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Issue 24, July 2006

Regulation—Making a Difference in Utility Performance

Electricity is regulated. Telecommunications is regulated. But rarely are water resources and services regulated. Could this be because people look at them as public goods that they are not accustomed to paying for unlike their electric and telephone bills? But why shouldn’t water resources and service require the same kind of accountability measures? The Philippines is among the few countries in Asia which have tried, and are still trying, to improve their water regulation. The experience is not without its challenges, but neither is it without rewards nor champions. This issue looks at the Philippines’ colorful experiences in economic and resource regulation.

Champion of Reform
Antonio de Vera on Building Viable Water Utilities through RegulationAntonio de Vera on Building Viable Water Utilities through Regulation

Mr. Antonio de Vera, Chairman of Subic Bay Water Regulatory Board, spent the past three decades looking at water operations from all angles—as lender, operator, and regulator. He says any city or country planning to regulate water should cover the basics— Who will regulate? Where will the money come from? And, are structural requirements, such as enabling laws, or review and appeals processes, in place?




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Focus

Regulation: What Works, Where, and Why?
We know the theories of regulation, but understand very little how it works in developing countries. Four case studies point to some interesting lessons, one of which is that there is really no international best practice. Regulatory design should focus on achieving attributes of coherence, credibility, predictability, legitimacy, transparency, and accountability, while recognizing a country’s local culture, economy, and political environment.




The Difference Regulation Makes—A Lesson Learned the Hard Way
Better later than never. Subicwater, a small public-private joint venture managing a midsize system in the Subic Bay area, waited 5 years to get the regulatory board promised in the concession agreement. In the meantime, service performance levels and capital investments plummeted. A court case finally installed a regulatory board. And what a difference that has made.




National Regulator Takes Drastic Measures Against Big-Time Commercial Water Abusers
Chief Regulator Ramon Alikpala just doesn’t take “no” for an answer, no matter how big the commercial water consumer/abuser is. He employs creative tactics to promote a little known, yet important law that regulates groundwater tapping. He has sealed up illegal deep wells of commercial malls—in the middle of the business district, in the middle of the business day.



Top 10 Reasons Why Public Utilities Should be Regulated
Need a good reason to lobby for water regulation in your city or country? We’ll give you 10 good reasons. We asked regulators, utility operators, and policy reform experts for the top 10 reasons why public utilities should be regulated. Why should the private sector get all the regulating? Public utilities also need to have efficient water services, viable finances, and satisfied customers.



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News

Three New PDAs Gearing Up for Implementation
Three Pilot and Demonstration Activities (PDAs) will demonstrate




ADB Taking New Directions in Ensuring Water and Sanitation for Asian Cities
"ADB updated its products in direct response to what our government clients said they needed from us," says ADB’s Arjun Thapan at the World Urban Forum. Cities in Indonesia, Pakistan, Philippines and in other Asian countries may soon avail of the new financial products for water and sanitation initiatives through ADB’s Water Financing Program.



Bangladesh: Grant Signed for Erosion-Affected Poor in Jamuna-Meghna Floodplains
About 20,000 people in Bangladesh’s Jamuna-Meghna floodplains were displaced by river erosion, became landless, and settled in riverside areas. A new US$790,000 grant agreed upon by ADB and the Government of Bangladesh will help reduce poverty, and create income-generating activities for the poor in the erosion-affected region.



Nepal: Environment Assessment Launched
ADB’s environmental analysis of Nepal reveals both encouraging and disturbing facts. Forest cover has increased, and more lands are being used for agriculture. But the more fertile lands are being converted to non-agricultural uses, and landslides and water shortages are becoming more common each day. Find out what the report recommends as possible development interventions.



People’s Republic of China: $80 Million to Help Clean Up Hai River Basin in Shandong
Overexploitation due to a fast-growing economy, combined with lack of wastewater treatment facilities, pose serious threats to Shandong Province’s Hai River Basin—one of the most industrial regions in the People’s Republic of China. ADB’s US$80 million loan will improve the urban environment and health of people living along the river basin’s tributaries.



Philippines: Pilot Project Putting Piped Water on Tap for Urban Poor
ADB’s new pilot project aims to demonstrate that urban residents who used to get their water from vendors at inflated costs can connect to good quality, lower cost piped water supply in less than a year. Water from the new connections is expected to be at P12 per cubic meter— giving households savings of more than P40 per cubic meter.



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Water Actions

Pakistan: Farmers Manage and Police Irrigation Systems
Pakistan’s irrigation systems have been frequent victims of water theft. Successive governments spent decades attempting to solve the problem until farmers began to organize themselves. Today, farmers’ organizations have come up with an effective solution to stop water pilferage: managing, policing, and owning their irrigation systems.




Bangladesh: Providing Water Supply and Sanitation to the Chittagong Hill Tracts
After decades of political unrest, the Jumma people in Bangladesh’s Chittagong Hill Tracts now have safe water, sustainable sanitation, and improved hygiene. Find out how various stakeholders and indigenous representatives worked together to restore peace, and provide basic water and sanitation services in the neglected region.



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Knowledge Products

Setting User Charges for Urban Water Supply: A Case Study of the Metropolitan Cebu Water District (MCWD) in the Philippines
This new ADB publication showcases the MCWD’s experience, which presents a good model for water tariffs and offers insights that could serve as basis of policy discussions, project design and analysis. MCWD’s example should be useful to water professionals doing sector studies and processing loans in urban water supply.




Philippines: Rescuing Lilo-an’s Coastline (Photo Essay)
Swimming in Lilo-an’s coastal waters was once considered dangerous to one’s health. Wastewater from the market’s septic tank used to be discharged straight into the sea. View how Lilo-an’s municipal government built a new wastewater treatment facility and saved its coastline from pollution.


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Water Calendar
24-28 Jul Capacity Building Workshop on Partnerships for Improving the Performance of Water Utilities in the Asia and Pacific Region (Bangkok, Thailand)
This workshop aims to create awareness on reforms needed to improve water utilities’ efficiency in Asia and the Pacific.
26 Jul Policy Framework to Combat the Growing Threat of Arsenic Contaminated Drinking Water in Pakistan (Tsukuba, Japan)
This Pakistan-Japan joint seminar will be attended by water experts, private companies, donor agencies, and other stakeholders that focus on water issues in South Asia.

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