Transcript E A P TASK FORCE EECCA-wide trends of water utility performance Tatiana Efimova Helsinki, 24-25 May 2007

E A P TASK FORCE
EECCA-wide trends of water
utility performance
Tatiana Efimova
Helsinki, 24-25 May 2007
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Structure of presentation
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State of water infrastructre in EECCA
Impacts on public health and the environment
Current state of financing EECCA water sector
User charges
Public budgets
External finance
Conclusions
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WSS infrastructure in EECCA is in critical
condition
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Key trends unchanged since 2005 Yerevan Ministerial
The water supply and sanitation network is extensive, but
increasingly deteriorating
The quality of service is decreasing as a result, impacting on
public health
Sewerage and wastewater treatment facilities are often the
first service items to be shut down resulting in increased
environmental impacts
Adverse impacts on public health stagnate at high levels
The most alarming situation of water infrastructure exists in
small and medium cities and in rural areas
On the positive side: water consumption and production are
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decreasing, metering is spreading
Water Coverage
120%
100%
80%
2000
2001
2002
2003
2004
2005
60%
40%
20%
0%
Armenia
Azerbaijan
Georgia
Kazakhstan
Kazakhstan
(big cities)
Kyrgyz Rep.
Source: EAP Task Force Water Utility Performance Indicator Database
Moldova Rep.
Russia
Tajikistan
Ukraine
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Continuity of Service
30.00
25.00
hrs/day
20.00
2000
2001
2002
2003
2004
2005
15.00
10.00
5.00
0.00
Armenia
Azerbaijan
Georgia
Kazakhstan Kazakhstan
(big cities)
Source: EAP Task Force Water Utility Performance Indicator Database
Kyrgyz
Rep.
Moldova
Rep.
Russia
Tajikistan
Ukraine
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Non Revenue Water
90%
80%
70%
60%
2000
2001
2002
2003
2004
2005
50%
40%
US 1996
30%
20%
10%
0%
Armenia
Azerbaijan
Georgia
Kazakhstan
Kazakhstan
(big cities)
Source: EAP Task Force Water Utility Performance Indicator Database
Kyrgyz Rep.
Moldova Rep.
Russia
Tajikistan
Ukraine
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=>
Medium sized cities are particularly
affected
(here continuity of service by size of settlement in
Moldova)
Hours of service by settlement category
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20
>200,000
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50,000 - 200,000
20,000-50,000
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5,000 - 20,000
0 - 5,000
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Average
4
0
2000
2001
2002
2003
2004
2005
Source: OECD EAP TF /EUWI /Jacobs (2007), Facilitating policy dialogue, and Developing a National Financing Strategy for Urban and Rural Water Supply and Sanitation in Moldova
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Access of rural population to sustainable,
clean drinking water in Kyrgyzstan
Access to sustainable water supply in rural areas
of Kyrgyz Republic
80
78,9
75,7
%
75
76,2
70
67,3
65
60
2000
Source: National Statistical Office of Kyrgyzstan.
2001
2002
2003
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Health data shows a mixed picture
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Some health indicators have been improving (e.g.
infant mortality rate)
While others are deteriorating in some countries (e.g.
infections with viral hepatitis A)
But all indicators are significantly above EU levels
Anecdotal evidence of out-breaks of water related
diseases are numerous
WHO reports that 13,000 children under 14 die every
year due to poor water in the ECE region
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Environmental impacts
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Wastewater treatment infrastructure is insufficient and where it
exists often out of operation
As a consequence municipal water systems have become the
main polluters of surface waters in many EECCA countries
EEA assess most rivers in Ukraine as polluted or highly polluted,
a similar situation exists in almost all areas of intensive
economic activity in EECCA
This is increasingly affecting the quality of drinking water
sources
Both the Caspian and Black Seas are assessed as under
severe environmental stress, mainly due to municipal water
pollution according to EEA
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Current state of financing WSS in EECCA
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50-90% of water utility revenue is generated by user
charges
The rest mostly comes from public budgets
But these funds are insufficient even to cover
operational costs
In some countries utility revenue from tariffs covers
less than 20% of operating costs
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Real cost recovery
1.00
0.90
0.80
0.70
2000
2001
2002
2003
2004
2005
0.60
0.50
0.40
0.30
0.20
0.10
Armenia
Azerbaijan
Georgia
Kazakhstan
Kazakhstan
(big cities)
Source: EAP Task Force Water Utility Performance Indicator Database
Kyrgyz Rep.
Moldova Rep.
Russia
Tajikistan
Ukraine
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Reasons:
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Water tariffs are extremely low
Collection rates of water charges from HH, even
though they are improving, are still low (e.g. typically
about 60%)
Operation of water utilities is inefficient due to
excessive leakage, inadequate technical equipment,
and over-staffing
Metering policies, while crucial for more
accountability and social policies, are hurting utility
revenues
However: improving economic conditions and
household income create new opportunities to
improve the situation
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Affordability is a constraint
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Tariffs are and will remain the main source of finance for the
sector
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But even at present, very low water tariffs many people face
an affordability problem; as EECCA proceed with reforms
this situation is likely to worsen
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Mechanisms to protect the poor exist but are frequently
insufficiently targeted at those in need
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Projections for Yerevan, Armenia
Distribution of Households by Charges for Water/Wastewater Services
as a Percentage Consumer Expenditures (%)
45,0
38,7
40,0
2004
35,0
2005
27,7
26,9
Per sent
30,0
29,1
25,0
20,0
15,0
10,0
5,0
12,4 11,1
7,1
9,8
6,6
3,5
5,3
3,4
2,3
4,1
2,9
1,1
1,0
1,1
0,0
0-1%
1-2%
2-3%
3-4%
4-5%
5-6%
6-7%
7-8%
8-9%
0,2
1,9
3,0
0,8
9-10% 10%
15 and
more
Public budgets
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Public budgets are the second largest source of
finance and will need to continue playing an
important role
In many countries, financing from public budgets will
need to increase significantly if the MDGs are to be
achieved (e.g. in Moldova a fourfold increase to 2%
of public expenditure spending is needed)
Governments need to set in place mechanisms that
ensure sufficient fiscal transfers to local level actors
on a predictable and stable basis
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External finance is small compared to needs
Bilateral and multilateral ODA for WSS in
EECCA
300
USD million (constant 2004 prices)
DAC Countries
250
200
Memo: Other Official Flows
150
Multilateral
donors
100
50
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
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Conclusions
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Infrastructure trends remain negative and resulting
impacts on public health and the environment at high
levels
Reforms in line with Almaty Guiding Principles
undertaken, but not producing results, yet
Efforts should focus on local level actors and rural
areas
Financing of sector reforms will require significant
efforts from users and public budgets and in poorest
countries external assistance will be potentially
important
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