trends in rural water sector development addressing the challenges of sustainability and scale
TRANSCRIPT
Trends in rural water sector development: addressing the challenges of sustainability and scale
South Asia Regional Conference on RWSS
Kathmandu, 10 -12 October 2012
Harold Lockwood
Aguaconsult
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Expectations and reality
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Progress - but mind the ‘sustainability gap’
+/- 60 – 70% functionality
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World Bank data Africa Percentage of rural water systems requiring rehabilitation
Uganda 10% Cote d'Ivoire 33%
Chad 13% Zambia 35%
Benin 14% Mozambique 40%
Burkina Faso 23% Namibia 40%
Ethiopia 25% Sudan 40%
Lesotho 25% Madagascar 50%
Rwanda 30% DRC 60%
Senegal 30% Malawi 75%
World Bank 2007. Africa Infrastructure Country Diagnostic Water Supply and Sanitation Survey Database.
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>30%
India: ‘slippage’ and declining service levels
Information presented at IRC Slippage roundtable Briefing, Delhi, June 2009
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Triple-S study of rural water sectors • 13 countries - range of sector reform, aid
dependency and decentralisation
• Analysis of trends – common opportunities and barriers to service delivery
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Summary of sector development
Group 1 countries
• Low coverage levels ~ 30 – 40%• Focus on construction phase - ‘infrastructure challenge ‘• Reliance on voluntary CBM• Move towards scaled up programming
EthiopiaMozambique
Group 2 countries
• Coverage ~ 50 - 70% and expanding • Tension between coverage and ‘slippage’• Trend to systemic sector capacity building• Limited budgets and increasing demand for higher service levels
Honduras, Colombia, Ghana, Burkina Faso and Uganda
Group 3 countries
• Coverage of 75 – 85% + • Investment in building sector capacities• Addressing service quality challenges, sustainability and long-term capital replacement• Reaching last 10 – 15% remains a challenge
India (Gujurat), Thailand, USA, Sri Lanka, South Africa
Findings: political economy mattersDecentralisation and sector reform:• Range of experiences, but in many cases
decentralisation has been partial and local government capacity remains weak
• Rural sector reform has lagged behind urban and not fully supported politically
• Many well defined policies, but lack of supporting legislation and application – ‘policy to practice gap’
• Aid dependency has led to fragmented approaches and donors can undermine national reform efforts
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Many challenges remain, but improving
• Transfer of authority to local level, but with limited fiscal decentralisation; human resource capacity remains low
• Functions decentralised, but resistance and confusion over responsibilities: CWSA Ghana, PHEDs in some states in India, SANAA Honduras; MoIWD, Malawi
• But ....... other more positive examples of structured support to local government under decentralisation: Uganda, South Africa
• SWAps (including rural sub-sector) are becoming more commonplace: Uganda, S. Africa, Benin + more on the way
Findings: management models
• Community management still dominates• Higher coverage trends towards greater diversity of
management models
Findings: CBM is dominant but evolving Increasing trend from volunteerism towardsprofessionalised management:
• Out-sourcing of specific functions (Honduras, Sri Lanka)
• Applying good business practices (Programa de cultura empresarial Colombia)
• Full out-sourcing of O&M and administration for more complex systems (Ghana, South Africa)
Findings: alternative models emerging • Self supply increasingly recognised and supported -
Ethiopia, Thailand, Uganda - and is a reality to improve sub-standard services almost everywhere
• Public Private Partnerships, especially for piped schemes and rural growth centres
• Public authorities letting contracts for operation and maintenance to private firms – Ghana, Burkina Faso, Uganda
• Implications for regulation of rural water services – remains limited in most contexts
Findings: external support is important for sustaining service delivery
• Monitoring and oversight•Technical advice•Administrative and organisational support•Conflict resolution•(re-) Training•Information and resources
Support for service providers – community management committees, private operators, associations:
Findings: examples of direct supportInstitutional arrangements
Examples of direct support models
Direct supportby local government
Burkina Faso, Ghana, Mozambique, Indiaand Uganda
Central governmentor parastatal agencies
Honduras: national utility SANAA programme of circuit riders, called Operation and Maintenance Technicians (TOMs),Chile: regional private utilities are contracted by the Central Ministry to provide direct support to rural service providers
Association of Community -based Service providers
Brazil: Sistema Integrado de Saneamento Rural (SISAR) combines association of community-based service providers with support from a state-level utility
Local governmentsubcontracting a specialised agency orindividuals
South Africa: municipalities can contract a Support Services Agency (SSA), which can be a private company or NGO .Uganda: individual entrepreneurs, particularly hand pump mechanics or area-based mechanics, provide support.
NGOsEl Salvador: Asociación Salvadoreña de Servicios de Agua (ASSA) offers direct support to 170 rural communities.
Findings: focus on CapEx, but lack of systematic financing for other costs
Public sector financing or external aid transfers
Assumed to be community responsibility (tariffs)
Cost categories are less-well specified and consistently under-funded
Findings: full cost recovery from tariffs in rural sector is unrealistic • Assumptions of full cost
recovery under CBM appear (wildly) optimistic
•
• In reality rural water tariffs often barely cover operational expenditure costs – need for subsidies?
Findings: even in USA subsidies are necessary
Average percentage of capital maintenance funded by source
System Type Funding Source Very Small
25-500
Small
501-3300
Medium
3301-10000
Large
10001-100000
Very Large
>100,000
Overall Average
for All Size Categories
Publicly Owned Systems
Current Revenue 45 53 50 56 65 51DWSRF & Other
Government Loans
11 19 14 12 6 15
Government Grants or Principal Forgiveness
30 15 16 6 2 17
Private Sector Borrowing
9 11 17 25 27 14
Other 6 3 2 0 1 3Source: Pearson, 2007 in Gasteyer, 2011
Findings: costs and financing for direct support varies • Little (comparable) data – lack of disaggregated costs • Support systems provide different functions/types of
services – supply and demand based approaches• Costs vary with service level, technology and
topography Case Institutional
modalityEstimated cost US$/capita/year
% of total costs of service
S.A. Alfred Nzo Private company 5.24 65%
S.A. Chris Hani Private company 9.94 53%
SISAR, BBA Brazil Association 3.63 33%
Ghana District LG 0.67 3 – 19%
Mali Private company 0.34 n/a
Mozambique District 0.0012 n/a
Key messages:
• Costs of direct support are significant – accounting for ~ 20 - 25% of all long-term recurrent expenditure• In (lower) middle income countries ~ US$2 – 3 person/year appears to be sufficient order of magnitude• < US$1 person/year appears too low to be effective
Findings: cost benchmarks (WASHCost)
Cost component
Primary formal water source in area of intervention
Cost range US$ (2011)
[min – max]
Total capital expenditure (total per person)
Borehole and handpump [20 - 61]
Small schemes (< 500 people) or medium schemes (between 500-5000 people)
[30 - 131]
Total recurrent expenditure (total per person per year)
Borehole and handpump [3 - 6]
All piped schemes [3 - 15]
Key message:• Over 20 year life-span, per person recurrent costs represent 2 to 3 times the capital expenditure cost of bore holes with handpumps• Over 20 year life-span, per person recurrent costs represent 2 times the capital expenditure cost of piped systems (all size schemes)
Capital expenditure dominates
Recurrent expenditure and support effort
dominates
Coverage rates
25% 50% 75% 100%
Capital maintenance expenditure dominates
Summary: as sectors evolve, effort, cost and institutional requirements also change
0
100
Source: Moriarty, 2011
Danger zone: as basic infrastructure
is provided, coverage risks stagnating at
around 60 – 80%
Danger zone: as basic infrastructure
is provided, coverage risks stagnating at
around 60 – 80%
Costa Rica ~2000: a cautionary tale
Instituto Costarricense de Acueductos y Alcantarillados
Dirección de Acueductos Rurales
Recap and implications for funders
CapEx
25% 50% 75% 100%
CapManEx
OpEx + support
Group 1 countries: increasing coverage and laying the groundwork
Group 2 countries: transition to service delivery approaches
Group 3 countries: consolidating service delivery
CapEx
25% 50% 75% 100%
CapManEx
OpEx + support
CapEx
25% 50% 75% 100%
CapManEx
OpEx + support
CapEx
25% 50% 75% 100%
CapManEx
OpEx + support
Group 1 countries: focus on increasing coverage and lay groundwork sustainability
• Strengthen CBM – legalisation to clarify roles and mandates
• Improve and invest in structures for post-construction support
• Align DP programmatic support, particularly around implementation approaches – avoid fragmentation
• Improve monitoring systems to focus on services, not just coverage
Capital investment for new hardware and:
CapEx
25% 50% 75% 100%
CapManEx
OpEx + support
Group 2 countries: support sectors in transition to service delivery
•Support sector reform and institution- building – clarifying policy and practice •Move toward sector-wide support•Structured support to decentralisation: improved fiscal transfers and capacity•Diversification in service delivery models•Rationalise monitoring frameworks – one national system•Improve life-cycle cost data and financial planning
Invest in scaled-up solutions as first order coverage is achieved for the majority:
CapEx
25% 50% 75% 100%
CapManEx
OpEx + support
Group 3 countries: consolidate service delivery focus in ‘mature’ sectors
• Asset management planning• Capacity support to local government• Financial mechanisms for capital
maintenance expenditures• Life-cycle cost analysis and more
investment in direct and indirect support• Regulation – monitoring of services and
service providers• Strategies to reach the last 10-15%
Invest in sector capacity and address systemic weaknesses by improving:
Thank you.
For further information see:
http://www.waterservicesthatlast.org/ http://www.washcost.info/
Or contact me on: [email protected]