?IN 1997, THE provincial government of Córdoba signed a 30-year concession contract with Aguas Cordobesas, a private consortium led by Suez-Lyonnaise des Eaux, for the delivery of water in the municipality of Córdoba (the second largest city in Argentina). System efficiency has improved but little progress has been achieved in expanding coverage to the 17 per cent of the population that were not connected to the water system at the start of the contract. The municipality of Córdoba is known for its pioneering efforts to bring local government closer to its citizens, however, it was not formally involved in the contracting process. It has exerted informal influence over the contract implementation and has initiated several pilot projects to extend water supplies to low-income communities, in partnership with Aguas Cordobesas and the communities themselves. The case study highlights how the separation of responsibility for water and sanitation can weaken the contribution of the public sector. It also identifies a number of local capacity problems, both within local government and, when partnerships with communities are envisaged, within the communities themselves.