Improving water supply and sanitation(WSS) services is a key mechanism for reducing poverty. WSSservices contribute directly or indirectly to incomegeneration, health, and education. Water is an intrinsicelement of the Millennium Development Goals agreed upon bythe international community in 2000. Halving by 2015, theproportion of people without sustainable access to safedrinking water and basic sanitation is one of the time boundtargets that are embodied in the Millennium DevelopmentGoals. Reaching this target requires that roughly onequarter of a million people per day gain access to safewater and one third of a million per day gain access toadequate sanitation. Currently, in developing countries, theoverall effectiveness of WSS service provision isdisappointing due to such factors as: poor management,inadequate investment, and political interference.Substantially increasing the number of people withsustainable access to WSS requires a transformation oflong-established sector approaches as well as a substantialincrease in WSS investments in the developing world.Foremost among reform measures are the introduction of soundpolicies and effective institutions at all levels.Strengthened institutions will be better able to generatecash flows, close revenue gaps, and attract financialresources. New avenues for public-public and public-privatepartnerships are needed. Building technical, managerial andoperational capacity is, therefore, an important componentof efforts to improve and expand service delivery in the WSS sector.