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Investing in sustainable water systems: who is leading the way?

 
Sanitation Issues in Slums

Politicians have traditionally been reluctant to raise water and wastewater tariffs, but perceptions are changing. Photograph: Mike F. Alquinto/EPA

 

Powered by Guardian.co.ukThis article titled “Investing in sustainable water systems: who is leading the way?” was written by Emilie Filou, for theguardian.com on Wednesday 18th December 2013 16.13 UTC

Out of the many obstacles development professionals face in the water and wastewater sectors – financing, poor planning, land tenure, technology – the one issue that seems to eclipse all the others is leadership.

Jemima Sy, senior water and sanitation specialist at the World Bank calls it “prioritising in the face of competing priorities”; Bastien Simeon, global head of water at KPMG, says it’s having the “courage to invest in the medium to long-term”, beyond a political term; Shayo Holloway, group managing director of Lagos Water Corporation, says it’s about ensuring you can recover your costs, even if it means raising tariffs.

Good leaders are a rare breed. Sy says that many municipalities and mayors, particularly outside capital cities, are well-meaning but have little understanding of what options are available to them and make inadequate investments as a result. “There is a lot more work to be done on getting knowledge to the people who need it most,” she says.

Sy and Simeon argue that this is where the private sector can be a valuable partner. “Many operators have been in the market for decades, they can bring real knowledge and expertise,” says Simeon. The partner doesn’t necessarily have to be foreign: Sy says that Ouagadougou, Burkina Faso’s capital city, contracted service provision in illegal settlements to local entrepreneurs to circumvent the law, which prohibited the state utility from servicing these areas.

Sy argues that given the right incentives, the private sector is more adept at navigating and adapting to the complexities of the sector than public entities. But the private sector has also been called upon for its financial might. Faced with a USD$3.5bn water infrastructure gap, Holloway says that authorities in Lagos had no alternative. “The government realised that we couldn’t single-handedly finance the sector,” says Holloway. So Lagos State passed a public-private partnership (PPP) law (pdf) to facilitate private sector participation and devised a comprehensive, 10-year water strategy that will see it through to 2020.

By then, says Holloway, the city will be the third most populous in the world and much of the infrastructure will have been financed, built and run by private companies. Detractors of PPPs argue that the private sector’s quest for profit leads to tariff increases, but being able to balance the books is essential to make the sector sustainable, says Holloway.

Politicians have traditionally been reluctant to raise water and wastewater tariffs because the measure is unpopular with customers, but perceptions are changing. Holloway says that Lagos has the largest middle-class in Nigeria, so he admits that his consumers’ willingness to pay is higher than in many other cities, but he says that the notion of paid-for service is sinking in.

The same can’t be said yet for wastewater services, argues Simeon, which makes wastewater infrastructure even more difficult to finance than water. The trick, he says, “is not to see wastewater as just something you have to get rid of but as a resource.” He gives the example of the National Water Company in Saudi Arabia who is investing heavily in reuse: the utility treats effluents, which can then be sold for irrigation or industrial use. In Saudi Arabia, reused water is cheaper than desalinated water so NWC has plenty of demand. “Wastewater is becoming a resource that is helping them finance new projects,” he says.

Del McCluskey, global lead for environment, climate change and urban services at DAI, says that developing world cities must also innovate with the configuration of wastewater systems because the ‘old-world’ model of a centralised, extensive piped network is prohibitively expensive. Manila is a good example: the city opted for small, decentralised networks and sceptic tank collection systems. Sy also highlights Sanergy in Nairobi, which has developed a franchise of public latrines called ‘fresh life’; the latrines are run as businesses by franchise holders and Sanergy collects the faecal sludge every day, which it then transforms into fertiliser.

Finally, developing cities could benefit from using ‘smart networks‘: this new technology allows utilities to detect leaks, regulate pressure, monitor water quality in real time, which can help save costs and improve efficiency. Amir Peleg, founder and CEO of technology firm TaKaDu and chairman of the Smart Water Networks Forum, says that cities in the developing world have the opportunity to leapfrog to smart networks, just like the telecoms sector did with mobile phones.

Many cities in Latin America and China have already made the leap, although this is less true in Africa where structural bottlenecks like power shortages and IT literacy have made it more difficult to adopt the technology.

 

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