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Water utilities that work for poor people : increasing viability through pro-poor service delivery

In many developing countries, criticism is routinely directed at water utilities for their failure to provide adequate services to poor people in urban contexts. With few incentives to act
otherwise, utilities tend to engage in ‘cherry-picking’, extending services to easy-to-reach, wealthy populations, driven not only by cost recovery concerns but also by preconceptions
regarding poor urban people, which prevent utilities from recognising poor urban areas as potential markets. According to WHO and UNICEF, 70% of people in urban areas of developing regions have access to water piped into their dwelling, yard or plot. However, a further 24% are using a source that is improved under the MDG definition but not piped via a network, eg a public standpipe. It is likely that many of this 24% will already be paying for their water, often by the bucket, at far higher per prices per litre than networked users. They therefore represent an untapped market for piped water in urban areas of the developing world, making up some 1.3 billion people in total. The utilities’ aforementioned preconceptions are fuelled by concerns
including the perceived lack of willingness and ability of poor people to pay for water services, concerns over the safety of expensive infrastructure, problems of insecure or disputed land
ownership, and the perception of slums as a “water engineer’s nightmare”. Poor urban populations are thus often left without access to officially provided water services. Even when they are able to access such services, these are often inadequate in terms of service levels and quality. Such problems are more evident in informal peri-urban and urban slum settlements, where residents face the multiple challenges of high costs of water purchased from vendors, high connection fees and bills, ‘hidden’ costs of connections (road digging, materials etc), block tariffs that penalise re-selling, and time constraints due to manual transportation of water. At the same time, many utilities are challenged by unaccounted-for water (due to illegal connections, leakages, bribes and vandalism), which along with the lack of confidence in financial returns from investing in service extension to low-income areas, adds to internal concerns of financial viability and managerial capacity. The result is “…a lose-lose situation for both end-consumers and for the utility”, including less revenue for utilities, which further challenges service extension”. [authors abstract]

This publication is the second of a set of three WaterAid discussion papers on how to improve water and sanitation services to poor people. The set includes:
• Access for the poor and excluded: tariffs and subsidies for urban water supply
• Water utilities that work for poor people : increasing viability through pro-poor service delivery
• Social accountability: tools and mechanisms for improved urban water services

TitleWater utilities that work for poor people : increasing viability through pro-poor service delivery
Publication TypeMiscellaneous
Year of Publication2009
AuthorsVelleman, Y.
Pagination19 p.; 1 fig.; 1 tab; 2 boxes
Date Published2009-11-01
PublisherWaterAid
Place PublishedLondon, UK
Keywordsaccess to water, case studies, poverty, urban communities, water supply
Abstract

In many developing countries, criticism is routinely directed at water utilities for their failure to provide adequate services to poor people in urban contexts. With few incentives to act
otherwise, utilities tend to engage in ‘cherry-picking’, extending services to easy-to-reach, wealthy populations, driven not only by cost recovery concerns but also by preconceptions
regarding poor urban people, which prevent utilities from recognising poor urban areas as potential markets. According to WHO and UNICEF, 70% of people in urban areas of developing regions have access to water piped into their dwelling, yard or plot. However, a further 24% are using a source that is improved under the MDG definition but not piped via a network, eg a public standpipe. It is likely that many of this 24% will already be paying for their water, often by the bucket, at far higher per prices per litre than networked users. They therefore represent an untapped market for piped water in urban areas of the developing world, making up some 1.3 billion people in total. The utilities’ aforementioned preconceptions are fuelled by concerns
including the perceived lack of willingness and ability of poor people to pay for water services, concerns over the safety of expensive infrastructure, problems of insecure or disputed land
ownership, and the perception of slums as a “water engineer’s nightmare”. Poor urban populations are thus often left without access to officially provided water services. Even when they are able to access such services, these are often inadequate in terms of service levels and quality. Such problems are more evident in informal peri-urban and urban slum settlements, where residents face the multiple challenges of high costs of water purchased from vendors, high connection fees and bills, ‘hidden’ costs of connections (road digging, materials etc), block tariffs that penalise re-selling, and time constraints due to manual transportation of water. At the same time, many utilities are challenged by unaccounted-for water (due to illegal connections, leakages, bribes and vandalism), which along with the lack of confidence in financial returns from investing in service extension to low-income areas, adds to internal concerns of financial viability and managerial capacity. The result is “…a lose-lose situation for both end-consumers and for the utility”, including less revenue for utilities, which further challenges service extension”. [authors abstract]

This publication is the second of a set of three WaterAid discussion papers on how to improve water and sanitation services to poor people. The set includes:
• Access for the poor and excluded: tariffs and subsidies for urban water supply
• Water utilities that work for poor people : increasing viability through pro-poor service delivery
• Social accountability: tools and mechanisms for improved urban water services

NotesWith 40 feetnotes, 6 interviews, 3 casestudies and 50 references
Custom 1205.40, 205.42

Disclaimer

The copyright of the documents on this site remains with the original publishers. The documents may therefore not be redistributed commercially without the permission of the original publishers.