Urban water lease (affermage) with SEEG, and the return to public management after 2000
Guinea ran its urban water service from 1989 under a ten-year lease in which the public asset company SONEG owned and financed the network and the privately led operator SEEG ran it, but after renegotiation failed the private operator withdrew in December 2000, the government decided in July 2003 to keep the service public, and revenue collected from private customers fell from US$5.8 million in 1998 to US$1.7 million in 2005.
1.7 million US dollars, revenue collection from private customers, urban water services, 2005. 5.8 million US dollars, revenue collection from private customers in the last full years of the lease, 1998. World Bank, Implementation Completion Report, Guinea Third Water Supply and Sanitation Project, Report No. 36083-GUI, June 2006, section 4.1, retrieved 2026-10-02.
The move, and what it needed
The state split the urban water utility into a public asset-holding company that owned and financed the network and a private-led operating company that ran it under a lease and was paid from tariffs; when the lease came up for renewal, tariffs were frozen, the private shareholder saw too much risk and left, and the public company took over operations it was not prepared to run.
Preconditions
- Tariffs set high enough and indexed so the operator's revenue does not erode in real terms
- Renegotiation started well before the lease expires, with a deadline
- A public asset company able to run operations itself if the private partner leaves
Limits: The figures sit in a PDF (page 9, printed page 4; the ten-year lease ending in 1999 is on page 6). The World Bank financed the lease from its first project in 1989 and rated this follow-on project and the borrower unsatisfactory, so it has a view on who was to blame. The revenue figures are in US dollars, and the report says tariffs were frozen until 2005 and fell from US$0.86 to US$0.21 per cubic metre in real dollar terms, so much of the fall in dollar collections is a currency and tariff effect, not only worse collection; the same paragraph says SONEG's net income went from US$2.9 million in 1998 to a loss of US$0.5 million in 2005. 1998 is a year chosen by the report, not a demonstrated peak. The report also says 24 hour service and compliance with water quality standards, achieved under the earlier operation, were lost and service became intermittent, with no figure for when. SEEG's private shareholder is named only as SAUR, in passing, and the share structure is not given. The 1989 start is inferred from the ten-year lease ending in 1999 and the first supporting credit of May 1989; the report gives no signing date. The lease ended at the end of its term after two years of failed renegotiation and contract extensions, so this is a partnership that was not renewed rather than one terminated for breach.