Transcript The challenge of the MDGs for water supply & sanitation

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Processes of Reform
Capacity Building Module
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Overview
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Introduction
 Key steps in reforms
 Balancing progress in utility and environment
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Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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Planning reforms
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Identify what the problems are…
 Inefficient planning and project implementation
 Water availability, water quality, energy supply
 Staff motivation, capacity, efficiency
 Tariff level and structure
 Corruption
 Commercial operation
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Key steps for successful reforms
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Planning the process of introducing reform
Involving stakeholders
Setting upstream policy
Setting service standards, tariffs, subsidies, and
financial arrangement
Developing institutional model
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Utility: public or PSP
Non-utility services: small scale providers
‘Environment’: policy maker; asset holder; regulator
Legal instruments for the arrangement
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Involving stakeholders
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Politicians: local and national levels
Management and staff of public utility
Consumer associations
NGO: national and int’l (service to the poor,
environment, governance…)
Financiers: multi and bi-lateral
Alternative suppliers (tankers, drilling companies…)
Media: national and int’l
Private sector: local and int’l
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Sustainable utility reform and reform of
the environment have to go hand-in-hand
Our goal
environment
good
Typical reform path
Possible combinations
environment status/utility
provider status
poor
poor
good
utility
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Reform of the environment
How Uganda combisequenced the reforms
of NWSC, its national utility
03 staff performance
contracts
02 automatic tariff
indexation
00 ext & int performance
contracts
98-00 service & revenue
enhancement programs
98 new MD
97 new Board
97 corporate plan
95 new statute
end 80s & 90s Major rehab
mid 80s new government
70s political turmoil
Utility reform
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Overview

Introduction
 Key steps in reforms
 Balancing progress in utility and environment

Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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South Africa
Mike Muller
Former Director General, South African
Department of Water Affairs &Forestry
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South Africa
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Total pop - 45.2 Million
(2005)
 Urban pop (% of total) –
59%
 Surface area - 1,221,037 sq
miles
 Life expectancy – 45 years
 GDP (US$ billions) – 240.2
 Access to water supply –
88%
 Access to sanitation – 65%
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Trigger: the end of apartheid
Vertical unbundling: bulk utilities
and end providers
Most utilities are corporatized
Subisidies: Free basic water 25
l/p/d
Basic water supplies to nearly 15
million people in 10 years;
Sanitation much slower
‘applying good old-fashioned
public finance principles’
Ongoing decentralization process
– after establishment of
democratic municipalities in 2001
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Uganda
Dr. William Muhairwe
Managing Director, National Water and
Sewerage Corporation, Uganda
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Total pop - 28.8 Million
(2005)
Urban pop (% of total) –
13%
Surface area - 241,038 sq
miles
Life expectancy – 49 years
GDP (US$ billions) – 8.7
Access to water – 60%
Access to sanitation – 43%
Reform of the environment
Uganda
Utility reform
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Russia
Alexander Bazhenov
Vice-Chairman, Eurasian Water
Partnership
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Russia
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Total pop - 143.2 Million
(2005)
 Urban pop (% of total) –
73%
 Surface area - 17,075,200
sq miles
 Life expectancy – 65 years
 GDP (US$ billions) – 763.7
 Access to water – 97%
 Access to sanitation – 87%
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Trigger: the end of communism
Subsidies: l’goti and maximum %
expenditure
WSS part of broader Housing and
Communal Services sector –
centralized billing and collection
Mostly municipal departments
with little autonomy
History of focus on infra: low
efficiency
Regulation is regional ‘oblast’
responsibility
Boom & bust of PSP in 03/04;
now 2nd generation PSP
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Overview

Introduction
 Key steps in reforms
 Balancing progress in utility and environment

Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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The first challenge: how to trigger reform
Droughts,
floods &
epidemics
Political
shifts &
pressures
Unacceptable
levels of
service
financial
crises
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The constant challenge to maintain
progress….
performance
Maintain
progress
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1
Pressure to
improve
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Broad sector
reform
3
Utility reform
time
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Triggers and Obstacles to Reform
Click the button to play a 5 minute video clip.
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Maintaining progress: Balancing
external accountabilities
Policy makers
Owners
The unserved?
Regulators
Financiers
Customers
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Overview

Introduction
 Key steps in reforms
 Balancing progress in utility and environment

Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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Key Success Factors in
Reform
Click the button to play a 5 minute video clip.
(Windows Media; 9,208k)
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Overview

Introduction
 Key steps in reforms
 Balancing progress in utility and environment

Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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Taking Care of the
Poor in Reforms
Click the button to play a 10 minute video clip.
(Windows Media; 15,619k)
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Existing quantity-targeted subsidies are
regressive
% of poor hhs receiving subsidy vs. benefit targeting
performance
Hungary (S), 0.98
Share of poor hhs receiving subsidy
100.0%
90.0%
India, State IB Ts,
0.56
80.0%
70.0%
60.0%
50.0%
Electricity
Guatemala, 0.20
40.0%
30.0%
20.0%
10.0%
0.0%
0.00
Water
Kathmandu, 0.56
Ho nduras, 0.49
P eru, 0.82
B angalo re, 0.66
Sri Lanka, 0.83
Cape Verde, 0.48
Sao To me, 0.41
Rwanda (S), 0.35
Cape Verde, 0.24
0.20
0.40
0.60
0.80
1.00
1.20
Benefit targeting perform ance indicator
Source: Water, Electricity, and the Poor: Who Benefits from Utility Subsidies? – Komives et al.
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Who are the urban poor?
Typically use multiple sources and differentiate drinking from other
uses - purchase small quantities if a free source is available:
 May share a house or yard tap with multiple families – design
standards underestimate number of users
 May purchase from a neighbor – poor households are often
heterogeneous; differentiate demand as slums may have mixed
densities, income levels
 May use a public standpipe/standpost/kiosk – the level of
consumption is constrained by distance traveled, time spent
collecting water
 May rely on small-scale private sector when services do not meet
their needs – choose to have water delivered to house rather than
walking to and queuing at the standpipe
BUT: poor households do pay for water often at higher rate (per
cubic meter) than wealthy households
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How to improve services for the poor?
 The
long term utility solution: a private house/yard -connection for all
 Standpipes – from free to paid service
 Augmenting small-scale service providers
 How to deal with self provisioning?
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Overview

Introduction
 Key steps in reforms
 Balancing progress in utility and environment

Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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The Role of the
Central Government
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(Windows Media; 7,526k)
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Overview

Introduction
 Key steps in reforms
 Balancing progress in utility and environment

Video interviews with three speakers
 Triggers and obstacles to reform
 Key success factors in reform
 Taking care of the poor in reforms
 Role of central government in reforms
 Leadership
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The political economy of reform
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Reforms must provide returns for the political
decision makers who are willing to make the
changes….
 Initiate reform where there is a powerful need, and
demonstrated demand, for change
 Nothing succeeds like success
 Best fit rather than best practice
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Realistic goals and timeline
Develop a sequenced, prioritized list of reforms…
Match available human, financial and knowledge resources
Take one step at a time, but lock in progress
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The Importance of
Leadership
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