Public Private Partnerships (PPPs) inthe water supply sector began to emerge in the early 1990sin most developing countries of the world. Initiated in mostcountries by international private operators, thesearrangements were typically large-scale PPP projects whichrequired the private operators to finance, develop, operate,and manage the water supply system for a large populationbase. However, international observers have noted that mostof these large-scale projects could not be successfullyimplemented on account of a host of interrelated factors.These factors included difficulties in achieving financialclosure by the private operators, sociopolitical barriers,tariff-setting issues, and high financial risk. The failureof several large-scale projects during this phase resultedin many international private operators withdrawing fromsuch projects in the developing countries. This gave rise tothe perception that the number of PPP contracts beingpursued in the water supply sector was declining.