1 MDG and MKUKUTA Water Sector Costing German Development Institute in cooperation with the MoWLD and the Millennium Project Prepared by Florian Misch

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MDG and MKUKUTA Water Sector Costing

German Development Institute in cooperation with the MoWLD and the Millennium Project

Prepared by Florian Misch and Joseph Kakunda

Shared with the MKUKUTA Secretariat

23rd June 2005

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OUTLINEOUTLINE

1. Introduction to MDG and MKUKUTA Costing

2. Review of Existing Costings in the Water Sector

3. Analytical Framework for the MDG and MKUKUTA Costing

4. Costing

5. Financing Strategy

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Introduction to MDG and Introduction to MDG and MKUKUTA CostingMKUKUTA Costing

Status of MDG and MKUKUTA Costing

Costing is part of MKUKUTA implementation– Initially water, health, education and agriculture sectors are costed

Costing will be undertaken jointly by respective sector ministry, ESRF, Millennium Project and GDI

Despite several earlier costings, there is the recognized need for a comprehensive medium- and long-term MDG and MKUKUTA costing

Time horizon for costing: – 2006-2010 for MKUKUTA – 2006-2015 for MDGs

MDG and MKUKUTA Costing has no implications for current budget process

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Costing and Needs Assessments (1)

‘realistic’ and ‘best computed’ assessment of resource needs to meet MKUKUTA Targets and MDGs

Determine the gap between resource requirements and available resources to meet MDGs and MKUKUTA targets

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Costing and Needs Assessments (2)

Needs assessment is critical to develop future financing strategies (total requirements must be known)

Tanzania is well positioned to access additional (not necessarily sufficient) external resources if MKUKUTA and MDGs are costed

– MKUKUTA targets and MDGs are approved by GoT and development partners

– Strong governance– Supportive donor community

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Guiding Principles for Costings (1)

Transparent – assumptions and methodology must be clearly visible and

modifiable

Methodology adapted to Tanzanian context – Millennium Project methodology should be seen as

guidance only – esp. consideration of cross-cutting as well as cross-sectoral

issues and capacity constraints

Must strive for maximum disaggregated results – e.g. between urban and rural, by year

Must allow the calculation of the financing gap

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Guiding Principles for Costings (2)

Costing refers to interventions needed to meet MDGs and MKUKUTA targets

– Interventions are defined as investments in goods, services and infrastructure required to meet the MDGs, e.g. the construction of new water supply schemes

– List of interventions based on political decisions about strategies, institutional set-up, etc.

Involvement of stakeholders – Choice of interventions– Development of methodology– Political decisions and choices influence results– Ensures that the results are broadly accepted

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Review of Existing Costings Review of Existing Costings in the Water Sectorin the Water Sector

Existing studies – National Rural Water Supply and Sanitation Programme

(NRWSSP)– Tanzania Country Stategy for Attaining MDGs and WSSD

Targets for the Water and Sanitation Sector (MoWLD)– The Cost of Water and Sanitation MDGs for Tanzania

(WaterAid)– The Millennium Project Case Study in Tanzania (preliminary

only)– Country Assessment – Tanzania (MoWLD / World Bank)

Ongoing work – National Urban Water Supply and Sewerage Strategy

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Costing MoWLD NRWSSPMillennium

ProjectWaterAid

MoWLD / World Bank

Costed goals MDGs MDGs MDGs MDGs MDGs

Timeframe 2004/2005-20152003/2004-

20152005-2015 2000-2015 2000-2015

Geographical scope

Tanzania (Dar Es Salaam

partially excluded)

mainland Tanzania mainland Tanzania

Rural / urban rural and urban rural rural and urban rural and urban rural and urban

Areas costed

Water SupplySanitationAwareness

RaisingIWRM

Water SupplySanitation

District Manag. Support

Inst. Strenthening


Wastewater TreatmentHygiene

Education


Water Supply

1010


Notes: Different definitions of rehabilitation; in prices of first year of respective costing; values may be implicit and based on own calculations; figures of WB costing include management and planning costs; NRWSSP recognizes substantial rehabilitation costs, but does not quantify them

Capital Cost for Rural Water Supply

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

MoWLD NRWSSP MillenniumProject

WaterAid MoWLD /World Bank

Expansion

Rehabilitation

Construction of newinfrastructure

1111


MKUKUTA targets have not been considered

Scope of costing varies

Due to different results, further analysis is required

– Compare and evaluate different methodologies, different assumptions and different data used

– Compare interventions that are costed– Enhance analysis by interviewing stakeholders

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Analytical Framework for the Analytical Framework for the MDG and MKUKUTA CostingMDG and MKUKUTA Costing

Costing builds upon

– MDG and MKUKUTA targets

– Previously identified interventions

Subdivision of the Sector

– Water Resource Management

– Water Supply

– Sanitation

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Water Resource Management Targets

MKUKUTA Allocation of water

– Domestic– Irrigation– Livestock– Industry– Energy

Pollution Water Harvesting Vulnerability Disaster Management

MDGs are broader as well as more general and require interpretation (MKUKUTA can be used)

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Water Supply and Sanitation Targets

MKUKUTA Increased proportion of rural population with access to clean

and safe water from 53% in 2003 to 65% 2009/10 within 30 minutes of time spent on collection of water

Increased urban population with access to clean and safe water from 73% in 2003 to 90% by 2009/10

Increased access to improved sewerage facilities from 17% in 2003 to 30% in 2010 in respective urban areas

Reduce households living in slums without adequate basic essential utilities

100% of schools to have adequate sanitary facilities by 2010 95% of people with access to basic sanitation by 2010 Reduce Cholera out-breaks by half by 2010

MDGs Halve, by 2015, the proportion of people without sustainable

access to safe drinking water and sanitation

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Cross-Sectoral and Cross-Cutting Issues

Focus on gender, environment and HIV/AIDS as critical cross cutting issues

– e.g. the impact of water on gender:Reduced time, health, and care-giving burdens from improved water services give women more time for productive endeavors, adult education, empowerment activities, and leisure.

Focus on sanitation as critical cross-sectoral issue– strongly related to health

Identification of additional requirements due to cross-sectoral and cross-cutting issues

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Interventions

Type of interventions Infrastructure related Institutional strengthening Awareness raising

Scaling-up Identify constraints for the scaling-up of

interventions Determine pace of scale-up and Identify Tanzanian ‘quick wins’

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CostingCosting

Refinement of methodology

Consideration of capacity constraints

Consideration of cross-sectoral and cross-cutting issues

Take into account suggestions from stakeholders

Identify critical parameters

Develop transparent model (spreadsheets)

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CostingCosting

Data and assumptions

Based on methodology, establish data requirements

Possible data sources:– MoWLD– Existing costings– Donor funded projects– International values

Fill data gaps with appropriate assumptions (e.g. for population projections, rural-urban migration etc.) as made by stakeholders

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Example: Costing the Example: Costing the Construction of Water Supply Construction of Water Supply

Infrastructure Infrastructure

Critical Parameters

– Settings(timeframe and targets, geographical scope)

– Demography (population, share of rural population, population growth, projected rural urban migration rate)

– Coverage(current rural coverage, current urban coverage, rural target coverage, rural urban coverage)

– Technology mix(current technology mix, target technology mix)

– Unit Cost(rural unit cost by technology, urban unit cost by technology)

2020

Example: Costing the Example: Costing the Construction of Water Supply Construction of Water Supply

Infrastructure Infrastructure Calculation (1)

Technology 1

Technology 2

Technology 3

Base year population X

current coverage

Target year population X

target coverage

Population using technology 1 in

base year

Population using technology 1 in

target year

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CostingCosting

Calculation (2)

– Calculate incremental number of people using technology i:

Population using technology i in target year – Population using technology i in base year

– Calculate cost of technology i:Incremental number of people using

technology i Xper capita unit cost of technology i

– Calculate total costs for rural or urban, respectivelySum of costs of all technologies

– Repeat Steps for urban or rural, respectively

– Total CostsSum of urban and rural

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CostingCosting

Presentation of Results– By year– By subsector– By type of cost– Rural / urban

Sequenced and costed intervention and investment plans as basis for a long-term strategy to attain the MDG and MKUKUTA targets

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Financing StrategyFinancing Strategy

Determine level of current financing Government spending Communal and private contribution External finance

Determine the financing gap

Present options for additional resource mobilization

Future short-term financing strategies (next budget guidelines and MTEFs) can be built on resource availability and resource requirements

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DiscussionDiscussion

Thank You!

Documents

1 MDG and MKUKUTA Water Sector Costing German Development Institute in cooperation with the MoWLD and the Millennium Project Prepared by Florian Misch