Environment in emerging and transition economies

Promoting the Use of Performance-Based Contracts between Water Utilities and Municipalities in Eastern Europe Caucasus and Central Asia (EECCA)


The work on promoting the use of performance-based contracts in the water sector, initiated by the OECD EAP Task Force and financially supported by the European Commission TACIS Regional Co-Operation Programme for the NIS (Newly Independent States) Region, seeks to support selected EECCA municipalities in their efforts to contractualise or to improve the contractual relationship with their water utility. This work draws from the international good practices identified in the OECD Guidelines for Performance-Based Contracts between Municipalities and Water Utilities in EECCA.


The specific objectives of this work are:

  • To provide support to EECCA municipalities in improving the performance-based contracts with their (public or private) water utilities. This implies analysing and evaluating existing contracts or contracts under preparation against the criteria and benchmarks identified in the Guidelines and providing practical recommendations for the improvement of these contracts in line with international good practices. It should be noted that this work does not aim at substituting legal advice on regular contracting but it rather seeks to provide additional expertise based on international experience with performance contracts in the water sector.
  • To deepen the analysis that is contained in the Guidelines in order to further improve their relevance to EECCA municipalities and water utilities so as to ensure a wider dissemination of the best practices in this area. This will be achieved by drawing lessons from the case studies as well as analysing the experience with relevant contracts in other EECCA and/or other regions in the world, as appropriate, summarised in a separate synthesis report.
  • To help increase the understanding of potential benefits from using performance-based contracts and the respective demand for such contracts in EECCA. This will require extensive communication and dissemination to specific audiences.


Five performance-based contracts have been reviewed so far: two in Armenia, one in Kazakhstan and two in Ukraine.

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