Not long ago, the issue of recurrent costs in rural water supply was simply a fee the users needed to pay. More recently, there’s been awareness and focus placed on recurrent costs post construction, in particular the costs of districts in supporting services after construction.Two big constraints often get cited in the sector: we don’t know what the costs should be, outside of capital costs; and there isn't enough money to pay for services after construction. District costs for example cannot be built into user tariffs, particularly in rural contexts, and transfers from central levels are consistently inadequate, almost regardless of the maturity of decentralisation. Recurrent costs include:operational and minor maintenance (typically financed by the users), capital maintenance to protect assets (typically financed by decentralised funds or NGOs), direct support costs for expertise, training, monitoring and backup for service providers and communities (typically with near to no financing, or limited funds from district projects or special funding for PEC zonal).Indirect support costs (the policy framework and planning and training at regional and national level (financed by National Water Directorate), and the cost of capital (financed by Ministry of Finance).The purpose of this presentation is to flight an idea for an experiment building on the findings of cost information and buy in to this at country level.
WASHCost in Mozambique culminated in two key outcomes: 10 key messages and working in 6 PRONASAR districts to identify life cycle costs for on-going service delivery, and provide capacity support.10 key messages were distilled from the main findings of the research that had particular relevance to burning questions about sustaining water and sanitation services in Mozambique.
On the left what was spent in 2010 per person per annum for water in Mozambique on capital maintenance (CapManEx), indirect and direct support costs and on operation and maintenance (OpEx). Current costs on the left come to just over US$ 1.00 per person per annum and, at this level, service levels are mainly substandard. (1 in 20 – 5% of the rural population has a water service that meets the basic standard).The right hand bar shows ‘ideal’ costs – what WASHCost believes needs to be spent on these components. Expenditure needs to double to at least US$ 2.10 per person per annum to achieve better services. Existing expenditure is met as follows: basket funding $0.37; central government $0.04; district funds $0.48; community $0.15.We know districts (direct support) are hopelessly under resourced. We know lack of money is blamed for lack of sustainability.From WASHCost we know that it costs about 1 USD per person per year to achieve basic rural water service levels, assuming PRONASAR still puts in at least 0.37 USD per person on rehabilitations. Of this 1 USD, 4% needs to be allocated to support province/national, 45% to district and 59% in community (preventive maintenance, funds for water committee and financial management . It would be good to target to reduce all support by half in each consecutive year.In 2012, WASHCost found the shortfall to sustaining basic services in PRONASAR districts was between 50 and 150K USDChókwé - USD 75.000, Mandlakazi - USD 50.000, Gurué - 150.000 and Alto Molócuè - 50.000. The Gurué plan was more complete in terms of LCCA approach in planning and budgeting; realistically it would be best to work in Mandlakazi district because it is close to Maputo (thus less costly in terms of follow up and coaching) and there is a continuous process as the district was not seriously affected by the floods in January as compared with Chókwè.
We know that:post construction support is necessaryfinance is necessary but not sufficient
Financing the Life Cycle Cost Gap: does it make a difference? Post construction support for WASH Services That Last in Mozambique
FINANCINGTHE LIFE CYCLE COST GAP:DOES IT MAKE A DIFFERENCE?Post construction support for WASHServices That Last in Mozambique
WATER SERVICES THAT LAST …3EXPENDITURE ON ANNUAL RECURRENTCOSTS NEEDS TO DOUBLE From the LCCA pilots we know that districts need tospend between 50 and 150 000 US$ to sustain basicservice levels.
WATER SERVICES THAT LAST …4What if2USD$/p/awas actuallyinvested in adistrict?Whatdifferencewould thismake tosustainabilityand servicelevels?What else isneeded?Experiment: Finance the district’s post constructionsupport gap Provide support to spend it on districtauthority and support functions Collect baseline and periodic service leveland sustainability data (SC) Reflect on monitoring results in sectorcollaboration forums Learn and document Invest in district support• Would closing the finance gap make ameaningful difference to services?• Would this work in other countries?