Water and sanitation - Comments
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Transcript of Water and sanitation - Comments
Anne Lyche Solheim, Senior researcher, Norwegian Institute for Water Research (NIVA)
World Bank Group and the Private Sector,
CMI seminar 14th June 2005
Water and sanitation - Comments
Challenging the hypothesis of sequencing water investments
Water resources cannot wait for sustainable management
Persistent blooms of toxic bluegreen algae in Lake Victoria
Example of pollution problem, Uganda
Toxic bluegreen algae dominate the ecosystem of Murchison Bay, Lake Victoria
This water is raw water for Kampala (1 mill.)
This water receives sewage from Kampala
The pollution accelerated after wetland destruction and enlargement of Nakivubo channel
Lack of holistic management
Strategy – priorities should be:
Water quality must be improved now!
Combined and parallel efforts of investment in infrastructure and management necessary
Capacity building at University level necessary
Reliable and continuous monitoring of water resources necessary (also stressed by UNEP as one of the major challenges for sustainable management)
Integrated water resource management
MGD/WSSD –Mid-term Assessment of Progress 1990-2015. Unicef/WHO Aug. 2004
The world is on track to meet the drinking water target, but sub-Saharan Africa lags behind
Without a sharp acceleration in the rate of progress, the world will miss the sanitation target by half a billion people
From now until 2015, greater effort must be made to reach the poor and those in rural areas, whose deprivation is hidden behind national averages
The Millennium Development Goals - MDGs – A Startling Reminder of the Financing Challenge Ahead
Halve by 2015 the proportion of people without sustainable access to safe drinking water;
Halve by 2015 the proportion of people without access to basic sanitation;
Translates into a doubling of investment needs from $15 billion to $30 billion per year for water supply & sanitation alone (as part of $180B a year for all water).
Investment needs per annum (B USD)
0
25
50
present MDG needs
wastewater treatmentsanitation
water supply
?
?
Financing Challenge
Investment needs are enormous Public funding stable or even decreasing in most countries; International aid is (and probably will remain) small
percentage of water and sanitation financing; Thus how to fill the gap?
The private sector? Taxpayers? User tariff? A combination?
Collapse of Private Flows to Infrastructure
Annual Private Investment in Infrastructure in 1990-2002, in US$ billion
0
20
40
60
80
100
120
140
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Private sector financed about 22 % of infrastructure investments in the 90s; about 8 % from ODA; 70% domestic financing.
Private Investments in Water Supply and Sanitation Have Been Low
0
50
100
150
200
Energy Telecom Transport Water & Sewerage
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
South Asia
Sub-Saharan Africa
Total (international) private investment in infrastructure in 1990-2002
by sector and region, US$ billion
US$ 0.8 billion of the total flows (less than 2% of total) in 2003 to water and sanitation; about half to China
Degree of cost recovery
Reasons NOT to Invest in the Water Business…
Telecom Gas Power Water0%
50%
100%
150%
200%
Financial autonomy
Domestic Public and Private Finance Remains the Dominant Source for Water & Sanitation
Financing flows into water in 2000
0
20
40
60
80
public private
international
domestic
Billion USD
Estimates from “GWP Framework for Action”
Domestic is dominant ~ 85%Domestic dominant 85%
Going Forward: Long-Term Sustainability: A Must!!
Improve Sector Performance – Closing the Revenue Gap is Key;
Make Use of All Sources of Financing;
Targeted Subsidies; and
Unbundle Finance and Management.
Targeted Subsidies
Stop subsidizing the rich, they can pay for themselves; Target subsidies better (subsidize connections rather than
consumption) cost recovery in water; subsidies required for sanitation and waste water (public good component);
Management
Fin
an
ce
Public Private
Pu
blic
Pri
vate
Unbundle Finance And Management - Unbundle Finance And Management - Looking at Sustainable Hybrid SolutionsLooking at Sustainable Hybrid Solutions
Leases/Affermage
Concessions
Divestitures
BOTs
Municipal Department Mgnt. Contracts
CorporatizedMuni. Service
Mixed Company
Operating Company plc
Public & Private sector roles in the WSS sector:Public & Private sector roles in the WSS sector:
Concluding Remarks Huge investment needs; Water infrastructure key to economic growth and development; Long-term sustainability a must; Improve sector performance – Closing the revenue gap is key; Make use of all sources of financing – Public or private and create
framework where risks are properly allocated and bound by enforceable contracts
And need to move beyond public-private debate: It is about delivering efficient quality services at lowest cost;
Water as an opportunity – not only as cost!