Harold LockwoodAguaconsult
Dr. Patrick Moriarty &Dr. Kurian Baby, IRC
Key findings from Triple S
TRENDS IN RURAL WATER SECTOR DEVELOPMENT
National Workshop on Sustainable RWSS
Government of Punjab, Chandigarh15 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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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
STUDY*
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GLOBALLY POSITIVE PICTURE – WE ARE GETTING THERE
70% functional
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RWSS DEVELOPMENT PHASE- ACROSS 13 COUNTRIES
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RANGE OF SERVICE PROVIDER MODELS
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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 O&M 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 HondurasSistema 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 ZimbabweSENASBA 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 (>10,000)
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, ThailandColombia, IndiaUganda, Ethiopia
Comprehensive and planned reforms for rural water
Well defined roles supported by policy/legislation
Honduras, Burkina Faso, Ghana, Mozambique
Reform processes not supported politically
More fragmented application in practice
Lack of clarity/conflicting roles
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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
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 3
Average Percentage of Capital Improvement Funded by Source
Source: Pearson, 2007 in Gasteyer, 2011
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Capital expenditure dominates
Recurrent expenditure and support effort
dominates
Coverage rates
25% 50% 75% 100%
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%
Capital maintenance expenditure dominates
Effort and costs/financing needs change with increased coverage
Towards Sustainable services that last..
Recommendations
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Capital expenditure dominates
Recurrent expenditure and support effort
dominates
Coverage rates
25% 50% 75% 100%
Capital maintenance expenditure dominates
~ US$ 5/capita/year for hand pumps
~ US$ 20/capita/year for small piped networks
~ US$ 5/capita/year for hand pumps
~ US$ 20/capita/year for small piped networks
Recap – as coverage rises management becomes more important
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CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
RECAP - DIFFERENT COUNTRIES AT DIFFERENT STAGES OF SECTOR DEVELOPMENT
Group 1: increasing coverage
Group 2: transitioning
towards service delivery approach
Group 3: consolidating
service delivery
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CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
20
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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CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
21
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 areas1.Sector reform and institution building2.Decentralisation and diversification3.Life-cycle costing
CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
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1. 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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2. 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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3. Adopt life-cycle costing
Services will only be sustainable where finances balance: inflows >= outflows•Ensure that identified sources of financing >= 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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CapEx
OpEx + support
25% 50% 75% 100%
CapManEx
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
70% functional
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WATER SERVICES THAT LAST
www.waterservicesthatlast.org
THANK YOU
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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)
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 O&M 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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Skewed distribution of HH connections and service level – tail end pressure lowVillage also has a RO plant selling approx 11,000 l/day but not to all HHs
Village level realities- Case of Venkatapuram, AP India
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Village level realities- Case Study of Venkatapuram
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Evolution of Chris Hani District Municipality O&M Arrangements
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