Guidelines for Performance-Based Contracts between water utilities and municipalities. Lessons learnt from Eastern Europe, Caucasus and Central Asia

To support EECCA authorities that are willing to contractualise their relationship with their water
utilities, the OECD EAP Task Force developed “Guidelines for Performance-Based Contracts between
Municipalities and Water Utilities in EECCA”. These Guidelines address the key elements that need to be
considered in connection with the preparation, implementation and periodic revision of a successful
performance-based contracting mechanism.
The present report summarises the major lessons learnt from the experience with performance-based
contracts (PBCs) in the water supply and sanitation sector in selected EECCA countries. The report also
seeks to highlight the main achievements of and challenges facing the EECCA countries in designing and
implementing such contracts. The analysis of the report is based on five case studies: two in Armenia (a
management and a lease contract), two concession contracts in Ukraine and one case study from
Kazakhstan (near full divestiture). The OECD Guidelines provided the analytical framework for these
assessments. The present report builds upon the Guidelines, further deepening the analysis on the basis of specific examples from the reviewed contracts.