84046 the PACIFIC REGION EAST ASIA and URBAN SANITATION REVIEW: A CALL FOR ACTION the PACIFIC REGION EAST ASIA and URBAN SANITATION REVIEW: A CALL FOR ACTION Vietnam Indonesia Philippines Source: Chau Doan Source: MataHati Production Source: Dennis Sabangan November 2013 The views expressed in this publication are those of the authors and not necessarily those of the Australian Government or the World Bank. Table of Contents FOREWORD vii ACKNOWLEDGMENTS ix ACRONYMS xi EXECUTIVE SUMMARY 1 CHAPTER ONE—Sector Overview 11 1.1 Existing Situation in the Region 11 1.2 Countries of Focus: Indonesia, the Philippines and Vietnam 13 CHAPTER TWO—Urban Sanitation Sector Analysis 19 2.1 People-centered Policies 19 2.2 Cost-effective Technical Solutions 22 2.3 Sustainable Institutions for Quality Service 26 2.4 Viable Financial Systems 29 CHAPTER THREE—Drivers and Factors of Sustainable Urban Sanitation 33 3.1 Drivers for Sustainable Urban Sanitation 33 3.2 Factors for Change 35 CHAPTER FOUR—Recommendations 39 4.1 People-centered Policies 39 4.2 Cost-effective Technical Solutions 41 4.3 Sustainable Institutions for Quality Service 49 4.4 Viable Financial Systems 52 4.5 Implementation Roadmap 56 REFERENCES 59 FIGURES 1 Infant mortality against urban sanitation coverage 2 2 Losses from inadequate sanitation 2 3 Urban sanitation situation (urban population-weighted average across the three countries) 2 4 Complex enabling environment in the sanitation sector 4 5 Annual investment in the sector: current versus needed 5 iii URBAN SANITATION REVIEW: ACTIONS NEEDED 6 Selected water and wastewater tariffs 5 7 Urban sanitation trends 6 8 Summary of recommendations 8 9 Sustainable septage management 8 10 Scheme of an effective water and wastewater urban 10 1.1 Infant mortality against urban sanitation coverage urban utility 11 1.2 An example of untreated wastewater flowing past a high rise building and an informal settlement (Hanoi, Vietnam) 12 1.3 Urban population using septic tanks and percentage of septage and wastewater treated 13 1.4 Wastewater and septage flow in urban Indonesia 14 1.5 Wastewater and septage flow in urban Philippines 16 1.6 Wastewater and septage flow in urban Vietnam 17 2.1 Open sewer channel in Jakarta, Indonesia 20 2.2 Sewers emptying into an urban water body 22 2.3 Combined drainage systems in Hanoi, discharging to open channel 23 2.4 Sequence of development in Korea 25 2.5 Central Government allocations for urban sanitation in Indonesia 31 2.6 Estimated share of urban sanitation expenditure in Vietnam 31 2.7 Selected water and wastewater tariffs 32 3.1 Losses from inadequate sanitation 34 3.2 Urban sewerage connections against city GDP per capita 35 3.3 Application of Kuznets curve to environmental degradation 35 4.1 Achieving sustainable urban sanitation 39 4.2 Flow of fecal matter 41 4.3 Three types of technical solutions proposed 42 4.4 Number of septic tanks de-sludged in Metro Manila 43 4.5 Sustainable septage management 43 4.6 Improving household connectivity 46 4.7 Investment cost of wastewater treatment plants in Brazil and Germany 47 4.8 Scheme of an effective water and wastewater urban utility 51 4.9 Annual investment: current versus needed 53 4.10 Investment in water and sanitation in China (1953-2008) 54 4.11 Comparison of average tariffs in selected countries 55 4.12 Estimated shares of tariffs, taxes and transfers in water and sanitation finance 56 TABLES 1.1 Key indicators in focus countries 12 1.2 Capacity utilization of wastewater treatment plants in Indonesia 14 2.1 Meeting future water needs in Singapore 26 2.2 Cost of sanitation 29 3.1 The 10 leading causes of death (Low-income countries, 2004) 33 3.2 Mortality and morbidity of infectious diseases 34 3.3 Factors that positively influence change 36 4.1 Pros and cons of CSS and SSS 47 4.2 Roadmap to sustainable sanitation services in urban areas 57 iv TA B LE O F CO NT ENTS BOXES 2.1 Facing the (Unpleasant) Facts 19 2.2 Five-Point Strategy for Promoting Household Connections in Vietnam 21 2.3 Mandamus by Philippines Supreme Court to Clean Up Manila Bay 21 2.4 Private Sector Success in Manila 28 2.5 Indonesia: City Sanitation Strategies Lessons Learned 30 3.1 Achieving Sustainable Sanitation—Indonesia Study 36 4.1 Ten-Step Promotion Tool Kit for Urban Sanitation 40 4.2 Effective Urban Investment—Vietnam’s Nhieu Loc—Thi Nghe Canal Is Revived 45 4.3 Sanitation in the United Kingdom 46 v Foreword During the last three decades, the countries of East Asia have All cities aim to be clean and provide a healthy environment experienced fast economic growth and a high proportion for the citizens. To this end, this report highlights the ben- of this growth originates from the cities. The proportion of efits of improved sanitation that would lead to better health, urban population will double from close to 25 percent in 1980 increased economic productivity, and an improved city envi- to over 50 percent in 2020. However, this surge in economic ronment. A key finding of the report is that, to address con- performance and urban population has not been matched cerns of the poor, a city-wide sanitation plan needs to be by an increase in urban sanitation services. implemented as the poor often reside next to polluted waters that are generated elsewhere in an urban area. Although access to sanitation in urban areas in the region is above 70 percent in most countries, service provision beyond Social, technical, financial and institutional issues that could access remains an issue: collection and treatment of waste- drive change were examined which led to recommenda- water and septage is low and sanitation operations are not tions on: yet institutionally and financially sustainable. The cost of • improving services through infrastructure development inadequate sanitation is large with a combined cost for Indo- and institutional strengthening; nesia, Philippines, and Vietnam estimated to be US$8.5 bil- • providing public financing as the costs for improved sani- lion annually in terms of health and environmental related tation will be large; and economic losses. A comprehensive and collective effort is needed to eliminate these losses. • promoting behavior change for communities, households, and for service providers and government officials through This report synthesizes urban sanitation issues in Indone- better information, education, and communication. sia, the Philippines and Vietnam. Separate reports for each This report illustrates the need for interventions across the of these countries have also been prepared. These country board in improving sanitation through changes in policy, reports were based on analysis of previous work and through financing, and regulatory arrangements. The World Bank interaction with sector professionals. Workshops were carried Group is committed to work with governments in East Asia out in Jakarta, Manila, and Hanoi to seek feedback on the to provide sustainable sanitation solutions that would lead findings of the country reports. This synthesis report broadly to cleaner cities and reduced health risks for the population, presents the issues that are faced across the region while including the poor. the country reports mention specific actions to be taken in a country. John A. Roome Director Sustainable Development Department East Asia and Pacific Region November 2013 vii Acknowledgments This report has been prepared with the financial support of Isabel Blackett. Important contributions were also made by the Australian Government. A broad consultation effort was a team of consultants, including: Eric Buhl-Nielsen, Mara undertaken in Indonesia, the Philippines and Vietnam and Baranson, Ross Kearton, John Smithson, James Corning, Sal- workshops were conducted to seek feedback from stakehold- vador Ner, Viet Anh, Liu Xujun, Risyana Sukarma, and Enrico ers as part of the report development process. Rahadi. The Task Team Leader (TTL) for this task is Sudipto Sarkar The efforts of the peer reviewers for the country reports and the Sector Manager for the product is Charles Feinstein. and the regional report are also appreciated: Claire Kfouri The previous TTL was Alan Coulthart. Major contributions (for Vietnam), Eduardo Perez (for Philippines and Indone- to this report and the country reports have been provided by sia), Michael John Webster (for Philippines and Indonesia), the following staff from the Bank and the Water and Sanita- Manuel Mariño (for the Vietnam and regional reports), Pier tion Program (WSP): Victor Vazquez Alvarez, Irma Magdalena Mantovani, and Greg Browder (for the regional report). Valu- Setiono, Christopher Ancheta, Hung Duy Le, Richard Pol- able inputs were also provided by Julia Bucknall, Water Sec- lard, Demilour Reyes Ignacio, Almud Weitz, Eduardo Perez, tor Manager, who chaired the Quality Enhancement Review Vinh Quang Nguyen, Alexander Danilenko, Edkarl Galing and meeting. ix Acronyms AKKOPSI Association of Cities and Districts Concerned MWCI Manila Water Company Inc. (Philippines) about Sanitation in Indonesia MWSI Maynilad Water Services Inc. (Philippines) AMPL Indonesia’s Steering Committee for Drinking MWSS Metropolitan Waterworks and Sewerage System Water and Environmental Health (Philippines) BAPPENAS National Development Planning Agency MPW Ministry of Public Works (Indonesia) (Indonesia) NSSMP National Sewerage and Septage Management BOD Biological Oxygen Demand Program (Philippines) BCC Behavior Change Communications NTP National Target Program (Vietnam) CSC Communal Sanitation Center (Indonesia) OD Open Defecation CSP City Sanitation Plan PPSP Indonesia’s accelerated sanitation develop- CSS Combined Sewerage System ment plan: Percepatan Pembangunan Sanitasi DEWATS Decentralized Wastewater Treatment Systems Permukiman DOH Department of Health (Philippines) RPJMN Indonesia’s medium-term development plans DPWH Department of Public Works and Highways SNIS Brazil’s monitoring system: Sistema Nacional de (Philippines) Informacoes sobre Saneamento EAP East Asia and the Pacific SSK City Sanitation Strategy (Indonesia) GDP Gross Domestic Product SSS Separate Sewerage System HCMC Ho Chi Minh City US$ United States Dollar HH Household USAID United States Agency for International IEC Information, Education and Communication Development IWRM Integrated Water Resources Management WHO World Health Organization JMP Joint Monitoring Program WQMA Water Quality Management Area (Philippines) KPI Key Performance Indicator WSP Water and Sanitation Program LGU Local Government Units (Philippines) WWTP Waste Water Treatment Plant LWUA Local Water Utilities Administration (Philippines) xi Executive Summary INTRODUCTION mortality decreases with increased urban sanitation cover- age (Figure 1). This study summarizes the main challenges to scaling up access to sustainable sanitation services in the urban areas of The economic cost of not addressing sanitation is high. three countries in the East Asia and Pacific region—Indonesia, East Asia is rapidly urbanizing, and its cities are engines of Philippines and Vietnam—and proposes the main steps these economic growth. While there has been economic progress in countries need to take to redress the status quo. The report these urban areas, sanitation conditions have not improved. is divided into four chapters. The first chapter provides an The economic impact of inadequate sanitation in the three overview of the current level and quality of access to urban focus countries is huge and increasing (US$8.5 billion) (Fig- sanitation in the Region. The second chapter examines the ure  2) (WSP 2008). To sustain economic growth, East Asian causes leading to the current state of urban sanitation, using cities will need to address significant gaps in their sanitation four thematic areas: people, technology, institutions and services. But returns on sanitation investments are also high. finance. The third chapter identifies those factors that need to be in place to trigger a different way of doing business in While access to sanitation is high, collection and treatment the sector and that may ultimately lead to transformational rates are low. Access to improved sanitation in urban areas changes. The fourth chapter proposes recommendations on is high (around 77 percent on average for the three focus how countries can upgrade and scale up urban sanitation countries).1 However, adequate collection and treatment rates services. The study has been developed from information are significantly lower, as less than 6 percent of the septage2 and data compiled in the existing literature and through or wastewater3 reaches a properly functioning treatment the country reports for Vietnam, Indonesia and Philippines, plant (Figure 3). In Indonesia and the Philippines, open def- which analysed the situation and proposed solutions for each ecation is still practiced in urban areas. This increases health country in more depth. risks, affects individual dignity, and is an inequitable burden on the poor. Safety, especially for women, is also an issue Urban sanitation is lagging in East Asia. About 2.5 billion associated with open defecation. people worldwide lack adequate sanitation—that’s one third • In Indonesia, septic tanks and onsite facilities domi- of the global population—and 660 million live in East Asia nate the urban sanitation arrangements and serve some and Pacific (JMP 2012). This study identifies the main sani- 85 percent of households. Only 4 percent of the septage tation challenges faced by three countries in the region— is treated, although a higher percentage is collected. Indonesia, the Philippines and Vietnam—and recommends ways to expand and improve urban sanitation services in 1 JMP defines sanitation access as “access to a facility that hygienically sepa- an inclusive and sustainable way. There are far-reaching rates human excreta from human contact.” benefits from improvements to sanitation, including better 2 Solid waste from septic tanks that includes fecal coliform. health and a more productive economy. For example, infant 3 Wastewater that is contaminated with human feces. 1 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 1: Infant mortality against urban sanitation coverage 90 Infant Mortality (deaths/1000 births) Nigeria 80 Djibouti 70 Congo 60 Yemen Sudan Ghana Zambia 50 India dia Papua Bolivia Bhutan Bhuta Uzbekistan 40 30 Morocco Guyana Mongolia Indonesia Gu Guatemala Nicaragua Philippines 20 Vietnam Honduras Egypt Moldova Syria 10 Sri Lanka 0 0 20 40 60 80 100 120 % Access to Improved Sanitation Sources: JMP, World Bank 2011 figures. Note: For the purposes of the graph, countries that have per capita GDP between US$1000 to US$3000 were used. Figure 2: Losses from inadequate sanitation Figure 3: Urban sanitation situation (urban population- weighted average across the three countries) 35 Economic losses — US$ per capita Tourism 30 0 Other welfare 100 Percent (coverage) Environment 80 25 5 Water 60 Health 40 20 0 20 0 Access to Access to Septic Septage Wastewater 15 5 Water Sanitation tanks treated treated Supply (JMP) 10 0 (JMP) Source: East Asia Urban Sanitation Review, World Bank 2013. 5 0 Indonesia Philippines Vietnam there are very few sewerage systems outside the capital Source: WSP 2008. and a few select tourist resort areas. About 3 percent of the urban population defecates openly. • Vietnam is one of the growing lists of countries in the Less than 1 percent of wastewater is safely collected region where open defecation in urban areas has been and treated despite the presence of sewerage systems eliminated. Vietnam, making use of combined systems, in 11  cities. Open defection is still practiced by about has a relatively high sewerage connection rate (60 per- 14 percent of the urban population. cent). However, even after a number of years of concerted • In the Philippines, septic tanks and other onsite facili- effort, only 10 percent of urban wastewater is safely ties dominate, serving 93 percent of the population. Only treated. Septic tanks and on site facilities not connected 10 percent of the septage is treated and safely disposed. to sewers serve the remaining 40 percent of the popula- Less than 4 percent of the urban wastewater is collected tion. Only 4 percent of the septage is safely treated and and safely treated and most of this is in Metro Manila; disposed. 2 EX ECU T IVE SU M M A RY Better sanitation improves health. In EAP, cities have high Public awareness is low for sanitation. Ultimately, it is population densities, with poor and non-poor areas in close demand from citizens that will lead to better sanitation proximity. Urban living concentrates waste; without effective services. In the Philippines, concerned citizens led by civil urban sanitation there is a high risk of epidemic diseases such society groups launched a legal challenge aimed at holding as cholera, as well as the chronic effects of poor health from authorities accountable for the clean-up of Manila Bay. The diarrhea. Worldwide, about 88 percent of diarrheal deaths are challenge was upheld by the Supreme Court and has led to due to a lack of sanitation facilities, together with inadequate stringent and independent monitoring of performance in water for drinking and hygiene (JMP). Inadequate sanitation managing wastewater in the capital city. In many countries in pollutes water supplies, rendering them unsuitable for drink- the region, it was concern over the quality of drinking water ing, irrigation, and other purposes. that triggered citizen demand that led to lasting changes. For instance, in Korea, public awareness created increased While returns are high, improvements to sanitation are demand for cleaner rivers, which in turn led to public actions impeded by the political economy of the region. A study car- to prepare projects and make financing available for waste- ried out by the World Health Organization (WHO) shows that water investments and operations. The key ingredients for US$1 spent on sanitation will yield US$8 in economic ben- triggering improvements to sanitation in recent regional efits. Yet the political economy of sanitation is such that these experience are: strong citizen awareness arising from an investments have not been made in a timely manner due to appreciation of the health and environmental consequences inadequate incentives to invest in sanitation, the absence or of poor services; access and free flow of information on envi- scarcity of local champions to promote change, inadequate ronmental and utility performance between public authori- institutional arrangements to identify and address priori- ties and civil society; and leadership by the public sector and ties, inadequate allocation of investment funds, inadequate organized civil society. capacity at the local level to provide decentralized sanita- tion services, the lack of viable investment proposals for the Cost-effective technologies delivery of sustainable services, and the lack of political will to address tariff issues to ensure the financial sustainability Inadequate collection and treatment makes wastewater a of service providers. vector for disease. Water consumption is generally high in the region, and most households have flush toilets. Waste- SECTORAL ISSUES water from households typically flows through septic tanks that do not function well, and untreated or under-treated The issues faced in the sector are summarized along these wastewater is discharged into rivers and creeks through com- four groups: policy, technical, institutional, and financial. bined sewers. In most cities in East Asia, combined drainage systems are not properly designed to carry wastewater. These People-centered policies drainage systems in many places are open and often collect solid waste which can block of flow of wastewater especially Policies to expand coverage exist but are not properly during rain events. If the combined drains are blocked, sew- implemented. While policies exist at the national level to age overflows to the streets creating a pathway for disease. expand coverage, they are not implemented due to insti- The combined drains are also not well constructed which tutional and financial constraints. In many urban areas in allows the infiltration of groundwater adding to the volume East Asia, there are no citywide strategies in place to deal of water that would have to be collected and treated. with flooding, groundwater contamination, and the separa- tion of waste and its safe disposal. Piecemeal interventions Poor design and maintenance of septic tanks make septage have taken place but the sanitation problems remain as a vector for disease. A large portion of the urban population seen through low levels of treated septage and wastewa- in East Asia relies on on-site sanitation, mostly septic tanks. ter. Sewerage and drainage systems that serve high-rise Given the scale of investment required to provide sewerage and high-density areas are often incomplete; and efforts to systems, most cities will continue to rely on improved septage upgrade the septage management system or to properly link management for many years to come. However, septic tanks the generation of wastewater to a citywide drainage strategy in most East Asian cities are poorly designed and constructed and sewerage system are missing. and not are emptied on a regular basis. When septage is 3 URBAN SANITATION REVIEW: ACTIONS NEEDED collected from the septic tanks, it is carried away by local policy (Figure 4). There are important gaps in the enabling private operators. Septage management is poorly regulated, environment, complicated by three levels of institutions, which creating motivation for illegal disposal of the septage, which hamper the effective implementation of programs. Strategies raises health concerns. to prioritize investments are not in place, financing policy is weak, and the institutional arrangements are often not clear. Sound project preparation is often missing. Authorities have not invested in thorough project preparation and feasibility The limited number of professionals in the sector inhibits studies. Without quality feasibility studies and designs, there capacity. For the focus countries, the capacity is not adequate is a risk of over-design and under-utilization of sanitation for carrying out sanitation services at policy and operational improvement facilities. The treatment technology selected is levels. In the Philippines, it is reported that only 500 out of often inappropriate and not the least-cost option. Also, house the 2,500 registered sanitary engineers in the country are connections to the sewers are not of high quality resulting practicing sanitation professionals. Capacity building is not in the discharge of wastewater to the groundwater or soil institutionalized as part of a career development path. Efforts and contributing to health and environmental risks. Urban to develop capacity are dominated by projects and special sanitation improvements are often handled as infrastructure initiatives that are not self-sustaining. Professionalization of projects rather than as an element in a wider service delivery the sector is important for building, sustaining, and replicat- framework. Infrastructure is necessary but requires service- ing capacity. For the focus countries, the sanitation profession oriented planning to be sustainable. has not benefitted from strong independent associations that ensure professional integrity and provide rewarding career Sustainable institutions for quality service prospects for new entrants. Both Korea and Malaysia have significantly enhanced sector capacity and performance by Urban sanitation requires horizontal coordination across a systematically institutionalizing training at all levels. Simi- range of sectors and vertical coordination from the national larly in Korea, the Korea Water Supply and Water Works Asso- to local level. There are at least three important levels to coor- ciation coordinated capacity building efforts in universities, dinate: service providers responsible for operation and mainte- research institutes, government, and the utilities. nance, local government responsible for ensuring an effective regulation, and central government responsible for setting There is insufficient managerial and financial autonomy in service provision. Autonomy makes it more feasible for a utility to make commercially and technically sound deci- Figure 4: Complex enabling environment in the sions. The balance between autonomy and accountability sanitation sector can be accomplished through effective governance. The most successful cases involve a strong board with consumer rep- CENTRAL LO LOCAL GOV OV SERVICE resentation that provides overall strategic guidance, as well as establishing economic and performance conditions that GOV PROVIDER are benchmarked against best practice. Autonomous and • Policies • Implementation • Provision of commercialized utilities that take responsibility for septage • Strategy • Targets water and • Laws • Project wastewater and wastewater collection and treatment are rare across • Finance Development services the region. Often these functions are fragmented across city • Supervision • Regulation • Operation, departments and prone to interference. Operational budgets • Monitoring • Finance Maintenance • Billing are not well defined, and it is difficult to predict revenues and to plan future investments to improve services. There are opportunities for economies of scale to potentially improve efficiency by combining water, wastewater and septage man- agement services within a city, and for larger cities to provide support services to satellite towns. This amalgamation of Quality Service For People services under a single utility will help financial viability; however, developing institutional arrangements to support Source: East Asia Urban Sanitation Review, World Bank 2013. such economies of scale is not explored. 4 EX ECU T IVE SU M M A RY Figure 5: Annual investment in the sector: current versus needed 0.68 percent of the GDP); however, the current expenditure on sanitation is US$60 million. 3000 2500 Policies are not backed by viable financing. Current Annual Investment The focus countries have sector policies; how- Annual Investment 2000 ever, what is missing is developing, funding Million USD Needed and implementing sanitation programs with 1500 a clear expenditure framework. The potential sources of finance—such as tariffs, taxes, and 1000 transfers from central government and the blend of loans and grants—are not well delin- 500 eated. The rules that govern public transfers, tariffs, and the engagement of private sector 0 Indonesia Philippines Vietnam finance are often unclear. As a result, the level Source: East Asia Urban Sanitation Review. World Bank 2013. of funding available to meet capital and oper- ational needs is not well understood; public authorities are unsure of potential funding sources and are not confident about making significant Viable financial schemes investment decisions. The phasing of investments is also often not well considered and financing is primarily driven Substantial financing is needed to develop infrastructure by country budget systems and cycles. It is difficult for city and provide sustainable services for urban sanitation. By authorities to make transparent and well-informed economic some estimates,4 investment levels of at least US$250/person decisions when the funding for the investments is uncertain. are needed. However, with the exception of Vietnam, this level of investment has not taken place (Figure 5). For instance, in Financing operating costs is an immediate challenge. Tariffs Indonesia, the annual expenditure to reach the entire urban do not meet operating costs in any of the focus countries as population over 15 years should be around US$2.9 billion their levels are low (Figure 6). Government and municipal (or 0.33 percent of GDP); however, the current expenditure authorities are often reluctant to increase tariffs because of on sanitation is US$920 million. Similarly in the Philippines, concern about reaction from citizens. In some instances, an the annual expenditure should be around US$1.5 billion (or increase in tariffs appears affordable, but the authorities are hesitant to increase the cost recovery from user fees. This 4 Based on Master Plans of Metro Manila and Feasibility Studies for Ho Chi leads to deferred maintenance and inadequate services. The Minh City. lack of cost recovery tariffs also creates the need to provide Figure 6: Selected water and wastewater tariffs Tariff USD/cubic meter 10 8 6 4 2 0 Hanoi Phnom Penh Davao Ho chi Minh Bandung Manila Chengdu Buenos Aires Jakarta Beijing Busan Ulsan Tijuana St Petersburg Konya Singapore Bogota Essen Fukuoka Aarhus Gothenburg Glasgow Source: Brown, Hector. 2012. 5 URBAN SANITATION REVIEW: ACTIONS NEEDED operating subsidies to the service providers. Operating sub- ened through Behavior Change Communication (BCC) sidies are subject to changes each year which also creates campaigns. These are especially relevant for the poor, as uncertainties in providing quality services. they often do not have adequate access to information that would lead to better sanitation practices. RECOMMENDATIONS • Area 2: Improved toilet system. Since the 1990s, there has been remarkable progress in all three focus countries in East Asian cities should aim to provide sustainable urban increasing access to improved toilet facilities (see Figure 7 sanitation services to their citizens by focusing on improve- below). However, there are gaps in coverage for the popu- ments in three main areas through three broad practices5: lation. As illustrated in Figure 7, in Vietnam, 7 percent of • Area 1: Improved hygiene practices. This is an ongoing the population—of which about 3 percent are poor6—still effort in all countries in the region and should continue. does not have access to improved sanitation facilities. In Better sanitation practice in households can be strength- 6 Access data from 2011 (JMP 2013). Estimations were conducted using data from national poverty assessments (WB). National Poverty Lines: Vietnam: 5 A five country study conducted in Cambodia, Indonesia, Lao PDR, the Phil- 653,000 VND/person/month (GSO-WB 2010); Indonesia: Rp 211,726 person/ ippines and Vietnam under the Economic of Sanitation Initiative (ESI); USAID month (BPS 2010); and Philippines: Php 1403 person/month (NSCB 2011). and WSP; 2008. Figure 7: Urban sanitation trends Indonesia Urban Philippines Urban Vietnam Urban sanitation trends sanitation trends sanitation trends 100 100 100 7 27 21 31 39 80 80 80 36 Coverage (%) Coverage (%) Coverage (%) 60 60 60 93 79 40 73 40 40 69 64 61 20 20 20 0 0 0 1990 2011 1990 2011 1990 2011 Unimproved facilities Unimproved facilities Unimproved facilities Improved facilities Improved facilities Improved facilities Source: JMP 2013. 6 EX ECU T IVE SU M M A RY the Philippines, 21 percent still lack access, and in Indo- include assigning clear responsibility and resources to a local nesia 27 percent of the population does not have access, government entity for the delivery of services. Better poverty of which about 5 percent are poor. Efforts should be in mapping together with the level of service the poor have place that will enable a higher percentage of the urban should be part of the process of planning for upgrading and population to have access to improved facilities with a extending urban sanitation. focus on providing assistance to the poor. • Area 3: Improved collection and treatment and disposal This study finds that there are four key drivers of change of human wastes. Access to toilets is the first step and that lead to improved urban sanitation services: citizen the next step is to collect and treat the wastes in a man- demand for better services, individual champions among ner that will improve the environment and reduce health the policymakers, the disclosure of information about nega- risks. In the focus countries, a very low percentage of tive environmental impacts of poor water and sanitation treatment is carried out for septage and wastewater. The services, and effective regulations that are actually enforced poor are most affected by this low level of treatment, as (Figure 8). These drivers of change point to four key recom- often they live next to polluted waterways. Thus, collec- mendations for policymakers: 1. Establish people-centered tion and treatment of human waste should be an area of policies, 2. Make the best use of technology, 3. Focus on insti- increased attention by Governments. tutional performance, and 4. Secure financing for the sector. The overarching goal is to collect and treat septage and People-centered policies wastewater in cost-effective ways. In Indonesia, Philippines, and Vietnam, access to improved water and sanitation ser- Sanitation should be integrated with city development plans. vices is high in urban areas. However, the level of treatment of Guided by national policy, each city needs to set objectives septage and wastewater is low, creating health and environ- that place urban sanitation at the core of a wider strategy mental concerns. For instance, in Korea and China about 90 for developing a modern city environment and sustaining a and 70 percent of the urban wastewater is treated, compared healthy and decent quality of life for its population. A people- to treatment levels of only 1 percent in Indonesia, 4 percent centered approach starts with the recognition of the power in Philippines, and 10 percent in Vietnam. The three coun- of an informed public as the most effective driver of change. tries need to set up specific targets to improve and increase septage and wastewater collection and treatment levels. This A well-informed public is the strongest long-term guarantee implies setting adequate regulatory, institutional and finan- of high standards for urban sanitation services. The demand cial environment, and also adopting practical approaches that for services from well-informed citizens to well-informed allow for cost efficiency in the design of the overall septage sector stakeholders is the basis for increasing levels of both management system at the city level. To increase collection the willingness to charge and the willingness to pay for better and treatment of wastewater, sewerage networks have to be quality sanitation services. Innovative approaches are needed built or upgraded and wastewater treatment plants have to that draw on the strength of a well-informed citizenry and be constructed, in line with the interventions taken in China encourage the exchange of environmental health and util- or Korea. These are capital intensive investments. As a result ity performance information between authorities and the prioritization and planning are required to ensure that cost- public they serve. Efforts to build civic awareness will also effective solutions are implemented. need to shape value systems, such as the appreciation of a clean environment. Information and education campaigns City-wide approaches to sanitation are needed. A compre- should focus on the collective gains of sanitation, and the hensive city-wide approach should be taken to ensure that associated benefits for public health, environmental protec- the local government or utility make priority investments. tion, and economic development. The poor often live next to contaminated waterways but the waste is often discharged to the water bodies elsewhere and Cost-effective technical solutions in upstream locations. Thus, while the poor should receive assistance on sanitation, human waste also needs to be col- The most immediate, cost-effective action that can be taken lected and treated from other parts of the city. Consequently, by most cities is to strengthen septic tank operations and city wide approaches to sanitation should be taken which septage management. Septic tanks are prevalent in the 7 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 8: Summary of recommendations ed Vi anc es Fi che Integrate sanitation with Maximize Use of consumer ab ia ie ter n m S le l lic en city development plans fees to meet operating s costs Po e-C l op Pe Promote Information, Secure capital needs Education, through Sanitation Communication Expenditure Framework Sustainable Sanitation Services Prioritize collection and Strengthen the service treatment of septage provider y n le Collect and treat rv for lit tio ab C ech wastewater at least cost e os n ua tu in Se s ic T Q sti sta t- ol Ef og In Su fe ie Adopt climate smart Develop city-wide ct s sanitation strategies iv strategies e Source: East Asia Urban Sanitation Review, World Bank 2013. region, but their operation is far from optimal. People rarely tanks. Regulation that sets up responsibilities and enforces have access to functioning septic tanks or safe pit latrines. regular de-sludging of septic tanks and financial assistance These facilities create health risks and need to be upgraded, to the poor to construct adequate septic tanks should also especially in areas where shallow groundwater is used for be in place (Figure 9). Improvements in septic tank manage- drinking water. Collection of baseline data on household sani- ment are not capital intensive, but efforts should focus on tation is needed, starting with an inventory of septic tanks institutional and regulatory aspects. which would help to track the frequency of septic tank clean- ing events. Also, social mobilization would be needed through Wastewater should be collected through maximization BCC to help the public appreciate the benefits of cleaning the of sewerage network and house connections. A sound, Figure 9: Sustainable septage management BCC SUSTAINABLE S E Regulate the Sector and Financial Support to SEPTAGE Enforce Desludging Poor HH M MANAGEMENTT Source: East Asia Urban Sanitation Review, World Bank 2013. 8 EX ECU T IVE SU M M A RY high-quality collection system is a necessary precursor for and presents broad solutions and performance benchmarks. effective sanitation management. This includes not only These plans should incorporate the concerns of the poor, the construction of sewer networks, but also proper house- including the elimination of open defecation and the improve- connections, which is often not prioritized. An increase in ment of sanitation services in informal settlements. Urban house connections can be promoted through: (a) better regu- planning needs to include locations for wastewater treatment lations including a mandatory charge on the water bill to facilities, taking into account issues such as current and make environmental improvements; (b) BCC campaigns so future population density, zoning, flood risk, topography, and that the citizens are aware of the benefits to connect to a drainage systems. Monitoring and evaluation systems should sewerage network; and (c) financial assistance to poor house- also be incorporated into city plans to inform the public and holds to connect to the network so that wastewater is moved to use as a management tool to determine progress. away from the population in a safe manner. Strengthen the service provider. City authorities should put Minimize the number of wastewater treatment plants in their urban sanitation services on a commercial footing. Cur- a catchment area. Wastewater treatment plants are expen- rently, sanitation is not conceived of as a business in the focus sive to build and operate. However, there are economies of countries. As a result, the professionalization of the sector is scale as the per capita investment cost or operating cost on a not yet complete. A robust regulatory environment should cubic meter basis drops for larger plants. Thus, the approach be combined with institutional strengthening to provide the should be to minimize the number of treatment plants in incentives and means for service providers to improve their a catchment area, taking into account the topography, the performance. Good practice emerging from regional and availability and price of land, and investment and operat- global experience points to the importance of: (a) recovering ing costs. Operations of a treatment plant can also be com- through tariffs, to the greatest extent possible, the costs of plicated, which is another institutional reason to limit the services that meet the health and environmental improve- number of plants in a catchment area. Feasibility studies ment plans of cities; (b) achieving economies of scale and need to consider a variety of least-cost options for treating thresholds of technical expertise by integrating water and wastewater considering financial and operational viability sanitation services (wastewater and septage management) across the life cycle of the system. under a single utility (Figure  10); (c) establishing regional water and sanitation companies that can support services Climate-smart sanitation strategies should be adopted.7 to small satellite towns; (d) monitoring and regulating utili- Because core sanitation infrastructure has a long life-span, ties while providing an effective complaint procedure and current designs should incorporate projected climate change an avenue for citizen participation and (e) considering city over the next century. As climate change increases the volatil- level interventions as part of wider catchment and basin ity of rainfall, sanitation planners need to know more about management plans. flows and pollution concentrations to ensure economic designs and optimize operations. Most cities in East Asia rely on com- Viable financial systems bined sewerage systems, making drainage as vital as sewerage. Flooding and climate change uncertainties need to be included The estimated cost to address sanitation is high and capi- in feasibility studies. Opportunities to convert waste to energy tal needs should be secured through a sanitation expen- should be explored more systematically. Furthermore, reuse diture framework. The estimated costs (using a per capita of water and generation of bio-solids from sludge will become expenditure of US$250) are: US$42.7 billion for Indonesia, important parts of a climate-smart sanitation strategy. US$23.1 billion for the Philippines, and US$8.3 billion for Vietnam. Cities need to expand sanitation services by adopt- Sustainable institutions for quality service ing a strategic expenditure framework for sanitation. Such a framework outlines the costs to improve sanitation; defines Every city should have a comprehensive and realistic city priorities; identifies mechanisms for the flow of funds, and sanitation plan that outlines needs based on local conditions arrangements for financial management; outlines plans to prepare projects along with expected targets and monitoring 7 Climate change impacts were not core focus of the study and would require plan; and identifies sources of financing for viable projects. additional in-depth work. In the expanding economies of many EAP countries, it is the 9 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 10: Scheme of an effective water and wastewater urban Staff Technical Capacity Public Awareness/ Commercialization Effective IEC Effective of Services Urban Water and Wastewater Utility Efficient provision of Customer Focus Integrated Urban Water Services Water Septage S Sewerage Sew Drainage Dra Supply Man Management Source: East Asia Urban Sanitation Review, World Bank 2013. absence of viable plans that is a key binding constraint. By the poor, such as direct transfers, should be provided. For a developing comprehensive financial frameworks, countries utility, when the tariffs do not meet operating costs, subsi- such as Korea and Malaysia were able to make use of both dies may be used to make up the difference between income conventional and innovative sources of finance. and expenses; however, these operating subsidies should be phased out as soon as possible. The environmental policies Consumer fees should be used to meet operating costs. and laws of most EAP countries call for wastewater costs Ideally, national and city authorities need to raise consumer being fully paid for by the polluter. Thus, dependence on fees to meet operating costs, taking into account affordability taxes to meet operating costs should be phased out not only for the poor. To help the poor, block tariffs can work where to encourage efficient water use, but also to bring utilities there are piped water systems. Other methods of support to under the scrutiny of a paying public. 10 CHAPTER ONE Sector Overview This chapter presents an overview of the sector in the 88 percent of diarrheal deaths are due to a lack of access Region, with special focus on Indonesia, the Philippines to sanitation facilities, together with inadequate availabil- and Vietnam. The chapter provides an overview of the main ity of water for hygiene and unsafe drinking water (JMP). issues in the sector, leading to recommendations suggested Inadequate sanitation pollutes water supplies, rendering in Chapter 4. them unsuitable for drinking, irrigation and other purposes. Improvements in sanitation services lead to significantly 1.1 EXISTING SITUATION IN THE REGION better health outcomes, as illustrated in Figure 1.1. In the EAP context, cities have high population densities often with Urban sanitation is lagging in East Asia. World-wide there poor and non-poor areas in close proximity. Sanitation solu- are 2.5 billion people who lack adequate sanitation, of tions should therefore address the concerns of the poor and which 660 million live in East Asia-Pacific (JMP 2012). About non-poor at the same time. Figure 1.1: Infant mortality against urban sanitation coverage urban utility 90 Infant Mortality (deaths/1000 births) Nigeria 80 Djibouti 70 Congo 60 Yemen Sudan Ghana Zambia 50 India dia Papua Bolivia Bhutan Bhuta Uzbekistan 40 30 Morocco Guyana Mongolia Indonesia Gu Guatemala Nicaragua Philippines 20 Vietnam Honduras Egypt Moldova Syria 10 Sri Lanka 0 0 20 40 60 80 100 120 % Access to Improved Sanitation Sources: JMP, World Bank 2011 figures. Note: For the purposes of the graph, countries that have per capita GDP between US$1000 to US$3000 were used. 11 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 1.2: An example of untreated wastewater While policies to improve sanitation exist, their implemen- flowing past a high rise building and an informal tation has been slow. It is estimated that in East Asia, every settlement (Hanoi, Vietnam) US$1 dollar spent on sanitation provides a return of US$8 (WHO 2012). Governments recognize the benefits of improved sanitation and have developed policies to expand coverage. However, the implementation of the policies has been slow mainly due to: lack of strong demand from the citizens for improved services, inadequate institutional arrangements to identify priorities and prepare viable projects, inadequate allocation of investment funds, absence of clear policies to raise tariffs to ensure financial sustainability of operations, and lack of commercialization of sanitation operations. Predominance of septic tanks in urban areas is a charac- teristic of the region. In the East Asian context, water con- sumption is relatively high—more than 80 liters per capita per day. Also, most urban households have septic tanks that Inadequate sanitation leads to economic costs. East Asia is are connected to combined sewers and drains. For instance, a rapidly urbanizing region, and the urban centers are the it is estimated that Metro Manila and Jakarta have about 2.2 engines of growth. While there has been economic progress and 1 million septic tanks, respectively. Also, in Ho Chi Minh in the urban areas, sanitation conditions have not improved. City, it is estimated that more than 1 million septic tanks are Untreated wastewater often flows through urban areas in operation. Septic tanks are not well maintained or regularly (Figure 1.2). cleaned. As a result, they do not function as intended which leads to under-treated or untreated wastewater eventually It is estimated that the cost of inadequate sanitation is US$8.5 being discharged to water bodies in an around the cities and billion (WSP 2008). The breakdown of this cost in select coun- into the groundwater. tries from the region is: Vietnam—US$780 million, or 1.3 per- cent of GDP; Philippines—US$1.4 billion, or 1.5  percent of Wastewater and septage are the major vectors for disease. GDP; and Indonesia—US$6.3 billion, or 2.3 percent of the GDP. A low percentage of urban wastewater is treated, creating While access to improved sanitation is high in these coun- health hazards. Similarly, there is inadequate control over tries, only a small percentage of the collected wastewater or septage collection, transportation, treatment and disposal. septage is treated (Table 1.1), compared to other countries in Furthermore, the septic tank design and construction has not the region such as China or Malaysia. been well regulated. Figure 1.3 illustrates the dominance of Table 1.1 Key indicators in focus countries Access to Urban Improved Percent Population Urban Urban Percent of of Urban Growth Rate Sanitation Wastewater Septage Country Population1 (%)1 (%)2 Treated (%)3 Treated3 Vietnam 26 3.5 93 10 4 Indonesia 45 3.0 73 1 4 Philippines 66 2.9 79 4 10 Notes: 1 National sources and World Bank 2011. 2 Source: JMP 2011 3 Source: East Asia Urban Sanitation Review, World Bank 2013. 12 SECTOR OVERVIEW Figure 1.3: Urban population using septic tanks and non-poor—as they all live within the same urban domain. Pol- percentage of septage and wastewater treated luted water or contaminated soil in a city can affect human Malaysia 100% health of all citizens and consequently comprehensive city- 00 100 wide sanitation solutions should be sought. The poor often 90 Philippines live next to contaminated waterways in low-lying areas; this 80 Indonesia Vietnam China 70% highlights the importance of treating wastewater collected 70 60 in a catchment area. Open defection also tends to be more 50 prevalent in low-income communities due to lack of toilets. % 40 For instance, in Indonesia about 14 percent of the urban 30 population still practice open defecation. This affects the 20 dignity and security of the concerned population, especially 10 the women. Open defecation is an issue that needs to be 0 addressed as part of sanitation strategies to assist the poor Urban Population Septage Treated WW treated with ST and reduce the environmental and health risks associated Source: East Asia Urban Sanitation Review, World Bank 2013. with presence of human waste in an urban setting. septic tanks in urban areas but at the same time shows how 1.2 COUNTRIES OF FOCUS: INDONESIA, a small percentage of the septage and wastewater is treated. THE PHILIPPINES AND VIETNAM This creates the risk for spreading of water borne diseases such as cholera. For instance, in 2008 there was a cholera Indonesia outbreak in Hanoi and fecal coliform levels in water bodies in and around Metro Manila are also reported to be high. Challenges remain in reaching targets and achieving sus- tainable operation. The majority of urban households and Behavior change is a primary challenge. Information on businesses in Indonesia use septic tanks for wastewater the importance of following good sanitation practices is not disposal and, as in other East Asian countries, the use of broadly available to the public. Similarly, the current poor water-flush toilets is common. However, less than 1 percent water quality levels due to inadequate sanitation are not of the wastewater generated in the country is treated and widely known. For instance, in the Philippines it was reported septage treatment is also low (Figure 1.4). There has been an that diarrheal diseases are the second leading cause of mor- almost eight-fold increase in financing for sanitation since bidity among all ages and the third leading cause of mortal- 2006, but it is still far from the projected investment needed ity among children under the age of five.8 Yet this informa- to achieve the 2014 targets, which aim to reach 5 percent of tion has not led to a country-wide momentum for change in the urban population through decentralized systems and a sanitation practices. Broadly speaking, there is evidence that further 5 percent through centralized systems. Cost recovery people are willing to pay the costs of improved sanitation if also remains a challenge because of low connection rates and they can see clear benefits (WSP 2011).9 Thus, policies should low tariffs. The sanitation services are mainly provided by a be developed which would allow the positive impacts of sani- local government agency, separate from the water company. tation to be broadly known, creating momentum for change In some cases, the water and sanitation services are com- which would include: behavior change on better sanitation bined where the bill collection rate is higher as it is combined practices, citizen demand for better services which would with the water bill. trigger actions on the part of central and local government officials, and willingness to pay more for the services as the Centralized systems are not fully utilized due to inadequate benefits are large. sewage network, including house connections. During the period 1980–2000, a number of centralized wastewater sys- Lack of adequate sanitation affects everyone, but the poor tems were built but they are still not working at full capacity suffer the most. Inadequate sanitation affects all—poor and (Table 1.2). The main reason for the under-utilization of the treatment plants is that the sewage network, including the 8 house connections, is not well developed. The focus in the past Field Health Service Information System; Department of Health, 2007. 9 The Political Economy of Sanitation (2011). was mainly on developing the infrastructure and now greater 13 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 1.4: Wastewater and septage flow in urban Indonesia Direct Sewerage ( p Tank) (no Septic ) <1% <1% Wastewater Total safely wastewater Septic Tanks collected treated g with Sewerage 1% <0.5% <0 5% .5% Communal Toilets ~0% ~0 % Septage Septage safely safely disposed/ URBAN collected treated Septic Tanks 4% Population NO Sewerage 110 million 62% 62% Septage + wastewater Other On Site unsafely 23% disposed Open Defecation 14% Source: East Asia Urban Sanitation Review, World Bank 2013. Table 1.2: Capacity utilization of wastewater treatment plants in Indonesia Percent WWTP Percent Sewer Year of Major City (2006 Data) Capacity Used Capacity Used Commissioning Rehabilitation Balikpapan 64 38 2001 Bandung 51 34 <1945 1994 Cirebon PU 60 43 1925 1998 Jakarta 12 30 1982 1996 Medan 28 87 1995 Medan Parapat 8 21 2000 Solo 98 47 <1945 Tangerang 35 45 2004 Yogyakarta 63 74 <1945 1996 Average 47 47 Source: USAID 2006. attention needs to be paid to social marketing and behavior be considered as a priority. Lessons learned from this experi- change aspects for the population and the readiness and insti- ence to increase household connections should be used in tutional capacity of the local governments to connect more the planning for future wastewater investments. citizens. Home owners do not connect to the network because it is cheaper to use a septic tank. Ways to maximize the usage There are sustainability issues with decentralized treat- of the existing infrastructure for wastewater treatment should ment systems and they need to be integrated with city-wide 14 SECTOR OVERVIEW sanitation plans. Recently, investments from the govern- sewage away from neighborhoods, especially in the poor ment, central and local level, have been mainly for decentral- areas. However, the treatment of wastewater for 50 house- ized systems. Such systems are well suited for areas where holds at a time does not bring economies of scale and is larger sewerage networks are not viable or to provide com- institutionally complex, as many small plants have to be munity solutions in low-income areas. However, there are installed in a sub-catchment area to scale-up sanitation. issues that have emerged in the Indonesian context that have Reforms in the sanitation sector are ongoing. A program is in to be addressed. The decentralized systems have been mainly place (Roadmap for Acceleration of Urban Sanitation Devel- community managed, but it is now recognized that commu- opment) that aims to eliminate open defecation in Indonesia nities do not have the institutional and financial capabilities and increase the number of sewer connections and associ- to properly operate and maintain decentralized treatment ated sewerage and wastewater treatment capacity to reach systems.10 Broadly speaking, three types of decentralized an additional 5 percent of the total urban population. A new systems have been constructed: (a) Communal Sanitation program is being planned for the period between 2015 and Centers (CSC) where the population uses a central facility 2020 to scale up sanitation through more centralized systems for sanitation needs. CSCs constitute about 75 percent of the that have adequate house connections and sewage network decentralized systems constructed; (b) simplified sewerage and through a stronger collaboration between central and systems where the wastewater is taken to a decentralized local governments. facility for treatment. This corresponds to about 15 percent of the decentralized systems constructed; and (c) combina- Review of effluent standards. The effluent standards for tion of CSC and simplified sewerage systems where the waste wastewater would also have to be reviewed for the program treatment system in CSC is also used for the treatment of starting from 2015. For instance, most countries in the region effluent from simple sewerage system from the surround- have a Biological Oxygen Demand limit of 50 mg/l or less in ing households which have private toilets. Some issues that treated wastewater. In Indonesia, the current equivalent stan- have come up are: dard is 100 mg/l which allows for a lesser degree of treatment • The CSCs usage has been around 20 percent of the for the wastewater. When Indonesia strengthens its standards expected demand. The national program implementation on wastewater effluent to reduce pollution, this would have assumed that about 100 households or more would use an impact on the wastewater treatment approaches and costs. a facility. However, the median usage is about 21 house- For instance, the decentralized systems currently used (which holds. The demand for these CSCs would need to be are mainly anaerobic) may not be suitable to meet lower efflu- reviewed because as more people receive piped water, ent standards without an aeration process that would further the demand to visit these community systems would add to the cost and complexity of operations. On the other diminish. The operating costs for these systems are also hand, the centralized systems typically include an aeration high11—estimated to be around US$0.47/m3 to meet efflu- process and would be able to handle a lower standard, but the ent standards of 100 mg/l of Biological Oxygen Demand. issue of right-sizing the plant has to be addressed. For comparison, similar anaerobic centralized systems have significantly lower operating costs: Bandung— US$0.01/m3; Medan—US$ 0.07/m3; Yogyakarta—US$ 0.08/ Philippines m3; and Cirebon—US$0.03/m3. Encouraging progress in upgrading and expanding urban • For the simplified sewerage systems, the expected sanitation services has been made in Metro Manila. In demand was that it would serve about 50 to 100 house- Metro Manila, the provision of collection and treatment of holds and the median usage is about 50 households. The wastewater has been successfully privatized and the sec- sewage systems for the decentralized treatment plants tor is well regulated. A well-conceived phased approach in serve a useful purpose of collecting and transferring the improving sanitation is being implemented by two private concessionaires. This approach includes a strategy to upgrade 10 Review of Community Managed Decentralized Wastewater Treatment Sys- septic tanks, existing drains, interceptors and treatment. The tems in Indonesia, WSP 2012. strategy aims to maintain and improve septage management 11 Monthly operating cost of US$95 based on 84 users (21 households, assum- ing 4 users per household); per capita wastewater generated assumed to be programs in order to complement combined sewerage sys- 80 liters. tems and, as affordability improves, to construct separate 15 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 1.5: Wastewater and septage flow in urban Philippines Direct Sewerage ( p Tank) (no Septic ) <4% <4% Wastewater Total safely wastewater Septic Tanks collected treated with Sewerage ~4% <1% Septage Septage safely safely disposed/ collected URBAN treated Septic Tanks 30% Population 10% 10% NO Sewerage 61 million 84% 84% Septage + wastewater Other On Site unsafely 9% disposed Open Defecation 3% Source: East Asia Urban Sanitation Review, World Bank 2013. sewerage in selected areas. However, outside Metro Manila monitoring arrangements. Local action is still needed in most the progress on sanitation has been slow (Figure 1.5). local government units (LGUs) to pass ordinances requiring septic tank de-sludging, appropriate disposal and treatment, The only local government-operated sewerage system and and to enforce the Building Regulation and Sanitation Code treatment plant is in Baguio, while there are private sec- provisions on septic tank design and construction. tor operated sewerage and treatment systems in the tourist area of Boracay and in the special economic zones of Clark Lack of capital investment is a significant constraint to sec- and Subic. Decentralized wastewater treatment systems tor development. So far, national government capital grants (DEWATS) have been implemented in some areas such as in have not been available for urban sanitation, and neither Dumaguete and Bayawan and for public facilities in other cit- LGUs nor Water Districts have been willing to borrow for ies, but their viability at scale still needs to be demonstrated. either sewerage or septage management. Under the NSSMP, There is currently an absence of any systematic sector moni- a proposed funding arrangement would include a 40 percent toring system at the national and local levels. subsidy from the national government for sewerage, with the remaining 60 percent being shared by the Water District and A clearer sector strategy is needed, along with improved the LGU. This arrangement will make available US$140 mil- regulatory arrangements. The National Sewerage and lion for investments in the sector from the national govern- Septage Management Program (NSSMP) was prepared in 2010 ment which would help with sector development. However, and sets ambitious targets for sewerage and septage man- it is also important to prepare a pipeline of viable projects agement provision in urban areas outside Metro Manila. Yet, that can utilize the funds. Such a pipeline of projects is not in a clear strategy needs to be developed on how to implement place. As more investments are made, it would be also critical this plan which would include regulatory, financing, and to ensure that tariffs are adjusted to meet costs. 16 SECTOR OVERVIEW Figure 1.6: Wastewater and septage flow in urban Vietnam Direct Sewerage ( p Tank) (no Septic ) 5% Wastewater Total safely wastewater Septic Tanks collected treated with Sewerage 10% 55% Septage Septage safely safely disposed/ URBAN collected treated Septic Tanks 4% Population NO Sewerage 25 million 22% 22% Septage + wastewater Other On Site unsafely 18% disposed Source: East Asia Urban Sanitation Review, World Bank 2013. Vietnam Korea. Other countries like Malaysia have also focused on improving septage management along with the development The policy to increase urban sanitation is in place, but of wastewater collection and treatment. In Vietnam, as of issues remain with providing sanitation services in a sus- 2012, 17  wastewater plants were constructed and 30 more tainable way. Through a Prime Minister’s decision, the overall plants in the urban areas are planned. However, adequate policy to improve urban sanitation is being implemented. emphasis has not been placed on the collection networks, Investments have also taken place over the years (US$1.2 bil- which need: rehabilitation to prevent infiltration of ground- lion between 1991 and 2005), but this is not supported by a water; better design, with a proper slope to carry water during national strategy for urban sanitation. Work remains to be dry and wet weather conditions; and to have proper house done to collect and treat septage and wastewater, as the connections so that wastewater is not discharged into the overall treatment level is low (Figure 1.6). For the rural water groundwater. In addition, attention needs to be paid to proper and sanitation sector there is a National Target Program (NTP) collection and treatment of septage. and a similar approach to have a NTP for urban sanitation can be considered. Sanitation policies are implemented by Cost recovery levels are low. The central government has provinces with various degrees of institutional capacity. In financed the investments in sanitation, often backed by loans some cases, the institutional capacity is not adequate to from international donors. However, investment decisions effectively deliver services. have been made on a case-by-case basis and a strategic approach to address priority actions in the country has been Attention needs to be paid to the quality of collection net- missing. Furthermore, revenues from tariffs and fees often works and sustainable operations, along with upgrades of do not cover operating expenditures for the sanitation opera- the septage management systems. The approach taken in tions. This creates dependence on operating subsidies from Vietnam to collect and treat the wastewater through central- provincial governments. The operating subsidies vary from ized systems is economic and is the process that has been year to year, depending on other competing needs, creating followed in other countries in the region such as China or uncertainties regarding the quality of the sanitation services. 17 CHAPTER TWO Urban Sanitation Sector Analysis This chapter provides an overview of the sectoral issues that householders do not ensure that their septic tanks are work- need to be addressed to improve sanitation. ing properly, are not interested in connecting the house- hold to sewers where they exist, or are not willing to pay for 2.1 PEOPLE-CENTERED POLICIES wastewater services, collectively the community will suffer due to a poor environment and unacceptable health risks. Public awareness is low due to uninformed demand for Creating citizen demand for better quality services requires sanitation. The negative impacts of unhygienic sanitation that they are aware of the serious health risks they face from practices on human health are not widely known. At the poor sanitation service and practices. This requires mak- household level, sanitation is typically seen as a private ing a shift from sanitation as a private concern to a public affair of the individual householder. However, if individual concern (Box 2.1) Box 2.1: Facing the (Unpleasant) Facts The Water and Sanitation Program (WSP) publication “Sanitation—It’s Not a Private Matter Anymore” spells out a number of facts and messages about Indonesia, that are also relevant in most East Asian countries that could serve as a basis for public information campaigns: • In Indonesia, out of every 1,000 live births, almost 50 children die before reaching the age of five. • According to the Ministry of Health, one of the causes of these deaths is diarrhea brought on by poor sanitation. • Nutrients from sewerage and septage encourage the growth of algae, which turns the water green. Algae uses up the oxygen in the water, killing fish and other aquatic life. • Around 75 percent of the rivers in Java, Sumatra, Bali, and Sulawesi are heavily polluted by organic matter from household waste. The water gives off a putrid smell and turns black. • Seventy percent of groundwater in cities in Indonesia is heavily polluted with sewage bacteria as a result of leaking septic tanks—yet half of city dwellers use groundwater for their daily needs. • Although they are only supposed to drain rainwater, ditches are used for dumping gray water and garbage. As a result, ditches become blocked and are breeding grounds for disease. • In urban areas, 35 percent of latrines are makeshift, having no water supply, no roof, or are not connected to a septic tank or other septic system. • After emptying the contents of septic tanks, many sewage trucks illegally dump their loads of sewage sludge straight into rivers. • In Jakarta alone there are more than one million septic tanks but almost no septic tank regulations to restrict the number per unit area or to require house owners to empty regularly. Source: WSP 2007. 19 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 2.1: Open sewer channel in Jakarta, Indonesia public opinion.12 The survey is an explicit “listening exercise” intended to understand consumer awareness and percep- tions of water and sanitation issues and legislation, as well as their willingness to take individual actions to improve the water-related environment. The survey informs policy mak- ers of the extent to which information campaigns have been successful and enables them to keep in touch with public attitudes and perceptions. Another example is in Vietnam where the authorities in Da Lat and Boun Ma Thout promoted household connections through a public awareness program which led to significant behavior change results (Box 2.2). Citizen initiatives to clean-up the environment have been successful and are likely to continue. There are many suc- cessful environmental initiatives taken by citizens which have led to change. As mentioned above, policy makers should facilitate information exchange so that citizens are better informed about the state of the environment. Some Ultimately, it is the demand from people that will lead to examples of successful citizen movement include: the Man- better sanitation practices. As the economies in East Asia damus issued by the Supreme Court of Philippines to clean grow, people will expect to live in a cleaner environment up Manila Bay (Box 2.3). Another successful example is the free from health risks and demand better sanitation ser- clean-up of the Boston Harbor. In 2009, the Massachusetts vices. Policy makers need to be prepared to respond to these Water Resources Authority mentioned that “It was only a demands by providing better services and build public aware- little over 20 years ago that Boston Harbor was known as ness of the importance of sanitation services and practices to the “dirtiest harbor in America.” Today, it’s “a Great Ameri- the health and well-being of households. The Association of can Jewel.” The Boston Harbor clean-up efforts picked up Cities and Districts Concerned about Sanitation in Indonesia momentum after citizen-led efforts resulted in the clean-up (AKKOPSI) Program in Indonesia provides an example of how of the harbor. civic awareness has helped in the delivery of better sanitation services. AKKOPSI was established by the mayors of the cities Constant public vigilance ensures better sector perfor- that had completed city sanitation strategies. Currently about mance. Demand by citizens for urban sanitation is influ- 120 cities have joined AKKOPSI. It is an advocacy group to enced by information on health and the environment, by how provide support for achieving the national sanitation targets well civil society is organized, and by cultural factors. In the by sharing experiences. The group meets quarterly and con- Philippines, there are opportunities through legal procedures venes annual City Sanitation Summits, and seeks to achieve for civil society or individuals to take legal action on a range a target allocation of at least two percent of local government of environmental issues. For example, the mandamus on budgets for sanitation. AKKOPSI has recently initiated City the clean-up of Manila Bay successfully demonstrates that Sanitation Rankings to benchmark and measure performance concerned citizens can engage with authorities and create in implementing City Sanitation Strategies. change. To promote such change, civil society must continu- ously monitor the environment and provide feedback to the Information exchange facilitates forming and understand- public authorities. For example, in the USA, a civil society ing opinions. Information ideally flows two ways: from pub- organization called Baykeeper regularly reports on how well lic authorities to consumers and from consumers to public authorities. Measures such as increasing tariffs are easier to 12 In 2000, in response to worsening water quality, the European Union implement if there is strong public awareness of the envi- launched the ambitious Water Framework Directive initiative, which aims to bring environmental performance of all 27 member countries to a similar ronmental and health impacts of inadequate sanitation. For level. Since the directive would need strong public support, based on public instance, the European Union has for some years now con- opinion that was founded on solid information, The Water Barometer survey ducted the “Water Barometer” survey to gauge and learn from was initiated. Source: European Commission, DG Environment 2012. 20 U R BA N SA NI TAT I O N SECTO R A NA LYSIS Box 2.2: Five-Point Strategy for Promoting Household Connections in Vietnam In Da Lat and Boun Ma Thout in Vietnam, a series of information, regulatory, institutional, and pro-poor measures were needed to effectively promote household connections. These included: • Public awareness was increased by launching an Information Education Communication (IEC) campaign to promote the connection of households to the public sewer system, citing the benefits of the program to the homeowner and environmental improvement to the community as a whole. • Local authorities issued a decree mandating that all households located within an area served by public sewerage system or drains be connected to the system. • A government subsidy was provided for household connections to encourage connection and to reduce the financial burden on the vulnerable households, especially the poor. • Local authorities established a specific house connection group or department responsible for operating the sewer system. The purpose of such a group is to promote, issue permits and monitor the permitted household connections throughout the sewerage service area. • Household connections are required to be an integral part of project formulation, funding, and implementation for new sanitation projects or existing sanitation projects that will be expanded. Box 2.3: Mandamus by Philippines Supreme Court to Clean Up Manila Bay In January 1999, a group called the Concerned Residents of Manila Bay sued several government agencies for the clean-up, rehabilitation, and protection of the Manila Bay. This concerned citizens group established that the fecal coliform level in Manila Bay exceeded norms in a significant way which required pro-active measures to reduce the pollution reaching the water body. On September 13, 2002, based on the law suit, a trial court in Philippines issued a decision requiring the government agencies to clean-up the bay. The Government agencies appealed to the Court of Appeals mentioning that the trial’s court decision did not require the agencies to carry out tasks outside their basic work. This matter was then ultimately elevated to the Supreme Court. On December 18, 2008, the Philippines Supreme Court ordered all concerned government agencies to coordinate in the clean-up, restoration, and preservation of Manila Bay. In the decision, the Supreme Court mentioned that Manila Bay was “a place with a proud historic past, once brimming with marine life and, for so many decades in the in the past, a spot for different contact recreation activities, but now a dirty and slowly dying expanse.” Through this decision, the Supreme Court directed related agencies to carry out the clean-up and noted that time was of the essence in addressing the ongoing environmental degradation. Based on this decision of the Supreme Court, actions are being currently taken to collect and treat wastewater generated in the Metro Manila area. the city authorities in San Francisco are controlling pollution Monitoring systems improve accountability and perfor- in the Bay. Baykeeper runs a website, distributes information mance. In the Philippines, one of the first steps of the new and promotes good performance of local sewerage agencies.13 National Sewerage and Septage Management Program is to These actions point to the capability of well-informed citizens develop a national monitoring system that intends to review to understand the root causes of poor performance and to the status of service coverage and performance. In Indonesia, advocate for increased funding to the sector. while awaiting the establishment of a formal national infor- mation system, mayors have initiated an inter-city ranking system that aims to benchmark sanitation performance. In Vietnam, the Government is considering to put in place web- 13 Source: http://baykeeper.org/news/column/working-capitol-healthier- based systems where the performance of water and waste- san-francisco-bay-2012. water utilities would be reported. Such systems will provide 21 URBAN SANITATION REVIEW: ACTIONS NEEDED information on a systematic basis and inform the public on Figure 2.2: Sewers emptying into an urban water important issues which in turn will raise civic awareness body on sanitation. One example of a monitoring system is in Brazil where the Sistema Nacional de Informacoes sobre Sanea- mento (SNIS; created in 1995) is credited with consolidating and accelerating progress not only in development of urban sanitation infrastructure, but also service provision perfor- mance. SNIS is a benchmark for performance indicators for a large number of both public and private service providers. The SNIS tracks about 80 performance indicators such as economic and administrative efficiency (30 indicators); water operational efficiency (20 indicators); sewerage operational efficiency (10 indicators); financial performance (10 indica- tors); and water service quality (10 indicators). SNIS publishes an annual yearbook where all indicators are tracked by the utility. In order to ensure a comprehensive database, access to loans and grants is conditioned on utilities joining the SNIS. 2.2 COST-EFFECTIVE TECHNICAL landfills and is frequently discharged illegally causing envi- SOLUTIONS ronmental and health concerns. • Solid waste: in the urban areas, solid waste is often dis- Baseline conditions will determine different technical solu- charged in combined sewers and open channels. Solid tions. The starting condition in most urban areas is deter- waste blocks the drains, which leads to wastewater over- mined by the high use of water, where the option of flush flowing to the streets. Removal of solid waste not only toilets is widely used to remove human waste. This situation improves the environment but helps to improve the aes- (use of flush toilets; most urban households using on-site thetic and hydraulic conditions of open canals. Thus, the systems) determines the main technical challenges the sector removal of solid waste should be considered together with faces because septic tanks do not function well, the transfer removal of septage and wastewater. of wastewater is not done in an environmentally safe manner, • Combined sewerage systems: the combined sewerage and wastewater is not treated before it is finally discharged networks—those that carry storm water and wastewater— which pollutes rivers and creeks. These issues are described in the East Asian context are mainly designed to drain below for a better understanding of the problem. storm water. However, effluent from septic tanks and • Most urban households have septic tanks but often the other on-site sanitation structures are discharged in these design and the construction quality is poor. These tanks drains which ultimately leads to wastewater being dis- are not emptied regularly either because they are inac- charged to open channels or urban creeks (Figure 2.2). cessible or there is no service available or demanded. In These combined drains are not well constructed which poor areas, pit latrines are used that discharge directly allow the infiltration of groundwater, increasing the vol- into street drains. In some poor areas, open defection also ume of wastewater that is collected in the drains. The occurs. Human waste from these practices causes health condition of these drains needs to improve to maximize and environment concerns. The service providers are typi- collection of wastewater and minimize runoff infiltration. cally private and not well regulated where septage collec- • Separate sewer systems: in new developments, most cit- tion services are provided under a regulatory framework ies plan to lay separate sewers that convey wastewater that ensures quality services and guarantees competition.14 directly from households to a wastewater treatment plant The collected septage is not always disposed in designated by means of a piped network. When separate systems are created, the sewers will convey wastewater while the storm drains will convey rain or flood waters. Sep- 14 Sanitation Markets (Pathfinder Paper), Sophie Tremolet 2012. arate sewers help to meet the objectives of separating 22 U R BA N SA NI TAT I O N SECTO R A NA LYSIS humans from waste and minimizing contamination of Philippines 85 percent; Indonesia 62 percent) or structures the environment. similar to septic tanks that retain most of the solids in waste- water, while allowing the liquids to flow to the drains. Simi- Wastewater and septage are the major vectors for dis- larly, in most other large cities, the wastewater in households eases. Due to the use of flush toilets, the high intensity of is typically first discharged to septic tanks. A key outcome of water use, and predominance of septic tanks, the differ- the presence of these tanks is that the organic load content ence between onsite and offsite sanitation is blurred.15 In (Biological Oxygen Demand, or BOD) in the wastewater that many cases, disposal of wastewater remains a challenge as reaches the drains is lower since part of the organic load is it leaks from the septic tank and ends up in streets becom- separated through the solids that are retained in the septic ing a vector for the spread of waterborne diseases. This is tank. The implication of this is that wastewater treatment the main reason for implementing a proper drainage and systems have to be typically designed for a lower BOD level. collection system, even in areas that will still be relying on Groundwater infiltration, due to sewerage pipes in poor con- septic tanks in the future. dition, also substantially lowers the BOD level for wastewater that reaches the treatment plants. Septage management is an immediate challenge in most Asian cities. The vast majority of the urban population is Presence of combined sewer systems will influence deci- served by septic tanks which are not properly maintained sions on sewers. In most cities in East Asia, combined drain- or regulated. The three most common problems with septic age systems are used that carry wastewater from households tanks are that, when they are not working well, they: (a) fail to and rain water during wet weather conditions. Very often separate waste from humans; (b) contaminate groundwater these combined systems are not properly designed or con- and open channels; and (c) create health and environmental structed. These drains are normally designed to collect storm risks when the septage from the septic tanks is disposed ille- water and not designed to collect wastewater but neverthe- gally in areas (land or water) that are not designed to receive less, wastewater is discharged to these drains (Figure  2.3). the waste. In the East Asia region, Malaysia has an innovative During floods—which are common in East Asia—these drains program on septage management with a number of innova- overflow and create pollution due to the presence of sewage. tions, such as payment arrangements that include regularly The drains also allow significant infiltration of groundwater scheduled de-sludging. This is working well with 100 percent which dilutes the wastewater almost to the level required coverage in the areas served by the system. In Metro Manila, for effluents as seen in Vietnam. Furthermore, due to the an environmental fee is charged for all consumers for which infiltration of groundwater, the hydraulic volume that is they receive a regular septic tank emptying service. transferred to the wastewater treatment plant is increased; and the groundwater has to be treated as well as it is mixed Septage disposal and treatment is inadequate. Almost all with the wastewater, although it may not be necessary to urban centers in the region have septage management sys- treat the groundwater. tems that are run by the private sector, indicating that septage collection is financially viable. However, septage collection from households is not uniform and only a small portion of the septage collected is treated. In Indonesia, only 4 percent of urban septage is treated. In the Philippines although over Figure 2.3: Combined drainage systems in Hanoi, discharging to open channel 30 percent of septage is treated in Manila; outside of Manila, this figure falls to 5 percent. In Vietnam it is estimated that 4 percent of septage is treated. Presence of septic tanks reduces organic load, hence wastewater systems have to be designed accordingly. Most urban households have septic tanks (Vietnam 77 percent; 15 Delivering Sanitation to the Urban Poor: A Scoping Study, Draft Paper, WSP 2012. 23 URBAN SANITATION REVIEW: ACTIONS NEEDED Separate sewerage systems are being considered in many financial concerns are missing. To reduce costs, local govern- cities, which will improve wastewater management, but ments hire consultants that may not have the adequate expe- they are expensive. In some cases, especially in established rience in addressing site specific issues. Sometimes, standard part of cities, combined systems are being replaced with designs are used which results in over-designed systems and separate systems. There are pros and cons of both systems use of treatment technology that may not be cost effective. and many cities that have long had sewerage systems still As mentioned before, the issue of house connections is not retain combined sewers. For instance, London—which was looked at in detail, resulting under-used treatment plants. one of the first cities in the world where sewerage systems Furthermore, the emphasis typically is on the construction were developed—still uses combined systems. In the East of the infrastructure; however, the operational aspects—such Asian context, separate sewers may not be implemented on as the presence of a financially viable local company that can a wide scale in the near future due to costs and difficulty in collect and treat the wastewater—are not considered at the installing separated sewers in roads that are narrow and in project planning stage. densely populated areas of cities. Economic decisions on investments and operations not Household demand to connect to sewerage connections is often made. Wastewater management is a new business in low. This is a major issue in the three countries of focus. In many parts of East Asia and the feasibility studies prepared Indonesia, the Philippines and Vietnam the country stud- by consultants are often not questioned in a rigorous man- ies found a consistent hierarchy of consumer demand that ner that could lead to an optimization of the investment. For moves from: (a) access to safe water; to (b) access to a toilet the feasibility study analysis, adequate data—water quality that has privacy; to (c) effective drainage of local areas; and and quantity—are not always collected or used to make an to (d) safe disposal of waste into receiving waters. There is informed decision on the wastewater treatment technology little demand for sewerage connection if septic tanks work choice. There is also a lack of information on technology without apparent problems to the householder. Strategies are alternatives that allow decision makers to make the optimal not in place to encourage connection to sewerage systems choices that would be economic. When wastewater treatment and the regular emptying of septic tanks. Capacity utiliza- plants do not function as planned, usually it is not the failure tion is low due to low household connection rates. Sanitation of the technology—as the processes used for wastewater plans, where they exist, do not take into account the above treatment are well established. The main reasons for non- mentioned hierarchy of demand. Although, wastewater from functioning treatment plants are: the septic tanks end up in the combined drains, it would be • the cost of operations cannot be sustained by the tariffs; important to have proper house connections to sewer lines (combined or separated) as they are installed or rehabili- • household connections are not maximized or the network tated. This will prevent the discharge of wastewater to the is not fully developed; and groundwater or streets. • the operations are complex and the institutional capacity to operate a wastewater plant is not adequate. Open defecation is still practiced. Open defecation has been eliminated in Vietnam in the urban areas. However, about Investments are still not adequately phased, especially 14 and 3 percent of the urban population defecate openly for wastewater. Wastewater treatment plants are built with in Indonesia and Philippines, respectively, mainly due to over-optimistic demand projections on the volume of waste- the absence of toilets. Open defecation increases the risk of water that needs to be treated. The lack of sewer networks the population being affected with diseases. Furthermore, or optimal number of household connections contributes to it reduces the dignity of the citizens that have to defecate the inadequate demand of the wastewater treatment plant. openly and it affects equity of services in an urban society. Furthermore, the quality of the wastewater with low con- Safety, especially for women, is also an issue associated with centration of biological load is not taken into account in the open defecation that needs to be addressed. design. As earlier outlined, it is common to find actual BOD levels less than 100 mg/l in East Asian cities due to the pres- Sound project preparation is often missing. A city-wide ence of septic tanks which remove some biological load and approach to identify priorities and, thereafter, preparing a the combined sewers which allow storm water to dilute the viable feasibility study that would address technical and wastewater. However, the sophisticated technology chosen is 24 U R BA N SA NI TAT I O N SECTO R A NA LYSIS designed to handle much higher BOD loads. Overdesign—by of treatment and environmental protection over time. building a plant larger than required or using overly sophis- Connection to a well-functioning septic tank that is ticated technology—leads to higher investment and opera- de-sludged regularly and where the groundwater can tional costs which should be avoided. safely absorb the overflow is accepted as a solution; this precludes the need to build expensive sewerage and Other countries in East Asia have sequenced technical solu- treatment systems. This policy, however, requires strong tions. In East Asia, countries with a higher gross domestic regulation with meaningful fines for non-compliance. product (GDP) have also sequenced their sanitation invest- In developing the sanitation strategy, the country also ments and they serve as models: ensured that the cost and the level of treatment grew in • Korea: initially, there was a focus on collecting the waste- tandem with the wealth of the population. water effluent and on accelerating the implementation of treatment capacity. As part of this effort, emphasis Adapting to climate change presents serious challenges to was put on replacing sewer pipes through a maintenance the sanitation sector. In some areas, the balance of supply program that lowered groundwater infiltration. This, in and demand will change due to changes in the seasonality turn, lowered the volume of wastewater that was pumped of rainfall. More frequent and intense rainfall events are to the treatment plants. As sewerage collection systems expected to occur. As most of the drains in East Asia are were upgraded, wastewater management improved, a combined, there is a risk of more frequent sewage overflows greater proportion of waste was captured and treatment to the streets affecting human health and the environment was more effective. With a rapidly increasing urban during flood events. In addition, climate change will increase population and in line with growing GDP, the focus has the emphasis on water reuse in the long run, as is already moved in phases from the introduction of sewerage in the happening in water scarce regions. The reuse of nutrients and 1980s to the treatment of waste water in the 1990s to the the production of bio-gas from the sludge also offer prospects removal of nutrients in the 2000s (Figure 2.4). for the sector to contribute to climate change mitigation. As the treatment and collection of septage increases and • Malaysia: the country adopted a sequential investment as more sludge is generated through increased wastewater pattern of first investing in collection of wastewater and treatment, opportunities to use sludge and septage as nutri- then gradually increasing the level and sophistication ents for agricultural purposes will increase. Figure 2.4: Sequence of development in Korea Gross National Income (GNI) in US$ Coverage $35,000 120.00% $30,000 100.00% GNI per capita (current US$) $25,000 80.00% GNI PPP per $20,000 capita (current US$) 60.00% $15,000 Water coverage, % 40.00% $10,000 Wastewater 20.00% coverage, % $5,000 $- 0.00% 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 Source: Yoon, Joo-Hwan. 2011. 25 URBAN SANITATION REVIEW: ACTIONS NEEDED Waste to energy has not been sufficiently explored. The 2.3 SUSTAINABLE INSTITUTIONS medium to large wastewater treatment plants provide an FOR QUALITY SERVICE opportunity to generate electricity from the gases gener- ated in the plant, in spite of the low concentration of BOD in The enabling environment is not in place. The current pro- the wastewater. However, it has not been common practice grams to expand sanitation services are not comprehensive to generate electricity in the plants that are located in the enough when compared with the magnitude of the problem region. Electricity generated and used in the plants would of lack of adequate sanitation. There are important gaps help to reduce operating expenditures as energy use consti- in the enabling environment that hamper effective sanita- tutes a significant cost. Furthermore, waste to energy mea- tion management: strategies to prioritize investments are sures would also help to reduce green-house gases. As new not in place, the institutional arrangements are often not wastewater treatment plants are considered, it would be clear, and viable projects are not in place that can attract important for decision makers to consider installing infra- financing from public and private sources. Furthermore, local structure that would generate electricity. The officials in Ho sanitation service providers are not in a financially viable Chi Minh City are considering such a measure for a large position as tariffs do not meet operating costs. This makes treatment plant and the expectation is that this project would them dependent on subsidies and services (such as regular set examples for other new plants under consideration. Expe- drain clearance) are cut to reduce expenditures in case the rienced operators, however, need to be in place to derive subsidies are not adequate. energy from sludge as the operations are complex. Policies to expand sanitation services exist, but implemen- There are limited experiences on water reuse. Nutrient tation has been slow. In the three focus countries, the overall reuse, water reuse, and energy production from wastewater service targets in terms of population and wastewater to be is not common in Indonesia, the Philippines, and Vietnam. collected and treated provide a perspective on the magnitude However, there are successful experiences in the region that of the issue. can provide lessons in this field. In Korea, as part of the green • In Indonesia, service expansion policies are defined in growth initiatives, there are plans to increase water reuse and the medium-term development plans (RPJMN) produced to reduce energy use at treatment plants. Increasingly, water every five years, the National Policy and Strategies on in Korea is called the “Blue Gold” of the future. Similarly, in Domestic Wastewater Management, and through the Singapore recent advances in converting wastewater to drink- policy on minimum service standards established by the ing water have shown that concrete measures can be taken Ministry of Public Works (MPW). Although the funding for to address the issue of water shortages that many cities will sanitation has increased, the funds have not been suf- increasingly face in the future. In Singapore, the recycled ficient to scale-up sanitation where about 1 percent of water is called NEWater and it already supplies about 30 the urban wastewater is treated. After 2014, Indonesia’s percent of demand. It is expected that by 2060, 50 percent accelerated sanitation development program (PPSP, which of the water used will be recycled water. Singapore also has stands for Percepatan Pembangunan Sanitasi Permukiman) a plan to increase its supply of desalinated water and by will continue through a second phase, which will provide 2060 about 80 percent of the water will be either NEWater the Government an opportunity to develop a comprehen- or desalinated water (Table 2.1). sive program. • In the Philippines, in Metro Manila, the Supreme Court Decision to clean up Manila Bay and the requirements of the Clean Water Act have set a clear path for service Table 2.1: Meeting future water needs in Singapore expansion. It is expected that by 2037, the wastewater Imported generated in the geographic areas covered by the two Water Metro Manila private concessionaires would be fully col- Desalinated and from lected and treated. Outside Metro Manila, plans to expand Year NEWater Water Reservoirs services are less firm, although the implementation of the 2012 30% 10% Rest National Sewerage and Septage Management Program 2060 50% 30% Rest and the Government’s plans to expand urban wastewa- Source: Public Utilities Board, Singapore. ter services to reach 50 percent coverage by 2030 in the 26 U R BA N SA NI TAT I O N SECTO R A NA LYSIS 17  Highly Urbanized Cities will help to bring focus on extended. A number of wastewater treatment plants are service expansion goals. in operation in the country and more plants are expected • In Vietnam, through a decision of the Prime Minister (Deci- to be put in place in the coming years. The construction sion 1930), the Government has set a target that by 2020, of plants was made possible by the central government’s 60 percent of wastewater in cities of Class 3 and above, and policy to finance 100 percent of the investment cost. But 40 percent of wastewater in cities/towns of Class 4 and 5, while the investments are in place, there are operational should be collected and properly treated. As it would be issues that need to be addressed including insufficient difficult to implement such a large program, the Govern- house connections, financial sustainability, and inad- ment should establish priorities with an implementation equate operations. These should be areas of policy focus plan covering infrastructure and financing needs. in the country. Countries may have different paths to increase and improve Close coordination of central and local governments is nec- coverage. The starting condition in every country is different essary. Commonly, sanitation policies are set by the central and, as a result, the path to achieve higher level of sanita- government while the implementation is done by local gov- tion will vary. ernments. Thus, close coordination is needed between the two levels of governments. Each country in the region will • In Indonesia, an added policy dimension is that many have a different approach to promote coordination among parts of the urban population do not have piped water cov- agencies depending on country-specific conditions. However, erage, and water from shallow wells is used. For instance, there are three examples that are instructive: in Jakarta piped water coverage is about 60 percent. In such an environment, if septic tanks do not function well, • Malaysia achieved coordination by first centralizing the risk of contaminating the drinking water is high. Thus, sanitation responsibilities under a single ministry which apart from the efforts of improving sanitation, policy mea- allowed for unified management. Once facilities were in sures to increase piped water coverage should be taken. place, capacity was built, and the sector was strengthened Malaysia started to gradually decentralize to local gov- • In the Philippines, in Metro Manila, the plan to increase ernments which have the capacity and means to provide sanitation coverage is moving ahead and is being driven quality sanitation services; by the Supreme Court Decision to clean up Manila Bay. An ambitious program to reach 100 percent coverage on • Korea applied the principles of integrated water resources sanitation has been developed by the two private con- management (IWRM) and used the river basin approach cessionaires (Box 2.4). Currently, there are no plans to as a means of promoting coordination across sectors and provide grants for financing the improvements and the among upstream and downstream entities; and investments have to be financed through cross subsidies • In Indonesia, the Steering Committee for Drinking Water from water. This, however, may create pressure to increase and Environmental Health (AMPL) is responsible for tariffs significantly as wastewater investments do not implementing sanitation strategies. The executive body generate revenues. Outside Metro Manila, apart from of AMPL is the Pokja (working group). Both the Steering Baguio, the tourism center of Boracay and the special Committee and the Pokja are chaired by the BAPPENAS economic zones of Clark and Subic, wastewater coverage (National Development Planning Agency) and comprise is minimal. Policies and plans need to be put in place to members from the Ministries of Public Works, Health, improve septage management and wastewater collection Home Affairs, Finance, Industry, Environment, Housing, and treatment for the rest of the country. Initial work Education, and the Central Statistics Bureau. Many of the has started through the NSSMP through which the cen- Pokja members collaborate closely on water and sanita- tral government has agreed to finance 40 percent of the tion policy issues which has led to increased awareness investment cost of sewerage for the 17 Highly Urbanized on sector issues in the country. Cities. Subsidies will not be provided for septage manage- Professionalization of the sector is still underway. Sustain- ment, which is considered to be a viable operation for able urban sanitation is a relatively new business and the financing by local government or Water Districts. overall sectoral knowledge in the focus countries is still devel- • In Vietnam, there is no specific program to improve oping. In the Philippines, it is reported that there are only 500 septage management. On wastewater, although col- out of the 2,500 registered sanitary engineers practicing their lection systems exist, they have to be upgraded and profession. Decentralization has tended to scatter rather than 27 URBAN SANITATION REVIEW: ACTIONS NEEDED Box 2.4: Private Sector Success in Manila Water crisis gave birth to private participation—In 1995, the Water Crisis Act was passed, providing the legal framework for the privatization of the Metropolitan Waterworks and Sewerage System (MWSS). Private participation was implemented through a concession contract in which two concessionaires, Manila Water Company, Inc. (MWCI) and Maynilad Water Services, Inc. (MWSI) were assigned the task of operating and managing the facilities, whereas MWSS preserved the ownership of the infrastructure. MWSI was assigned to operate the West Zone with 16 cities/ municipalities serving currently around 7.2 million people and MWCI the East Zone with 23 cities/municipalities serving around 6.2 million people. The companies are regulated by the MWSS Regulatory Office. A realistic and phased strategy is delivering promising results—A Sewerage and Sanitation Master Plan (2005) proposed to increase sanitation services through collecting the wastewater through interceptors and existing combined drains and directing the wastewater to treatment plants for treatment. The strategy also involves a septage management program. MWSI and MWCI sewerage coverage is now 8 and 9 percent, respectively; and both companies plan to increase coverage to 100 percent by 2037. Currently, MWSI operates five treatment plants with a capacity of 470 million liters per day, although an additional six major and 16 smaller plants are proposed in the next phase of development. MWCI operates 33 sewage treatment plants with a capacity of over 100 million liters per day. It has two septage treatment plants and about 50 vacuum trucks that regularly clean the sludge from septic tanks in the East Zone. This is a successful experience in the region because of: • remarkable growth in treating septage (Fig. 4.4); • a comprehensive approach to collecting and treating wastewater is taken by assessing the needs of the city through a Master Plan and addressing priorities at a catchment level; • the regulatory environment is clear; • the presence of customer-oriented utilities that provide information to the consumers to improve services; and • a public-private partnership exists that has improved services on water, wastewater, and septage management. 2008–2012 2013–2016 2017–2021 2022–2037 Total Maynilad Sanitation coverage 14% 30% 60% 100% Investment cost US$113 M US$411 M US$604 M US$622 M US$1.75 B Manila Water Sanitation coverage 30% 45% 63% 100% Investment cost US$295 M US$680 M US$164 M US$481 M US$1.62 B Source: Sewerage and Sanitation Master Plan 2005. replicate or enlarge the pool of sanitation expertise. Profes- on-the-job experience through a training program run sionalization of the sector is important for building, sustain- by the national utility. This capacity building, which was ing, and replicating institutional capacity. Two examples are done at scale and at all levels, is enabling Malaysia to provided below: decentralize services. • In Korea, a national certification system was introduced in • In Malaysia, training and professionalization of sector the 1990s to improve the expertise of water treatment plant staff was carried out systematically. Cadres of sanita- operations especially for small-scale plants. This was further tion professionals—functioning at all levels—were trained formalized in 2002 by the newly established Korea Water through universities, vocational training colleges and Supply and Water Works Association which coordinated 28 U R BA N SA NI TAT I O N SECTO R A NA LYSIS the capacity building undertaken by universities, research Combining sanitation (septage and wastewater) and water institutes, government, utilities, and the private sector. supply operations is a viable solution that is not always fol- lowed. Merging water and sanitation services leads to econo- Managerial and financial autonomy for efficient service mies of scale. Furthermore, the customer base for the service provision is absent. The entity that is providing sanitation provider is the same, which facilitates billing and enforcing services at the local level is vital in ensuring that health the collection of sanitation fees. Thus, wherever possible, and environmental concerns are properly addressed. These the water and sanitation services should be merged. Such entities could be departments of local governments or a util- examples of merged utilities exist in Dalat (Vietnam) and in ity that provides sanitation services to the population. The Metro Manila. For the latter, there are no subsidies from the entities that provide sanitation services are typically finan- local governments. As the two concessionaires are private cially weak, excepting in large cities, as they do not meet entities, the water tariffs cross-subsidizes the investment and expenditures that are needed to run sanitation services. The operating costs for septage and wastewater collection and financial weakness stems from the fact that sanitation tariffs treatment, and overall the two concessionaires are profitable. do not meet operating costs and the service provider has to This illustrates that it is possible to run financially viable depend on subsidies from the local government which may sanitation operations, especially if the business is combined vary. Operational budgets are not well defined and it is dif- with water. ficult to predict revenues and to plan future investments to improve the services. The service standards are also not well 2.4 VIABLE FINANCIAL SYSTEMS defined, although there are exceptions such as the concession arrangements in Metro Manila where the two concessionaires The cost to improve sanitation is significant. The invest- have an obligation to the regulator to increase coverage. ment cost to improve sewers, construct wastewater treat- ment plants, and make other improvements on septage Except for septage management, private sector operations management is estimated to be at least around US$250 on are not viable. Aside from the successful Metro Manila case, a per capita basis16. However, it is recognized that the per the role of the private sector has been limited in the collec- capita cost would vary depending on the situation in a city tion and treatment of wastewater due to regulatory risks and the plans to upgrade septage management and to col- and low tariffs. Regulators such as the Regulatory Office lect and treat wastewater. Using a per capita cost figure of under MWSS are not yet present outside Metro Manila and US$250, the total cost to cover the urban population in the in other countries. A regulator would ensure that quality focus countries in the next 15 years is: US$42.7 billion in services are provided at economic tariffs. The risks in the Indonesia; US$23.1 billion in Philippines; and US$8.3 billion septage collection business seem low as private companies in Vietnam (Table 2.2). are involved in all three focus countries. However, the way septage is treated and disposed of should be regulated as there are concerns that septage is not being handled in an 16 Based on Manila Sewerage Master Plan and Feasibility studies for Ho Chi environmentally safe manner. Minh City. Table 2.2: Cost of sanitation Vietnam Indonesia Philippines Current urban population (million) 23 110 61 Urban population in 2025 (million) 36 172 95 Current wastewater volume 3,424 16,538 9,108 (in 1000 m3/day) Current treatment of wastewater (percentage) 10 1 4 Investment needed to collect and treat 8.3 42.7 23.1 wastewater until 2025 (US$ billion)* *Assuming a per capita investment cost of US$250. Source: East Asia Urban Sanitation Review, World Bank 2013. 29 URBAN SANITATION REVIEW: ACTIONS NEEDED Urban sanitation investments are often not guided by strat- Investments in sanitation in Indonesia and the Philippines egies or integrated into investment planning cycles. Urban are low compared to needs. In these two countries, the sanitation represents a major investment for most cities and actual expenditures have been low compared to the needs, towns. However, often these investments are not integrated creating large wastewater infrastructure and service gaps. In into the multi-annual investment planning cycle for the Vietnam, the expenditures have been around 0.45 percent of municipality as part of urban development plans. City-wide the GDP and, if this trend continues, the country would make sanitation plans or Sewage Master Plans are not commonly significant improvements in sanitation. Assuming that the developed. Accountability is weakened if city leadership is investments are to take place over the next 15 years: not well informed about the development of the sector and • In Indonesia, the annual expenditure should be around is unable to present a compelling case for investment to US$2.9 billion (or 0.33 percent of GDP); however, the the public who will ultimately be paying for the systems current expenditure on sanitation is US$920 million through taxes or tariffs. A key lesson from the city sanita- (0.1  percent of GDP), financed by the government and tion strategies pioneered by Indonesia (Box 2.5) is that these other sources. This includes a significant increase in strategies need to be city-developed, city-led and city-owned financing for the sector—mostly focused on decentral- even if there is a matching subsidy available from the central ized systems—from around US$50 to US$400 million per government. year between 2006 and 2012 (Figure 2.5). Sanitation policies and plans are not translated into funded • In the Philippines, the annual expenditure should be programs. The focus countries have sector policies, but these around US$1.5 billion (or 0.68 percent of GDP); however, policies have not translated into implementable and funded the current expenditure on sanitation is US$60 million programs with a clear expenditure framework. The potential (0.03 percent of GDP). The historical expenditure on water sources of finance such as tariffs, taxes and transfers from cen- and sanitation in the Philippines from 2001 to 2007 has tral government and the blend of loans and grants are not well been about US$72 million annually, with the bulk of the delineated. The rules that govern public transfers, tariffs, and investments being in the water sector. While the invest- the engagement of private sector finance are not uniform and ments in wastewater have been low, the NSSMP for the are determined on a case-by-case basis. As there is uncertainty Philippines foresees a first-phase, 10-year investment in the investment financing and rules to access government level of some US$641 million to serve the urban areas grants, the authorities sometimes defer investment decisions outside of Manila. which, in turn, affects the development of the sector. Box 2.5: Indonesia: City Sanitation Strategies Lessons Learned As of mid-2012, the cities in Indonesia have prepared 240 sanitation plans. The broad lessons that are emerging from the preparation of the plans are: • Ownership: The city has to take charge and have ownership of the process and the plan. This also implies that adequate institutional capacity must be in place for the cities to lead the development of sanitation plans. • Comprehensive: Strategies have to take into account not just sanitation, but also drainage and solid waste management. • Coordinated: Strategies have to involve not just the public sector, but also the private sector and civil society. Within the public sector, they should involve all the relevant departments ensuring that the planning, health, environment, and public works functions are at the core of the process. • Top-down meets bottom-up: Strategies must engage with both top down planning based on targets and bottom up planning based on community and demand-driven processes. • Evidence-based: Based on empirical data, the plans must be credible and well founded on demographic data, and be based on a thorough investigation of the existing facilities, services. and urban environmental sanitation situation. 30 U R BA N SA NI TAT I O N SECTO R A NA LYSIS Figure 2.5: Central Government allocations for urban sanitation in Indonesia Urban sanitation expenditure US$ millions 450 400 350 300 250 200 150 00 100 5 50 0 2006 2007 2008 2009 2010 2011 2012 Source: Urban Sanitation Development Program (USDP), Indonesia. • In Vietnam, the annual expenditure should be around wastewater collection and treatment. In the case of septage US$555 million (or 0.45 percent of GDP) and the current management, tariffs cover the cost of private operations expenditure is at that level (0.45 percent of GDP). A rapid of septage collection. However, the discharge of septage is increase in urban population and the Government’s deci- expected to come under more regulation leading to increases sion to improve urban services resulted in increases in in septage collection fees. In the case of wastewater, because expenditures in sanitation. In the 15-year period between operating costs are not met, maintenance is deferred and 1995 and 2009, about US$1 billion was spent or an aver- as a consequence services are inadequate. These are key age of about US$69 million per year. The expenditures regulatory issues that need to be addressed for the financial were on drains, sewers, wastewater treatment plants, and viability of the sector. An overview of the tariff story in differ- pumping stations as illustrated in Figure 2.6. ent countries is described below (and depicted in Figure 2.7): Wastewater tariffs do not meet operating costs. The tariffs • In Indonesia, the wastewater tariff varies across the country. Tariffs range from US$0.77/m3 in Surakarta to that are in place in the region do not meet operating costs of US$0.15/m3 in Banjarmasin. Other cities like Medan have Figure 2.6: Estimated share of urban sanitation a fixed monthly tariff of US$2.4 per household. Apart from expenditure in Vietnam the low tariff, another constraint is that the systems are not fully utilized—household connections are lower than the planned amounts and wastewater flows to the treat- 12% ment plants are lower than planned volumes. 16% Drainage networks • In Vietnam, there are two regulatory instruments to estab- Sewerage networks lish wastewater tariffs. The first one is the Environmental 28% Protection Fee, which is established by the Ministry of WasteWater treatment Environment. The fee is calculated on a percentage— plants about 10 percent- of billed water (Decree 67). The second Pumping and other one is the Wastewater Fee, charged by the water utilities 44% equipment on the basis of water consumed (Decree 88). The imple- mentation of these instruments is not uniform, as there Source: Hydroconseil 2010. is a wide range in the fees. Municipalities also only apply 31 URBAN SANITATION REVIEW: ACTIONS NEEDED one of the instruments. Dalat uses a wastewater fee of Wastewater companies are dependent on varying operat- US$ 0.05/m3 of water consumed using the Decree 88 while ing subsidies. As wastewater utilities are not able to recover Ho Chi Minh City charges 10 percent of the water bill costs, they rely on operating subsidies. However, these operat- using provisions of Decree 67 which translates to a charge ing subsidies are financed through the city budget and may of around US$0.025/m3 for households. In addition, the vary depending on the overall revenues and expenditures of a high operating costs of treatment plants increase costs city. This brings uncertainty to the level of service. For exam- overall, which in turn creates greater pressure to increase ple, in Ho Chi Minh City (HCMC), the cost recovery for drain- tariffs. age and wastewater management is around 60 percent.17 This • In the Philippines, the wastewater and septage manage- can be increased as tariffs are set low and a modest increase ment fee in Metro Manila is defined as a surcharge in the would be affordable. However, instead of raising the user water bill. This surcharge is presently 20 percent for all fees and making the wastewater utility more self-reliant, the households irrespective of whether they have a sewer authorities continue to provide operating subsidies. connection. This represents, on average, a sanitation fee of around US$0.12–0.15/m3 for the two concessionaires Unwillingness to charge is an increasingly common obsta- that are responsible for the provision of water, wastewater cle to financial sustainability. Government and municipal and septage management services. In the case of septage authorities are often reluctant to increase tariffs because of management, the service includes regular de-slugdging. concern about popular reaction. In Buon Ma Thuot (Vietnam), Being private companies, the two concessionaires do not surveys concluded that users were willing to pay for ser- receive operating subsidies and they have to meet all vices up to a cost-recovery level. However, once a project had their costs. However, as the wastewater tariffs are not moved into the operational stage, the authorities abandoned adequate to cover all costs (investments and operations), the planned fee structure and continued to fund the opera- the wastewater and septage management operations are tional deficit through the city budget. In many instances, it cross-subsidized by the water operations. The few urban is seen that an increase in tariff is affordable, but still the sewerage schemes operating outside Metro Manila have authorities are hesitant to increase tariffs and increase the low tariffs in the form of fixed fee per month—US$0.02 cost recovery from user fees. to US$0.7/m3 in the city of Baguio, which requires the sanitation operations to be subsidized. 17 Implementation Completion Report, Ho Chi Minh City Environmental Sani- tation Project; World Bank 2012. Figure 2.7: Selected water and wastewater tariffs Tariff USD/cubic meter 10 8 6 4 2 0 Hanoi Phnom Penh Davao Ho chi Minh Bandung Manila Chengdu Buenos Aires Jakarta Beijing Busan Ulsan Tijuana St Petersburg Konya Singapore Bogota Essen Fukuoka Aarhus Gothenburg Glasgow Source: GWI 2012. 32 CHAPTER THREE Drivers and Factors of Sustainable Urban Sanitation • Public health is the primary argument for improved This chapter presents the drivers of change for the sector and urban sanitation and environmental health. Urban living then explores the various elements that appear to influence concentrates waste and, without effective urban sanita- or facilitate change. These factors were identified through tion, there is a risk of the spread of disease through epi- the detailed country studies and are presented using the demics such as cholera, as well as the chronic effects of people, technology, governance, and financial sustainability poor health from diarrhea. Tables 3.1 and 3.2 illustrate framework used in previous chapters. the diarrheal diseases which are largely sanitation-related and a major cause of illness and death. A study carried 3.1 DRIVERS FOR SUSTAINABLE URBAN out by WSP in South East Asia on the economic impacts of SANITATION Sanitation (WSP, 2008) concluded that the health impacts had the greatest economic impact as shown in Figure 3.1. Drivers for change. The main drivers for investing in urban The four countries in the study (Vietnam, Philippines, sanitation and ensuring continuing service provision are the Indonesia and Cambodia) have a total of 400 million imperatives of ensuring public health, protecting the environ- people and poor sanitation causes 180 million disease ment, and contributing to development. episodes and 100,000 premature deaths annually. Table 3.1: The 10 leading causes of death (Low-income countries, 2004) Cause of Death Deaths in Millions % of Deaths Lower respiratory infections 2.94 11.2 Coronary heart disease 2.47 9.4 Diarrheal diseases 1.81 6.9 HIV/AIDS 1.51 5.7 Stroke and other cerebrovascular diseases 1.48 5.6 Chronic obstructive pulmonary disease 0.94 3.6 Tuberculosis 0.91 3.5 Neonatal infections 0.90 3.4 Malaria 0.86 3.3 Prematurity and low birth weight 0.84 3.2 Source: World Health Organization data quoted in Schlipköter (2010). 33 URBAN SANITATION REVIEW: ACTIONS NEEDED Table 3.2: Mortality and morbidity of infectious diseases Mortality and Morbidity Due to Selected Infectious Diseases Cause of Death Annual Deaths Annual DALYs* Lower Respiratory Infections 4.1 million 94.5 million Diarrheal Diseases 2.1 million 72.7 million HIV/AIDS 2 million 58.5 million Tuberculosis 1.4 million 34.2 million Malaria 889,185 33.9 million Measles 423,710 14.8 million Neglected Diseases 195,098 19 million Sexually Transmitted Infections 128,472 10.4 million Polio 1,195 34,399 Other Infectious Diseases 1.3 million 28.5 million Notes: *DALY = Disability-Adjusted Life Years, which is the years of healthy life lost due to disability, sickness or premature mortality. N/A = not available. Source: Global Health Council 2009 quoted in Schlipköter (2010). Figure 3.1: Losses from inadequate sanitation global economy through agricultural and seafood exports has encouraged sanitation improvements. Agricultural 35 exports from a number of Latin American countries, such Economic losses — US$ per capita Tourism 30 0 Other welfare as Chile and Mexico, were closed down because of water- Environment and sanitation-related disease outbreaks in the import- 25 5 Water ing countries, notably the United States. The WSP study Health on the economic losses from inadequate sanitation esti- 20 0 mates that the combination of inadequate water quality 15 5 and environmental conditions accounts for a significant percentage of the impact (Indonesia 25 percent; Philip- 10 0 pines 23 percent; and Vietnam 52 percent). In Philippines, 5 environmental pollution of Manila Bay has also been a powerful driver for action in the sanitation sector. 0 • Aspiration to improve quality of life is also a strong Indonesia Philippines Vietnam driver. As income levels increase and basic needs are met, Source: WSP 2008. people expect a better quality of life and environment in which they live. Figure 3.2 illustrates the correlation • The impact on the environment is a second powerful between GDP in a city and the urban sewerage connec- driver. Inadequate sanitation affects the environment tion. Cities in East Asia are engines of economic growth. As through pollution of water supplies, which renders them they continue to develop economically, income levels will unsuitable for drinking, irrigation and other purposes. rise, leading to demand for better environmental condi- Polluted water can also affect fish and agricultural pro- tions. The figure also illustrates how Jakarta and Manila duction, as well as the tourism industry, thereby having have a lower rate of sewerage connections compared to significant economic implications. Integration into the cities with similar per capita GDP. 34 D R I V ER S A ND FACTO R S O F S U STA I NA B LE U R BA N SA NITAT IO N Figure 3.2: Urban sewerage connections against city GDP per capita 20000 GDP per capita in city (current prices, US$) Seoul 18000 Guangzhou 16000 14000 Kuala Lumpur 12000 Shanghai 10000 Beijing Bangkok 8000 Jakarta Nanjing 6000 Manila 4000 Mumbai Delhi 2000 Hanoi Kolkata 0 0 20 40 60 80 100 Urban sewerage connections (%) Sources: East Asia Urban Sanitation Review. World Bank 2013; Asian Green City Index, 2011 (Siemens AG); Asian Sanitation Databook, Asian Development Bank 2008. 3.2 FACTORS FOR CHANGE Figure 3.3: Application of Kuznets curve to environmental degradation Policy makers face an array of choices in terms of what to Environmental Degradation change in order to move forward on the path towards sus- tainable urban sanitation. The Kuznets Curve—first drawn “Normal” path up to explain rises and falls in inequality as GDP grows—has also been applied to the environment to explain the observed relationship between income and pollution by illustrating how increases in GDP affect the value placed on improved environment (Figure 3.3). The Kuznets Curve has explained changes in air pollution. Changes in environmental degra- “Goal” path—the flatter the better. Economic growth with minimal dation arising from urban sanitation could follow a similar environmental degradation and least impact on human health path as air pollution and thus be potentially explained by GDP the Kuznets curve. In the first stage, increased environmen- Source: East Asia Urban Sanitation Review, World Bank 2013. tal degradation ensues as the economy grows, urbanization grows denser and waste concentrates. In the second stage, as basic services are met, a turning point is reached where Factors that positively influence change. Table 3.3 (which increasing wealth leads to adoption of waste management derives from discussions undertaken during preparation of technology and greater regulation to stabilize environmental the country reports) outlines the key factors that stimulate degradation. In a third stage, there is a recovery as pollu- positive change and pairs this with an overview of the role tion to rivers is reduced and earlier levels of water quality of the stakeholders—the public, the service provider, local return, as has been seen in most of the industrialized world. government, and central government—in that change pro- For policy makers in East Asia, the goal would be to follow cess. Further guidance on achieving sustainable sanitation is a flatter path (as depicted above) where growth in GDP will provided by examining what has been done in Indonesia to have minimal negative environmental impact. address the political economy of sanitation (Box 3.1). 35 URBAN SANITATION REVIEW: ACTIONS NEEDED Table 3.3: Factors that positively influence change Main Stakeholder(s) Responsible for This Action Factors that influence change Service Local Central (from the country studies) Public Provider Authority Authority Comments 1. People demanding change The public seeks changes to improve their quality of life. The authorities implement change to increase public satisfaction. 2. Champions among policy makers Champions help increase pushing for change awareness which stimulates willingness to make changes. 3. Disclosure of information on Disclosure by the different negative environmental impacts stakeholder categories prompts (e.g., water quality) different sorts of changes. 4. Presence and effective Legislation and regulation stimulate implementation of national and guide changes made by legislation and regulation authorities. 5. Adequate institutional capacity Institutional capacity is needed as needs to be in place a foundation for change. 6. Strategic plan for investment and Each category of stakeholder operations is in place plays a role: the public pays tariffs that support operations; the service providers seek to operate efficiently; and the authorities shape the operating environment. Box 3.1: Achieving Sustainable Sanitation—Indonesia Study Multiple steps taken over time can bring progress on sustainable urban sanitation. A study of the political economy of sanitation in Indonesia (WSP 2011) concludes that the following steps could be taken to mitigate political economy effects: (a) identify key entry points in national and sub-national policy and planning cycles, as this is crucial due to the relative inflexibility of national Indonesian policy formulation; sequence different interventions over different time scales (e.g., strengthen community-based systems before or while large infrastructure systems are being developed); (b) ensure that funding mechanisms are politically acceptable and negotiations are flexible, as this is necessary to reduce and mitigate wide opposition, particularly to multilateral loans; (c) identify the type of evidence needed from rigorous analysis that is appropriate to different target audiences: analysis and evidence from a regional comparative study on economic impacts of sanitation has had significant effects within national and sub-national governments, but it has had less effect on raising wider public awareness; (d) support efforts to increase and/or ensure clarity over institutional roles and responsibilities, as this will increase the space for demand-side accountability; (e) ensure that both government commitment on the supply side and public commitment on the demand side are supportive of investment; and (f) define sanitation more broadly to include solid waste management and drainage, as well as sewerage and wastewater. People demanding change. Public demand is potentially the not been that emphatic mainly because the public is not fully strongest and most reliable factor in promoting change. By informed about the negative impacts of inadequate sanita- and large, the public demand for change in sanitation has tion services. In addition, a greater voice for women will tend 36 D R I V ER S A ND FACTO R S O F S U STA I NA B LE U R BA N SA NITAT IO N to increase demand. In Indonesia, low public awareness has drinking water has been a strong driver for scaling up waste- been recognized as a crucial barrier to urban sanitation and water treatment as shown by the innovative practice of down- a range of innovative measures have been put in place to stream towns paying for upstream wastewater treatment. In increase awareness including a partnership with the media. the Philippines, the decision to investment in septage treat- Similarly, the case of the mandamus in Metro Manila (Chap- ment in the cases of Baliwag and San Fernando arose because ter 2) shows how concerned citizens can achieve progress in of the fear of groundwater pollution. In the cases of Bayawan improving water quality. Lack of public awareness not only and Dumaguete, the decision to invest arose because of con- hampers the ability to raise wastewater tariffs to meet higher cern over pollution of recreational coastal waters; and the costs of better services, but also affects the pace of change in local authorities of Baguio and Boracay built sewage treat- making improvements in sanitation practices such as regular ment systems after pollution incidents threatened the tourist cleaning of septic tanks or connecting households to sewers. industry. Risk of environmental epidemics such as cholera and yellow fever has also spurred sanitation improvements in Champions among policy makers pushing for change. some regions. Preventing epidemics was the original driver for Public authorities (local and national) make change hap- implementing urban sanitation in the industrialized countries. pen, stimulated by champions. A combination of drivers, an For example, in Latin America, Buenos Aires and large cities in enabling environment and catalytic factors are needed to Brazil suffered epidemics in the 19th century that prompted create breakthrough results. A driver for the public author- calls for better potable water and sanitation. After eradicating ity changes will ultimately be public opinion expressed as a cholera for more than one hundred years from Latin America demand. The extent and nature of this demand will be deter- the disease returned in 1991 and spread across the whole of mined by: (a) cultural factors which influence the level of the region within less than three years, again lending urgency tolerance; (b) the information environment which influences to programs of better urban sanitation. Similarly, the devel- the accuracy of the demand for improvements; and (c) the opment of sewers accelerated in London after the summer degree to which institutions exist to translate public demand of 1858 when the smell of untreated human waste affected into collective action. Champions are an important catalytic citizens (the situation is also known as the Great Stink). factor encouraging change. Sanitation investment, in par- ticular, is often driven by local and/or national champions. Presence and effective implementation of regulations. Effec- tive regulation is a strong driver for improving sanitation • In Indonesia, the new urban sanitation initiatives and services. Where local authorities are held to account, services new scale of funding for sanitation can be traced back are likely to improve. In Malaysia, effective regulation creates to a number of champions at the national and local lev- steady demand and scheduled septic tank emptying arrange- els. For example, in Indonesia, the association of Mayors ments have been built into the tariff. Frequent septic tank champions sanitation improvements. emptying and safe disposal has improved service provision in • In the Philippines, champions such as the mayor or a many towns. In the Philippines, the regulatory environment senior official in the local authority have often been within Metro Manila is much more effective than for other behind sanitation advances. At the national level, the cities in the country, and this enhances the effectiveness Department of Public Works and Highways is spearhead- of septage services in the capital city. Furthermore, it has ing new initiatives in addressing the sanitation problems. been shown that well-regulated septic tank emptying can Champions help achieve needed steps such as necessary be financially viable and provide an income stream both for increases in tariffs, which are often difficult to achieve private and public operation. due to concerns over affordability and public reaction, among others. Adequate institutional capacity needs to be in place to sup- port progress in the sector. Insufficient attention is given to Disclosure of information on negative environmental and training and professionalization of the sector. In Indonesia health impacts. Public worry over pollution of drinking it is estimated that the national strategy will require some water seems to be the strongest health-related concern driv- 15,000 sanitation professionals.18 In Vietnam, low capacity at ing investment in sanitation. However, other environmental concerns are also strong drivers, especially in recreational 18 PT Qipra Galang Kualita. Sanitation Personnel: Capacity Development and tourist areas. In Korea, public apprehension over polluted Strategy, March 2012, WSP. 37 URBAN SANITATION REVIEW: ACTIONS NEEDED the local level leads to long delays and cost overruns, with services is important, and the commitment of local authori- projects taking longer to progress from concept to commis- ties to promote sanitation and ensure a high quality of ser- sioning. Specialized training is needed to plan for sanitation vices is paramount. For instance in Metro Manila, the local investments and to operate the systems. Developing such authorities have ensured that the urban sanitation services training programs should be integrated in country plans to are well managed through a public-private partnership. improve sanitation. Furthermore, financing needs to be available and readily accessible. This remains a main issue in the three focus Strategic plan for investment and operations needs to be countries as capital and operating subsidies are currently in place. Local authority prioritization of urban sanitation required. 38 CHAPTER FOUR Recommendations This Chapter provides recommendations to address the by the community of the implications of inadequate sanita- main challenges in the sector and help cities to be clean and tion leads to limited political support which in turn leads to healthy. Recommendations are divided in four key areas: set- limited sanitation interventions. To break this cycle, a combi- ting up people-centered policies, implementing cost-effective nation of long-term people-centered policies are needed that technical solutions, developing sustainable institutions for would address poverty and promote behavior change. At the quality service, and developing viable financial systems same time, city-wide sanitation plans that are integrated with (Figure 4.1). urban development should be developed and implemented. 4.1 PEOPLE-CENTERED POLICIES Recommendation 1: Integrate sanitation with city development plans Overall, policies exist to upgrade services and expand cov- erage, but they need to be implemented through people- City Sanitation Plans (CSPs) needed. Clean and healthy cities centered approaches. Currently sanitation improvements are are key to eliminating water-borne diseases and improving constrained by a vicious cycle where the lack of awareness the quality of life of many people that live in the vicinity of Figure 4.1: Achieving sustainable urban sanitation ed Vi nc es Fi che Integrate sanitation with Maximize Use of consumer ab ia ie ter na m S le l city development plans fees to meet operating lic en s costs Po e-C l op Pe Promote Information, Secure capital needs Education, through Sanitation Communication Expenditure Framework Sustainable Sanitation Services Prioritize collection and Strengthen the service treatment of septage provider y n le Collect and treat rv for lit tio ab C ech wastewater at least cost e os n ua tu in Se s ic T Q sti sta t- ol Ef og In Su fe ie Adopt climate smart Develop city-wide ct s sanitation strategies iv strategies e 39 URBAN SANITATION REVIEW: ACTIONS NEEDED untreated wastewater and raw sewerage. This initiative exists clean public spaces are created and maintained. This can be in Indonesia, however the plans are not always comprehen- achieved through smart BCC campaigns, including the use sive. Due to inadequate institutional and technical capac- of social media and activities in schools and social centers. ity at the local level, the plans have not contributed to the These interventions need to be consistent and long term, and scale-up of sanitation in Indonesia. For instance, only about should be closely monitored to determine progress. Eco-Asia, 1  percent of the wastewater collected is treated. Guided by with support from USAID, has developed a 10-step promotion national policy, each city needs to set objectives that place tool kit for sanitation (Box 4.1) which draws on lessons from a urban sanitation at the core of a wider strategy for develop- number of different Asian countries and incorporates social ing a modern city environment and sustaining a healthy marketing techniques. Information and education campaigns and decent quality of life for its population. To this end, should focus on the importance of the collective gains of urban areas need to develop CSPs that will identify issues sanitation and the associated benefits on public health and and cost-effective solutions. In these CSPs, people-centered economic development. approaches should be taken as well-informed citizens will create the demand for cities to make changes. Plans need to Information technology can help to acquire information be comprehensive and realistic with confirmed funding and from citizens and shape improvement plans. Mobile phones a clear implementation schedule. are available widely in cities and also in low-income areas where sanitation services may not be adequate. Citizens can Address poverty through city-wide interventions. Untreated use their smart phones and inform local authorities about the septage and wastewater typically are found in areas where need to make sanitation improvements by sending in a short the poor live. This phenomenon is more pronounced in low description of the problem along with pictures. Citizens could lying areas where wastewater and stormwater accumulate demand various types of sanitation improvements including from other parts of the city. Thus, a city-wide solution is measures to stop open defecation, protection of children from needed where wastewater is captured throughout the city and treated before it reaches low-lying areas, affecting the population including the poor. At the same time, initiatives to eliminate open defecation such as behavior change cam- Box 4.1: Ten-Step Promotion Tool Kit for Urban paigns and financial support to the poor should be incorpo- Sanitation rated as a key part of these integrated solutions. Furthermore, Step 1: DEFINE problem, audiences and ideal the operations of septic tanks and septage collection and behaviors; treatment should be undertaken at the city-wide level given the large positive externalities of such interventions. The City Step 2: GATHER information; Sanitation Plans should identify issues and recommend cost- Step 3: FOCUS on feasible behavior for one audience effective solutions for all sanitation related services from and problem; collection of septage and wastewater to treatment by taking into account life-cycle costs (investments and operations). Step 4: STRATEGIZE long-term change goal, objectives, and impact; Recommendation 2: Design and implement behavior Step 5: PLAN short-term promotion; change communication strategies Step 6: CREATE promotional materials and activities; Social accountability should be increased. A well-informed Step 7: PRETEST and finalize materials and activities public is a strong driver in ensuring high standards of envi- for production; ronmental and urban sanitation performance. Although awareness is not the only factor influencing demand for Step 8: IMPLEMENT the promotion campaign; sanitation services, it plays the major role and forms the Step 9: MONITOR promotion process and outcomes; basis for behavior change, willingness on the part of city governments to charge for sanitation, and willingness on the Step 10: EVALUATE promotion outcomes and improve part of citizens to pay for quality services. The strategy should Source: http://www.10step-toolkit.org. be to promote behavior change so that within a community 40 R ECO M M ENDAT IO NS exposure to contaminated water and soil, improvement of are made below on how City Sanitation Plans can provide sanitation facilities for the public and especially for girls in solutions to collect and treat septage and wastewater in a schools, better management of wastewater and drains, and cost-effective manner. improvements in response time. Sanitation meetings have been conducted in Indonesia, Philippines, and Vietnam to There are three types of technical solutions proposed seek ideas on mobile phone applications. These ideas could depending on the situation. The overall technical approach be developed further to promote sanitation at the city level. in addressing sanitation can be as follows (depicted in In a rural water and sanitation program in Vietnam, mobile Figure 4.3): technology is being used to promote transparency and social accountability, as well as health monitoring and evaluation, • Type 1 homes—septic tanks or pit latrines with no con- illustrating how such methods could also be used for the nection to combined or separate sewers. This situation urban setting. occurs mainly in Indonesia. For these homes, the priority would be to ensure that septic tanks operate effectively and septage management is done properly; 4.2 COST-EFFECTIVE TECHNICAL SOLUTIONS • Type 2 homes—septic tanks connected to drains or com- bined sewers: this situation occurs mainly in the Philip- Wastewater and Septage are disease vectors and should pines and Vietnam. For these homes, the priority would therefore be properly collected and treated. Figure 4.2 illus- be to: (a) ensure that the septic tanks operate effectively trates a typical problem in East Asian cities. All human waste and septage management is done properly; (b) intercept eventually ends up in water bodies that are often open drains the wastewater coming out of the homes before it reaches located in populated areas or as septage that can be a health the water bodies. This would mean construction of inter- hazard if not properly handled. To help improve human ceptors and upgrading of existing sewers and house con- health, the risk of disease through these pathways of con- nections; and (c) treat the collected wastewater in a cost- tamination has to be reduced. Technical recommendations effective manner; and Figure 4.2: Flow of fecal matter Negative Value Direct Sewerage (no ST) Environmental Added Impact SANITATION IMPROVEMENTS Septic Tanks Energy with Sewerage Waste Water Water Reuse: Septic Tanks irrigation, NO Sewerage industry Biosolids for Other On Site Septage/Sludge Agriculture Open Defecation 41 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 4.3: Three types of technical solutions proposed Type 1: Septic Tanks with no sewers Improve construction and operations of septic tanks Ultimately connect to combined or separate sewers, when Septic economically justified Tank Type 2: Septic Tanks with combined sewers Improve construction and Intercept wastewater, improve operation of septic tanks construction of sewers Septic Combined sewers Cost effective Tank Treatment Type 3: Septic Tanks with separated sewers Bypass Septic Tank Septic Separated sewers Cost effective Tanks Treatment • Type 3 homes—septic tanks are connected to separate addition to collecting the septage on a regular basis, the two sewers or there are no septic tanks and the wastewater companies also treat the septage before discharge to a landfill flows directly to separate sewers. These situations occur (Figure 4.4 on the next page). Such an example should be often in new development areas where the construc- considered for other cities. tion of new septic tanks is not the preferred option. For these homes, the approach would be to: (a) ensure, in the Strengthen Septic tank operations and septage manage- short term, that the septic tanks operate effectively and ment. An effective septage management system can be septage management is carried out properly. However, developed through well-designed and constructed septic in the medium term, the septic tanks should be directly tanks that are regularly de-sludged; Behavior Change Com- connected to the separate sewer system; and (b) treat the munication campaigns; and a well-regulated sector, espe- collected wastewater in a cost-effective way. cially considering the operating conditions of the private companies that primarily collect and transfer the septage Recommendation 1: Prioritize the collection (Tremolet 2012).19 Financial assistance to the poor should also and treatment of septage be provided to rehabilitate the septic tanks where the design is inappropriate, construction has been inadequate, or if it is Septic tanks are prevalent in the region and their operations inaccessible for emptying (Figure 4.5). Other ways to ensure have to improve. Septic tanks will remain in place in most that septage is handled properly include: cities for the foreseeable future and effective operation of • combining billing and collection for septage management these tanks and management of septage is an integral part with water services to increase willingness to pay for the of the sanitation strategy in the region. In Metro Manila, a emptying tanks (USAID, 2010);20 successful septage management program is in place and emptying of tanks has steadily increased. The two conces- sionaires (Manila Water and Maynilad) are responsible for 19 Sanitation Markets, Pathfinder Paper, Tremolet 2012. septage management and are monitored by a regulator. In 20 A Rapid Assessment of Septage Management in Asia, USAID 2010. 42 R ECO M M ENDAT IO NS Figure 4.4: Number of septic tanks de-sludged in Metro Manila 140000 120000 100000 80000 60000 40000 20000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Maynilad Water Services Inc. and Manila Water Company, Inc. Figure 4.5: Sustainable septage management BCC SUSTAINABLE S E Regulate the Sector and Financial Support to SEPTAGE Enforce Desludging Poor HH M MANAGEMENTT • regulating the operations of the private companies that • providing financial assistance to the poor for the reha- collect septage. This includes requiring companies to pro- bilitation or construction of septic tanks; and vide information on the volume of sludge collected and • monitoring the groundwater to ensure that it is not pol- disposed, and installing Global Positioning Systems (GPS) luted due to inadequate operations of the septic tanks, to monitor the movement of the septage trucks to prevent especially if groundwater is used for drinking purposes. illegal disposal of sludge; • constructing septage treatment plants and landfills Provide appropriate on-site sanitation. If septic tanks or where the septage may be treated and discharged in an latrines are not well constructed and cause environmental environmentally safe way; or health concerns, they should be replaced as a priority. 43 URBAN SANITATION REVIEW: ACTIONS NEEDED Similarly, if no regular sewerage is planned in the areas where whether or not the home is connected to the sewer net- the pollution is evident, the immediate strategy should be to work. As the users pay, it creates an incentive for them to upgrade the on-site systems to effective septic tanks, unless consume less water and also allows the utility to generate other options exist such as communal sanitation facilities or revenues to address sanitation issues. There is a public decentralized systems through a simplified sewerage system. health reason to connect to sewers so that wastewater is not discharged to open drains in front of homes creating a health risk. Furthermore, by taking away the wastewa- Recommendation 2: Collect and treat wastewater ter from neighborhoods, the risk of contaminating the at least cost groundwater is reduced; Wastewater is a major vector for disease and should be • implementing BCC campaigns on the benefits of sanita- collected before it reaches water bodies. Most homes have tion and connecting households to sewers; and septic tanks but, due to the intensive water use and sub- • providing financial assistance to the poor to connect to optimal functioning of septic tanks, water contaminated with the sewers. The connections could be made by the waste- fecal matter is discharged from septic tanks and reaches water company and recovered over time through tariffs waterways through poorly constructed drains or combined as in the case in Vietnam. sewers. Therefore, special attention should be paid to proper Specific analysis should be carried out at the city level to collection of wastewater through: determine whether separate or combined sewers should • construction of interceptors that would collect the waste- be developed. As depicted in Table 4.1, there are certain water before discharge to the major water bodies. This is technical advantages to installing separate sewers (pump- the approach that has been followed in Ho Chi Minh City ing costs are lower, contamination during flood seasons (see Box 4.2) and also in Metro Manila. The sewer dimen- eliminated). However, it would be very expensive to replace sions should be carefully calculated to allow for proper the current combined systems in most cities with separated drainage capacity in wet weather; and sewerage systems (SSS). Also, in some cities, there may not • upgrading and construction of sewers to remove the pol- be enough physical space to construct separate sewers luted waters from neighborhoods and treat the water in and the cost of disruption would be very high. Thus, the a cost-effective way. Sewers should be properly designed decision to develop or switch to separate sewers should be and constructed to minimize infiltration and intrusion taken on a case-by-case basis and when cities can afford of solid waste to prevent obstruction of wastewater flow. it. However, once separate systems are in place, it would Simplified sewerage as a cost-effective solution should be important to: be explored as in the experience of Brazil where smaller • bypass the septic tanks in households as they would not diameter sewers have been used with shallow excavation. be needed. Two benefits would emerge by eliminating the Connection to sewers is important to remove polluted water use of the septic tanks: homeowners would not have to from neighborhoods. A higher connection rate to sewers will incur the cost of cleaning the septic tank, and the risk of ensure that wastewater generated in an area is transferred groundwater pollution due to malfunctioning septic tanks to another location for treatment. This will eventually help would be reduced; and improve the environment and reduce health concerns. This • recognize that a higher biological waste load would be approach was taken in London in the mid-1800s when the transferred to the wastewater treatment plants as the city faced sanitation issues due to urbanization (Box 4.3). In treatment of the wastewater in the septic tanks will no the focus countries, experience has been that while sewers longer take place. To this end, the wastewater treatment (combined or separate) exist, not all homeowners connect to plant should be designed in a manner that can handle them. This issue needs to be addressed by: higher levels of biological waste. Also, it would be impor- • regulating and enforcing homeowners to connect to sew- tant to ensure that the separate sewers do not discharge ers in cases where sewer lines are available in the vicinity wastewater to open channels as the health risk would of a home. In Vietnam and in Metro Manila, an environ- increase with a higher level of biological waste load. mental fee is charged as a percentage of the water bill, 44 R ECO M M ENDAT IO NS Box 4.2: Effective Urban Investment—Vietnam’s Nhieu Loc—Thi Nghe Canal Is Revived The Nhieu Loc—Thi Nghe Canal runs through the center of Ho Chi Minh City, Vietnam’s largest city. This canal once resembled an open sewer. While the canal collected rainwater and water from the Saigon River, it also received a constant flow of untreated wastewater and domestic waste from surrounding slums and seven of the city’s most populous districts. Transformation process A process of transformation leading to revival of the canal started in the 1990s. From 1993 to 2003, the city invested Vietnamese Dong (VND) 1.6 billion (about US$80 million) in providing compensation to and for resettling 7,000 households living in slums along the banks of the canal. Efforts were also made to improve the functioning of the canal, including limited dredging and structural investments. In 2002, the World Bank became involved in the revival efforts by funding the Environmental Sanitation Project. About US$317 million was spent to support major works including sediment dredging within the canal and the installation of a sewerage network to intercept and collect domestic wastewater. Nearly 60 kilometers (km) of pipes were laid under the canal, creating an expanded wastewater network in the city center. A pumping station was connected to the network to safely collect and dispose of wastewater and to reduce tidal and storm-water flooding in the city. Along the canal, another program of resettlement of families was necessary followed by a rehabilitation and reinforcement of 18 km of the canals’ embankments. The collected wastewater would be treated through a treatment plant that is being planned under the proposed Second HCMC Environmental Sanitation Project. Project achievements The project has directly benefitted 1.2 million people in HCMC with improved sanitation, provided 400,000 people with flood protection infrastructure, and revitalized the polluted canal so that it is now clean enough to host fish. These accomplishments are a source of civic pride to all the city’s residents. The lessons learned from the Nhieu Loc—Thi Nghe area are now being applied to upgrade the Tan Hoa Lo Gom Canal, through the Bank’s HCMC Urban Upgrading Project aiming to improve living conditions in the poorest neighborhoods. BEFORE…. AFTER…. 45 URBAN SANITATION REVIEW: ACTIONS NEEDED Box 4.3: Sanitation in the United Kingdom England was one of the first areas of the world to urbanize and it went through some of the sanitation issues that are seen in East Asia today. By the late 1700s, citizens of London had access to water through wells and from the Thames River. Sewers were also in place to carry grey water and ‘night soil’ men would remove the excreta from cesspools and sell to farmers for fertilizers. However, from the beginning of the nineteenth century, a number of factors emerged that worsened London’s sanitary conditions leading to cholera epidemics in 1831, 1848, and 1853: (a) the population of London increased rapidly and between 1800 and 1860—trebling to nearly 3 million; (b) cesspools started to be connected to the sewer lines that were discharging to the Thames; (c) the water consumption per household rose from 160 to 244 gallons/ day due to the introduction of Water Closets; and (d) the market for human waste as a fertilizer collapsed with the introduction of guano imported from South America. In the summer of 1858, the Thames and its tributaries were carrying raw sewage. It was also a hot summer that led to foul odors affecting the population and members of the Parliament (located next to the river). The unsanitary conditions of the summer are referred to as ‘The Great Stink’ which was a driver in the enactment of the Metropolis Management Amendment Act and which led Joseph Bazalgette to design and plan a series of interceptor sewers on each bank of the Thames to collect the wastewater and then discharge it well downstream of London. This approach is similar to that being followed in HCMC and Metro Manila. Starting from the mid-nineteenth century, the sewerage system developed further to the current modern system that is effective in treating pollution. Five key lessons for sustainable development of urban sanitation can be distilled from the United Kingdom experience: (a) public awareness of the benefits of sanitation; (b) public acceptance of the fair cost, and a willingness to pay for it; (c) public representation and effective powers to influence service provision; (d) legal framework for service providers and their duties; and (e) financial sustainability of service providers. Later refinements of the England and Wales sector involved practical organization of service providers and division of responsibility between those providing the service and those safeguarding the standards: (a) water and sewage should be a unified service; (b) service providers have physical boundaries which are coincident with natural drainage boundaries (e.g., river catchment areas), which make it easier to coordinate water resource development and environmental management; and (c) regulators with effective resources and legal remedies are provided for quality of service and cost of service. Figure 4.6: Improving household connectivity BCC Regulating Household IMPROVING Financial Support to connections C CONNECTIVITYY Poor HH 46 R ECO M M ENDAT IO NS Table 4.1: Pros and cons of CSS and SSS Pros Cons CSS • Collection system is economical as it uses existing • Pumping costs are greater because of higher water channels volumes • Polluted water from the streets during rain events is • Odor generation collected and treated SSS • No need for septic tanks • It is expensive to construct a dual collection system • Pumping costs can be less • Runoff from the streets during rain events is not collected and treated Minimize the number of treatment plants in a catchment than 100,000 people where the per capita biological waste area. Investment costs of wastewater treatment plants generated is 60 gm of BOD5). The per capita operating costs (WWTPs) drop substantially on a per capita basis with an also decline substantially with larger treatment plants. Given increase in size. Thus, in principle, the goal should be to maxi- that investment and operating costs of larger treatment plant mize the size of a treatment plant for a particular catchment are lower compared to smaller plants, the approach should be area through the construction of sewers to take the polluted to build larger treatment plants which would minimize the water away from the residents. Decisions on an optimal num- number of treatment plants in a city. This will also make it ber of treatment plants in a catchment area should be made institutionally less complex if the number of plants is limited. based on sound financial and technical analysis at the catch- Such an approach of having centralized treatment plants has ment area level, taking into account the life cycle of a plant been followed in other parts of the world including Korea and including the cost of land, cost of operations, cost of sewer China, where urban sanitation improvements were steadily networks, and cost for the wastewater treatment plant. From achieved. the examples below (Figure 4.7), it is seen that economies of scale start to appear when treatment plants are designed for Low-cost technologies for wastewater and septage treat- more than 100,000 Population Equivalent (i.e., serving more ment should be chosen to make operations viable. The Figure 4.7: Investment cost of wastewater treatment plants in Brazil and Germany Investment cost of WWTPs worldwide 1000 (2013 price level) 900 800 Germany CAPEX net (US$/PE60) 700 Brazil 600 500 400 300 200 100 0 0 100000 200000 300000 400000 500000 Population Equivalents, capacity (PE60) Sources: Buchauer, K. 2012. 47 URBAN SANITATION REVIEW: ACTIONS NEEDED choice of technology is important, as it determines the finan- electricity. However, the anaerobic processes also have cial and operational viability of a treatment plant. Two factors some disadvantages: operation is sensitive to the biologi- should be considered while determining the suitability of a cal load and temperature, it does not remove nutrients technology: (phosphorous and nitrogen), and it can produce odors and corrosive gases (Libhaber, Orozco-Jaramillo, 2012). • low life-cycle cost, which is a combination of investment and operation cost. Treatment facilities that have high Recommendation 3: Adopt climate-smart operational costs are often not run properly due to lack of sanitation strategies funding. A lower operating cost also reduces the pressure to increase tariffs. If higher effluent quality is required, it Flooding and climate change uncertainties should be inter- can be achieved by combining various low-cost processes nalized in the feasibility studies. Most cities in East Asia have into a single treatment plant (Libhaber, Orozco-Jaramillo, combined systems, and for that reason drainage deserves the 2012). The price of land for the construction of a treat- same importance as sewerage. Before sewer networks are ment plant is an important factor and should be taken constructed there should be a monitoring system established into account in determining the life-cycle cost; and to measure flows and pollution concentrations to optimize operations. Rainfall analysis should also be undertaken to • phasing investments, very often the hydraulic and the ensure adequate dimensioning of the pipes. When construct- biological load of the wastewater does not materialize as ing new or upgrading combined sewer networks, the following planned, immediately after a new treatment plant comes three objectives should be kept in mind: on line for operations. This is because it takes time to build a comprehensive sewerage network to collect waste- • the network should have enough drainage capacity to water from a catchment area. As it is economical to mini- avoid floods in a city. Apart from increasing the sewer mize the number of treatment plants, the approach taken pipe size which can be expensive, other options should be should be to phase the construction of the treatment considered to reduce surface run-off such as permeable plants to meet immediate wastewater flows and allow pavements, storm tanks, soakaways, infiltration trenches expansion in the same location to meet future demands. or green roofs. Such measures are becoming increasingly popular in many parts of the world to reduce operating The type of treatment chosen would have to be case specific. costs of wastewater systems. There are many types of technologies that are available to treat • the network should minimize the discharge of sewage wastewater, and the choice of the technology would depend on into water bodies to reduce risks to human health and the site-specific conditions and the operational cost recovery improve the environment. Innovative solutions such as goals. As many East Asian cities are close to the sea, the option variable Combined Sewer Overflows or bypasses could be of using sea outfalls may be considered after adequate level of used that would control the volume and concentration of treatment. Constructed wetlands are also popular in China to wastewater that reaches a treatment plant; and remove nutrients (nitrogen and phosphorous) and could also be considered for the countries of focus. Anaerobic treatment • the network should maximize the biological load to the processes are not common in East Asia, but they should be treatment plant by connecting as many houses as possi- considered along with the aerobic processes: ble. Furthermore, groundwater infiltration to the sewerage pipes should be minimized through proper construction • aerobic treatment options are used in most countries techniques: to reduce the volume of water that is carried in East Asia, as the technology is well established and in a network so that pumping costs are minimized; so commonly used in the region. However, the energy con- that excess capacity is in place to carry storm water as sumption for aerobic treatment is higher compared to needed; and to ensure that dilute wastewater does not anaerobic options; and flow into the treatment plant as this would result in low utilisation of the plant. • anaerobic treatment, which is a cheaper option, as the construction is simpler and there is no need to intro- Solid waste management should be part of the sanita- duce oxygen into the wastewater. In addition, there is tion strategy. This is particularly true when considering less sludge generated compared to an aerobic process the illegal dumping of garbage in the streets that ends up and methane from the plant can be used to generate clogging drains and sewers, leading to floods (which have 48 R ECO M M ENDAT IO NS become more intense due to climate change) or discharge of management involves many institutions and incorporates untreated wastewater into the streets. Operation and mainte- many different sectors including finance, health, urban devel- nance costs of sewerage considerably increase due to blocked opment, and the environment. Policies, laws, and regulations drains. Therefore, solid waste management should be part of have to be tackled at the same time at the central and local the sanitation strategy. Behavior Change Campaigns are also levels for effective sanitation management. While the three important so that the population is aware of the importance focus countries of Indonesia, Philippines, and Vietnam have of not illegally dumping waste in drains and water bodies. policies to increase sanitation, the implementation of these policies needs to be accelerated. Options to convert waste to energy should be explored. Generation of electricity from the sludge in the wastewater Recommendation 1: Develop city-wide treatment plants has not been fully explored. Electricity gen- sanitation strategies erated in the plant could reduce the overall energy consump- Ensure that a comprehensive national program for urban tion in wastewater treatment plants reducing the operating sanitation is in place. As the previous sections demonstrate, costs. The conversion of methane to electricity also reduces sanitation improvements have not been uniform across the carbon emissions contributing to efforts to mitigate climate three focus countries and much more remains to be done. change. Best experience should be sought to analyze the A comprehensive action oriented program with targets and viability of incorporating energy recovery technologies on a funding is needed in all countries to improve services. In case-by-case basis and it should be adequately reflected in Indonesia, Philippines, and Vietnam, national programs exist the feasibility studies. Converting waste to energy, however, but they need to be strengthened in the following ways: requires skilled operational techniques and such institutional capacity needs to be in place for sustained energy generation • prioritize investments. Based on the needs, priorities from wastewater treatment plants. for improving sanitation in various parts of the country should be established. These priorities could be based on Sanitation by-products have value that can influence sani- health or environment indicators or regional develop- tation management. There are two by-products of wastewa- ment priorities. The priorities should be linked with short, ter treatment that have monetary value and can be a factor medium and long term targets that should be periodically in sanitation management (Tremolet 2012): revised every three to five years. Decisions on establishing priorities should be based on economic principles and • reused water can be used for agricultural purposes and taking into account the concerns of the poor; can be factored into the overall supply of water if the treatment level is adequate. The cost of irrigating urban • institute a strong coordination mechanism. To overcome spaces and golf courses can be reduced if re-used water the issue of institutional fragmentation, there should be is used. Aside from irrigation, re-used water is used for a lead national agency appointed to coordinate the devel- drinking purposes in Singapore which has set a bench- opment of sanitation planning among agencies, ensure mark in the region on the potential use of wastewater. that public financing is in place, strengthen the service However, there are risks to public health if re-use of the deliverers, and monitor progress; and water is not properly regulated; and • make public funding available. Large amounts of pub- • bio-solids for fuel or fertilizer is also an important by- lic sector funding would be required to make progress product from wastewater treatment plants. The use of in sanitation—at least US$250 on a per capita basis. A the bio-solids is increasing in the region but again there financing plan should be in place to support the priori- is need for regulations and their enforcement to promote tized investments. To this end, Ministries of Finance of the good practices in handling sludge. respective countries should be involved as a key agency that would inform the sector ministries on the availability of resources which in turn would help to identify priority 4.3 SUSTAINABLE INSTITUTIONS FOR investment actions. QUALITY SERVICE City-wide-wide economic solutions should be pursued. Sanitation is a complex business and the policy and institu- Urban development plans include population projections, tional environment has to be well adapted. Urban sanitation development plans for different areas in a city, ways to 49 URBAN SANITATION REVIEW: ACTIONS NEEDED address informal settlements, and infrastructure develop- investments, comprehensive analysis should be carried out ment plans such as roads and housing. These are important to assess the interests of the stakeholders and to identify factors that need to be considered in preparing City Sanita- incentives and potential winners and losers (WSP 2011).21 tion Plans that should cover the entire city, including the poor. Support to the poor would entail: The approach in addressing sanitation should be as follows: • Eliminating open defecation (OD). As mentioned earlier, • A City Sanitation Plan—a strategic document that out- OD is a problem in many cities and this issue needs to lines the need for better sanitation based on local condi- be addressed as a priority to improve the dignity of the tions and presents broad solutions—should be developed residents that have to defecate in the open. Reducing open for urban catchment areas before any decision on invest- defecation also creates equitable service provision and ment is taken. The City Sanitation Plans should be used improves the overall environmental condition in a city. to secure financing from central and local government Open defecation is more prevalent in Indonesia and in the entities. Furthermore, the City Sanitation Plans should Philippines. In Vietnam, open defecation is not prevalent. ensure that the local government will be in charge of • Improving access to finance for the poor to improve sani- delivering the services. Once a City Sanitation Plan is in tation. The private costs borne by the poor to connect place, detailed investments have to be prepared through to the sanitation network and in constructing toilets or feasibility studies. City Sanitation Plans should have a upgrading septic tanks should be supported, as needed. monitoring plan to determine progress on sanitation. Micro credits, revolving funds, micro-guarantees or micro • Prioritized options that take into account the ‘big picture’ insurances, direct subsidies, vouchers, collective credits, should be progressed considering life-cycle costs compris- and ex-post subsidies linked to results, are mechanisms ing investment and operating costs. There may be social to be considered (IRC, 2011). In addition, the use of block- obligation exceptions where sanitation facilities, although tariffs for sanitation services or targeted subsidies could not economic, are required solely for health improvement be considered. reasons, to support the poor through community sanita- • Improving services in informal settlements. Sanitary tion facilities or to eliminate open defecation. conditions are often worse in informal settlements as Urban planning must account for availability of land for the urban density is high and wastewater and septage septage and wastewater treatment facilities. To reach econo- is not properly collected and treated. Slum upgrading mies of scale, it is important to minimize the number of programs need to address the issue of better wastewater wastewater treatment plants in a city. To this end, advance and septage management, similar to the approach taken planning is required to determine the availability of land for in the Nhieu Loc Thi Nghe (NLTN) area in Ho Chi Minh wastewater treatment considering issues such as current and City. Slum upgrading is not an easy task and the politi- future population density, zoning plans, flood potential, the cal and legal barriers should be addressed to improve topography, and the drainage systems. These elements have services. In addition, multiple levels of consultation and to be factored into the overall life-cycle cost. The availability direct engagement with households should be conducted of land will be a key factor in determining the type of treat- (WSP 2012).22 ment and the length of sewers that would lead to a wastewa- ter treatment plant. Land as well as being expensive is also Recommendation 2: Integrate urban politically contentious when it is to be used for wastewater water management treatment because of the “Not in My Backyard” (NIMBY) syn- drome expressed by residents. The siting of septage treatment Robust regulatory environment should be in place to jointly facilities also has to take into account the NIMBY syndrome address water and sanitation issues. A regulatory envi- and the environmental effects of sludge transportation. ronment at the local level that ensures quality of service at economic costs is paramount. As sanitation is linked to Concerns of the poor should be incorporated in the City water supply, the business of providing water and sanitation Sanitation Plans. The poor constitute a large portion of the 21 Evaluating the Political Economy for Pro-Poor Sanitation Investments. urban population (Indonesia 18 percent; Philippines 13 per- Research Brief, WSP 2011. cent; and Vietnam 6 percent) and their concerns need to be 22 Delivering Sanitation to the Urban Poor: A Scoping Study, Draft Report, WSP taken into account. In preparing CSPs to support pro-poor 2012. 50 R ECO M M ENDAT IO NS Figure 4.8: Scheme of an effective water and wastewater urban utility Staff Technical Capacity Public Awareness/ Commercialization Effective IEC Effective of Services Urban Water and Wastewater Utility Efficient Provision of Customer Focus Integrated Urban Water Services Water S Septage Sew Sewerage Drainage Dra Supply Man Management services should be jointly regulated. A robust regulatory envi- would meet the health and environmental improvement ronment should be combined with institutional strengthen- plans of cities. Countries that have made improvements in ing to provide the incentives and means for service providers sanitation have utilities that provide these services in cities to enhance their performance. Good practice emerging from and such a model should be followed in the EAP countries. regional and global experience points to the importance of: Examples include Metro Manila which is served by two pri- (a) recovering through tariffs, to the greatest extent possible, vate companies, and public utilities in Vietnam. The advan- the costs of services that meet the health and environmental tage of having a commercial operation is that the operating improvement plans of cities; (b) achieving economies of scale costs and revenues are transparent and available to pub- and thresholds of technical expertise by integrating water lic officials who can make the necessary improvements to and sanitation services under a single utility (see Figure 4.8); strengthen the utility on institutional and financial matters. (c) establishing regional water and sanitation companies that In addition, four other factors should be considered to pro- can support services to small satellite towns, incorporating mote commercialization of sanitation utilities: also septage management, and drainage; (d)  closely moni- • Wherever possible, merge the water and sanitation ser- toring and regulating utilities while providing an effective vices so that they are provided by a single utility. Water complaint procedure and an avenue for citizen participation and sanitation services are closely connected and a and (e) considering city level interventions as part of wider single bill can be used to recover the costs. In the EAP catchment and basin management plans. countries, such an approach is possible as water ser- vices, if provided by the local government, are metered. Urban sanitation services should be commercialized. There The exception may be in Indonesia, where piped water are costs involved in delivering sanitation services and these service coverage is not high. In such a case, the provi- costs should be recovered to provide quality services that sion of piped water services may also be considered if 51 URBAN SANITATION REVIEW: ACTIONS NEEDED it makes economic sense, along with improvements in carrying out operations in a sustainable manner. Optimiz- the institutional arrangements. ing the operations of a treatment plant requires experience to balance energy consumption and biological load reduc- • Determine the possibility of establishing regional water tion. Wherever possible, training should be provided to the and sanitation companies. To achieve economies of scale operators so that they are able to maximize the reduction on institutional and financial matters, agglomeration of of pollution at the least cost. Water associations are present utilities should be considered.23 The urban service pro- in the focus countries and they play an important advocacy vider can offer support to the outlying smaller towns and role in promoting the water sector. These water associations suburbs that would have difficulties in providing services or similar agencies should also take up the cause of sanita- by themselves. Vietnam has water companies that serve a tion to improve services. In Korea, professional associations province and they could take on such a responsibility to have become a knowledge management hub for urban provide water and sanitation services to the entire prov- sanitation and contribute to sector capacity by encourag- ince. In the Philippines, outside Metro Manila, there are a ing viable career paths for those that enter the profession. number of small water service providers and their func- Such associations can also serve a lobbying function and tions also could be consolidated. Examples of regional ensure that codes of practice are kept updated. companies that provide water and sanitation services exist in China, Korea, Malaysia, United Kingdom, Brazil, and other countries. Ideally, these utilities should also be Set up monitoring and evaluation systems. A monitoring responsible for the provision of septage collection and program should be incorporated in a city-wide sanitation disposal (directly or through subcontractors) and drainage plan and used as a management tool to determine progress. operations, since wastewater is usually collected through The monitoring system should include parameters such as a system of combined sewers and overflows. number of people served, volume of septage and wastewater collected and treated, improvement in health conditions, • Regulate the operations of the utilities. The performance improvement in water quality, reduction in the pollution load of the utilities in service delivery should be monitored discharged, energy spent per kilogram (kg) of BOD treated, by the local or central governments and improvements and financial cost recovery through tariffs. should be made on a continuous basis. A regulator should be responsible for: regulation of services provided by a 4.4 VIABLE FINANCIAL SYSTEMS utility, including penalties for non-compliance; defin- ing and overseeing the tariff system; and monitoring the The cost of improvements in sanitation will be high. Careful performance of utilities. In Vietnam, the Government is planning is needed to ensure that resources in a country are planning to create a benchmarking system on the per- well spent to address priority investments that will contribute formance of the water and sanitation companies. Once towards shared prosperity through better sanitation. such a system is in place, it would greatly help to improve the services of the water companies. The two concession- Recommendation 1: Secure capital needs through aires in Metro Manila are also effectively regulated by the a sanitation expenditure framework public authorities which are factors in the improvements in wastewater and septage management in the city. In A well-defined sanitation expenditure framework needs the Philippines, the Government is also considering the to be in place with sources of funding identified. Figure 4.9 establishment of a national regulator. illustrates how the financing for the sector in Indonesia and • Develop institutional capacity at the local level to effectively Philippines has been low compared to the needs. To improve manage sanitation. The sanitation business is relatively urban sanitation, the countries would have to spend more new in the focus countries and as a result, professionaliza- resources. The expenditure framework would outline the tion of the sector is not yet complete. Sector expertise needs costs to improve sanitation; define priorities and related to be in place so that policies are implemented by local costs; identify sources of financing, establish mechanisms authorities by implementing investments effectively and on funds flow and financial management arrangements; outline plans to prepare projects along with expected targets 23 Gaining Operational and Managerial Efficiencies Through Water System and monitoring plans; and identify viable projects for the Partnerships; US Environmental Protection Agency, October 2009. short, medium and long term. Such frameworks have been 52 R ECO M M ENDAT IO NS Figure 4.9: Annual investment: current versus needed limited in East Asia with certain exceptions where land developers have built small sewerage 3000 networks and treatment plant where the costs Current Annual have been recovered through the sale of new 2500 Investment property. Such schemes, however, can be repli- Annual Investment cated in other areas where the value of the new 2000 Million US$ Needed property sold is high. For instance, the Govern- 1500 ment of Malaysia introduced a policy that obliges housing developers to build sewerage systems 1000 for areas comprising more than 30 households or 150 people equivalent. The government effec- 500 tively made use of a real estate growth to fund sewerage and urban sanitation infrastructure. 0 It did this through building codes that made Indonesia Philippines Vietnam wastewater infrastructure mandatory for new Source: East Asia Urban Sanitation Review, World Bank 2013. developments and by charging for connection to existing systems. prepared for the countries that joined the European Union recently as they had to develop a plan to meet European Regulatory changes are needed to attract commercial capi- Union requirements on water quality within a fixed period. tal and private operators. Under the current circumstances, While each country in East Asia will have to develop the where tariffs do not meet operating costs and the regulatory expenditure frameworks based on country and sector condi- environment is not clear, commercial financing for the sector tions, these should include: has been limited. An exception is the case of Manila, where Manila Water and Maynilad have embarked on an ambitious • investments: (a) review sector needs through a country- investment program to have full wastewater coverage in the wide assessment; (b) prioritize cities where activities city. The companies are raising commercial financing for the need to take place based on criteria such as environment, investments and, since wastewater tariffs are low and the health, and regional growth objectives; (c) estimate over- companies do not receive grant financing, the investment costs all investment costs for the priority cities; and (d) define would not be recovered through wastewater tariffs. Thus, cross a financing policy for the sector which would include a subsidization from the water business would be needed. This plan of recovering investment costs through tariffs and case in Metro Manila demonstrates that it is important to: the use of subsides that are fiscally affordable; and • have an economic regulator that will ensure that quality • operations: (a) develop clear policies to increase waste- services are provided at economic tariffs. The regulator water tariffs; and (b) develop plans to phase-out operat- will ensure that tariffs are adjusted to meet regulatory ing subsidies. This would include plans to use treatment requirements on the service levels; and technologies where operating costs are low. • merge the water and sanitation services. Such an approach The sanitation expenditure framework has to be linked with allows common billing and a cross subsidy between water the fiscal plans of central and local governments. The bulk and wastewater. In the medium to longer term, however, of the investment financing will be from public resources as wastewater tariffs have to increase to reach cost recovery seen through various examples in the world. Given the large levels and the public needs to be informed about the need public good element of universal sanitation, public invest- to raise wastewater tariffs. ment for sanitation is justified. However, the public invest- ments for sewerage and wastewater treatment would have The funding strategies have to be developed with a wide to be fiscally affordable and sanitation investments should range of central government ministries. Improving sanita- be carried out in their order of priority. tion management involves the local governments for imple- mentation issues, but a wide range of central government Private financing of infrastructure in new developments is agencies should also be involved. Apart from the sector agen- possible. Overall, private financing for the sector has been cies, it would be important to include the ministries and 53 URBAN SANITATION REVIEW: ACTIONS NEEDED departments that are responsible for finance and economic finance urban infrastructure development, as seen in the planning. Key decisions on setting priorities, government sup- rapid increase of water and sanitation investments (Fig- port for sanitation, and institutional arrangements should be ure 4.10). Korea has a remarkable achievement of increasing taken by a wider range of central government agencies that the national coverage of sewerage network for its citizens address issues on the economy, finance, and the sector. In from 39 percent in 1992 to 76 percent in 2002. This was partly the focus countries, there are explicit policies that the central financed through liquor tax revenues. Liquor tax collected by government would provide support for investments which the national government was transferred to the local govern- makes their involvement critical: ment, through the Local Subsidy Program to support road construction, water quality protection, agricultural and fish- • Indonesia: the DEWATS program been funded by the ery development, youth education and rural development. It central government through the PPSP program and this is estimated that between 1992 and 2002, about 7 trillion won program is expected to be in place until 2014; was spent on sanitation investments (sewers and wastewater • Philippines: the NSSMP stipulates that 40 percent of the treatment) of which about 28 percent was financed through investment cost for sewerage in the 17 Highly Urbanized the liquor tax revenues. Cities will be financed by the central government and funds have been allocated in the budget for 2013; and There will be private investment costs for which the poor • Vietnam: Sanitation investments have been mainly may need to be supported. Most of the expenditures will financed by the central government through grants, based be for public investments in sewers and wastewater treat- in inter-governmental policies on transfer of funds. ment plants. However, there are private costs for individual homes to either upgrade septic tanks or to connect to sewers Innovative sources of finance can help in the medium term. or combined drains once a new network is installed in front Countries that have achieved close to universal coverage, or of a house. Homeowners may have difficulties in accessing which are well on their way, have often used highly innova- funds for the investments to connect to the sewer network. tive sources of finance. In Brazil, funds for urban sanitation To support homeowners—including the poor—microcredits were provided through a workers pension fund (Fondos de could be provided which would allow the homeowners to Garantiapor Tempo de Servico). In China, the Urban Mainte- pay for the cost over time, which would offer an affordable nance and Construction Tax was introduced in 1985 to help scheme. An example of such a scheme is in Santiago, Chile which has 97 percent sewerage connection. This was pos- sible through a financing model introduced by the Municipal Works Company of Santiago which provided different loan Figure 4.10: Investment in water and sanitation systems for the poor, depending on the extent of poverty.24 in China (1953–2008) It has been seen that hardware subsidies of some form usu- ally play a critical role in expanding access to sanitation in Yuan million poor areas, just because lump sum initial investments are 60000 the most common barrier for poor households (WSP, 2010). Results-based financing (RBF) also contributes to realign 50000 incentives and foster more equitable and efficient services Water for the poor. An interesting form of RBF is to support sup- 40000 Sanitation pliers to provide them with incentives to prioritize the poor 30000 (WSP, 2011).25 When this kind of subsidy is provided on an output basis rather than an input basis, it can be effective 20000 at stimulating demand and leveraging private investment. 10000 24 Sanitation Financing Models for the Urban Poor, International Water and 0 1953 1963 1973 1983 1993 1998 2003 2008 Sanitation Center, November 2011. 25 Identifying the Potential for Results-Based Financing for Sanitation, WSP, Source: China Small and Medium Towns Overview, World Bank, 2012. 2011. 54 R ECO M M ENDAT IO NS Recommendation 2: Maximize the use of consumer Public support for the investments could be justified given fees to meet operating costs the environmental externalities. However, operating subsidies financed by taxes should be avoided to promote economic Wastewater costs should be fully paid by the polluter or operations. It is critical that sector financing plans jointly user. In Vietnam, the wastewater charges are a percentage of take into account the resources that can be used from the ‘3T’ the water bill. In the case of Metro Manila, this also includes areas—tariffs, taxes (local), and transfers (from the central septage management services. This is a practical approach government). Figure 4.12 illustrates how different countries as the water and sanitation sectors are linked. Wastewa- in the world have financed their water and wastewater opera- ter charges should meet operating costs and by linking the tions through a combination of the 3Ts. The level of financ- water and wastewater fees, incentives are created to mini- ing through tariffs in the three focus countries is low (less mize water consumption and thereby reduce wastewater than 20 percent), indicating the need for tariff reforms as the generation that would have to be collected and treated. In economy grows and as ability and willingness to pay increase. the East Asian countries, wastewater charges are normally less than 20 percent of the cost of water. However, this will Block tariffs are a practical way to support the poor where change over time as operating costs increase to collect and water supply systems are in place. For operational expenses, treat the wastewater. Figure 4.11 shows that in high-income while tariffs have to increase to meet costs, there are cases countries (Germany, Denmark, Australia, United Kingdom), where these increases may also not be affordable to the poor. the cost of wastewater is just as high as water. Targeted direct subsidies (income assistance) can be provided to the poor to help them pay for the utility expenditures. Dependence on taxes to meet operating costs should be This is the most efficient way to help the poor, however, it phased out. Tariffs in the three focus countries are not ade- is administratively difficult as a database on the recipients quate to cover operating expenditures, and the difference of the financial assistance has to be maintained and regular is covered through operating subsidies generated through payments have to be made by the local government authori- local taxes. Subsidies, if used, should be directed towards ties. Another way to assist the poor where there are water capital costs rather than operation and maintenance costs. supply systems in place would be through a block-tariff Figure 4.11: Comparison of average tariffs in selected countries 9 8 Waste water tariff 7 (USD/m3) 6 Water tariff Tariff US$/m3 (USD/m3) 5 4 3 2 1 0 Denmark Australia Germany UK France Canada USA Japan Turkey South Korea Mexico China India Source: Brown, Hector. 2012. 55 URBAN SANITATION REVIEW: ACTIONS NEEDED Figure 4.12: Estimated shares of tariffs, taxes and transfers in water and sanitation finance 100 90 80 70 60 transfers % 50 taxes tariffs 40 30 20 10 0 Armenia Austria Czech Egypt Ethiopia Georgia Korea Mexico Moldova Mozambique China Indonesia Philippines Source: OECD 2009. Vietnam system where the water and associated wastewater tariff 4.5 IMPLEMENTATION ROADMAP would be low below a certain threshold (say 5  m3/month/ household). Tariffs above the low consumption threshold Comprehensive interventions should be made to make have to be higher to offset the revenue impact on tariffs made improvement in the sector. The recommendations men- available to the poor. This system is easy to implement and tioned is summarized in a roadmap that can be made coun- is already in place for water tariffs in Indonesia, Philippines, try specific with the agreement of the major stakeholders— and Vietnam and many other parts of the world. In the region, central government, local government, service providers, and as the tariffs are revised for wastewater, the use of a block citizen groups (Table 4.2). Following the actions laid out in the tariff system should be considered. short, medium, and long term will help to create sustainable sanitation services in the urban areas. 56 R ECO M M ENDAT IO NS Table 4.2: Roadmap to sustainable sanitation services in urban areas Recommendations Actions Short Term Medium to Long Term People-Centered Policies Integrate sanitation with city • set objectives, priorities and realistic targets • integrate sewage and septage management development plans • ensure low income and peri-urban areas plans with urban development plans are served • train related officials and personnel • involve the public in the planning process Design and implement • conduct surveys and identify targets • implement Behavior Change Behavior Change • develop toolkits incorporating social Communication stategies Communication Strategies marketing techniques Cost-Effective Technical Solutions Prioritize the collection and • combine billing and collection of septage • monitor groundwater pollution treatment of septage with other water services • increase direct sewage connections to • regulate companies that collect and replace on-site solutions discharge septage • increase septage treatment capacity in cities • provide assistance to the poor for better on-site sanitation Collect and treat wastewater at • intercept flow of wastewater to water bodies • expand capacity to treat wastewater least cost • expand sewerage network • increase household connections to sewers • provide assistance to the poor to connect to sewers Adopt climate smart strategies • consider climate effects for wastewater and • scale up waste to energy activities drainage activities • scale up wastewater reuse • explore waste to energy activities • pilot use of wastewater re-use and bio-solids Sustainable Solutions for Quality Service Develop city-wide sanitation • eliminate open defecation • implement city sanitation plans strategies • develop city sanitation plans to expand and improve services Integrate urban water • integrate water and sanitation services • develop institutional capacity to operate management through a single service provider sanitation systems • establish monitoring systems to determine progress made in cities Viable Financial Systems Secure capital needs • define investments to meet sector goals • provide financing through public sources in through Sanitation Expenditure Framework a fiscally affordable manner • provide financial support to the poor for • promote the role of the private sector for investments financing and operations Use consumer fees to meet • develop policies to increase wastewater • implement policies to increase tariffs which operating costs tariffs to meet operating costs will reduce the need for operating subsidies • ensure wastewater tariffs are regulated • ensure poor can afford to receive sanitation services 57 References Asian Development Bank. 2008. “Asian Sanitation Data Book International Water and Sanitation Center. 2011. “Sanitation 2008: Achieving Sanitation for All.” Financing Models for the Urban Poor.” Asian Green City Index 2011. 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