Adigue 2017 All Rights Reserved Declaration This thesis contains no material which has been accepted for the award of any other degree or diploma in any university. To the best of the author’s knowledge, it contains no material previously published or written by another person, except where due reference is made in the text. Allinnettes Go Adigue June 2017 iii Acknowledgments This thesis evolved from my interest in the topic of water privatisation for my Master’s degree thesis in 2004. As one of the millions of customers of the former MWSS, I too hoped for better water and sewerage services after the Metro Manila water concessions were awarded, having experienced those days when rust–coloured water came out from our tap and sewage water flows back into our bathroom drain during floods. As a former policy analyst for the Philippine government for many years, I was concerned with formulating policies that would improve government bureaucratic processes to better serve the Filipino people. This research is a continuation of that passion. My deepest and sincerest gratitude goes to all who made this Ph.D. journey possible. I am especially grateful to my primary supervisor, Bingqin Li, for her brilliance, intellect, patience, guidance, kindness, candidness, encouragement and impeccable timing, i.e., moving to Crawford School when I was looking for the perfect supervisor. I am also thankful to my supervisory panel members, Bjoern Dressel, Jeroen Van der Heijden and Bob Warner, for their insightful, invaluable and honest feedback on my work. I wish to express my appreciation to Megan Poore, for not just being great at her job as academic skills advisor but also for being an amazing friend and human being. I am also thankful to Frank Jotzo for giving me research work opportunities that introduced me to a world outside of sewerage, i.e., the world of climate change economics and policy. This research would not have been possible without the funding from the Australia Awards-Endeavour Scholarships and the Crawford School of Public Policy. I would also like to thank my own personal network for helping make this research on interorganisational network happen. My friends, former colleagues, fraternity brothers and sorority sisters who helped me gain access to sources of information during my fieldwork: Judy Saclamitao, Geraldine Bacani, Virginia Ballesteros, Virginia Octa, Boying Remulla, Mehol Sadain and Ariel Tanangonan. My dear friends, near and far, who would indulge me to an online or real time chat to talk about the mundane when the cerebral drudgery of Ph.D. wore me down. I also thank my sister, Arabelle, who encouraged me to read books without pictures at a very young age and my mother, Teresita, who, through the years, has learned to support my quest to chase my dreams even when they take me far away from home. Finally, I dedicate and offer this to my father and my hero, Pedro A. Adigue, Jr. (1943- 2003), for giving me what he didn’t have — a university education— and for teaching me to dream and making them happen. A world champion boxer and a world champion daddy. v Abstract Improving public sanitation is one of the major urban health and environmental issues that confronts most cities in the developing world. Sanitation-related diseases have been practically eradicated in the developed world but these diseases continue to threaten lives in the developing world. It is estimated that poor or inadequate access to sanitation kills some ten million children below the age of five every year. More than half of the world’s rivers, oceans and lakes are polluted with untreated wastewater, which contributes to environmental degradation as it pollutes surface water, rivers and groundwater. This holds true for the Philippines where cholera and diarrhoea remain endemic. In Metro Manila, the country’s capital region that is home to at least 12 million people, less than 15% of the population are connected to the sewage system, some 85% are served by improperly constructed and ill-maintained septic tanks and the rest of the populations still practise open defecation. In 1997, the Philippine government awarded long-term concession contracts to two private concessionaires to bring in the much-needed capital and private sector efficiency to upgrade and expand water and sewerage services in Metro Manila. Some 20 years after the concession contracts were awarded, the two private concessionaires have achieved or nearly met their target of providing 100% water supply connections in the capital. Sewerage services, on the other hand, are at less than 15% of the population. Why has public-private partnership (PPP) failed to fix the sewerage problems in Metro Manila? To answer this question, this research analyses the performance of Metro Manila sewerage services through the lens of the network governance theory. This thesis suggests that the concessionaires were not able to timely deliver the intended outcomes because of the network effect of PPP. The network effect of PPP refers to outcomes that are caused by the emergence of network features created as a result of bringing in the private sector in the governance of public services. PPP has exhibited certain network features that altered the rules of infrastructure service delivery and allocated new roles among the state, the market and civil society. The network features created by PPP are (1) resource interdependence between the stakeholders both in the private and public sectors, (2) challenge of achieving goal congruence in a multi-stakeholder setting and (3) unclear management roles. Data collection for this research in the form of documentation, interviews and direct observation, was conducted in Metro Manila, Philippines. Interviews were the key source of information for this thesis to elicit information on the respondents’ interorganisational vii relationships and dynamics and how such interactions impact on the service delivery outcomes as documentary information mainly provided information on the legal, political and performance aspects of the Metro Manila water and sewerage concessions This research contributes to both research and practice. This research contributes to the literature on network governance, PPP and policy implementation. By using the network perspective to analysing PPP performance, this research augments the current literature on understanding PPP outcomes by filling out the administrative analysis gap that has not been explored in the literature. Second, it also offers a new perspective on evaluating and understanding PPP outcomes by developing an analytical framework that examines networks, not just a single organisation, as the unit of analysis to analyse the performance of sewerage services. Third, it aims to contribute to the growth of a more specialised and differentiated study in the field of network governance theory. For policymakers and practitioners, this research promotes the understanding that policies are implemented by multiple institutional actors, which can make policy implementation a complex process. An acceptance of the perspective that policy implementation is interorganisational in nature contributes to effective and responsive policy design. This can guide governments in considering the potential network features that may arise when adopting a new policy, such as PPP, that can hinder the achievement of the desired goals or effects. viii Table of Contents Declaration ................................................................................................................................... iii Acknowledgments ......................................................................................................................... v Abstract ........................................................................................................................................ vii Table of Contents ......................................................................................................................... ix List of Tables .............................................................................................................................. xiii List of Figures ............................................................................................................................. xiv Acronyms and abbreviations ...................................................................................................... xv Units of measurement ............................................................................................................... xvi Chapter 1 Introduction ................................................................................................................ 1 1.1 The need to improve access to sewerage services ............................................................. 1 1.2 Problem statement and central argument .......................................................................... 4 1.3 Structure of the thesis .......................................................................................................... 7 1.4 Summary of findings ............................................................................................................. 8 Chapter 2 Networks, network effects and the performance