TRENDS IN RURAL Water SECTOR DEVELOPMENT

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TRENDS IN RURAL Water SECTOR DEVELOPMENT
Harold Lockwood Aguaconsult Dr. Patrick
Moriarty Dr. Kurian Baby, IRC
Key findings from Triple S
National Workshop on Sustainable RWSS Government
of Punjab, Chandigarh 15 December 2011
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BACKGROUND TO TRIPLE-S

• Six-year action research project - managed by IRC
  with partners
• Funded by BMGF as part of WASH learning
• Contribute to shift from infrastructure to
  service delivery approach
• Ghana, Uganda and Burkina Faso
• Global research and documentation
• Partnerships and advocacy

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Study

• Range of sector reform, aid dependency and
  decentralisation
• Analysis of trends common opportunities and
  barriers to service delivery
• Implications for policy
  and aid
  delivery
• Benin, Burkina Faso, Colombia, Ethiopia, Ghana,
  Honduras, India (Gujarat, Maharashtra and Tamil
  Nadu), Mozambique, South Africa, Sri Lanka,
  Thailand, Uganda and the USA

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globally positive picture we are getting there
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RWSS DEVELOPMENT PHASE- ACROSS 13 countries
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Range of service provider models
Service delivery model options Ethiopia Mozambqu Burkina Faso Uganda Ghana Benin India Honduras Sri Lanka Thailand Colombia South Africa USA
Rural coverage () JMP, 210 29 26 72 64 74 69 84 77 88 98 73 78 94
Community-based management P P P P P P P P P P P P P
Private contracting (includes to NGOs or CBOs) P P P P P P P P
Local govt. /municipal Provider/Water Boards/Dpts P P P P P
Self supply P P P P P P P P
Association of community or user associations P P
Urban utility (public, private or mixed) P P P P
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Cm predominates, but professionalising

• Increasing trend from volunteerism towards
  professionalised management
• Out-sourcing of specific functions (Honduras, Sri
  Lanka)
• Applying good business practices (Programa de
  cultura empresarial Colombia)
• Full out-sourcing of OM and administration for
  more complex systems

• Post-construction support is increasingly
  formalised part of sector policy - but not
  applied systematically and often under-resourced
  positive emerging examples

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Post-construction support critical for rural
operators
Institutional modality Type of model Examples
Association of community-based service providers Delegated model. In cases this is a de facto delegation and not formal National Rural Water Association in the USA AHJASA and AJAMs in Honduras Sistema Integrado de Saneamento Rural, SISAR, NE Brazil
Direct support by local government Devolution model Uganda, Ghana, Thailand, Municipal promoter, Nicaragua Cali municipality, Colombia
Local government subcontracting a specialised agency Delegation between local government and a specialised agency Urban utility (e.g. in Colombia and Senegal). Private company or NGO as Support Services Agency (South Africa)
Government or parastatal agencies Centralised or deconcentrated models Circuit rider model, SANAA in Honduras AyA in Costa Rica DDF (District Development Fund) in Zimbabwe SENASBA in Bolivia. Regional utilities Chile
NGOs and faith-based organisations Delegated model. In most cases, this is a de facto delegation and not a formal one. Ad hoc examples where NGOs have specific support programmes, for example through ASSA in El Salvador
Private sector Delegated model. In most cases, this is a de facto delegation and not a formal one. Contracted by government agency - STEFI in Mali - or individual entrepreneurs providing post-construction support, particularly hand-pump mechanics or area-based mechanics (Uganda).
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Post-construction support AT what costs?

• Little (comparable) data lack of disaggregated
  costs
• PCS systems provide different functions/types of
  services supply and demand based approaches
• Costs vary with service level, technology and
  topography

Case Institutional modality Estimated 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
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Increasing role for local private operators

• CWSA policy to establish sliding scale of private
  sector provision across 3 of 4 management options
  with full delegation in in largest (gt10,000)

• Rwanda - management by private operators
  increased from 7 in 2003 to nearly 30 at end
  2007
• Implications for regulation of service providers
  early experiences from Colombia

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Decentralisation and sector reform

• South Africa, Thailand
• Colombia, India
• Uganda, Ethiopia

• Comprehensive and planned reforms for rural water
• Well defined roles supported by
  policy/legislation

• Reform processes not supported politically
• More fragmented application in practice
• Lack of clarity/conflicting roles

Honduras, Burkina Faso, Ghana, Mozambique
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Service authority functions

• Transfer of authority to local government despite
  little capacity and resources to do the job -
  fiscal decentralisation is limited in practice
  districts engaged in local planning processes
  which cannot be supported
• Functions decentralised in policy terms, but
  resistance and confusion over roles and
  responsibilities CWSA/MMDAs Ghana, PHEDs in some
  states in India, SANAA Honduras (MoIWD, Malawi)
• Positive examples of structured support to local
  government Uganda, South Africa

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Harmonisation is improving

• Aid-dependent countries in study show improving
  picture of coordination and alignment -
  SWAp/progammatic mechanisms in Uganda, Benin and
  South Africa moving forward in Ghana,
  Mozambique and Ethiopia
• Improved coordination and common funding allows
  systematic capacity development putting in
  place elements such as common monitoring
  frameworks and post-construction support
• NGO investment programmes can be significant and
  often not integrated with government systems

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focus on capital investments

• Capital investment (taxes and transfers small
  user contribution) and minor OpEx costs well
  defined
• Long-term recurrent costs, specifically for
  support and capital maintenance are less well
  defined Uganda with regularised rehabilitation
  funds (8)
• Assumptions of full cost recovery under community
  management proven to be (wildly) optimistic - in
  reality rural water tariffs (barely) cover OpEx
  costs
• Even in USA 50 capital maintenance comes from
  sources other than tariffs

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USA public subsidies for rural water services
Average Percentage of Capital Improvement Funded
by Source
System Type Funding Source Very Small 25-500 Small 501-3300 Medium 3301-10000 Large 10001-100000 Very Large gt100,000 Overall Average for All Size Categories
Publicly Owned Systems Current Revenue 45 53 50 56 65 51
Publicly Owned Systems DWSRF Other Government Loans 11 19 14 12 6 15
Publicly Owned Systems Government Grants or Principal Forgiveness 30 15 16 6 2 17
Publicly Owned Systems Private Sector Borrowing 9 11 17 25 27 14
Publicly Owned Systems Other 6 3 2 0 1 3
Source Pearson, 2007 in Gasteyer, 2011
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Effort and costs/financing needs change with
increased coverage
Danger zone as basic infrastructure is provided,
coverage risks stagnating at around 60 80
Sector effort and costs
Recurrent expenditure and support effort dominates
Capital expenditure dominates
Capital maintenance expenditure dominates
25
50
75
100
Coverage rates
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Towards Sustainable services that
last.. Recommendations
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Recap as coverage rises management becomes more
important


US 5/capita/year for hand
pumps US 20/capita/year for small piped
networks
Sector effort and costs
Recurrent expenditure and support effort dominates
Capital expenditure dominates
Capital maintenance expenditure dominates
25
50
75
100
Coverage rates
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Recap - Different countries at different stages
of sector development
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Recommendations for countries with low coverage
focus on increasing coverage

• Provide capital investment for the construction
  of new hardware while preparing ground for
  service delivery
• Strengthen CBM legalisation and formalisation
  with local government
• Emphasise 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

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RECOMMENDATIONS FOR COUNTRIES WITH HIGH COVERAGE
AND MATURE RURAL SECTORS CONSOLIDATING SERVICE
DELIVERY

• Provide technical support and limited investment
  through harmonised approaches
• Asset management planning
• Capacity support to local government
• Financial mechanisms for capital maintenance
• 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 of un-served
  

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Recommendations for countries in transition

• As first order coverage is achieved for the
  majority, capital investment must continue while
  sustainable service delivery requires support in
  three related areas
• Sector reform and institution building
• Decentralisation and diversification
• Life-cycle costing

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SUPPORT TO REFORM AND INSTITUTION BUILDING

• Sustainability requires clarity of roles,
  availability of information and space for
  experimentation
• Clarify institutional/policy frameworks
• Development of systems to monitor both
  functionality and service delivery
• Creation of regulatory capacity
• Impact evaluation, space for learning, adaptation
• Promote harmonisation around agreed sector-wide
  approaches

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SUPPORT DECENTRALISATION DIVERSIFICATION

• Sustainable services depend on sustainable
  decentralised institutions and organisations -
  which need to be created (e.g. private sector)
  and supported
• Capacity building of local government as part of
  public sector reform
• Encouragement and support of local private sector
  (including local NGOs)
• Increase in of financing flowed through
  decentralised system(s)
• Differentiate rural market allow for different
  service levels
• Reduce role of INGOs as primary service providers
  or channels for financing

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Adopt life-cycle costing

• Services will only be sustainable where finances
  balance inflows gt outflows
• Ensure that identified sources of financing gt
  estimated life-cycle expenditure at both sector
  and system scale
• Systematically collect and make available data on
  life-cycle costs (benchmark)
• Create mechanisms for post construction support

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Summing up

• Status quo will only bring us so far in terms of
  increased coverage
• Need a step-change in sector development to move
  from (sub) basic coverage levels
• Shift emphasis of financing and advice from new
  infrastructure to sustainable services.
  Provide support to
• Sector reform and institution building
• Decentralisation and diversification
• Life-cycle costing

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Water services that last
THANK YOU
www.waterservicesthatlast.org
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Benefits of post construction support ?
ASSA study in 60 communities, El Salvador,
(Kasyer et el 2010)
BNWP study in 400 communities, 2009

• Inconclusive evidence of direct correlation
  between PCS and performance
• No significant difference between demand or
  supply-based systems of PCS
• But 15 increase in consumer satisfaction where
  support provided to operators (Bolivia)

Control
Circuit rider
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Expenditure on WASH Sector Share of Drinking
water and Sanitation in the Budget

• Plan expenditure dominates - focus on coverage
  and creation of infrastructure.
• Relative share of drinking water in the budget
  has increased only marginally.
• Share of non-plan expenditure has increased while
  the share of plan expenditure declined over the
  period.

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Expenditure on WASH Sector Composition

• More than 80 percent of the allocations are
  devoted to infrastructure.
• Allocations towards minor works, mostly OM on
  declining trend
• Shift focus from asset creation to maintenance
  and management.

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Relative proportion of disaggregated costs

• Capital Expenditure (Hardware) is the highest
  (56) followed by Household Capital Expenditure
  on Hardware (19) ( Storage structures, booster
  pumps)
• Capital Maintenance expenditure i accounting to
  10 - met from adhoc allocations
• HH Support costs are as high as 6 -unreliability
  of the sources leading to alternatives
  including buying
• If only public expenditure is taken CapEx and
  CapManEx take 90 of the allocation
• Soft ware costs negligible

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Disaggregated costs Service Delivery India

• Capital Expenditure (Hardware 56), Household
  CapEx 19, ( Storage structures, booster pumps)
• Capital Maintenance expenditure accounting to
  10 - from adhoc allocations
• HH Support costs are as high as 6 -unreliability
  of the sources leading to alternatives
  including buying
• If only public expenditure is taken CapEx and
  CapManEx take 90 of the allocation
• Soft ware costs negligible

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Village level realities- Case of Venkatapuram, AP
India

• Skewed distribution of HH connections and service
  level tail end pressure low
• Village also has a RO plant selling approx
  11,000 l/day but not to all HHs

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Village level realities- Case Study of
Venkatapuram
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Evolution of Chris Hani District Municipality OM
Arrangements