Transcript The challenge of the MDGs for water supply & sanitation

Republic of Yemen
Ministry of Water and Environment
National Water Sector Strategy and Investment Program
NWSSIP 2005-2009
First Joint Annual Review – JAR 2005/06
Findings and Recommendations of
the Urban Water Supply and
Sanitation Review Team
NWSSIP - JAR 2005/06
Target population

Urban population end of 2004 was 5.585 million,
increased to 5.864 end of 2005

Urban population share end 2004 was 28.4% and its
growth rate (5% pa) is well beyond national average

More than 40 registered urban utilities under LC &
NWSA umbrella represent approx. 90% of total urban
population
84% of population belong to the 23 utilities which are
decentralized under LC umbrella; process thus well on track
Additional 2 approved LCs are awaiting legalization
Total staff working 7.500 in 2005, about 11% professionals plus
19% with at least high school or vocational training certificates
NWSSIP - JAR 2005/06
Budget performance

NWSSIP annual investment target of USD 150 million
missed by far
USD 134.5 million were formulated as budget request
USD 65.1 million were approved (50% of requested amount)
USD 45.2 million were disbursed (77% of approved amount)

However, physical completion rate of planned projects
was 71%, indicating that cash-flow was a limiting factor

Recurrent budget approval rates below requested
funds, but due to a high percentage of fixed costs and
availability of own revenues, approved budgets were
overspent
In average, 86% of requested budgets approved (USD 47
million)
In average, 109% of approved budgets spent (USD 52 million)
Approval ratio goes down to < 70% and disbursement ratio
goes > 135% in some cases
NWSSIP - JAR 2005/06
Urban service coverage

Achieved water supply coverage end 2005 = 58%, with 457,000
house connections reaching a population of 3.428 million

130 million cbm of water produced, 62 l/c/d reached the
population (in average slightly below NWSSIP targets);

Most utilities have rather regular water supply, but in some critical
areas supply constraints are dramatic

Achieved sewerage network coverage end 2005 = 32%, with
250,000 house connection reaching a population of 1.875 million

All sewerage networks connected to treatment plants (under
planning, construction and mostly already operating)

NWSSIP water supply target of 71% network coverage achievable
with enhanced capacities and additional financial resources

NWSSIP sewerage target of 52% network coverage needs to be
reduced to 42% and non-network based sanitation needs to be
considered seriously in addition
NWSSIP - JAR 2005/06
Cost and output


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Average cost per house connection estimated
in NWSSIP was USD 2,170
Average cost for 25,385 water and 32,380
sewerage house connections in 2005 was an
extremely economical USD 780
Overall cost trend upwards (average cost per
HC in latest complex UWSS project in Sa’ada in
the range of USD 4,000 each)
Benchmarking and larger variety of
technological choices are needed
Urban interventions should focus on highest
value-for-money
NWSSIP - JAR 2005/06
Operational and financial efficiency

In 2005, most utilities cover their O&M cost with own revenues
Billed revenue in average covered 120% of O&M cost (av. 2005)
Collected revenues covered 107% of O&M cost (average 2005)
Collection efficiency 98%, UFW 29.4 % (end 2005)

Many utilities have accumulated reserves for replacement of
electromechanical equipment
USD 13 million are deposited on depreciation accounts (for
electromechanical replacements)
USD 35 million virtual funds as depreciation reserve in balance sheets

Full cost coverage as sub-sector goal not achievable in the short
term

Non-domestic (commercial, industrial, government) water share
16.2%, overall water use efficiency 85% (15% technical losses)

More attention is to be given to water and STP effluent quality
aspects
NWSSIP - JAR 2005/06
Institutional capacities

Staff training efforts are reasonable, but can be improved
Average of 0.7 days of in-country, mostly on-the-job training per year
provided to all 7.500 staff working in the sub-sector (4.3 days per year
if limited to professional / technical staff)
5.200 person/days of graduate / post-graduate training provided outof-country (medium and long-tern courses)
UWSS as launched its PIIS with 19 utilities affiliated so far; feeds into
sector M&E
HRD inventory and assessment study started as baseline for a sector
wide HRD strategy
Several institutional support / capacity building programs ongoing

JAR brought about a number of weaknesses of managerial
capacities which need to be addressed urgently
Establishing baselines and coverage data, statistics in general
Understanding of financial management and accounting
Monitoring and evaluation of plans and actions
Language and computer skills
NWSSIP - JAR 2005/06
Poverty relevance

The poor get a fair share of water at affordable prices
All utilities use a block tariff systems that cross-subsidizes, sometimes heavily,
the consumption of the first 10 cbm/month considered the “lifeline” for the
average family
In average, 61% of clients of utilities consume up to the lifeline quantity, thus
their whole water bill is subsidized
This principle is not threatening the financial sustainability of utilities, since it
accounts for an average of 10% of revenues only
On the average, these clients consume 31% of total or 37% of domestic water
sold
Networks are by far the most economic water source for all purposes
Average household expenditure for water in the range of 4-7%, about 25% of
what is spent on QAT

The system has a number of issues to be addressed
The block tariff can be designed with a more pro-poor focus
Tariff adjustments are too irregular, and periods of validity are too long, which
undermines real value of collections in a high inflation environment
Mobilizing additional resources on the way to full cost coverage is not really the
basis for tariff adjustments
NWSSIP - JAR 2005/06
Key recommendations

Update baseline on urban population and service area

Assess and improve managerial capacities especially in critical
utilities
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Study financial accounting data by independent expert
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Legalize and launch independent operations of approved LCs

Clarify relations between LCs and utilities within the governorates

Implement recommendations of study on independent regulator
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Increase speed of project preparation and implementation and
initiate steps toward a program-based approach

Increase investment funding and disbursement in line with
updated NWSSIP targets, aligned with mid-term results framework

Address the cost-coverage issue through further improvement of
operational efficiency and realistic tariff adjustments