Global learning in Sustainable drinking water services at scale –

everyone forever

Jean de la Harpe

11 March 2013

Roundtable2013

13 MarchNew Delhi

COVERAGE

Millennium development goal on safe drinking water reaches target earlyOnly 11% remaining un-served

Global achievements

• From 1990 to 2010 over 2 billion people gained access to improved water sources

• 1.8 billion people gained access to improved sanitation facilities

• Progress over last 20 years has been in the context of rapid population growth

Number of people who gained access to improved drinking water sources from 1990 to 2010 by MDG region (millions)

India 522 million

India – massive progress

But

Over 780 million people are still without access to improved sources of drinking water

If current trends continue, by 2015, 605 million people will be without an improved drinking water source

And the ‘job is far from finished’

• Many still lack safe drinking water

• Services are not sustainable

• High rates of non-functionality and slippage

• Lack of adequate institutional arrangements

• Current JMP indicators do not address the safety, reliability and sustainability of drinking water supply

Sustainability risks

GLAAS 2012 (74 developing countries)

• A chronic lack of technicians and skilled labour

• Insufficient staff to operate and maintain drinking-water infrastructure

• Inadequate funding for operation and maintenance

• One in three countries highlighted insufficient revenues to cover operating costs

• Only 7% of external support is directed at maintaining services

All these factors put sustainability of water systems at risk in many countries

IRC Triple-S study of rural water sectors

13 countries with range of sector reforms, aid dependency and progress in decentralisation

Analysis of trends found common opportunities and barriers to service delivery

Group 1 countries

• Low coverage levels ~ 30 – 40%• Focus on infrastructure• Reliance on voluntary community management• Move towards scaled up programming

EthiopiaMozambique

Group 2 countries

• Coverage ~ 50 - 70% and expanding • Tension between coverage and ‘slippage’• Trend to 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 sector capacity building• Addressing sustainability challenges and long-

term capital replacement• Reaching last 10 – 15% remains a challenge

India (Gujurat), Thailand, USA, Sri Lanka, South Africa

Findings of the study - sector development

• In many cases decentralisation has been partial

• Local government capacity remains weak

• Lack of clear roles and responsibilities

• Limited fiscal decentralisation

• Well defined policies, but lack implementation – ‘policy to practice gap’

• Aid dependency has led to fragmented approaches

• Insufficient support to the local level

…. Latest GLAAS report confirms these findings

Findings of studyIncomplete decentralisation and sector reform

• 90% of responding countries indicated that decentralisation has taken place to lower levels …

• But less than 40% have carried out meaningful fiscal decentralisation

• Only 40% have sufficient maintenance staff

• In rural sector less than 20% have sufficient maintenance staff

Community management remains the dominant approach in many countries for rural areas

Whilst there are moves to professionalise community management ….. there are still significant problems in achieving sustainable service provision within the model

Examples professionalising community management

Out-sourcing of specific functions: Honduras, Sri LankaApplying good business practices: ColombiaUse of support agents: South Africa

Findings: community management challengesManagement models

Eth

iop

ia

Mo

zam

bq

ue

Bu

rkin

aFa

so

Uga

nd

a

Gh

ana

Be

nin

Ind

ia

Ho

nd

ura

s

SriL

anka

Thai

lan

d

Co

lom

bia

S.A

fric

a

USA

Rural coverage (%); JMP, 2010 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

Poor serviceLow tariff collection

Water losses and high usage drive

up costs

Maintenance postponed

Service deterioratesCustomers less

willing to pay

Efficiency deteriorates

further

Service provider cannot pay all the

costs

Staff demotivated

Service failure

Service failure is also about poor governance at the local levelLack of

accountability

Weak policy

Poor planning

Lack of sector coordination

Incomplete decentralisation

Weak authority capacity

Budgets don’t reflect life cycle

costs

No service provider contracts

Poor service

Focus on projects instead of services

Poor citizen/ customer relations

Big gap is support at the local level

Both local government (such as the district level) in its capacity as the service authority

and local water service providers require support

Water service authority (WSA)

Water service provider (WSP)

National support

Policy support Sector collaboration

District level development

planning

Bylaws and regulatory functions

Service provision conditions & contracts

Monitoring and reporting

Budgeting real costs (tariff structure)

Technical training

Operational planning Customer care

and awareness

Billing system

Asset management

(O&M)

Operational budgeting

National planning

Establish post construction

support

Infrastructure development

Service provision support

Service authority

support to local government

Build sector capacity support

Harmonisation and alignment

Life cycle costing

Service provision (post construction) support – 5 Ms

• Mentoring support

• Management support (budgeting, financial and operational planning, financial management, asset management, human resource issues)

• Monitoring

• Major maintenance support

• Mobilisation and on-going training

Community based service providers require on-going support

Findings: Financing gap

Capital expenditure

Operational and minor

maintenance expenditure

Capital maintenance expenditure

Expenditure on direct support

Expenditure on indirect support

Costs of capitalPublic sector financing or external aid transfers

Assumed to be community responsibility (tariffs)

Unclear who finances support -these costs are consistently under-funded

Consequences of the financing gap

• Insufficient maintenance

• Deteriorating services

• Weak institutions

• Services not being extended to those without access

• The gap impacts on the ability of the entire sector to deliver sustainable services

Closing the Gap – 3 sources of revenue

• Ultimately there are only three sources of revenue to help close the financing gap. The 3Ts:

– Tariffs

– Taxes, and

– Transfers (from national government)

• Loans and bonds will need to be paid back and mainly serve to “bridge the gap”

Source: OECD

Full cost recovery from tariffs- unrealistic in rural areas

In reality rural water tariffs often barely cover operational expenditure costs

What does this mean for subsidies?

South African example …

South Africa

Massive investment in the water sector

With major grants to support scaling up AND sustainable service provision

- Infrastructure grant

- Operational grant

- Institutional grant

Municipal Infrastructure Grant (MIG)

Capacity Building Grant

(CBG)

Equitable Share (ES)

Infrastructure (capital

projects)

Institutions(capacity building

initiatives)

Service provision(operational grant)

Expand to un-served poor

Increase municipal capacity

Subsidy for the provision of services for the poor

South AfricaThree major grants to support sustainable scaling up

Equitable Share

• Subsidy for funding operating costs

• Unconditional transfer from national to local government, based on the levels of poverty within the particular municipal area

• Covers approximately 16% of total operating costs -the majority costs are covered through user tariffs

79% 5% 16%

User charges

Conditional grants

Equitable Share

Sources of water services operating revenue – national profile

25what is happening to our investment?

The

unserved

Sector Investment

Despite financial resources – we face increasing maintenance backlogs

What does sustainability mean in practice?

Eight point plan towards a

service delivery approach

1. Develop a clear water and sanitation policy and legislation

Sector vision, goals and targets

Institutional framework

Financial framework

Planning framework

National norms and standards (levels of service)

Regulatory framework

Support and monitoring framework

Implementing the Strategic Framework

2. Ensure effective financing strategies

Sustainability is about increasing investment in the sector –investment framework

Efficient use of resources and financial predictability

Multi-year plans based on the targets and sufficient recurrent income to cover operations and maintenance

Life cycle costing

Where tariffs are insufficient, other sources of revenue need to be found to close the gap

3. Plan to address targets – (everyone) AND for sustainability (forever)

- where are the un-served?

- what can they afford for water?

- what are the most appropriate technologies?

- what levels of service?

- what are the costs?

- who will be responsible for providing the services and how ?

- how will sustainability be ensured?

- what support is needed?

Disaggregate targets for the local level and develop local level

sector plans

4. Sector collaboration

Build a strong sector based on collaboration – between appropriate Ministries (horizontal) and local government (vertical)

Ensure a common approach working towards a single sector vision, goals and targets

One policy, one investment plan and one programme for the sector – where everyone is working to common objectives

Strengthen the development of robust national plans for WASH service provision

One plan

Collaboration

Common approach

Build the sector

5. Effective decentralisation

Decentralisation must be properly supported

Full fiscal decentralisation must accompany decentralisationof functions

Local government in the driving seat

But does local government have the capacity for infrastructure development and service provision?May be necessary to look at

other solutions for

implementing capital

programmes …

6. The right institutional arrangements

Need a focus on service provision functions: ongoing operations and maintenance, revenue collection, asset management, customer relations

Who is going to be responsible for provision?

What can partnerships offer?

Challenge to find the best mix of sector capacity -public, private, NGOs, CBOs, or a combination

Too often communities are left to manage their schemes with little or no support and ultimately the service fails – support services are essential (5Ms)

7. The right support at the right time

• Develop a support strategy as part of sector collaboration

• Identify support needs, particularly at the local level

• Implement support programmes for local governance and for service provision

• Emphasis on asset management

• Put in place a good monitoring system with feedback

• Ensure lesson and knowledge sharing

• Provide for mentoring and institutional support

• Regulate!

8. Always address the context

• Build on existing institutions

• Don’t mimic what works best in other countries – rather learn from successes and find what works best in the given context

• Find a ‘best fit’ approach within the context as opposed to ‘best practices’ (which tend to be relevant to other contexts)

• Facilitate local problem solving

• Learn from everyone

• Copy no-one

There is no ‘universal best practice’ approach to governance for development

There are no institutional templates that are valid everywhere and for all stages in a country’s development

We need to focus on maintaining assets to sustain services – this is as important as focussing on new infrastructure

Beyond 2015, achieving new drinking water targets will require not only a vast allocation of resources, but also

- concerted efforts to deliver sustainable service provision

- major focus on local government water services capacity

Sustainability through the full life cycle

Planning Implementation

(infrastructure

development)

Policy Service Provision

(sustainable

services)

Financing

From policy to ongoing services

Thank you

Jean de la Harpe

delaharpe@irc.nl

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