Balancing Financial Risks with Social and Economic Benefits: Two Case Studies of Private Sector Water, Sanitation, and Hygiene Suppliers in Rural Vietnam

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The paper is empirically based on 2 national context-based case studies. There is a potential in the paper, but it needs to be developed further. 

First, literature review part should be broadened and extented. In the present form, it presents basically theoretical framework, but indepth literature review is missing.

Second, for the methodology, it is not clear when and how surveying and focus group analyses were conducted. Furthermore, it is not clear, what was the content of the survey, where it originates (self-developed, taken from some study, etc.). This should be clearly extrapolated.

Third, discussion part of the paper is missing. This should be thus developed, and what is missing also, is actually the comparative analysis of study/results and their contextualization.

Author Response

Comment 1. First, literature review part should be broadened and extended. In the present form, it presents basically theoretical framework, but in-depth literature review is missing.

Response 1. The literature section has been revised, with more lietrtaure added in both the general section (see p 2 & 3) and the Vietnam context (see p 4, 5).

Comment 2. For the methodology, it is not clear when and how surveying and focus group analyses were conducted. Furthermore, it is not clear, what was the content of the survey, where it originates (self-developed, taken from some study, etc.). This should be clearly extrapolated.

Response 2. It is now stated in the methods section on page 6 that “Drawing on the Nguyen et al.’s (2018) findings of risks and financial viability in public-private partnership in Vietnam” The content of the survey is described in the same section - see grey highlighted text. 

Comment 3. Discussion part of the paper is missing. This should be thus developed, and what is missing also, is actually the comparative analysis of study/results and their contextualization.

Response 3. The discussion sections are now added to both case studies (see page 9 & 10 for case study 1) and p 14 & 15 for case study 2.  The discussion presents a comparative analysis of the study/results with Cambodian counterparts who operated in similar WASH development project - this contextualisation is explained in the Research Problem section on page 4 & 5.

Reviewer 2 Report

Comments and Suggestions for Authors

1 -Importance

The study investigates the operation and financial risks of Water, Sanitation, and Hygiene (WASH) companies. It provides data on how public and private sector services can be kept in balance regarding WASH and gives clues about activities to be carried out in rural areas.

2-Aims

 The study aims to identify the financial risks of Vietnam's rural WASH service providers and evaluate the effects of these risks on the financial sustainability of the institutions. On the other hand, the economic difficulties experienced by water and sanitation companies are analyzed through two special case studies.

3-Method

The study was conducted through surveys and focus group discussions with 15 WASH providers in Vietnam. The research is based on qualitative case studies.

4-Findings

 At the end of the study, it is understood that infrastructure investment costs in the water sector may change, low demand from terrorism and low prices are a negative financial deterioration.

It seems that financial resource shortage and low demand are important problems in the sector. The uncertainty of government subsidies is another risk.

5- Elements that distinguish this study from the literature

The study differs from the literature in that it directly addresses the financial sustainability problems of private sector WASH enterprises with the help of field-based data. It analyzes the impact of public decisions on the private sector, providing up-to-date findings on financial sustainability specific to Vietnam.

 6-contribution to literature

The contribution of the study to the literature is that it addresses the financial risks of micro-level businesses and provides strategic suggestions.

7-policy recommendations, 

* Providing affordable interest loans and investment incentives for washing businesses

*Reducing uncertainties in price tariffs

* Supporting increasing the awareness level of consumers in order to increase the current demand for businesses' services.

Providing a financing environment where small businesses in the study can access capital more easily

8- Shortcomings of the study

 *Since there is insufficient explanation about the population, the sample size of 15 is considered inadequate.

*The study method is based mostly on qualitative analysis and statistical models based on quantitative data were not used.

*The situation regarding Vietnam has not been compared with other countries.

 * Details about the applicability of policy recommendations are not included

*The study was conducted with a business focus and the consumer's perspective was not included sufficiently.

*The task of providing water to cities is usually provided by municipalities. Is this situation different in Vietnam? An explanation should be made regarding this. Is providing clean water a problem in Vietnam?

*Why this study was needed/research problem was not adequately explained. These should be written clearly, and the need for which the study is designed should be explained.

Author Response

Comment 1. There is insufficient explanation about the population, the sample size of 15 is considered inadequate.

Response 1. The context of the evaluation of a WASH development project that this study extends is now added in the new section "Research Problem". This section also explains the population – see page 4 & 5.

Limitation of the study in terms of teh sall ssample size is now added in the Method section – see page 5.

Comment 2. The study method is based mostly on qualitative analysis and statistical models based on quantitative data were not used.

Response 2. Yes, that's correct. The small sample size did not warrant statistical methods. This is explainend in the Limitation of the Study subsection, see page 5. 

Comment 3. The situation regarding Vietnam has not been compared with other countries.

Response 3. The case studies have now included discussion subsections where comarison with Cambodian counterparts that operated in similar WASH Development project, see page 9 & 10, 13 & 14.

Comment 4. Details about the applicability of policy recommendations are not included

Response 4. The Conclusion section of the paper has been revised extensy to clarify the applicability of the recommendations—specifically, to support private sector WASH businesses operating within development programs and scale-up opportunities under public-private partnership (PPP) models, particularly those serving underserved households in rural areas of Vietnam (see pages 14-15).

Comment 5. The study was conducted with a business focus and the consumer's perspective was not included sufficiently.

Response 5. The study was conducted as an extension of an evaluation of the WASH Project which is explained in the Research Problem setcion (see p 4 & 5). The evaluation findings included some household or customer perspectives, which have now been included in the case studies results and the COnclusion where relevant (see p 8, 11, 12, 14).

Comment 6. The task of providing water to cities is usually provided by municipalities. Is this situation different in Vietnam? An explanation should be made regarding this. Is providing clean water a problem in Vietnam?

Response 6. Providing clean water is a problem in rural Vietnam – thisis now added in the first paragspah of the Vietnam Context subsection of the Literature Review, see p 3. 

This paper focuses on rural water supply and suppliers in rural area, not urban. This is stated in the Introduction on page 2, newly added Research Problem section on page 4, and throughout the paper.

Comment 7. Why this study was needed/research problem was not adequately explained. These should be written clearly, and the need for which the study is designed should be explained.

Response 7. The Research Problem section is added after the Vietnam context literature review to make it clear the rationale for the study, extending on the evaluation findings of a WASH development project to provide context of the study and the research problem it addresses – see page 4-5. The Method section outlines the research methodology explaining how suppliers in the project are invited to take part in this extension study – see page 5.

Reviewer 3 Report

Comments and Suggestions for Authors

The topic of the paper – Balancing Financial Risks with Social and Economic Benefits: Two Case Studies of Private Sector WASH Suppliers in Rural Vietnam – is relevant and very interesting, but probably only in Vietnam, not at the other part of the world, so it would be better to add examples from other emerging economies like Vietnam. Authors analysed and synthesized nearly 40 literature sources, but unfortunately more than half of them are from over 10 years. I suggest improving it with sources from the near past (last 10 years), and sources from other countries. They introduced their research topic through 2 surveys and focus group discussions with 15 suppliers in five provinces.  They focused on the financial risk factors affecting water and sanitation suppliers and their impact on financial viability through two case studies. Based on their research they stated that from the side of water operators the risks mainly contain infrastructure management, operational costs, and revenue instability, while in the sanitation sector, they highlighted fluctuating material prices, limited business expansion capital, and inconsistent household affordability. In their research they emphasized the role of government and donor subsidies, which enhance service accessibility but at the same time distort market dynamics, so that is the reason for the necessity of targeted financial and policy interventions, including better access to microfinance, regulatory improvements, and human resources development. I suggest improving this paper with figures and tables. I appreciate their results which can help in the future for the policymakers, but it would be necessary to improve it.

Author Response

Comment 1. Need to improve the literature review with sources from the near past (last 10 years), and sources from other countries.

Response 1. The literature review has been revised with addition of more recent references for both the general section and the Vietnam context section. The review on general section is revised to make it clearer that it draws on studies from other countries such as South Africa, Kenya. The Vietnam context is also revised to include studies on Cambodia and Indonesia.

Comment 2. Improve this paper with figures and tables.

Response 2. Thnak you for your suggetsion. The paper draws on mainly qualitative research data. Although there was a survey, the small sample size makes it difficult to present charts and tables in a meaningful way. This is explained in the method section on page 7 under the new subsection "Limitation of the Study", stating that "Due to the small sample size, the findings are presented as case studies and draw primarily on the focus group discussions. Survey data was analyzed descriptively and, where relevant, is incorporated into the case study results."

Comment 3. I appreciate their results which can help in the future for the policymakers, but it would be necessary to improve it.

Response 3. The results sections have been revised with discusion sections in each case study. The Conculsion section with Future recommendation was also rewritten to clarify the applicability of the recommendations—specifically, to support private sector WASH businesses operating within development programs and scale-up opportunities under public-private partnership (PPP) models, particularly those serving underserved households in rural areas of Vietnam (see pages 15–17).

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

• The literature review part should be further extended.
• Author(s) should also explain in detail within methods part, what served as an input for their development of the survey.
• Similar note is directed also towards discussion part. Simply comparison to the neighbouring country's cases shall not be sufficient, broader context should be formulated.
• As paper puts forward policy implications at the end, it would be highly recommended and highly beneficial to elaborate the proposed strategies more in detail, both for 6.1 and 6.2. E.g., it should be added what would be needed in practice to implement advanced payment model, what to offer financial assistance to suppliers, what to induce higher tariffs for better situated households etc. What needs to be done? What is a political and public stand on these remedies? What about equity and fiscal considerations? Etc.

Author Response

Comment 1: The literature review part should be further extended.

Response 1: Thank you for the suggestion to extend the literature review further. We would like to highlight that there is limited literature specifically addressing the financial sustainability challenges of private sector WASH enterprises operating within public-private partnership models in rural Southeast Asia. The context of our study—rural Vietnam—is particularly unique, with distinct political, economic, and institutional characteristics that differ significantly from those of other regions where most existing WASH literature is concentrated.

Available research rarely examines the intersection of financial viability, financial risks, and regulatory constraints faced by private WASH providers operating in partnership with government agencies, especially in contexts where pricing is regulated and governance is shaped by one-party systems. This type of context is largely specific to a few Southeast Asian countries such as Vietnam, Laos, and Cambodia, and is notably different even from other countries in the region, such as the Philippines or Indonesia. Countries outside Southeast Asia typically do not share the same institutional and governance features. This underscores the value of our field-based case study, a contribution that has been acknowledged by Reviewer 2.

In the first round of reviews, and in response to feedback from other two reviewers, we expanded the literature review to provide a more detailed discussion of the Vietnam context and to more clearly articulate the research problem. Further expanding the literature review at this stage would present challenges in staying within the journal's word limit for a case study paper (currently at 9,285 words), and may shift focus away from the core case study findings and discussion. We believe the current literature review achieves an appropriate balance—adequately situating the study within the existing research landscape while preserving the depth and focus expected of a case study.

This decision also responds to concerns raised by Reviewer 3 regarding the generalisability of the findings. As clarified in the paper, the case study methodology is not intended to produce broadly generalisable results but rather to offer in-depth insights into a specific and under-researched setting.

We appreciate the reviewers' thoughtful and constructive feedback, and note that both Reviewer 2 and Reviewer 3 have expressed satisfaction with the revised literature review in their subsequent comments.

Comment 2: Author(s) should also explain in detail within methods part, what served as an input for their development of the survey.

Response 2: Thank you for your comment. As noted in our response to this request in your first-round review, we added in the methods section Nguyen et al. (2018) as a key source informing the survey development, particularly in relation to financial risks and viability.

In this revised version, we have now provided further detail on how Nguyen et al.’s findings were applied. Specifically, the survey was informed by their identification of four major areas of cash-flow risk in public-private partnerships in Vietnam: construction costs, operation and maintenance costs, financing costs, and operating revenue. These categories shaped the section of the survey where respondents were asked to rank financial risks based on their perceived impact on business sustainability – see the green-highlighted text on page 5 for this update.

Comment 3: Similar note is directed also towards discussion part. Simply comparison to the neighbouring country's cases shall not be sufficient, broader context should be formulated.

Response 3: Thank you for your suggestion. As noted in our response to your comment in Point 1, the scope of this study is intentionally framed as a case study due to the unique institutional, political governance, and regulatory context of Vietnam, particularly in relation to the management of water supply and the financial risks facing micro-level WASH enterprises. The study is designed to examine financial viability within this specific setting, and extending the analysis to broader or more generalised contexts would not be feasible or meaningful within the aims and methodological design of this research.

During the first round of review to address concerns from Reviewer 2, we have clarified that, given the nature of the case study methodology, the findings are not intended to be generalisable. This clarification was added to the Limitations section on page 5. The revision alongside with other reason on adding discussion section (see below) was considered satisfactory in the subsequent round of review.

In the first-round review, Reviewer 2 suggested a comparative analysis of other WASH suppliers in other contexts in the discussion. In response, we incorporated the case of Cambodia, where a similar public-private partnership (PPP) model had been used to implement a similar WASH development project serving poor and marginalised households. The comparison between Vietnam and Cambodia was included to draw out commonalities in risk areas under PPP arrangements, particularly from the perspective of private sector actors operating in underserved rural areas. At the same time, we highlighted key differences in governance structures, institutional frameworks, and regulatory environments between the two countries. This was important to demonstrate that financial risks and viability are shaped by the intersection of micro-level business dynamics and broader governance systems, which may either constrain or enable various aspects of financial risk and sustainability. We have now included this point in the revised version of the paper to clarify the intention and significance of the comparison with Cambodia in the Conclusion section—please see the green-highlighted text on page 14.

Comment 4: As paper puts forward policy implications at the end, it would be highly recommended and highly beneficial to elaborate the proposed strategies more in detail, both for 6.1 and 6.2. E.g., it should be added what would be needed in practice to implement advanced payment model, what to offer financial assistance to suppliers, what to induce higher tariffs for better situated households etc. What needs to be done? What is a political and public stand on these remedies? What about equity and fiscal considerations? Etc.

Response 4: Thank you for your thoughtful suggestions. These are valuable points that would indeed benefit from further research—particularly through experimental studies to determine feasible payment and subsidy models, as well as to model a range of tariff structures. Such work would require detailed financial modelling and the involvement of experts in that field.

Similarly, questions related to political and public acceptance would require a more extensive study, potentially involving surveys or longitudinal research. This type of data is beyond the scope of our current study, and to our knowledge, no existing research provides sufficient evidence in this area.

As such, these suggestions fall outside the intended scope of this paper, which is focused on providing strategic insights based on a single case study. Given the limitations of the available data, we are not in a position to make specific recommendations regarding payment models or broader policy implementation at this stage, and recommend further research to be able to address these - this is now added to the concluding paragraph of the paper, see green-highlighted text on page 16.

Reviewer 2 Report

Comments and Suggestions for Authors

I see the author has answered all of my questions and improved the paper. Now it seems better. Thus this manuscript can be published.

Author Response

Thank you.

Reviewer 3 Report

Comments and Suggestions for Authors

I appreciate corrections.

Author Response

Thank you.

Round 3

Reviewer 1 Report

Comments and Suggestions for Authors

As already noted, the theoretical framework and literature review part of the paper should be extended. It should be conceptualized in a broader sense, i.e. it is understandable that we have nation-specific context, but the research topic relates to the issues like PPP and water industry. These are topics that received some attention within the existing literature. The same applies then under the discussion part.

Under the methodology, the authors should also state, as noted, when surveying and focus group analysis was actually performed.

The authors should also change the chapter number 7 to 6.

 

Author Response

Comment 1. As already noted, the theoretical framework and literature review part of the paper should be extended. It should be conceptualized in a broader sense, i.e. it is understandable that we have nation-specific context, but the research topic relates to the issues like PPP and water industry. These are topics that received some attention within the existing literature. The same applies then under the discussion part.

Response 1. In response to the reviewer’s request, additional material relevant to water supply and public-private partnerships (PPPs) in the Vietnamese context has been incorporated. These additions are intended to address the broader relevance of the topic while maintaining the paper’s central focus on the specific case study of financial risks in public-private partnerships (PPPs) within the WASH sector in Vietnam and the broader development context. As noted in our earlier response, the literature review had been carefully expanded with the aim to articulate the research problem more clearly and strengthen the contextual framing of the study, and discussion of results. In this revision, we have tried to incorporate the reviewer’s suggestion of literature on PPP and water supply without compromising the clarity, coherence, and analytical focus of the paper which is on Vietnam water and sanitation, and the distinctiveness of the case study approach.

Please refer to the revised literature review on page 4, the discussion sections on pages 7–9, and the conclusion on page 15. 

Comment 2. Under the methodology, the authors should also state, as noted, when surveying and focus group analysis was actually performed.

Response 2. Timing of analysis has been added to the methodology section, see page 6.

Comment 3. The authors should also change the chapter number 7 to 6.

Response. Thank you. Chapter number 7 has been changed to 6.