Uzbekistan: Water and Sanitation Strategy Development and Capacity Building

Water and other urban infrastructure and services / Urban sanitation - Urban water supply

Uzbekistan is one of the most important economies of the Belt and Road Initiative in Central Asia. Historically, the WSS sector has suffered from a combination of insufficient investment and an inadequate policy framework. Acute funding constraints for capital investments and poor operations and maintenance have led to poor service, including high losses from leaks, frequent breakdowns, and excessive repair costs. Institutional arrangements are characterized by (i) fragmented and dysfunctional regulatory and institutional frameworks, (ii) restricted sector planning capabilities, (iii) ineffective regulatory compliance mechanisms, and (iv) weak interagency coordination and oversight. Independent WSS utilities, known as vodokanals, did not have the operational capacity or sufficient compensation to deliver adequate WSS services. This has (i) undermined consumer confidence and their willingness to pay; and (ii) increased regulator's reluctance to raise tariffs, further constraining financial and institutional performance.

Since 2000, the Asian Development Bank (ADB) has invested more than $500 million in the rehabilitation and expansion of Uzbekistan's WSS infrastructure. More than 5 million residents have benefited from this assistance through safer and more reliable WSS services. To address the government's institutional shortcomings, ADB has assisted in the development of a phased, nationwide reform program, including the reorganization and consolidation of WSS sector institutions, and implementation of sector-wide reforms.

Phase 1 of the reform program, which focused on institutional consolidation, was implemented under the ADB-financed Uzbekistan Water Supply and Sanitation Services Investment Program in 2009 2018. In 2015, the Government of Uzbekistan enacted the Decree of the Cabinet of Ministers (DCM) 306 to establish regional WSS utilities, known as suvokovas, in each province. Vodokanals were restructured and absorbed as branches of their respective provincial suvokovas. Suvokovas are also mandated to implement more than 40 corporate governance improvements to strengthen utility capacity. Phase 2, which is ongoing, aims to overhaul of the WSS institutional framework. The Agency Kommunhizmat (CSA) under the Ministry of Housing and Communal Services (MHCS) is expected to (i) unify government policy on WSS, (ii) manage interdepartmental coordination in WSS, and (iii) implement WSS projects financed by international financing institutions. The State Unitary Enterprise Educational and Methodological Center Kommunalukuv has also been transitioned under MHCS into the main training center to build human resource capacity, facilitate the formulation and refinement of legislation, and undertake public awareness activities.

Although the WSS sector reform has made substantial progress, three key initiatives have been identified as being critical to the ongoing reform process: (i) formulation of a medium-term WSS sector development strategy to guide sector development from 2019 2028, (ii) targeted training and support to build the institutional and operational capacity of Kommunalukuv, and (iii) refinement of DCM 306 and other regulations based on recent sector findings and emerging developments.

Medium-term urban WSS sector development and investment strategy prepared

Training Center Kommunalukuv capacity strengthened

WSS regulatory framework improved