Development Aspects Impressum Editors

Quality of institutions

In terms of the quality of institutions, one way of mitigating its impact is to im- plement and improve social oversight systems, on the basis of transparency and the dissemination of performance information on service provision and aspects of service management, including the following: the business plan; any works and their progress; financial results; level and breakdown of borrowing; efficiency of costs and activities; and details of procurement and contracts, like bids, informa- tion on tenders and acquisitions, prices and suppliers. It would also be important to include information on the assets of the company’s board members and employees linked to management, as well as a sworn declaration on links between directors or employees and suppliers, contractors and subcontractors of the company con- cerned. All such information should be available online and a summary periodically published in the mass media, i.e. press, radio and television, including reference to more information being available on the relevant website. The system should probably be run by one or more non-governmental organizations selected by pub- lic tender based on institutional background, the team responsible for the system, proposed methodology and plan for tasks and equipment.

3. International arbitration and change of corporate strategy by the Suez Group

These exogenous factors, international arbitration and the change of corporate strategy by the Suez Group are linked to the participation of the private sector as a service provider. Although the provision of services in the metropolitan area of Buenos Aires will not immediately be faced with this situation, past experience recommends that the legal framework of the contract should provide for local

dispute settlement bodies, in order to avoid recourse to international arbitration. Furthermore, it is important to point out that regulation governed by a general legal framework, rather than by a specific contract, provides more protection to the concessioning authority in the face of disagreements that arise from changes to the legal framework. In terms of changes in the business strategies of the operating companies, it is essential to create mechanisms to discourage, prevent and penalize opportunistic conduct on the part of private companies seeking to generate con- flicts that could result in a termination of the contract.

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