Catalog

Building on Success

Lessons learned from high-impact water supply and sanitation projects can provide the framework for improving future efforts and policy dialogues

By K. E. Seetharam( kseetharam@adb.org )
Evaluation Specialist

MORE THAN WATER Carefully crafted sanitation, hygiene and health promotion programs are needed

Background

Urban and rural water supply and sanitation (WSS) projects contribute to poverty reduction directly by providing safe water and indirectly by improving health, environment, livelihood, and social empowerment.

Given ADB's focus on reducing poverty, there is great interest in developing new projects and policy dialogues in this sector. This prompted ADB to conduct an impact evaluation study (IES) of completed projects to assess how improved water availability has affected different user groups — particularly the poor, glean lessons learned, and recommend future investments in the sector.

ADB has devoted $4.6 billion (5% of total lending) to the WSS sector, mostly for constructing water supply facilities. Technical assistance (TA) totaling about $84 million has been provided to prepare projects and strengthen local water service agencies.

The main beneficiaries of ADB's WSS lending have been, in declining order of loan assistance, Philippines, Thailand, Republic of Korea, People’s Republic of China (PRC), Pakistan, Indonesia, and Malaysia. Together, they account for 80% of the total WSS lending.

The impact evaluation study was conducted in 2002 and consisted of desk reviews of 50 loan and TA reports and in-country surveys, consultations, and workshops with stakeholders involved in six ADB-funded projects and two non-ADB funded projects (see box).

The focus of all the ADB-funded projects was water supply, with sanitation either absent or only in a secondary role. Of the two non-ADB funded systems in India, one in Pune focused on building toilets, and the other was a water supply project implemented on a fast-track turnkey basis by a private-public partnership.

Common goals of all the projects were improved water services; improved community health and living conditions; reduced poverty; and increased economic growth, in part by reducing the incidence of water-related diseases.

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Impact of Past Projects

All six ADB projects were found in evaluation surveys to have substantially increased the availability and consumption of water by households.

In the Philippines and Sri Lanka — and to a lesser extent in Malaysia — many more households had direct household water connections or an improved supply as a result of project implementation.

Many of these households were poor. At the time of project implementation in India and the Philippines, 50% or more of the project beneficiaries lived below the poverty line. In Malaysia, more than 50% of the surveyed beneficiaries in the rural areas were poor.

Both domestic and other water customers with piped connections were generally satisfied in all four countries, but water quality was perceived to be a problem in both Malaysia and the Philippines, especially during the rainy season.

The primary benefits of these projects to poorer households were time savings, reduced cost of water, and the incremental benefit of increased water consumption.

Secondary impacts were on health and on small-scale economic activities, made possible partly because of time savings and the more readily available water supply.

The non-ADB funded Pune Community Sanitation Project has had positive and lasting impact on the sanitation sector. The Society for the Promotion of Area Resource Centers (SPARC), together with other nongovernment organizations, worked to build about 7,000 toilets that serve more than 500,000 people.

Community mobilization was a distinct factor in their success. In most of the projects reviewed, health promotion programs were not explicitly included, but many good examples were found in each country.

In Dalian, the water company assisted schools in hygiene education, and in Malaysia, incidence of hand washing— a good indicator of hygiene practices—was high.

The currently accepted approach for small town and rural projects of having prospective beneficiaries fully involved in project planning and implementation was largely absent in the original ADB project designs.

Similarly, the important role of women was not widely recognized at that time. However, community participation was partly achieved in Sri Lanka and the Philippines, and very well achieved in Pune, India, where it was part of the project design.

In the India drinking water project, the local government and the Sathya Sai Central Trust subsidized the full cost of operation and maintenance. The PRC project is likely to achieve full cost recovery in the near future.

There was partial cost recovery in projects in Malaysia, Philippines, and Sri Lanka, making their chances for sus- tainability more likely. In these projects, the governments partly subsidized and urban consumers cross-subsidized the costs. Households pay an average of 1%–2% of their household income for water.

The willingness of households connected to piped systems to pay for water was well established in areas where the service was reliable and was highest in the PRC.

But for those in villages still using hand pumps and standpipes, as in some of the Philippine subprojects, less than half said they would be willing to pay to connect to a piped supply.

The situation is quite different in the PRC, where domestic tariff rates have increased substantially since 1998. These increases appear to have been well accepted by the population, although in Zhangjiakou a cash rebate is paid to certified poor households.

The two water supply companies in the PRC were fully recovering their costs. The schedule of tariff increases implemented by the Zhangjiakou water utility, which received ADB assistance with tariff reform, should make it debt-free by 2006.

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Lessons Learned

This IES identified several lessons learned and best practices. The following are the most important.

Aim for full cost recovery. The success stories from the PRC show that assisting water utilities with tariff reform increases their chances of meeting financial targets and achieving long-term sustainability. People are generally willing to pay for 24-hour supply and private house connections.

Include sanitation, hygiene, and health promotion. The traditional emphasis on water supply is insufficient to achieve the full benefits of improved individual and community health.

Carefully crafted sanitation, hygiene, and health promotion programs are needed, such as the SPARC model in Pune, India.

Reduce nonrevenue water. Reducing nonrevenue water to “reasonable levels” of about 25–30% or even lower is possible, as demonstrated by Dalian’s achievement of 25%.

Leak detection is only one of many options; other useful tools include benchmarking the performance of water utilities, and the “caretaker approach,” where utility workers are assigned to small zones of the distribution system to work with customers to reduce leaks, wastage, and pilferage.

Practice demand-side management. Demand-side alternatives to supply- side expansion of system capacity can succeed with political support and appropriate customer conservation awareness campaigns as observed in Dalian. Conservation can postpone supply expansion by 10 years.

Consider selling bottled water. Experience in the PRC and Indonesia shows that selling bottled water is a viable business for utilities; the selling price of bottled water is about 1,000 times the cost of water production.

Bottling water and/or selling it from the water treatment plant in bulk to bottling companies would increase revenues and reduce nonrevenue water.

It could be done on a limited scale to ensure that the drinking water needs of the poor are fully met.

Involve beneficiaries at all stages of rural water supply projects. The greatest obstacle to successful participatory development is convincing institutional players that it is indeed possible.

Success stories from Malaysia and the Philippines show that often just one committed person leads the community participation efforts. Rural water supply projects should educate, encourage, and employ beneficiaries.

Streamline project management and administration. The great majority of WSS projects experience significant delays in implementation, causing customer dissatisfaction, slowed loan disbursement, and increased costs.

Success stories of NGO-implemented projects in India and Indonesia show that innovative approaches, such as awarding a turnkey contract, greatly expedite implementation of WSS projects.

An integrated and comprehensive set of actions has emerged from the IES. The action plan is consistent with the Water for Asian Cities Program announced by the ADB President at the World Summit on Sustainable Development, in Johannesburg in August 2002, and aims to further accelerate the implementation of the ADB water policy.

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