Khaberni - Written by Anas Al-Rawashdeh:
The local governance in Jordan has undergone important structural transformations in the past decades, one of the most prominent being the move towards enhancing the role of the private sector in providing public services which were traditionally monopolized by the municipalities. The privatization of municipalities or engaging the private sector in managing municipal services represents an administrative approach aimed at increasing operational efficiency and improving the quality of services provided to citizens, responding to the increasing financial pressures facing local governments and the need for investment in infrastructure. Exploring the topic of municipal privatization in the Jordanian context requires an in-depth analysis of its motives, actual implementations, and ensuing impacts, especially in light of the specific regulatory and social environment of the kingdom.
The concept of privatization in Jordan is driven by several key factors. First, the structural financial challenges faced by many municipalities, where their budgets heavily rely on government grants and traditional fees that are insufficient to cover operational and development costs. Secondly, the need to introduce modern administrative and technical expertise owned by the private sector, enabling the application of best global practices in waste management, road maintenance, and public utilities management. Thirdly, the shift to a public-private partnership model aims to relieve the burden on the state’s general budget and encourage private investment in local infrastructure.
Although privatization in the comprehensive sense of the complete sale of municipal assets is not prevalent, the actual application in Jordan tends toward a "contracting services" or "joint management" model. A prime example in Jordan is the solid waste management sector, where the task of collection, transportation, and processing of waste in many provinces has been assigned to specialized companies through long-term contracts. Some experiences in provinces like Amman and Irbid have shown significant improvement in collection efficiency and long-term operational cost reduction, thanks to the use of modern technologies in sorting and processing. Some trials have also included partial privatization of some recreational facilities or car parks in major cities to maximize their revenues and improve their maintenance.
However, the path of privatization in Jordan is fraught with challenges. The foremost challenge lies in achieving a balance between economic efficiency and social responsibility. There is legitimate concern that profit-seeking might lead to the marginalization of less attractive investment regions, or the increase of fees beyond what poorer social segments can afford. Services such as water and sanitation, if completely privatized, may face popular resistance unless there is a strict regulatory framework ensuring continuous and affordable access for all.
Additionally, the legislative and regulatory environment presents a significant challenge. The success of the partnership with the private sector requires strong and independent municipal regulatory bodies capable of drafting clear and fair contracts and ensuring contractors’ compliance with agreed quality and specifications. In many cases in Jordan, the supervisory capabilities of many municipalities still need strengthening, which could lead to weak supervision and misuse of powers granted to the private sector. Furthermore, resistance to change from within the municipal body itself and fear of job loss are social and administrative barriers that cannot be overlooked.
From a local development perspective, privatization should focus on achieving broader goals beyond merely providing the service. It should be accompanied by mechanisms to ensure the transfer of knowledge and expertise to local municipal staff, enabling them in the future to regain management of some services with higher efficiency or to negotiate more effectively. Transparency in the processes of tendering and contracting is considered a cornerstone for ensuring integrity and combating corruption, a sensitive point in any process of assigning public services to the private sector.
To move forward with reforming the management of municipal services in Jordan, a comprehensive national privatization strategy must be adopted. This strategy should begin by accurately identifying services that are eligible for privatization, while keeping services of a sovereign or strategic nature under direct government supervision. Innovative financing models that do not rely solely on direct fees but benefit from formats like Build-Operate-Transfer (BOT) for major capital projects should be developed. Moreover, building human and technical capacities in municipalities remains vital to ensure that privatization is not merely an escape…
