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Water and Sanitation Services That Last

Costing sustainable services The life-cycle cost approach

Catarina Fonseca and Peter Burr

International Water and Sanitation Centre

Water and Sanitation Services That Last May 2012

Agenda for webinar

1. What is the life-cycle costs approach

2. From theory to practice

3. Uptake: What’s in it for you


All materials available from:

www.washcost.info www.waterservicesthatlast.org

Partners

http://www.washcost.info/

http://www.waterservicesthatlast.org/

Life-cycle costs approach: What is it?



Non-functionality and decreasing service levels


What are the life-cycle costs?

The costs of ensuring adequate water, sanitation and hygiene (WASH) services to a specific population in a determined geographical area - not just for a few years but indefinitely.’


What are the cost components?


How to compare costs when services are different?


Service level

Quantity

(lpcd) Quality

Accessibility

(minutes per round trip=

distance and crowding)

Reliability

(number of days

functioning)

High >= 60

Good

<= 10 Very reliable

Intermediate

>= 40 Acceptable <=30 Reliable/secure

Basic (normative)

>= 20

Sub-standard >=5

Problematic

<=60 Problematic

No service (after

intervention)

<5

Unacceptable

> 60 Unreliable/insecure

Source: Moriarty et al., 2011

Water service levels


Service level

Quantity

(lpcd) Quality

Accessibility

(minutes per round

trip=

distance and

crowding)

Reliability

(number of

days

functioning)

Status

(JMP)

High >= 60

Good

<= 10 Very reliable

Improved Intermediate

>= 40

Acceptable <=30 Reliable/secure

Basic (normative)

>= 20

Sub-standard >=5

Problematic

<=60 Problematic

Unimproved No service

(after

implementation)

<5

Unacceptable

> 60 Unreliable/inse

cure

Source: Moriarty et al., 2011 Water service levels


0%

20%

40%

60%

80%

100%

Borehole and hand pump

Small piped system Well

% o

f p

op

ula

tio

n

Combined service level (quantity + quality + accessibility + reliability) in Mozambique sample

No Service

Sub-Standard

Basic

Different systems and still… very low services overall

Source: WASHCost team Mozambique, 2011


Exclusion analysis: different caste groups in a village in Andhra Pradesh (India)

Source: WASHCost team India, 2011


Toilets: access and use by different caste groups Andhra Pradesh


Life-cycle costs approach – from theory to practice



LCCA: bringing costs and service levels together


Service levels and costs: WASHCost sample for rural water

Andhra Pradesh

Burkina Faso

Ghana Mozambique Total

Number of rural communities sampled

187 9 36 67 299

Detailed HH surveys 5,743 3,046 1,273 1,710 11,772

Other data sources Borehole drilling contract data, financial record from small towns,

census data


Water facilities in the countries where cost information was collected/compared

Water system

Definition Andhra Pradesh

Burkina Faso

Ghana Mozambique

Borehole and manual hand pump

Mechanised Borehole

Small distribution network connected to public stand post. Limited storage and provision for HH connections

Single village scheme

Reticulated supply with village storage

Multi village scheme

Centralised supply serving a number of communities

Mixed piped supply

Overlapping service delivery systems


0

20

40

60

80

100

120

0%

20%

40%

60%

80%

100%

Co

st p

er

pe

rso

n U

S$ (

20

10

)

% o

f p

op

ula

tio

n

Mean capital expenditure per climatic zone of Andhra Pradesh compared with service levels

No Service Sub-Standard Basic Intermediate Cost per person

Low levels of service can be costly



More complex systems do not necessarily provide better levels of service (even with higher post-construction expenditure)

4.0

3.3

3.3

2.7

5.9

4.4

3.5

Andhra Pradesh Burkina Faso Ghana Mozambique

0.1

0.2

0.5

0.1

0%

10%

20%

30%

40%

50%

60%

% o

f u

sers

wit

h a

bas

ic s

erv

ice

leve

l

Mechanised Borehole Single Village Scheme Multi Village Scheme

Mixed Piped Supply Borehole and Handpump

Size of bubble denotes expenditure per user (US$2010)

Source: WASHCost Burkina, Ghana, Mozambique and India teams, 2011


Andhra - HH Exp.

Andhra - Gov't Exp.

Burkina Faso Ghana Mozambique

CapEx (current costs)

290 1820 12507 8922 8660

CapEx (PPP) 706 4267 29328 11383 19905

0

5000

10000

15000

20000

25000

30000

35000 U

S$ (

20

10

)

Capital costs of boreholes with hand pump systems


Implications for the sector

1. From delivering technology to deliver services – what can be

done to speed up change in mind-set?

2. Expenditure on direct support and capital maintenance are

not happening – how can the sector finance this

expenditure?

3. Who’s accountable for sustainability?

For delivering change, understanding costs necessary but not

sufficient

Uptake: examples of use and what’s in it for you



Many organisations and governments already using components of the life-cycle costs approach

Source: 2011 WASHCost annual report


Replication of components of LCCA by type of organisation (Jan 2012)

1

1

1

4

3

3

7

7

1

3

2

2

3

8

9

0 5 10 15 20

Network

Project

Foundation

Training inst.

Academic

United Nations family

Development Bank

Government

NGO

Using components of LCCA Planning to use components of LCCA

Source: 2011 WASHCost annual report


Example from Ghana (Government) - Cost components and service level norms within

District Monitoring and Evaluation System (DiMES) going to become a national monitoring system.

- Working groups on how to finance capital

maintenance and direct support

Source: WASHCost team Ghana, 2012


NGO Fontes Foundation in Uganda

Costs by categories for their Katunguru water project 2004-2010 in 2010$US

Source: Koestler et. al, 2010


What early adopters say…

1. Non-functionality is high. How can I increase functionality with a better understanding of costs?

2. There are a lot of investments on infrastructures, but resulting services are low. Can we get more value for money?

3. The donor says is too expensive. Can I show that my programme is cost effective?

4. I want to monitor sustainability. What are the best indicators?


What early adopter say…

5. My organisation uses different approaches, I want to see which one is more cost-efficient.

6. As district government I need to ensure the maintenance of existing infrastructure. How can I calculate who will pay how much for what?

8. As local government I need to plan, budget and monitor WASH services

9. ?

The end

Thank you

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