UK water companies that provide water supplies to developing countries could contribute to international efforts to eradicate poverty. A new report from Christian relief and development agency, Tearfund, says that companies could also improve their own margins and reduce the risk of failure by adopting the development methods of aid agencies.

The Community Participation in Urban Water Services report argues that UK water companies – at the forefront of a recent global trend to provide water supplies in developing countries – could contribute to the long term reduction of poverty by including poor communities at all stages, from planning to the actual operation of water services. By working closely with local poor communities, water companies would trim business costs and improve their chances of winning further contracts, said the report.

The 65-page document states that private sector investment in water and sewerage projects in developing countries has risen from virtually zero in 1990 to US$25B in 1997. It predicts the upward trend will continue due to World Bank pressure on developing countries to involve private companies in the provision of basic water and sanitation services.

Tearfund recommends that water companies establish policies on community involvement and sustainable development for their international operations, and then ensure the policies are adequately supported through strong leadership, sufficient resources and comprehensive management.