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Trends in rural water sector development and implications for international aid delivery: A Discussion paper

Published on: 09/11/2011

This paper summarises findings from a recent study of the status of rural water supply in some thirteen countries, which aimed to identify commonalities in both challenges and opportunities to rural water supply in countries as diverse as the USA, India, Honduras and Ghana.  It spans a developmental range from one of the world’s richest countries to nations that are still struggling to meet the challenges of basic infrastructure provision. In between these two ends of the spectrum  are  countries in which first-time access to water services has been achieved by a majority of the rural population and in which previously overlooked second order issues to do with service sustainability and quality are starting to rise up the agenda.

From one perspective the case of the rural water sector in developing countries over the past thirty years is a success story: 720m rural people served with improved water supplies and percentage of unserved rural people reduced from 36% to 22%.

But, from another perspective the story is more nuanced: many of these supplies stopped functioning, or function poorly. Various studies have pointed towards serious challenges to sustained services; one recent survey in Ghana estimated that 70% of rural point source water supplies functioned at a substandard level [1]. Many other estimates point to 30 to 50% of non-functionality of water supply at any given moment. [2]

Few of these estimates are based on large scale or systematic data collection, but together with anecdotal evidence, a picture emerges of unacceptably high levels of post-construction breakdown and sub-standard service; at least one other recent study however had more optimistic findings. [3]

Looking back to move forwards

This paper summarises findings from a recent study of the status of rural water supply in some thirteen countries, which aimed to identify commonalities in both challenges and opportunities to rural water supply in countries as diverse as the USA, India, Honduras and Ghana.  It spans a developmental range from one of the world’s richest countries to nations that are still struggling to meet the challenges of basic infrastructure provision. In between these two ends of the spectrum  are  countries in which first-time access to water services has been achieved by a majority of the rural population and in which previously overlooked second order issues to do with service sustainability and quality are starting to rise up the agenda [4].

For many countries, particularly those most reliant on international aid, a number of shared lessons have been identified:

  • Fragmentation. Funding tends to be dominated by external donors, and is not always well coordinated with national frameworks leading to fragmentation [5]. Non-governmental organisations (NGOs), including large international franchises, smaller national charities and faith-based groups tend to ignore government policy, coordination and normative guidelines. Many larger INGOs work at best in parallel, or more typically, may actively undermine efforts to build coherent national systems by investing in competing approaches and implementation packages that are usually relatively costly and beyond the baseline capacity of government or communities to deliver.
  • Isolation from broader public sector functions. Because of the reliance on  external funding and the fragmentation of investments, many efforts to strengthen the sector have been de-coupled from broader, more mainstream, public administration and management reform, resulting in short-term and localised gains which fall away once support is withdrawn. This lesson is supported by a recent AMCOW study suggesting that rural water sectors often perform better when more integrated into core government systems [6]. 
  • Partially implemented decentralisation.  The twin processes of decentralisation and sector reform have often left the rural water sector as the orphan child, with more obviously ‘profitable’ urban utilities split off for privatisation. Whilst our study flagged positive examples, such as South Africa, Uganda and some States in India, where relatively comprehensive frameworks have been established, local government is often weak, ill-equipped and poorly resourced to carry out the mandate of ensuring water (or indeed any) services. Structured support for local government is seldom in place, and normally not adequately budgeted for. Lack of meaningful fiscal decentralisation remains a core barrier, often slowed down by political influence and other disincentives.
  • Insufficient investment in institutions.   The focus in the sector has been on the construction of civil works, rather than the strengthening of the institutions to manage infrastructure, regulate services, and in general create an enabling environment. Too much expectation has been placed on community management to deliver sustainable services. This model has been applied all too often with a ‘one-size fits all’ approach, complicated by lack of clarity about asset ownership, regulation, and accountability.  Added to this is a lack of support services, especially when it comes to more complex supplies to larger populations (absolute and density).
  • Financing capital investment only. A primary focus on capital investments - driven by coverage targets - with much less attention given towards other life-cycle costs, such as post construction support and capital maintenance, both of which were found to be under-supported. Added to an unrealistic assumption of ‘full cost recovery’ under community management , the impact of this imbalance between capital and other recurrent expenditures becomes increasingly critical when coverage rates start to climb [7]. The result is that water supply systems continue to fall out of service as fast as new ones are constructed.

Trends and developments

Despite these challenges, the rural water sector is neither static nor lacking in innovation or improvement; the study identified the following trends, with implications for both governments and funding agencies.

Growing demand for higher service levels.  Economic growth, together with rising expectations, growth in rural populations and a trend towards more densely populated rural villages and small towns are all strong drivers of demand for increased levels of service: moving up the ladder from basic point sources to reticulated systems with street or household connections. Preliminary analysis by WHO/UNICEF of the 2010 JMP results indicate that from 1990 to 2008 fully 50% of the newly served - some 360 million people  in rural areas of the developing world- gained new access in the form of piped supplies to their premises.

Point sources important for poor:  At the same time there remains a significant ( some 1 billion) and growing number of those relying on point sources in rural areas, particularly for the poorest populations and most scattered. Point source management will remain a challenge.

Professionalization of community-management:  The scope to transition from volunteerism to more professionalized management is reliant on market viability (an adequate tariff base) and economies of scale; ten of the 13 case study countries included a trend towards more professionalized management. The separation of service authority from provision functions is essential. Communities retain the ultimate management and decision-making power, through their elected representatives (either in local government or in CBOs such as water boards). But equally, are able to separate out specific tasks, or all of the operation and administration of a system, and delegate this to entrepreneurs or local companies.  

Growing role for local private operators: Linked to the demand for increasingly professional services is the growing potential for small-scale private sector involvement. Moving beyond the more conventional role in construction of new systems, the local private sector may enter the market as either formally contracted operators, or in the provision of mentoring support to community-based operators. In some countries, these contracts can be large-scale and operate under area-based agreements for maintenance, management support or a combination of installation and maintenance contracts. [8]

Regulatory frameworks are nascent, but will become more important over time. The study found very few examples of independent regulation of services or operators. More common is the use of accountability relations between consumers and their water committees or operators. These are either direct (and rather weak), or indirect in which case consumers may turn to the local government authority with an oversight role (which also tend to be weak, largely due to capacity constraints within local government).

One further trend or driver is the importance of the political economy of rural water. The formal development of the sector takes place against a complex backdrop of powerful interests and competing agendas, few of which are formally captured in documentation or evaluations. In many cases such political influence is manifested in negative terms – local politicians who promise new water infrastructure to gain votes;  donors or NGOs that want to achieve impact and visibility and so work outside of government-led processes. Taken together these tend to reinforce capital investment for financial, political or reputational gain, and conversely undermine attempts to support long-term service delivery. But political engagement can also be used for good. Influential politicians and senior civil servants can help drive through complex reforms or the establishment of open dialogues between governments and donor agencies.

Implications for policy and development partner assistance

What emerges from this overview of diverse rural water sectors is a messy picture of constant change. But we do note a general shift, or attempt to shift, towards a more service delivery-based approach and away from fragmented interventions simply delivering water infrastructure. Nonetheless, the road ahead is neither smooth, nor well mapped out, and involves multiple actors with entrenched stakes in the status-quo. It presents in other words a classic change management challenge, albeit a particularly complex one.

To support these more positive trends we feel that international funding organisations need to re-assess their role and investment decisions in client countries. This re-assessment may result in future funding decisions that ensure minimum levels of support are in place; for example, a clear strategy and adequate financing plan for post-construction support.  At the same time, a trigger for change within organisations may be as simple as introducing hard reporting or monitoring requirements for a set period following completion of the loan or grant.  We therefore propose that both large-scale loans and grant-funding take into account the following three broad strategy areas:

A. Support to reform and institution building for rural water as part of a coordinated, comprehensive and government led strategy

A.1         Policy analysis and development is an involved process that takes time and money to facilitate properly; governments require support to look at what is not working, to learn and to develop new policy and clarify institutional roles and responsibilities. [9]

A.2         A common and critical weakness is the lack of reliable data and/or multiple and competing monitoring systems; funding support is urgently needed to establish, or upgrade, national level systems that can serve both the upward demand for strategic planning and the downward demands for operational planning and decision-making at the local level.

A.3         No inherently monopolistic service can be provided effectively without regulation. Support to the development of regulation of service provision and service providers is of critical importance.

A.4         Impact evaluation is largely lacking from the rural water sector, yet without it no systematic learning of lessons can take place.  Support and encouragement to governments to establish and finance space for learning within programmes that allow for ‘controlled experimentation’ can feed a positive cycle of sector capacity development and knowledge management.

B. Support to decentralisation and diversification of service delivery, as well as the phase out of (I)NGOs as primary service providers (other than in failed states/humanitarian emergencies)

B.1          Local government institutions need comprehensive support to carry out their mandates of ensuring service provision. Increasing capacity and competence as part of mainstream public sector reform is badly needed if local government is to play this role fully.

B.2          Local private sector provision needs to be stimulated and supported to help deliver more professional services and higher (more complex) levels of service.

B.3          (I)NGOs should be encouraged to transition from a role as primary providers of services other than where  local NGOs are contracted under similar terms to local private sector) to support for local government and for piloting and learning. NGOs will always have a legitimate advocacy role towards both central and local government in pressing for adequate service provision.

C. Address the time-bomb of unbalanced financing  between capital investment and other life-cycle costs

C.1        All expected financial flows (from tariffs, taxes and transfers) need to be assessed against life-cycle  costs to ensure that secured funds are realistically available to cover the services delivered.        

C.2        To enable this,  information on life‐cycle costs should become increasingly available as part of sector monitoring and be shared and used in the context of decentralisation. Financial planning and budgeting should increasingly be informed by evidence based cost information.

C.3        Support for government is required to set up and properly finance (or provide financing mechanisms) for systems of post-construction support, both for operators and service authorities (e.g. local government), as well as revolving funds for soft loans to enable capital maintenance.

[1] WASHCost (2011) Life-cycle costs in Ghana Briefing Note 4: Access to water services in rural areas and small towns

[2] RWSN, 2009. Myths of the Rural Water Supply Sector, Perspectives No. 4, RWSN Executive Steering Committee, July 2009. St Gallen: Rural Water Supply Network.  Taylor, B. (2009). Addressing the Sustainability Crisis: lessons from research on managing rural water projects. Dar es Salaam: Wateraid.; Godfrey, S., Freitas, M., Muianga, A., Amaro, M., Fernandez, P. and Sousa Mosies, L., 2009. Sustainability check: A monitoring tool for the sustainability of rural water supplies. Paper presented at the 34th WEDC International Conference: Water: Sanitation and Hygiene: sustainable development and multisectoral approaches, Addis Ababa. Loughborough, WEDC.; Reddy, V R., Rammohan Rao, M S. and Venkataswamy M., 2010 (Undated) ‘Slippage’: The Bane of Drinking Water and Sanitation Sector  (A Study of Extent and Causes in Rural Andhra Pradesh)’.

[3] Bakalian, A. and Wakeman, W., 2009. Post-construction support and sustainability in community-managed rural water supply: case studies in Peru, Bolivia and Ghana, Working Paper Report, Number 48731, 1 (1), Water Sector Board discussion paper series, no. 14 Washington, D.C.: Bank-Netherlands Water Partnership (BNWP) and World Bank.

[4] Recent publication (Lockwood, H. & Smits, S., 2011. Moving towards a Service Delivery Approach for rural water supply: lessons from a multi-country study, Rugby, UK: Practical Action Publishing), which is a synthesis of country studies carried out as part of the Sustainable Services at Scale project which is managed by IRC of the Netherlands with funding from the Bill and Melinda Gates Foundation; these individual studies cover the following countries: Benin, Burkina Faso, Colombia, Ethiopia, Ghana, Honduras, India, Mozambique, South Africa, Sri Lanka, Thailand, Uganda and the USA.

[5] Fonseca, C and Diaz, C. (2008) Working Together to Improve Aid Effectiveness in the Water Sector, European Union Water Initiative, Africa Working Group, December, 2008.

[6] 2010 AMCOW Country Status Overviews of water supply and sanitation

[7] A variety of evidence suggests indicative figures for recurrent expenditures in the order of magnitude of US$ 5/capita/year for boreholes with handpumps and circa US$ 20/capita/year for piped systems (for example, a detailed study of two different municipalities in South Africa indicates total costs per capita per year between US$ 5.24 and US$9.94 for direct support costs per capita per year and between US$8.08 and 11.50 for capital maintenance per capita per year depending on technology and distances to travel for support services. Analysis of aggregate figures from Chile indicate a national average for direct support costs of around US$ 3.5 US$/capita/month, with higher levels of capital maintenance. This compares with initial capital expenditure costs in the order of US$ 20-40/capita for handpumps and US$ 100/capita for piped networks (capital cost estimates; Ghana, 2010)

[8] For an overview of the rural private operators see E. Kleemeier, 2010, Private Operators and Rural Water Supplies: A Desk Review of Experience, Washington D.C.: World Bank.  http://water.worldbank.org/water/publications/private-operators-and-rural-water-supplies-desk-review-experience.  For additional resources on rural and small town prviate operators, see the RWSC.  http://community.worldbank.org/pg/pages/view/712023/

[9] See C. Prevost, S. Bea. and C. Leroy-Themes, 2009, Scaling Up Rural water Supply Support in Benin: A Programmatic Approach and Budget Support.  SmartLessons.  November.  Washington D.C.: IFC.  http://smartlessons.ifc.org/smartlessons/lesson.aspx?id=1147