Small-scale providers of water supply and sanitation (WSS) play important roles as investors, developers, and/or managers of WSS services, reaching poor and underserved communities in niche markets that the formal utility is not well placed to reach. To supply water, they either operate as an extension of formal utilities, on which they depend for bulk water supply, or they operate independently and in competition with utilities. Small-scale providers in sanitation include masons who build latrines and truckers who empty latrine pits and septic tanks.

Unlike in rural areas, where water supply cooperatives and water user associations have long been accepted as key means of service provision, in urban areas small-scale WSS providers are often viewed as a temporary fix, soon to be replaced by utility services and therefore not warranting attention from practitioners and policymakers. But experience in the past ten years has made clear that these providers are often an important link in the service delivery chain, reaching areas that have proved difficult for formal utilities.

Key Challenges
In some countries (e.g., low income and post-conflict countries), providing efficient, effective, and sustainable services for all may require a phased approach that builds on existing modes of service delivery. Providing access to a conventional utility water supply may be the second or third phase of a long-term strategy that recognizes that it may take at least a decade to provide access to a piped network.

Where small-scale providers of water work as an extension of the utility – purchasing bulk water and retailing it to customers within the utilities service area – efforts to improve the quality of services may involve contracting out service delivery, establishing bulk tariff rates, and introducing regulatory oversight. Where small-scale providers are independent from the network, they may need support to regularize their business; suitable arrangements are also needed for issuing permits for abstraction or operating licenses, and for regulating these providers’ water quality and prices.

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