Participatory irrigation management is gradually being introduced in the canal irrigation system in Pakistan. In this study, performance of a participatory irrigation management system is compared with that of a conventional centrally controlled irrigation system. The study is carried out for canal irrigation systems of Lower Chenab and Jhelum, both located in Punjab, Pakistan. The performance indicators used included: establishment cost, operation and maintenance cost, water fees (abiana) collected and equity of water distribution. The data for performance assessment were collected from various sources, including field measurements, interviews with farmers, interviews with officers of the irrigation department, previous studies, and data from the Punjab Irrigation Department and the Punjab Irrigation and Drainage Authority. The analysis indicates that establishment costs of both public–private partnership management and a centrally controlled irrigation system are more than operational and maintenance costs. The water supply in the main canal is satisfactory in both systems. Water fees (abiana) collected are declining in the case of the participatory management system. Structural change in the participatory management system and extensive work on capacity building are required in order to obtain the benefits of transferring management to farmers' organizations in Pakistan. Copyright © 2013 John Wiley & Sons, Ltd.