Publication: Achieving Financial Sustainability and Recovering Costs in Bank Financed Water Supply and Sanitation and Irrigation Projects
Loading...
Published
2012-06
ISSN
Date
2014-03-07
Author(s)
Editor(s)
Abstract
This note is a partial response to the above mentioned 2010 Independent Evaluation Group (IEG) evaluation. It covers the specific issues to be addressed in the Water supply and Sanitation (WSS) sector and in the irrigation sector in two distinct parts, because if WSS and irrigation have some common features, there are many distinctions to be made. Among the various water-using sectors, that include navigation, fisheries, hydropower, rain fed agriculture, irrigated agriculture, WSS, and more generally 'the environment', cost recovery issues are of primary concern, and are the focus for this note, in the WSS and irrigation sectors. This preliminary background Note is divided in four parts: a 'history' of the call for financial sustainability and cost recovery and the parallel documenting of the lack of progress. This section ends with what this Note hopes to achieve in the face of what is clearly a deeply rooted problem; an outline of options to be considered for achieving financial sustainability of WSS service providers and recovering the costs of the WSS service through tariffs, i.e., from users and through subsidies; a discussion on what makes financial sustainability of irrigation projects different from WSS projects; and a summary of recommendations to teams involved in the identification, preparation, appraisal and supervision of water projects and of practical measures and actions that both the water sector board and the water anchor could take to help improve the Bank's track record in achieving and financial sustainability of the water projects it finances.
Link to Data Set
Citation
“McPhail, Alexander; Locussol, Alain R.; Perry, Chris. 2012. Achieving Financial Sustainability and Recovering Costs in Bank Financed Water Supply and Sanitation and Irrigation Projects. Water papers;. © http://hdl.handle.net/10986/17226 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Approaches to Conducting Political Economy Analysis in the Urban Water Sector(World Bank, Washington, DC, 2012-09)Progress in urban water supply and sanitation has been slow over the past few decades. The sector suffers from issues of equity and efficiency. Today, more than 780 million people are still without access to improved sources of water, and 2.5 billion lack improved sanitation. Those average figures mask huge disparities between the rich and the poor, the poor consistently have less access to reliable services than the non-poor. Even those who do have networked service often suffer from irregular service and poorly maintained infrastructure. A search of more than 12,000 observations on the water utility benchmarking website, the International Benchmarking Network for Water and Sanitation Utilities (IBNET), indicates that 37 percent of water utilities in the developing world do not even cover operations and maintenance costs from their internal revenue. Overall, political economy analysis provides a practical and useful operational tool that World Bank task team leaders and other urban water specialists can employ in their sector and project work.Publication Improving Urban Water Supply and Sanitation Services : Advisory Note(Washington, DC, 2012-07)The purpose of this report is to distill lessons learnt for improving Water Supply and Sanitation (WSS) services in India, by reference to the recent WSS business plans prepared for the three states of Maharashtra, Rajasthan and Haryana and from various studies carried out by the World Bank on international good practices in urban water service delivery. The report culls out the core elements of the WSS reform program and proposes how such reforms might be implemented. The intended audience for this report is policy makers at the national and state levels, sector professionals and practitioners. The report identifies the key elements of a state-wide program for improving WSS services and accountability on the basis of the following three pillars: i) policies and institutions: appropriate policies and institutional arrangements that clarify the roles and responsibilities of key actors, and which create service providers that are efficient, accountable and customer focused with sufficient autonomy to manage their affairs in a professional manner; ii) infrastructure and financing: medium term infrastructure development program with appropriate financial frameworks that encourage service providers to rely increasingly on user fees and, later on, loans as their main sources of financing. Any subsidies within that framework should be provided in a targeted and transparent manner to support government policies; and iii) capacity building for professional services: ensuring well trained, knowledgeable and motivated staff to deliver the services in a high quality manner. To put the sector in context, the report begins by summarizing the results of various international studies undertaken over the last several years by the World Bank to better understand the makings of well run public WSS companies. These findings point towards the need to establish sectors which encourage the development of autonomous, accountable and customer oriented service providers. Within that framework the report provides suggestions on practical steps that can be taken by governments and service providers.Publication Reforming Urban Water Utilities in Western and Central Africa : Experiences with Public-Private Partnerships, Volume 2. Case Studies(World Bank, Washington, DC, 2009-06)The Western and Central Africa has one of the longest experiences with public-private partnerships (PPPs) in the developing world, both for water supply and for combined power and water supply utilities. Cote d'Ivoire has a successful partnership dating from 1959, and over the last two decades as many as 15 countries (out of 23 in the region) have experimented with PPPs: eight for water supply operations alone and seven for combined power and water supply operations. This discussion paper documents the region's experience with PPPs for urban water supply in a comprehensive manner to help inform the current debate about the benefits brought by PPPs, in the context of helping Africa to achieve the Millennium Development Goals (MDG). Eleven PPPs have been studied, and detailed performance indicators are reported for six large cases - Cote d'Ivoire, Senegal, Niger, Mali, Burkina Faso, and Gabon, with at least four years of private operation. Through its successes and failures, the Western and Central African experience offers interesting lessons that other developing countries could reflect upon as they strive to improve the quality of urban water supply services, increase the efficiency of operations, and establish the financial credibility of the sector.Publication Reforming Urban Water Utilities in Western and Central Africa : Experiences with Public-Private Partnerships, Volume 1. Impact and Lessons Learned(World Bank, Washington, DC, 2009-06)The Western and Central Africa has one of the longest experiences with public-private partnerships (PPPs) in the developing world, both for water supply and for combined power and water supply utilities. Cote d'Ivoire has a successful partnership dating from 1959, and over the last two decades as many as 15 countries (out of 23 in the region) have experimented with PPPs: eight for water supply operations alone and seven for combined power and water supply operations. This discussion paper documents the region's experience with PPPs for urban water supply in a comprehensive manner to help inform the current debate about the benefits brought by PPPs, in the context of helping Africa to achieve the Millennium Development Goals (MDG). Eleven PPPs have been studied, and detailed performance indicators are reported for six large cases - Cote d'Ivoire, Senegal, Niger, Mali, Burkina Faso, and Gabon, with at least four years of private operation. Through its successes and failures, the Western and Central African experience offers interesting lessons that other developing countries could reflect upon as they strive to improve the quality of urban water supply services, increase the efficiency of operations, and establish the financial credibility of the sector.Publication India - Improving Urban Water Supply and Sanitation Services : Lessons from Business Plans for Maharashtra, Rajasthan, Haryana and International Good Practices(Washington, DC, 2012-07)The purpose of this report is to distill lessons learnt for improving Water Supply and Sanitation (WSS) services in India, by reference to the recent WSS business plans prepared for the three states of Maharashtra, Rajasthan and Haryana and from various studies carried out by the World Bank on international good practices in urban water service delivery. The report culls out the core elements of the WSS reform program and proposes how such reforms might be implemented. The intended audience for this report is policy makers at the national and state levels, sector professionals and practitioners. The report identifies the key elements of a state-wide program for improving WSS services and accountability on the basis of the following three pillars: i) policies and institutions: appropriate policies and institutional arrangements that clarify the roles and responsibilities of key actors, and which create service providers that are efficient, accountable and customer focused with sufficient autonomy to manage their affairs in a professional manner; ii) infrastructure and financing: medium term infrastructure development program with appropriate financial frameworks that encourage service providers to rely increasingly on user fees and, later on, loans as their main sources of financing. Any subsidies within that framework should be provided in a targeted and transparent manner to support government policies; and iii) capacity building for professional services: ensuring well trained, knowledgeable and motivated staff to deliver the services in a high quality manner. To put the sector in context, the report begins by summarizing the results of various international studies undertaken over the last several years by the World Bank to better understand the makings of well run public WSS companies. These findings point towards the need to establish sectors which encourage the development of autonomous, accountable and customer oriented service providers. Within that framework the report provides suggestions on practical steps that can be taken by governments and service providers.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2007(World Bank, 2006)The theme of The World Development Report 2007 is youth - young people between the ages of 12 to 24. As this population group seeks identity and independence, they make decisions that affect not only their own well-being, but that of others, and they do this in a rapidly changing demographic and socio-economic environment. Supporting young people's transition to adulthood poses important opportunities and risky challenges for development policy. Are education systems preparing young people to cope with the demands of changing economies? What kind of support do they get as they enter the labor market? Can they move freely to where the jobs are? What can be done to help them avoid serious consequences of risky behavior, such as death from HIV-AIDS and drug abuse? Can their creative energy be directed productively to support development thinking? The report will focus on crucial capabilities and transitions in a young person's life: learning for life and work, staying healthy, working, forming families, and exercising citizenship. For each, there are opportunities and risks; for all, policies and institutions matter.Publication Falling Long-Term Growth Prospects(World Bank : Washington, DC, 2024-02-01)A structural growth slowdown is underway across the world: at current trends, the global potential growth rate is expected to fall to a three-decade low over the remainder of the 2020s. Nearly all the forces that have powered growth and prosperity since the early 1990s have weakened, not only because of a series of shocks to the global economy over the past three years. A persistent and broad-based decline in long-term growth prospects imperils the ability of emerging market and developing economies to combat poverty, tackle climate change, and meet other key development objectives. These challenges call for an ambitious policy response at the national and global levels. This book presents the first detailed analysis of the growth slowdown and a rich menu of policy options to deliver better growth outcomes.Publication Recipe for a Livable Planet(Washington, DC: World Bank, 2024-09-20)The global agrifood system has been largely overlooked in the fight against climate change. Yet, greenhouse gas emissions from the agrifood system are so big that they alone could cause the world to miss the goal of keeping global average temperatures from rising above 1.5 centigrade compared to preindustrial levels. Greenhouse gas emissions from agrifood must be cut to net zero by 2050 to achieve this goal. Recipe for a Livable Planet: Achieving Net Zero Emissions in the Agrifood System offers the first comprehensive global strategic framework to mitigate the agrifood system’s contributions to climate change, detailing affordable and readily available measures that can cut nearly a third of the world’s planet heating emissions while ensuring global food security. These actions, which are urgently needed, offer three additional benefits: improving food supply reliability, strengthening the global food system’s resilience to climate change, and safeguarding vulnerable populations. This practical guide outlines global actions and specific steps that countries at all income levels can take starting now, focusing on six key areas: investments, incentives, information, innovation, institutions, and inclusion. Calling for collaboration among governments, businesses, citizens, and international organizations, it maps a pathway to making agrifood a significant contributor to addressing climate change and healing the planet.Publication El Salvador - Public Expenditure Review : Enhancing the Efficiency and Targeting of Expenditures, Volume 2. Chapters and Statistical Tables(Washington, DC, 2010-11)This Public Expenditure Review (PER), produced jointly by the World Bank and the Inter-American Development Bank (IADB), is an in-depth economic and sector report on El Salvador. The study builds on the analysis and recommendations of the PER delivered in 2004 that concluded that El Salvador faced the dual challenge of addressing deteriorating fiscal trends while financing key investments required to accelerate growth and meet pressing social needs. This report is intended to provide the government with practical and useful near-and medium-term recommendations that will support the country's efforts to ensure sustainable fiscal balances and establish effective and transparent mechanisms to allocate public resources to promote broad-based economic growth, improve social indicators, and reduce poverty. Hence, the government knows that El Salvador is faced with two fiscal challenges that will have great influence on the economic performance over the coming years. The first is the need to improve the fiscal balance, by strengthening revenue and reducing expenditure, to ensure medium-term sustainability. The second is the need to finance priority investments required to accelerate growth, reduce unemployment, and cover basic social needs. Meeting both challenges simultaneously will require great skill, given the still fragmented political environment and the difficulties in creating a consensus on future policies. The country needs to strengthen its fiscal stance because not doing so jeopardizes the medium-term macroeconomic framework, and exposes the country to greater vulnerability in the face of external shocks and contingent liabilities.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.