KSU exchange with Université Cheikh Anta Diop Dakar, Senegal
Dakar (Senegal), December 6 to 10, 2004
description
Transcript of Dakar (Senegal), December 6 to 10, 2004
WUP - WBIWater Supply and Sanitation Sector Reform Course
Session 8Special Challenges of Urban Special Challenges of Urban
SanitationSanitation
Jan G. JanssensJan G. Janssens World Bank World Bank
Dakar (Senegal), December 6 to 10, 2004Dakar (Senegal), December 6 to 10, 2004
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 22
OutlineOutline
IntroductionIntroduction Issues in urban sanitationIssues in urban sanitation Institutions and regulatory frameworkInstitutions and regulatory framework Economics, pricing, financingEconomics, pricing, financing
– Overview of economics, pricing & financing of urban sanitation
– Principles for design of pricing, funding and subsidy mechanisms (linked to service levels, technologies)
ConclusionsConclusions
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 33
OutlineOutline
IntroductionIntroduction Issues in urban sanitationIssues in urban sanitation Institutions and regulatory frameworkInstitutions and regulatory framework Economics, pricing, financingEconomics, pricing, financing
– Overview of economics, pricing & financing of urban sanitation
– Principles for design of pricing, funding and subsidy mechanisms (linked to service levels, technologies)
ConclusionsConclusions
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 44
ContextContext
Sanitation lags behind water Sanitation lags behind water supply in coverage, but is mostly supply in coverage, but is mostly dependent on piped waterdependent on piped water
Adequate/safe sanitation is not Adequate/safe sanitation is not just a private household issue, just a private household issue, but a community-wide issuebut a community-wide issue
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 55
Objectives of urban sanitation
Improvement/protection of healthImprovement/protection of health– Safe removal of waste Safe removal of waste (liquid & solid)(liquid & solid) from homes and from homes and
citiescities– Safe disposal/reuse Safe disposal/reuse to protect downstream usersto protect downstream users
Protection of the environmentProtection of the environment– Fish, vegetation, aquatic ecosystemsFish, vegetation, aquatic ecosystems– Water resource conservation Water resource conservation – water demand – water demand
managementmanagement Urban developmentUrban development
– Urban planning, extension, attraction to industryUrban planning, extension, attraction to industry Optimal use of resourcesOptimal use of resources
– Wastewater reuse for agricultureWastewater reuse for agriculture– Sensible investment/cost recovery issuesSensible investment/cost recovery issues
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 66
Urban sanitation and Urban sanitation and healthhealth
High density livingHigh density living in urban areas in urban areas requires safe sanitation to safeguard requires safe sanitation to safeguard community heath (typically requires a community heath (typically requires a sewer network)sewer network)
Lower density peri-urban areasLower density peri-urban areas can have can have low cost on-site systems which protect low cost on-site systems which protect healthhealth
A safe facility in itself does notA safe facility in itself does notguarantee an absence of health riskguarantee an absence of health risk
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 77
Controlling disease within the city
Faeces
Future Victim
Fluids
Fingers
Flies
Fields/Floors
Food
Sanitation
Hygiene
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 88
OutlineOutline
IntroductionIntroduction Issues in urban sanitationIssues in urban sanitation Institutions and regulatory frameworkInstitutions and regulatory framework Economics, pricing, financingEconomics, pricing, financing
– Overview of economics, pricing & financing of urban sanitation
– Principles for design of pricing, funding and subsidy mechanisms (linked to service levels, technologies)
ConclusionsConclusions
World Bank 2004
WardCity
River & Environs
Peri-domestic
(street, school, work-place)
Home
The urban environment
World Bank 2004
(street,school, workplace)
Peri-domestic
Street Sewers
Home
House Connections
An “engineer’s” view
Central Treatment Works
City
Collectors
Ward
World Bank 2004
Ward
Sewer Mains
House Connection
Home
Peri-domestic
Street Sewer
City
Interceptor/ Collector
River & Environs
Treatment Plant/Outfall
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1212
Some questions that arise
Wastewater treatment standardsWastewater treatment standards Objectives of standards: health, environment? Objectives of standards: health, environment? What standards can we afford?What standards can we afford? Uniform treatment standards or vary with receiving Uniform treatment standards or vary with receiving
water and its use? water and its use? Reuse of wastewater when there is water scarcity Reuse of wastewater when there is water scarcity
(industrial/irrigation)(industrial/irrigation)
Sanitation and public healthSanitation and public health How do we set priorities on sewerage investment?How do we set priorities on sewerage investment?
Which towns?Which towns? Which streets?Which streets?
Where is onsite sanitation (infiltration) acceptable?Where is onsite sanitation (infiltration) acceptable?
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1313
Urban sanitation issues
Economics, Pricing and FinanceEconomics, Pricing and Finance What is a realistic approach to paying for What is a realistic approach to paying for
sanitation? sanitation? How can we balance investment decisions How can we balance investment decisions
and priorities against available resources?and priorities against available resources? Customers are willing to pay for drinking Customers are willing to pay for drinking
water, but not for wastewater ?water, but not for wastewater ? In case of non-payment drinking water can In case of non-payment drinking water can
be cut off, wastewater can not …be cut off, wastewater can not …
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1414
Urban sanitation issues
Institutional arrangements Institutional arrangements Who is responsible for what?Who is responsible for what? Are different arrangements needed Are different arrangements needed
in small towns, large cities?in small towns, large cities? How is this decided/negotiated?How is this decided/negotiated?
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1515
Sanitation, hygiene and water
Public health issues of faecal contaminationPublic health issues of faecal contamination is about more than “protecting water quality”is about more than “protecting water quality”
““Groundwater protection”Groundwater protection” is not an absolute…is not an absolute…it depends uponit depends upon useuse of groundwater as to of groundwater as to whether it is an issuewhether it is an issue
How to target sanitation investmentsHow to target sanitation investments where where they will have the biggest impact?they will have the biggest impact?
Industrial wastesIndustrial wastes are an entire major topic that are an entire major topic that merits a workshop on its own!merits a workshop on its own!
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1616
Who needs to be involved? e.g.
Min. of Public Works (Min. of Public Works (finance, capital budgetfinance, capital budget)) Min. of Economic Affairs and Finance (Min. of Economic Affairs and Finance (subsidy issuessubsidy issues)) Min. of Health (Min. of Health (health priorities, hygienehealth priorities, hygiene)) Min. of EnvironmentMin. of Environment MunicipalityMunicipality
– Health department (priorities, hygiene promotion)Health department (priorities, hygiene promotion)– Urban developmentUrban development
Utility (Utility (service provider, bill collectorservice provider, bill collector)) Householder (Householder (acceptance, bill payeracceptance, bill payer)) and Othersand Others……
None of the above can solve on their None of the above can solve on their own!own!
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1717
Understanding the Understanding the technologiestechnologies
Network systemsNetwork systems– Centralized and decentralized Centralized and decentralized – Standard and condominialStandard and condominial
On-site systemsOn-site systems– Conservancy tanksConservancy tanks– Septic tanks and variants (pour-flush etc)Septic tanks and variants (pour-flush etc)– ““Dry” systems (pits, VIPs)Dry” systems (pits, VIPs)
Informal systemsInformal systems– The “flying toilet”The “flying toilet”
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1818
What are the lessons?
Focus on the household…Focus on the household…– Where most disease transmission occursWhere most disease transmission occurs– Which are most exposed, most vulnerable?Which are most exposed, most vulnerable?
Hardware and softwareHardware and software– Hygiene is crucial to achieve health benefitsHygiene is crucial to achieve health benefits– Hygiene is a challenge Hygiene is a challenge everywhereeverywhere in the world… in the world…
consistently shown to reduce diarrhoeal disease consistently shown to reduce diarrhoeal disease by up to 50%by up to 50%
Many sanitation technologies do the jobMany sanitation technologies do the job– ……depends on the context…what can best serve depends on the context…what can best serve
the household?the household?
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 1919
OutlineOutline
IntroductionIntroduction Issues in urban sanitationIssues in urban sanitation Institutions and regulatory Institutions and regulatory
frameworkframework Economics, pricing, financingEconomics, pricing, financing
– Overview of economics, pricing & financing of urban sanitation
– Principles for design of pricing, funding and subsidy mechanisms (linked to service levels, technologies)
ConclusionsConclusions
World Bank 2004
Institutions, and,Institutions, and,regulatory frameworkregulatory framework
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2121
Institutional Institutional arrangementsarrangements
Choice of delivery institution Choice of delivery institution affects financing optionsaffects financing options– Water and sewerage/sanitation Water and sewerage/sanitation
utilityutility– Sewerage/sanitation utility (rare)Sewerage/sanitation utility (rare)– Local government provision Local government provision
(common)(common)
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2222
Water and sanitation services
Drinking water supply
Wastewater collection
Wastewater treatment
Domestic and industrial clients
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2323
Functions in the water sector
Drinking water supplyDrinking water supply– Intake– Production and transmission– Distribution– Billing and collection
Wastewater collectionWastewater collection– TransportTransport– Billing and collectionBilling and collection
Wastewater treatmentWastewater treatment– TreatmentTreatment– DischargeDischarge– Billing and collectionBilling and collection
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2424
Overall Objective
The objective is to make the The objective is to make the most efficient, effective and most efficient, effective and equitable use of the investments equitable use of the investments in sanitationin sanitation
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2525
Options
Integration of all servicesIntegration of all services
Specialization of servicesSpecialization of services
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2626
Separate functions
SpecializationSpecialization– high quality servicehigh quality service– high reliabilityhigh reliability– adequate servicesadequate services
but, triple:but, triple:– billing and collectionbilling and collection– laboratorieslaboratories– managementmanagement– asset planningasset planning
Drinking water supply
Wastewatercollection
Wastewatertreatment
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2727
Separate functions allow for other combinations in institutional
arrangements River Basin Management plays a role in River Basin Management plays a role in
wastewater collection and treatmentwastewater collection and treatment
Wastewater collection combined with Wastewater collection combined with roads (Municipalities)roads (Municipalities)
Separate systems for storm and Separate systems for storm and wastewaterwastewater
Urban drainage and solid waste disposalUrban drainage and solid waste disposal
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2828
Integrate services
Drinking water,wastewater collection,wastewater treatment
Customer
Closed water cycle
One tariff including all services
Efficiency gains
•one laboratory
•billing and collection
•emergency service
•management
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 2929
Option: asset holding integrated; and operations separated(example: France)
Asset holding integrated (Municipalities)
Operator drinking water
Operator waste water collection
Operator waste water treatment
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3030
Option: asset holding and operations integrated per individual service (example: Netherlands)
Drinking water
Wastewater collection
Wastewater treatment
Owner of assets and Operator:
Drinking Water Companies
Owner of assets and Operator:
Municipalities
Owner of assets and Operator:
Water Boards
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3131
Option: integration of all services
including electricity (example: Casablanca, Morocco)
All water supply, sanitation and electricity services,including investments and operations
Municipality,
contracted a concession with LYDEC
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3232
Option: integration of sanitation, but separated from drinking water(example: Tunisia)(example: Tunisia)
SONEDE
Drinking water, investment and operations
Tariff collection also for ONAS
ONAS
Wastewater collection and treatment, investments and operation
Tariff through SONEDE
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3333
Option: asset holding and operations integrated for all water supply and sanitation services(example: UK (private and regulated)) (example: UK (private and regulated))
Asset holding and operations for all water services integrated in one water company
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3434
River Basin Authority (RBA)
Within a national water strategy,Within a national water strategy, RBA is responsible for the quality of water RBA is responsible for the quality of water
resources and for allocationresources and for allocation Responsible for prevention of pollution: options:Responsible for prevention of pollution: options:
– Sets standards and monitorsSets standards and monitors– Manages, conserves and protects water resources, Manages, conserves and protects water resources,
and, implements basin strategiesand, implements basin strategies– Establishes rules to regulate water useEstablishes rules to regulate water use– Plans, designs and constructs treatment facilities Plans, designs and constructs treatment facilities
(management of means) and operates (management of means) and operates – Manages the means and contractManages the means and contract operations outoperations out
Tariffs: surcharge on water bill or taxesTariffs: surcharge on water bill or taxes
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3535
OutlineOutline
IntroductionIntroduction Issues in urban sanitationIssues in urban sanitation Institutions and regulatory frameworkInstitutions and regulatory framework Economics, pricing, financingEconomics, pricing, financing
– Overview of economics, pricing & financing of urban sanitation
– Principles for design of pricing, funding and subsidy mechanisms (linked to service levels, technologies)
ConclusionsConclusions
World Bank 2004
Economics, pricing, Economics, pricing, financingfinancing
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3737
Understanding the costs
Four cost elementsFour cost elements– Health/hygiene awareness and educationHealth/hygiene awareness and education– Safe disposal (at/from site)Safe disposal (at/from site)– Collection (network cost)Collection (network cost)– Treatment (environment & health benefit)Treatment (environment & health benefit)
Full costs includeFull costs include– Asset expansion and renewalsAsset expansion and renewals– Profit or return on asset (if appropriate)Profit or return on asset (if appropriate)
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3838
Understanding the incentives
HouseholdsHouseholds have incentives have incentives to export their waste beyond to export their waste beyond their immediate areatheir immediate area
Local communitiesLocal communities have have incentives to protect their incentives to protect their area from the risks of area from the risks of sanitation-related diseasessanitation-related diseases
National governmentNational government has has incentives to improve incentives to improve sanitation related to political sanitation related to political profile of sanitation (usually profile of sanitation (usually low), however, national low), however, national government is usually willing government is usually willing to make some resources to make some resources available to assistavailable to assist
e.g. toilet waste into open storm water channels in street.
This is reflected in property and land prices.
Experience suggests national governments are seldom willing (and able) to pay thefull sustainable costs
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 3939
The essential financing choice
User charges
Local tax base
Regional / national tax base
Money to pay for the costsof urban sanitation must
ultimately come from one ofthese three sources
extent of “geographic base” of income
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4040
User charges
Users who benefit, pay Users who benefit, pay for the servicefor the service
But benefits of services But benefits of services extend beyond the extend beyond the private householdprivate household
Where there are Where there are significant backlogs in significant backlogs in services, then some services, then some form of user charge is form of user charge is more equitable than more equitable than nonenone
User charges
extent of “geographic base” of income
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4141
User charges – sewer User charges – sewer networknetwork
Fixed chargeFixed charge– f(Property area)f(Property area)– f(number of toilets)f(number of toilets)
Water consumption related Water consumption related chargecharge
Volume and quality related Volume and quality related charge (industry)charge (industry)
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4242
Local tax base
Property tax captures Property tax captures willingness to pay for willingness to pay for community-wide benefits community-wide benefits of an adequate sanitation of an adequate sanitation system in the areasystem in the area
But valuation roles and But valuation roles and local tax systems may be local tax systems may be absent, out of date or absent, out of date or inefficientinefficient
Some (but limited) Some (but limited) possibility of cross-subsidy possibility of cross-subsidy existsexists
extent of “geographic base” of income
Local tax base
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4343
National/regional tax baseNational/regional tax base
National tax collection could National tax collection could be more efficient than local be more efficient than local tax and also more tax and also more redistributive redistributive
Problem is one of allocation Problem is one of allocation whilst minimizing distortionswhilst minimizing distortions
Better to use this to Better to use this to promote access (funding promote access (funding capital investments) and capital investments) and notnot operating costsoperating costs
Capital subsidies should be Capital subsidies should be targeted (e.g. service level targeted (e.g. service level targeting, or property value targeting, or property value targeting)targeting)
extent of “geographic base” of income
National/regional tax base
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4444
Getting the balance right
User charges
Local tax base
Regional / national tax base
Captures willingness to pay for improved sanitation on part of household.
Captures benefits of sewer networkand treatment through local property tax
Supplements local sources of financingwith targeted capital grants to extend coverage
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4545
Sources of finance
EquityEquity DebtDebt Public (government) – fiscal Public (government) – fiscal
transferstransfers
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4646
Equity finance
Private equity not likely to be a major Private equity not likely to be a major source of financing for urban source of financing for urban sanitation. However, some sanitation. However, some opportunities do exist:opportunities do exist:– BOT type contracts for wastewater BOT type contracts for wastewater
treatmenttreatment– Concession contracts for combined water Concession contracts for combined water
and wastewater utilitiesand wastewater utilities– Enhanced lease contracts with limited Enhanced lease contracts with limited
investments (for connections, say)investments (for connections, say)
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4747
Debt finance
Requires a secure income streamRequires a secure income stream– Combination of user charges and Combination of user charges and
taxes taxes Banks seem generally more Banks seem generally more
reluctant reluctant toto lend for sanitation lend for sanitation compared to water because the compared to water because the financial revenue stream is less financial revenue stream is less secure than that for watersecure than that for water
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4848
Public finance
Reliance of public financing through local Reliance of public financing through local taxes and/or regional/national taxes is taxes and/or regional/national taxes is much greater in sanitation than is the case much greater in sanitation than is the case in water supply (which can more easily be in water supply (which can more easily be directly self-financed through user directly self-financed through user charges)charges)
Disadvantage vis-à-vis income from tariffs, Disadvantage vis-à-vis income from tariffs, is the dependence each year of the is the dependence each year of the budgetary process (political agenda …)budgetary process (political agenda …)
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 4949
Cape Town (South Africa)Cape Town (South Africa)
50% of income through property 50% of income through property taxtax– tax exemption for property values less than $10 tax exemption for property values less than $10
000 (new comprehensive valuation role)000 (new comprehensive valuation role)
50% of income linked to volume of 50% of income linked to volume of water purchase with a volume capwater purchase with a volume cap
500 000 sewer connections for a population of about 3 million500 000 sewer connections for a population of about 3 million
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 5050
Subsidies for sanitation
Important to target the poorImportant to target the poor Promoting on-site sanitationPromoting on-site sanitation
– Additional cost of improvementAdditional cost of improvement– Administration of subsidy an issueAdministration of subsidy an issue
Subsidizing domestic sewer Subsidizing domestic sewer connectionsconnections– Requires household contributionRequires household contribution– Funded from a levy or local tax baseFunded from a levy or local tax base
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 5151
Output Based Aid (OBA)for sanitation
Per domestic sewer connection installedPer domestic sewer connection installed
Per cubic meter wastewater treated to Per cubic meter wastewater treated to standardstandard
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 5252
OutlineOutline
IntroductionIntroduction Issues in urban sanitationIssues in urban sanitation Institutions and regulatory frameworkInstitutions and regulatory framework Economics, pricing, financingEconomics, pricing, financing
– Overview of economics, pricing & financing of urban sanitation
– Principles for design of pricing, funding and subsidy mechanisms (linked to service levels, technologies)
ConclusionsConclusions
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 5353
Conclusions - 1
There is no solution that fits allThere is no solution that fits all
Urban sanitation involves Urban sanitation involves many issues, many issues, many players many players who need to be involvedwho need to be involved
Strong coordinationStrong coordination is required to get is required to get the best out of hardware, software, the best out of hardware, software, finance, institutionsfinance, institutions
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 5454
Conclusions - 2
Put the household firstPut the household first …– in both public health and financial terms (cost in both public health and financial terms (cost
recovery)recovery)– provide maximum beneficial gains for customers, provide maximum beneficial gains for customers,
particularly the poor, from investments in sewerage particularly the poor, from investments in sewerage and sanitationand sanitation
Make Make arrangements transparenttransparent
World Bank 2004
Dakar, 6 to 10 December 2004Dakar, 6 to 10 December 2004 5555
Thank Thank youyou
World Bank 2004