Transcript Making Part F work Transpower Discussion 14 February 2003

Water and Sanitation Review
NORTH
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Infrastructure in East Asia and Pacific – the Way
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Outline
Service vs. GDP
Performance Review - is there a
problem?
Improvement vs. other sectors
Improvement vs. goals
Investment Needs
Past investment levels
Service standards, Tariffs, Subsidies,
Efficiency
Biggest problem : cost recovery
Institutional change to lock-in good
incentives
Financial Intermediation
Arrangements
1
Access to Improved Water vs. GDP per capita
Tonga
Samoa
Access to improved water source - % of population
100
90
Vanuatu
Philippines
70
60
Thailand
Indonesia
China
Solomon Islands
80 Vietnam
Mongolia
50
Kiribati
Fiji
40
Papua New Guinea
Lao PDR
30
Cambodia
20
10
-
500
1,000
1,500
2,000
2,500
3,000
GDP per capita
2
3,500
4,000
4,500
5,000
Annual average percentage changes in income, teledensity and access to improved water
GDP per Capita
9.00%
Annual average % change 1999-2000
8.00%
7.00%
6.00%
5.00%
4.00%
Total Fixed and Mobile
Phones-lines per capita
3.00%
2.00%
Improved water access
1.00%
0.00%
Philippines
Thailand
Vietnam
-1.00%
3
China
Investment needs (to 2015) vs. Historic actuals (1990-2000) (US$/person/year)
5.00
4.50
Investment (US$/capita/year)
4.00
Estimated Investment Need to
Meed MDGs
3.50
3.00
2.50
2.00
Estimated Private Direct
investment
1.50
1.00
Estimated Public & ODA
investment
0.50
Cambodia
China
Indonesia Philippines
4
Vietnam
an
d
al
es
5
M
in
h
ne
pu
r
an
ila
hi
M
Lu
m
C
Ku
al
a
Ho
Vi
en
tia
Ul
aa
nb
aa
ta
r
Sh
an
gh
ai
Ja
ka
rta
0.60
Ch
en
gd
u
Pe
nh
W
Ph
no
m
En
gl
an
d
Working ratio (Operating Revenue / Operating Expenses)
Ratio of operating expenses to revenue
1.60
1.40
1.20
1.00
0.80
y=1.00
0.40
0.20
-
Cost recovery through getting service standards, tariffs and subsidies right
Efficiency
Cost of Service
Service
Standards
Subsidies
Is the bundle
of services,
tariffs,
subsidies
right?
Customer
Tariffs
Lock In
6
Social and
Environmental
Priorities
Locking in Good Incentives through Good Institutions
Public
Services
Politicians
(Minister / Mayor)
Utility
Inform, Involve,
Consult
Explain the trade-offs
Link good service to
good politics
Commercialize,
corporatize
Contract with private
operator to lock in
autonomy, subsidy,
tariff rules
7
Conclusions
 Section is under-preforming against other sectors and MDGs
 Meeting MDGs requires US$6.3 billion investment per year – twice current levels
(but only US$3.50 per person per year)
 Biggest barrier to good service and investment is lack of cost recovery
 Achieving cost recovery requires:
-
Consistent, appropriate package of service standards / tariffs / subsidies
Institutional reforms to create informed consumers, accountable politicians,
efficient utilities and reliable tariff and subsidy rules
8
Financial intermediation for the water and sanitation sector
Public
Utilities
Public –
Private
Partnerships
Municipal
Government
Private
utilities
Customers
Banks
Central
Government
Financeable Projects
(US$ 8 trillion)
Private Sector Savings
Bond
Markets
Specialized
intermediaries
Taxpayers
9