This week I attended a meeting organised by the Interamerican Development Bank for its water officers and their counterparts working for governments and utilities from all over Latin America and the Caribbean. One of the sessions was dedicated to sustainability of rural water supply. It proved to be a very inspiring event, giving a good insight into trends in rural water supply in the region, and ways to address the challenge of sustainability of rural water supply.
One of the presentations made a nice outline of how community management of rural water supply is firmly established in the region. Nearly all countries in the region have adopted legislation and regulation that recognises water committees as rural service providers. In Colombia they are even called community-based service providers, and not just water committees. Although through community-based management impressive results have been obtained in increasing water coverage, its limitations are also well known, with an estimated 30-40% of community-managed systems performing below the expectation.
A main avenue that has been followed in Latin America to address this is post-construction support, of technical assistance, advice and monitoring support to community-based service providers. Various institutional models are employed in the region for this. One example is the contracting of an urban utility to provide such support to its surrounding rural areas, as for example around Medellín in Colombia. Also associations of community-based service providers are promoted; those can then jointly hire a technician who provides technical support. Paraguay, Colombia and Honduras have examples of that. In some instances, a dedicated government agency even provides such support, such as SANAA through its well-known TOM programme in Honduras.
A model I didn’t know is the one used in Chile. There the Ministry of Public Works contracts the utilities providing water and sewerage service in a certain region to also provide support to the community-based operators in that same region. This entails support in ”software”, such as auditing, retraining the water committee, administrative support, as well as in the hardware, particularly in identifying major repair needs and then planning such interventions. The Ministry also has a linked fund available to support communities to cover their asset renewal costs. All in all, it looks like a nicely structured programme, combining post-construction support with asset renewal and replacement, two of the most difficult nuts to crack in rural water supply. But what does it cost?
If my calculations are correct (I was writing down the numbers rapidly from the slides, so I stand to be corrected on any mistakes that might have slipped in), the post-construction support component costs US$ 5 million/year nationwide. This is equivalent to an average of 0.32US$ of rural user/month. It is fully funded by the national government. The fund available for asset management is 75 US$ million/year, complemented by a contribution from users, who through their tariffs are supposed to contribute around 15% of asset renewal costs. How this compares to other countries is difficult to say, as few references exist of the costs of such programmes. In fact, any data you may have on the costs of post-construction support, please share them here. We are looking for such kind of info. But the bottom-line of the Chilean experience is that users are only expected to pay a small part of all the costs of rural water supply, i.e. only the operation and maintenance costs, and a fraction of asset renewal cost. The remainder of asset renewal is covered by the government as are the costs of post-construction support. If that is the case in a relatively well-off country like Chile, can we expect much poorer rural users elsewhere to pay the full life-cycle costs? The most likely answer is no. But that begs the question whether governments in poorer countries can afford the type of bill that the government in Chile is footing? Or, do we need to look into other modalities to cover such costs? Who knows, can share the answer here.