Sustainability of Urban Water Supply and Sanitation Operations: Findings and Lessons

The sustainability of urban water supply and sanitation operations can be improved by learning from recent developments and changing attitudes across the region. Successful reduction of nonrevenue water, such as occurred in Manila and Phnom Penh, as well as successful reforms and innovation in other cases in the People’s Republic of China, Bangkok, and Jakarta should be promoted and widely publicized. Lessons from these success stories can be simplified and delivered to the public and politicians to influence change. Reforms also take shape through response to crises. Water shortage in Pakistan and a possible water crisis in the whole of Asia can possibly motivate preemptive change in some situations, but in others might lead to calamities that will hopefully lead to belated reforms. Economic growth, rapid urbanization, and globalization will hopefully increase demands on the quality of water supply and sanitation, increase acceptance of the need to pay for water services, and lead to improved sustainability.

While several measures within ADB and across the region are already being taken to improve water supply and sanitation project sustainability, future work can still benefit from additional measures to improve project outcomes. Based on the case studies reviewed, project design and implementation can be improved through careful evaluation of demand and estimation of project costs, more attention to system interdependencies, proper planning for operation and maintenance, and long-term engagement with clients. Setting appropriate tariffs and cost recovery remains essential to the long-term sustainability of water supply and sanitation operations. Tariffs can be coupled with budgetary transfers provided a policy reform framework exists. Community participation in selected cases in Bangladesh, Indonesia, Nepal, and the Philippines contributed to project sustainability. Efficiency measures such as addressing nonrevenue water and assessing human resource capacity can also improve project sustainability. 

Institutional reform is another key element and a foundation for long-term sustainability. While institutional reform takes time, it is critical for water supply and sanitation development. Asian countries have been pushed to implement institutional reforms very quickly, much more quickly than the pace of reform that occurred in advanced countries. While some Asian success stories involve relatively quick reform of organizations, in most cases expecting full implementation of aggressive reforms under single project loans is not realistic. Moving forward, improved project outcomes can be expected if the ambitions to catalyze reform are tempered by a deep understanding of the particular political context of projects and by an appreciation that, even in the best of circumstances, substantial reforms take time to implement. From this perspective, institutional reform has not failed in Asia; it may just be starting if one thinks of the last 25 years as a period of gestation. The decision to remain engaged should rest on policies that acknowledge the crucial relation of water supply and sanitation investments to inclusive and environmentally sustainable growth, and the complex and slow-moving nature of the sector.