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Water Briefs
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This year, for the first time in history, more than half of the world's population are living in cities1, and about a third of them—or 1 billion—are in slums. Asia and the Pacific is home to the largest number of slum dwellers—554 million people, or 60% of the global slum population.
At least 40% of slum households in Asia have no piped water, and sanitation is typically nonexistent. Official water utilities usually lack the financial capital, legal mandate, or internal will to think innovatively about how to connect slums.
In 2002, ADB commissioned a study2 to understand how urban poor people get their water if not from a connection to a formal utility. The study covered nine cities3 and found that as many as 50% depend on a variety of independent, small-scale water suppliers for most or all of their daily water needs. These vendors may be a small company, cooperative, or enterprising individuals operating within the community, such as neighbor reselling water from a private well or piped connection, a water tanker brought in by a private company or a politician, or a bottled water supplier.
While filling a market void, the problem with most kinds of water vending is its cost to the poor. The ADB study found that water vendors charge anywhere from 5-20 times more than what a local utility charges for the same amount of water. As much as 15% of the poor's income goes to paying water vendors. This confirms other studies that have consistently proven that the poor are willing to pay more for water.
Small piped water networks and the entrepreneurs who finance, build, and operate them are emerging as an interim solution that is more affordable for the poor than vended or bottled water. One model involves a local entrepreneur who sets up a system within a slum area (which is usually near the entrepreneur's own residence) that provides affordable direct connections to
urban poor households.
In this model, the water source is either a pumped dug well or tube well. The entrepreneurs behind the system, who are usually civil engineers, tend to use the most economical materials in order to recover their capital investment within 3 years. From the outset, the studys says, operators offer neighborhood connections based on a schedule of connection costs, water price, payment method, and billing periods.
ADB recently tested another model of the small piped water network idea in two slum areas of Manila, Philippines. For the first pilot area, ADB worked with Manila Water Company, Inc. (MWCI) and a homeowners' association. For the second, ADB worked with Maynilad Water Services, Inc. (MWSI) and a local NGO.
Manila Water installed several bulk meters to supply water to four homeowners' associations, totaling about 1,000 households. The homeowners' associations are billed based on the bulk meter reading every month. The homeowners' associations then worked with leaders from each street within the network to record the household meters, bill, and collect monthly payments. The leaders are also authorized to disconnect nonpaying customers from the system.
As a concession, Manila Water charges the community a regular domestic rate rather than the more expensive commercial bulk rate.
One barrier to connecting poor households is the prohibitive connection charge. This pilot project demonstrated that the poor can pay the connection charge on an installment basis over a period of time. Manila Water required the connection fee upfront for the single bulk meter and household connection, so ADB extended a flexible and revolving financing mechanism that allows payment of connection fees to be spread over three years. Manila Water then deposited their repayments into the revolving grant fund, and this will be used to connect another slum area in a similar way. Ultimately, ADB hopes that enough demonstration of this approach will convince utilities to change their connection fee policy to allow installment schemes for low-income customers.
This pilot project connected the community to piped water in four months and at 55% of the costs of what they were paying (for half the volume of water) to informal vendors.4 The completed Manila Water pilot project showed an average consumption of about 13 m3/household, more than double the previous consumption of 6 m3/household bought from vendors.
For the second pilot project, Maynilad tapped an entrepreneur who will build the system and bill the households for connection costs, spread over 3 years, and consumption charges. The project, started in April 2007 and to be completed in July 2007, will benefit over 600 households.
ADB is undertaking similar demonstration projects in Tien Giang Province in Viet Nam and Ahmedabad, India. Connections to the new systems are in progress.
For small piped water networks to live up to their potential, ADB advises:
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How Small Delivers Big
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| Convenient. Customers do not have to travel long distances or waste time queuing for water, which may only be available a few hours in a day. |
| Reliable. Customers are assured of uninterrupted service or at least regular service—on a "same time, every day" basis. |
| Adequate technical standards. With proper support, planning and implementation, the supply of bulk water and pipe laying, including individual house meters, can have the same technical specification as those of the water utility, which would ensure a smooth transition from small piped network to utilities in the future. |
| Expanded Coverage. Although most slums do no qualify for utility services because of land tenure issues, utilities can still assist them in getting connected by recognizing entrepreneurs willing to build small networks. |
| Sustainability.When the community takes up partial responsibility for meeting its own needs, they are more likely to sustain the efforts to keep the system operating. |
| © 2012 Asian Development Bank Terms of Use |
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