Towards sustainable water services in La Paz, Bolivia

Woman in Chuquiaguillo siphoning water from tank to fill jerry cans. Photo: Erma Uytewaal, IRC.

A Dutch-funded project aims to bring piped drinking water to peri-urban neighbourhoods of the Bolivian capital La Paz. What will determine its success? Is it the inhabitants’ willingness and ability to pay for improved water services? No, the biggest threat to the sustainability of the project is the lack of a national sector strategy that clearly outlines how to finance the full costs of service delivery.

At present, the 125,000 inhabitants of the Chuquiaguillo sub-district have to rely on a network of plastic/flexible tubes providing untreated water through public taps. Or they get water from water tankers and unprotected springs.

“Network of plastic/flexible tubes providing untreated water” in Chuquiaguillo. Photo: Erma Uytewaal, IRC.

The Chuquiaguillo Water Supply Service Improvement and Extension Project will connect 25,000 homes to a new water supply system by 2015. The system consists of a water treatment plant and 50 km of distribution pipes. The project wants to ensure that services are sustained long after the infrastructure is in place. The IRC International Water and Sanitation Centre contributed to this aim by supporting consultants Royal HaskoningDHV to carry out a socio-economic feasibility study of the Chuquiaguillo project. The study examined the pro-poor impact of the project and the ability and willingness of the poor to pay for the services.

Royal HaskoningDHV and water operator Vitens Evides International (VEI) are advising Bolivia’s state-run water utility EPSAS to implement the Chuquiaguillo project. It faces several technical and environmental challenges due to the difference in altitude between the water reservoir and the service area, and climate change (for more details see the NL Agency website).  The project is being financed by the Facility for Infrastructure Development (ORIO), a grant scheme operated by the Dutch Ministry of Foreign Affairs.

Critical for the project’s sustainability is a national sector strategy that clearly outlines how to finance the full costs of service delivery. As it stands now, tariffs only cover direct operations and some maintenance costs. In line with the present governments’ pro-poor policy, service providers apply a solidarity tariff for the first 10 cubic metres of water. However, it is unclear how the solidarity tariff will be subsidised. This needs to be clarified in a sector financing strategy, which also promotes a life-cycle costs approach (LCCA) in which all costs for capital expenditure, capital maintenance, and direct and indirect support are covered.

The social action plan, to be implemented by EPSAS, will also contribute to the sustainability of the project. Enhanced transparency and accountability are important elements of the plan. This refers to  performance indicators on service levels provided, cost recovery, investments, customer satisfaction, and operation and maintenance (O&M).

For more information contact Erma Uytewaal

For more on IRC’s activities in Latin America go to: www.irc.nl/page/36926

For more on the Life-cycle costs approach go to: www.washcost.info

For more on sustainable service delivery go to: www.waterservicesthatlast.org

Bolivia: Cuchumuela first municipality to reach 100 percent water coverage

Water supply in Cuchumuela. Photo: José Rocha, Los Tiempos

Villa Gualberto Villarroel, better known as Cuchumuela, is the first municipality in Bolivia to achieve 100 percent water coverage. Official recognition for their achievement came from Bolivia’s water and environment ministry MMAyA. It is the story of a successful partnership between local government, communities and an international NGO, Water for People.

According to Mayor Oscar Terrazas, the foundation for achieving water for all 2,000 inhabitants of Cuchumuela was laid in 1996 when Bolivia passed the law on popular participation (Ley de Participación Popular). This gave local government and communities the power to set their own priorities for local services. Each of the 15 autonomous communities in Cuchumuela is responsible for the financial management and maintenance of their fully metered water system.

Colombia: testing innovative models for rural water and sanitation services

Photo: IRC

NGO “Give to Colombia” will implement several pilot projects that will serve as models for the Rural Water Supply and Wastewater Management Program in Colombia. This large-scale programme is financed with the help of a US$ 60 million loan from the Inter-American Development Bank (IDB).

The pilot projects have four components:

• School water, sanitation and hygiene promotion (SWASH), which will implement and evaluate UNICEF’s model for SWASH interventions in at least 25 rural public schools
• Post-construction support and the sustainability of rural water projects with a focus on innovative financial models
• Sustainable models for the financing and provision of household connections
• Sustainable self-supply models for disperse rural communities

The AquaFund and Japan Fund for Poverty Reduction are financing the pilot projects. Contributors to the Aquafund are IDB, the governments of Switzerland and Austria, and the PepsiCo Foundation.

The pilot projects will cost about US$ 2.1 million. The implementing agency Give to Colombia (G2C) receives resources from the Embassy of Japan and the General Electric Foundation. PepsiCo Colombia is supporting the dissemination of the innovative models being developed in the projects.

In 2011, IRC International Water and Sanitation Centre and CINARA carried out a study on behalf of IDB, about post-construction support on rural water supply services in Colombia [1]. The study [2] shows that those service providers that receive more structured support perform better.

[1] IADB publishes report on post-construction support on rural water supply services in Colombia, IRC, 21 Aug 2012 ; Webinar – Impacts of post-construction support on the performance of rural water supply in Colombia, IRC,

[2] Smits, S. et al., 2012. Gobernanza y sostenibilidad de los sistemas de agua potable y saneamiento rurales en Colombia. (Monografia; IDB-MG-133). [online] Washington, DC, USA: Inter-American Development Bank. Available at: <http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36986189>

Related websites:

• IDB – Rural Water Supply and Wastewater Management Program (CO-L1105)
• IDB – AquaFund
• Give to Colombia (G2C)
• IRC – Triple-S/Water services that last – Colombia

Source: Latin American Herald Tribune, 10 Oct 2012 ; IDB, 02 Oct 2012

Brazil: Amazonas planning US$110mn sustainability projects for southeast region

Brazil’s Amazonas state is planning projects worth US$110mn aimed at improving water supply and other sustainability issues through state development plan Proderam, the plan’s executive coordinator, Laercio Cavalcante, told BNamericas.

Read full article on: BAmericas, [subscription database], July 2, 2010

Guatemala: US$ 100 million from Spain and the IDB to improve water and sanitation services

Thanks to US$ 50 million in grants from Spain and US$ 50 million in loans from the Inter-American Development (IDB) Guatemala will expand safe water and sanitation services to approximately 600,000 people in 280 rural communities and 60 urban and periurban areas that today lack those services.

In addition to enhancing and expanding water and sanitation services, the program will foster organized participation by the rural communities and the municipalities in order to ensure that the systems constructed are sustainable over time. The funds will also serve to consolidate and strengthen the institutions needed for the planning, regulation and delivery of the services.

The program will lend support to a comprehensive plan drawn up by the Government of Guatemala to reduce the shortfall in coverage of these services. Current water and sanitation service coverage, nationwide, is 75 percent and 47 percent, respectively, which means that nearly 3 million Guatemalans still lack public water services and approximately 6 million lack sanitation services.

In the rural areas of Guatemala, water coverage is 60 percent, sanitation 36 percent. The worst shortfalls are found in areas with predominantly indigenous populations. According to Government estimates, only 15 percent of the water distributed in the country can be considered potable and barely 5 percent of the sewerage systems properly treat wastewater prior to disposal. To achieve United Nations Millennium Development Goals, Guatemala would have to invest an estimated $1,602 million in improving these services.

This is the fourth project financed jointly by the IDB and the Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean (the Spanish Fund), an entity established in 2009 at the initiative of the President of Spain, José Luis Rodríguez Zapatero.

[...]

Apart from the project in Guatemala, the IDB and Spain are co-financing projects in Haiti, Bolivia and Paraguay, and between now and mid-2010 they are expected to finance projects located in Brazil, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Honduras, Peru and Uruguay. All in all, Spain will donate US$ 407 million to those projects, while the IDB will contribute US$ 213 million in grants and loans, in addition to defraying the bulk of the their preparation and implementation costs. Some 4 million people living in low-income urban and rural communities are expected to benefit directly from these projects.

Initially, the program will be executed by the National Peace Fund (FONAPAZ) with the support of the Ministry of Public Health and Social Assistance. Nineteen months into the Program, responsibility for executing it will pass to the Municipal Development Institute (INFOM/UNEPAR).

Of the loans granted to the program by the IDB, US$ 40 million will be for a 30-year term, with a 5.5 year grace period, at a variable interest rate based on Libor, while the remaining US$ 10 million will be for a 40-year term with a grace period of 40 years, and an interest rate of 0.25 percent. The IDB could eventually consider financing a second phase of the program with an additional US$ 100 million loan.

Project information: IDB – Water and Sanitation Program for Human Development-Phase I

Related web sites:

• IDB – Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean
• IDB – Water & Sanitation

Contact:

• Camilo Garzón, IDB Project Team Leader, USA, tel: (202) 623-1945, e-mail: camilog [at] iadb.org
• Edgar Orellana, IDB Project Team Leader, Country Office in Guatemala, e-mail: edgaro [at] iadb.org

Source: IDB, 23 Nov 2009

See below an IDB video on the Spanish Water and Sanitation Cooperation Fund

Dominican Republic: Tecvasa awarded San Juan potable water, sanitation consultancy contract

Dominican Republic national water utility Inapa has awarded a consultancy contract for a water and sanitation project for San Juan province to Spanish firm Tecvasa through its subsidiary Consorcio GSM. The project is part of Inapa’s goal to gradually transfer the management of rural systems to financially and operationally autonomous entities in local communities.

Source: BNamericas.com [subscription site], 17 Nov 2009

Chile: Lower house to discuss bill to concession rural water, sanitation services

Members of Chile’s lower chamber of congress will discuss a bill to concession rural potable water and sanitation services in the second week of November 2009, an official from the house’s public works committee told BNamericas.

The senate approved the bill unanimously in October 2009 and it has been classified as “extremely urgent” due to its importance for the sector, the official added.

The new law includes the creation of a national rural sanitation department that will operate within the waterworks division of the public works ministry (MOP).

The new authority will award the operation and maintenance of rural sanitation services to existing cooperatives, to newly created ones and also to sanitation companies.

“Cooperatives will operate as concessionaires because they will be given the right to manage these services and administer revenues over a period of time,” the official said.

When the concession period is over, the cooperative in charge of services will have certain advantages if it wants to continue but there is no guarantee it will be awarded the concession again, the official added.

The new rural sanitation department will work with regional governments to draw up plans and programs to expand services; create a registry of and classify rural water operators; and supervise these entities to guarantee services. The authority will also decide policies and administer technical and financial support from national government on a case-by-case basis.

Contracts will be granted for 30 years, during which the awardee will provide potable water and sewage services, sewage collection services and wastewater treatment in some cases, according to the bill.

Service rates will be set for five-year periods by the national sanitation services authority SISS, which also establishes the rates for urban water utilities.

Under Chile’s current framework, many entities are involved in rural sanitation, which makes it difficult to monitor the services provided by cooperatives and solve problems efficiently.

In 1964 only 6% of Chile’s rural population had access to potable water. Nowadays, coverage is at 98%, serving a population of over 1.5mn inhabitants. The quality of these services, however, differs among communities.

The increase in rural potable water coverage is mainly due to a US$400mn investment carried out by the state from 1994-2005.

Source: Eva Medalla, BNamericas.com [subscription site], 04 Nov 2009

Peru: IDB loan will help improve water and sanitation services

A US$ 20 million loan from the Inter-American Development Bank (IDB) will support government efforts to implement reforms to improve the efficiency, equity, access and sustainability of water and sanitation services.

The program aims to correct service deficiencies, which include intermittent water supply in many areas, low quality of water, particularly in rural districts, high level of unmetered water, average payment arrears of five months, and rates too low to cover operational costs.

The operation, third in a series of three annual loans for this sector, will support government efforts to implement structural, institutional, legal and regulatory reforms in the following areas:

• The sector’s institutional framework, in order to build the capacity of institutions and improve regional planning capacity, particularly in small communities.
• Financial policy, aimed at establishing criteria for public resources allocation and improving the financial condition of municipal water and sanitation service providers.
• Rate policy, intended to simplify rate structures, target subsidies, and incorporate the concept of environmental costs.
• Service providers management, seeking to institute good corporate governance practices and reporting by operators.
• Private sector participation, aiming to optimize the process for structuring public-private partnerships.

The loan is for a 20-year term, with a 5-year grace period, at a variable interest rate based on Libor.

Project information: PBP Sanitation Sector Reform – Phase III – First Generation

Related web site: IDB – Water & Sanitation

Contact: Carmiña Moreno, IDB Team Leader, carminan@iadb.org

Source: IDB, 28 Oct 2009

Peru: Legislators discuss bill to strengthen local water utilities

A bill to strengthen Peru’s regional water utilities (EPS) was presented by congressman Isaac Serna. The majority of the country’s 50 EPS are on the brink of bankruptcy – having registered negative financial results – and 41 have a total debt of US$1.62bn, according to Serna.

The bill looks to create policies to finance, modernize and reorganize the management of the utilities. Supporters of the bill are requesting that the state set policies to financially help the utilities, which could include resources from the national government.

In addition, the initiative requests regional governments, in coordination with the municipalities that currently manage the EPS, to provide resources and become shareholders in the utilities. The bill also suggests that the EPS merge into one regional company, with the regional capital’s water utility absorbing the rest.

Source: BNamericas [subscription site], 15 May 2009

Chile: Public works committee calls for creation of national rural sanitation

Chile’s senate public works committee is calling for the creation of a national rural sanitation services sub-department [within the waterworks department, as] an integral part of a bill, currently being debated, governing the provision of these services.

Currently, rural potable water systems (APRs) are run by local committees. [...] “We believe it is fundamental that the state has a solid structure to regulate, supervise and assist the more than 1,500 rural potable water committees that exist around the country,” said senator Pablo Longueira, head of the public works committee.
The committees will not only be in charge of potable water, but also wastewater treatment. “Given the investments that will need to be made in technology and infrastructure, we believe the existence of a national department is important,” Longueira said.

The bill under discussion aims to define a national policy for rural potable water supply and distribution and, when necessary, [sanitation].

Source: BNamericas [subscription site], 08 May 2009