17'7 jqq7 UNDP- Making Rural Water World Bank Water and Supply Sustainable: Sanitation Program Recommendations from a Global Study rravis Katz lennifer Sara PPC's "-.AW ' # AW .- 7 - 177-11 - 4~~~ * ~ 20 Ies UNDP- World Bank Making Rural Water Water and Supply Sustainable: Sanitation Program Recommendations from a Global Study Travis Katz Jennifer Sara Making Rural Water Supply Sustainable: Recommendations from a Global Study The Rural Water Supply Global Study aims to: a clarify what is meant by "demand-responsiveness" in theory and in practice; and * measure and quantify the impact of demand-responsiveness on the sustainability of rural water systems. The study found that employing a demand-responsive approach at the community level significantly increases the likelihood of water system sustainability. However, it also found that even projects that have adopted this approach tend to apply it inconsistently among the communities where they work. The study found that to be effective, a demand- responsive approach should include procedures for an adequate flow of information to households, provisions for capacity-building at all levels, and a re-orientation of supply agencies to allow consumer demand to guide investment programs. The study also found that the existence of a formal organization to manage the water system and training of household members are significant factors in ensuring water system sustainability. Positive correlations were also found between water system sustainability and water committee training in operations and maintenance, and the quality of construction of the system and water system sustainability, although these findings are less consistent across countries. A complete report of the study will be available in February 1998. The Rural Water Sector and the types, most notably social investment funds. World Bank Social funds are quasi-financial intermediaries During the past several years, World Bank that channel funds to small-scale projects for poor lending in rural water supply has seen a communities. These projects can fund a number dramatic increase. The Bank finances rural water of sub-project types (such as water supply, supply investments through two broad project schools, or roads), and deserve special attention types. The first type is the stand-alone rural water as they have gained increasing importance in the supply project, which typically provides only Bank's lending program lover 45 projects have water or water and sanitation services, and is been approved and more are underway), and usually implemented by government agencies. In often include large rural water supply addition, the Bank provides resources for rural components. Both stand-alone and multi-sectoral water supply as components of other project projects were examined in the study. Project CFD SIF- 1 YRWSS F IS- 1 PROPAR VIP-Java WSLICC LGRD NRSP RUWASA Objective Water Employment Water, Employment Water, Public Water, Water, Water, Water, generation, sanitation, generation, sanitation, infrastructure, sanitation, sanitation sanitation, scnitation, improve hygiene poverty heailth employment hygiene, agriculture health basic alleviation generation health services Source of funds France IDA Dutch, IDA, Swiss IBRD IBRD IDA Government, Government, UNDP-WB KfW,USAID donors DANIDA Project type Stand-alone Multi - Stand-aione Multi - Stand-alone Multi - Stand-alone Stand-alone Multi - Stand-alone WSS sectoral WSS sectoral WSS sectoral WSS WSS sectoral WSS Year initiated 1989 1990 1991 1990 1986 1995 1994 1992 1991 1991 Duration of 4 yrs 4 yrsiFIS1) 4 yrs 5 yrs 10 yrs 4 yrs 6 yrs 9 yrs Ongoing 5yrs phase included IFHIS1) (phase 2) in study Total project cost 8.2 95.6 2.8 97.2 1.90 83.8 123.3 194.2 16.4 35 (millions of US$) (GOP only) Costof water 8.2 16.4 2.8 21.3 1.90 about 1.7 123.3 194.2 16.4 35 supply component (GOP only) (millions of US$) Intended number 200,000 550,000 31,000 No info 60,000 3 million 2 million 630,000 385,273 761,400 of beneficiaries Number of 33 242 520 244 139 1,200 1,400 1,600 986 2,892 communities Study Context: Weak Sector Policies alone rural water supply projects in the same and Rules country that adopt different rules and objectives In many developing countries, rural water supply to build very similar infrastructure. sector policies have been poorly defined and public sector implementing agencies historically A Demand-Responsive Approach weak. This situation has been exacerbated as Against this background, participants at the 1 992 donors and implementing agencies bypass International Conference on Water and the governments to set their own policies and rules Environment in Dublin endorsed a set of principles for their projects. In addition, where the Bank has advocating the concept of water as an economic a strong presence, it has often sent inconsistent as well as a social good that should be managed policy signals. In some cases, the Bank has at the lowest possible level. The demand- financed independent multi-sectoral and stand- responsive approach to providing services is a 2 direct extension of these principles. It advocates constructed, and levels and quality of household that to manage water as an economic good, and water committee training. Identical indicator projects should let consumer demand guide key categories allow for comparison of the project investment decisions. Specifically, projects should approach as perceived by household members adopt clear and transparent rules that allow users and water committees (or community leaders). to select the level of service, technology, and Five other indicators measure the location of facilities that best fit their needs, with a performance of the water system, in terms of clear understanding of the costs and physical condition, consumer satisfaction, responsibilities that these options bear. operations and maintenance, financial An increasing number of projects are applying management, and willingness to sustain the these principles to varying degrees. This study was system. In the analysis, these variables, along designed to learn more about the nature of with 75 additional background and project- demand and the linkages between the demand- specific variables, were subjected to statistical responsiveness of rural water supply projects and tests (including correlation and regression the sustainability of the infrastructure provided. analysis) to determine which factors were most important in ensuring water system sustainability. Methodology The study was carried out over a one-year period by field-based teams in six countries: Benin, m6Eor Find g Bolivia, Honduras, Indonesia, Pakistan and Uganda. Each field team was composed of local 1. Demand-responsiveness increases researchers-either from nongovernmental sustoinobility. organizations (NGOs) or universities-using a common methodology. The projects included in Sustainability is higher in communities where a the study were chosen based on the high degree demand-responsive approach was employed. of demand-responsiveness they employed, and However, most projects do not apply their rules the interest of the project director (and in some consistently among the communities where they work. cases the World Bank task manager) to participate in the study. At least one project in The study found that sustainability was markedly each country is funded by the World Bank. higher in communities where household members The analysis was based on a set of indicators made informed choices about whether to build a developed specifically for this study. An indicator system and what type and which level of service is a group of statistical values that taken together they preferred. This relationship proved is indicative of a particular characteristic. statistically significant, even after controlling for Indicators were used to measure both the relative the effects of independent factors such as poverty demand-responsiveness of the project's level and distance from a major city, and project- approach in a particular community, from the related factors such as training, technology type, perspective of household members and from and the per-capita cost of the system. water committees, as well as the sustainability of Although sustainability is higher in that community's water system. Data for these communities where project staff employed a indicators was collected from primary sources, demand-responsive approach, the study revealed including household surveys, structured that project staff apply the approach interviews with water committees and community inconsistently. Community and household surveys leaders, technical assessments, and qualitative indicated that projects were sometimes supply- assessments. In all, the study team members driven (not offering community members options surveyed 1,875 households, representing 125 or informing them of expected costs or communities served by 10 projects. responsibilities), and at other times were demand- Eleven indicators form the core of the study's responsive (spending time informing communities analysis. Six indicators focus on the communities' about their options and giving them a lead role in role in project implementation, measuring the decisionmaking process). The survey reports community involvement in project initiation, the similar findings on the issue of training-projects degree to which the community made an conducted training in some villages and not in informed choice about the type of water system others. These findings illustrate that project rules 3 adopted in a central headquarters office do not Households were not aware of options in multi- always lead to consistent operations in the field, sectoral projects. especially when a wide range of intermediaries are involved. The projects included in the study Multi-sectoral projects can provide funding to varied significantly in how they implemented their communifies for any number of small-scale projects. work, ranging from implementation by project While such a design should optimally allow staff to implementation by independent communities the broadest expression of demand (they contractors or NGOs. However, the inconsistency can select not only service types and levels but between in approach was common to all projects, sectors), most households served by these projects suggesting a need for better implementation reported that they did not know they had the option of procedures across projects. another type of project. 2. Household demand should guide 3. Training, community organization, investment decisions. construction quality, and technology also contribute to sustainability. Sustainability is higher when demand is expressed directly by household members, not Training for household members and for water through traditional leaders or community committees improves sustainability by building capacity representatives. and commitment. The study found that the relationship between the One of the most conclusive findings of the study was demand-responsive approach and sustainability that both household and water committee training is strongest when household members, rather played an important role in ensuring the sustainability than community representatives (such as water of water systems. This finding supports the notion that committees, traditional leaders, or local even when communities have high demand for water, governments) are involved in project initiation they may lack the capacity to operate and maintain the and in decisions that need to be made about the system on their own. In addition to providing water system. The study found that large gaps knowledge on how to operate and repair the water often exist between the perceptions of system, training informs people of what expectations households and the community leaders with they should have for their water system and how to which project staff or intermediaries work. identify and address minor problems in the system Numerous examples emerged in which before they become major. Providing people with community representatives co-opted project informafion about the potential health benefits of an benefits, either placing the water system on their improved water supply affects how they value their own property, excluding certain segments of the water source and thereby improves their willingness to community from using the system, or selecting a sustain the system. design option that other community members did not want. In other cases, community A designated community organization is a necessary representatives failed to consider the demand of component of success. certain segments of the population, such as women or the poor, leading to a design that did The third factor (together with a demand-responsive not reflect the preferences of the community as a approach and training) affecting the overall whole. In such cases, community members often sustainability of a water system was the existence of a expressed dissatisfaction with the service, formal community organization that operates the possessed a low sense of ownership, and had system. In most cases the water committee manages little willingness to pay for the maintenance of and oversees the system's operation, which includes the service. The study found that quality conducting preventive maintenance, collecting tariffs or improves when projects, NGOs, or other payments for repairs, keeping records of financial intermediaries employ well-trained extension transactions, manuals and blueprints, sanctioning staff to help ensure that all members of the people for non-payment, and ensuring that repairs are community have the opportunity to participate in made. The study found sustainability to be significantly the decisionmaking process. lower in communities that lacked such an organization. 4 -Upo' bias toward gravity systems rather than giving communities a choice. The study showed that users r- [ ; ghad a strong preference for house connections and there was a strong willingness to pay the additional costs of these connections. However, Z X- \ , some projects were designed to provide only a minimum service level and did not take this incremental demand into account. If users expanded the water system on their own, the technical viability of the system was often jeopardized. The study found no relationship between technology type, or age of the system z (most systems included in the study were between f three and five years old), and sustainability. - , X - - - - . C 4. A demand-responsive approach requires appropriate financial policies and accountability to community members. Quality of construction is crucial in ensuring The lack of accountability and tronsparency in sustainobility. some government agencies led to higher costs, delays in implementation, and lack of trust by The study found that construction quality had a community members. major impact on sustainability. Qualitative assessments revealed that even when a demand- The study found that construction of water systems responsive approach was used, poor often rests in the hands of non-responsive construction quality lowered the chances that the agencies even in demand-responsive projects. system would be sustained. Construction quality Communities have no way to ensure that and sustainability were not linked to per-capita contractors or government agencies will honor the costs, and systems built by private contractors choices they have made or to hold project staff were not consistently better or worse than those accountable if a system is poorly constructed, built by community members. Poor construction incomplete, or if construction is delayed. quality was more likely to occur when Furthermore, the study revealed a lack of financial supervision was lacking and where contractors accountability, particularly in government or project staff were accountable to a distant agencies. Most projects surveyed kept no records project manager rather than directly to of system costs or how much communities communities. In community-built systems, contributed to the water system. The study found construction quality was often linked to the evidence that, as a result, many users did not trust provision of adequate technical support to that the agencies would use their contributions communities by the project. well, and that willingness to pay for investment costs increased dramatically when communities Inflexibility in technical options and service levels have control over how funds are spent. puts systems at risk. Financial policies failed to link service level to Many of the projects applied design standards costs, and did not provide incentives for projects that promoted over-design and did not allow much to reduce costs. service level flexibility, regardless of project rules that allow for community choice. Gravity systems The study found that the financial policies of most are often considered the most reliable technical projects were not well prepared. Frequently there option and are the easiest to maintain by was no clear rationale for financial policies, and communities. Many projects in Asia and in Latin no incentives to promote more cost-effective America and the Caribbean were found to have a investments. Most projects required very small 5 members in all projects. in order for contributions to be used as an indication of demand these inkages must be more clearly established. Iplicm ations for Projects The most important lesson of the study was that project rules mavter, and their design and implementation can profoundly affect water system sustainability. These rules-which define the eligibility criteria c u for communities, decisionmaking roles, difinancial policy, service levels, and technology options-set the framework and incentives that wili determine the success of a project. The study also found that care must be taken to ensure that these rules are implemented consistently. Specifically, the study suggests that: contributions from communities that are not linked to the costs of providing services. The study found that per capita costs were lower 1. Adopting a demand-responsive where there were higher community approach will improve the sustainability contributions, strict cost control measures, a of water systems. defined per capita subsidy ceiling, and when construction contracts were managed by NGOs The study found that sustainability is higher in rather than government agencies. communities where projects employ a demand- responsive approach. The study provides When choices are not linked to prices, evidence that the definition of the approach households view contributians as a tax rather should be expanded and refined as Follows: than an expression of demand, c Household-level demand should guide key In a demand-responsive approach, the choices investment decisions. that people make should be linked transparently Sustainability is increased when the role of project to prices so that people can make informed initiation and selection of service level options, choices about their participation. Most projects technology, and siting are placed in the hands of did not make this link explicit, so that many well-informed household members rather than household members perceived their contribution traditional leaders or water committees. If as a tax, rather than a price they were paying in representatives are used, project staff should take exchange for a service. In most cases, the costs active steps to ensure that community of different options were not presented when representatives are truly representing all members communities were making decisions. The required of the community. contributions were usually so low or so vague that communities did not perceive that they faced an *Focus on information flows before, during, economic trade-off for a higher level of service. In and after implementation. addition, project staff or community leaders did Because the success of a demand-responsive not always give individuals a choice on whether approach depends on people making informed or not they would contribute. However, the study choices, project staff should place greater did find that regardless of the established emphasis on providing information at the contribution level (ranging from no contribution up household level. Before communities are to 40 percent of costs) there was a consistent selected, project staff should inform community willingness to pay for services by community members of the type of assistance they offer and the 6 eligibility requirements that must be met. During the payment when works are completed (even if services design phase, project staff must ensure that people are provided directly by government agencies). are aware of what is being offered, the costs and Once construction is completed, communities need benefits of each option, and their expected roles in flexibility in deciding how they want to manage the operating and maintaining the systems. Before water system. While most projects require deciding whether to participate in the project, communities to establish a separate water communities should be informed of where they will committee, communities may prefer alternative be able to find technical assistance and where to arrangements such as contracting a water system locate tools and spare parts for the system. operator or using existing community organizations. * Community mobilization is important to 2. Better focus on implementation of rules by facilitate the aggregation of demand. project staff, intermediaries, contractors, or Demand theory assumes that individuals will NGOs will improve performance. express their preferences if the incentives are correct. Since a water system is a good to be To improve sustainability, project staff need to ensure shared by individuals with very different priorities that the rules are well communicated and understood and needs, being demand-responsive at the by those who are expected to implement them, community level requires an aggregation of especially with regard to community mobilization individual demand to formulate a single, community activities. In addition, staff need to be appropriately demand. Projects should employ staff or trained and have adequate resources available to intermediaries to facilitate this process and ensure them. Supervision mechanisms should be established that the community demand is representative of all to ensure that project rules are implemented correctly. members of the community. Such mobilization may take the form of town-hall meetings and may include 3. Investing in household and water gender-sensitive techniques to ensure that women's committee training pays off in terms voices are heard. of sustainability. The aim of community mobilizafion in this context should be to ensure that there is a demand Projects should include training as part of their for service among all potential users, to identify the project design. Communities that receive preferences and priorities of the community, and to household-level training are more satisfied with ensure that users are committed to operating and their systems, more willing to pay the costs of maintaining the system before a decision is reached maintenance, keep the system in better physical to build a water system. When community condition, and carry out better operations and mobilization is weak or absent, projects risk having maintenance. At the same time, training members their benefits appropriated by community leaders or of the water committee will lead to better dominant ethnic groups, excluding women and operations and maintenance and financial other user groups from decisionmaking processes management. and project benefits, and jeopardizing a community's commitment to sustain the water system. 4. Adopting flexible design standards will prevent ad-hoc modifications that * Communities should be able to choose how, jeopardize water system integrity. when, and who will deliver and maintain services in addition to selecting service levels and Projects should adopt flexible design standards technologies. that allow communities that prefer higher levels of Projects often stop short of being truly demand- service to bear the cost of household responsive by giving communities choices on their connections as part of the original design. participation and service levels, but not on how Projects should also provide the option of lower services are delivered. Supply agencies should be service levels for communities that prefer to pay accountable to communities by providing agreed- less. Without this flexibility, project staff run the upon services in an efficient and effective manner. risk of over-designing systems that people are not Communities should participate in contractor willing to maintain, or under-designing them and selection, when appropriate, and have greater running the risk of ad-hoc modifications to the control over supervising works and authorizing water system. 7 Regional water and sanitation groups: Photography: Front cover: Adrian Arbib/Still Pictures. Ron Giling/Still Pictures. Heine RWSG-East and Southern Africa Pedersen/Still Pictures. The World Bank P.O. Box 30577 Graphic Design: Grundy & Northedge Nairobi, Kenya Phone 254-2-260400 C1 997 International Bank for Reconstruction Fax 254-2-260386 and Development/The World Bank 1818 H Street, N.W. RWSG-West and Central Africa Washington, DC 20433 The World Bank USA B.P. 1850 All rights reserved Abidjan 01, Cote d'lvoire Manufactured in the United States of America Phone 225-442227 Fax 225-441687 This report has been prepared and published by the UNDP-World Bank Water and Sanitation RWSG-East Asia and the Pacific Program. Copies of the report are available The World Bank from the Program headquarters in Washington P.O. Box 1324/JKT DC. Material may be quoted with proper attribution. Jakarta 1 2940, Indonesia Phone 62-21-252-0606 Printed on 100% recycled paper. Fax 62-21-252-0432 This report is also available in French and RSWG-South Asia Spanish and electronically at www.@wsp.org The World Bank 55 Lodi Estate P.O. 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