The changes needed to secure sustainable access to adequate services usually involve various processes of reform that must be carefully planned and implemented in collaboration with a diverse set of stakeholders. This 90 minute face-to-face module presents some of the key considerations and steps for successful reform using practical case studies from Uganda, South Africa and Russia. The intended format is a seminar which incorporates both a lecture and question and answer period.
2. 2
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
3. 3
Planning reforms
Identify what the problems are…
∼ Inefficient planning and project implementation
∼ Water availability, water quality, energy supply
∼ Staff motivation, capacity, efficiency
∼ Tariff level and structure
∼ Corruption
∼ Commercial operation
4. 4
Key steps for successful reforms
Planning the process of introducing reform
Involving stakeholders
Setting upstream policy
Setting service standards, tariffs, subsidies, and
financial arrangement
Developing institutional model
∼ Utility: public or PSP
∼ Non-utility services: small scale providers
∼ ‘Environment’: policy maker; asset holder; regulator
∼ Legal instruments for the arrangement
5. 5
Involving stakeholders
Politicians: local and national levels
Management and staff of public utility
Consumer associations
NGO: national and int’l (service to the poor,
environment, governance…)
Financiers: multi and bi-lateral
Alternative suppliers (tankers, drilling companies…)
Media: national and int’l
Private sector: local and int’l
6. 6
Sustainable utility reform and reform of
the environment have to go hand-in-hand
Our goal
utility
poor good
poor
good
Typical reform path
environment
Possible combinations
environment status/utility
provider status
7. 7
How Uganda combisequenced the reforms
of NWSC, its national utility
Utility reform
Reformoftheenvironment
70s political turmoil
mid 80s new government
end 80s & 90s Major rehab
95 new statute
97 new Board
98 new MD
98-00 service & revenue
enhancement programs
00 ext & int
performance contracts
02 automatic tariff
indexation
03 staff performanc
contracts
97 corporate
plan
8. 8
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
10. 10
South Africa
Total pop - 45.2 Million
(2005)
Urban pop (% of total) –
59%
Surface area - 1,221,037 sq
miles
Life expectancy – 45 years
GDP (US$ billions) – 240.2
Access to water supply –
88%
Access to sanitation – 65%
Trigger: the end of apartheid
Vertical unbundling: bulk utilities
and end providers
Most utilities are corporatized
Subisidies: Free basic water 25
l/p/d
Basic water supplies to nearly 15
million people in 10 years;
Sanitation much slower
‘applying good old-fashioned
public finance principles’
Ongoing decentralization process
– after establishment of
democratic municipalities in 2001
12. 12
Uganda
Total pop - 28.8 Million
(2005)
Urban pop (% of total) –
13%
Surface area - 241,038 sq
miles
Life expectancy – 49 years
GDP (US$ billions) – 8.7
Access to water – 60%
Access to sanitation – 43%
Utility reform
Reformoftheenvironment
14. 14
Russia
Total pop - 143.2 Million
(2005)
Urban pop (% of total) –
73%
Surface area - 17,075,200
sq miles
Life expectancy – 65 years
GDP (US$ billions) – 763.7
Access to water – 97%
Access to sanitation – 87%
Trigger: the end of communism
Subsidies: l’goti and maximum %
expenditure
WSS part of broader Housing and
Communal Services sector –
centralized billing and collection
Mostly municipal departments
with little autonomy
History of focus on infra: low
efficiency
Regulation is regional ‘oblast’
responsibility
Boom & bust of PSP in 03/04;
now 2nd
generation PSP
15. 15
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
16. 16
The first challenge: how to trigger reform
Droughts,
floods &
epidemics
Unacceptable
levels of
service
Political
shifts &
pressures
financial
crises
17. 17
The constant challenge to maintain
progress….
time
performance
Pressure to
improve
Broad sector
reform
Utility reform
2
1
Maintain
progress
4
3
18. 18
Triggers and Obstacles to Reform
Click the button to play a 5 minute video clip.
(Windows Media;9,421k)
20. 20
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
21. 21
Key Success Factors in
Reform
Click the button to play a 5 minute video clip.
(Windows Media; 9,208k)
22. 22
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
23. 23
Taking Care of the
Poor in Reforms
Click the button to play a 10 minute video clip.
(Windows Media; 15,619k)
24. 24
Existing quantity-targeted subsidies are
regressive
%of poor hhs receiving subsidy vs. benefit targeting
performance
India, State IBTs,
0.56
Cape Verde, 0.48
Sao Tome, 0.41
Peru, 0.82
Honduras, 0.49
Guatemala, 0.20
Hungary (S), 0.98
Rwanda (S), 0.35
Kathmandu, 0.56
Bangalore, 0.66
Sri Lanka, 0.83
Cape Verde, 0.24
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
0.00 0.20 0.40 0.60 0.80 1.00 1.20
Benefit targeting performance indicator
Shareofpoorhhsreceivingsubsidy
Electricity
Water
Source: Water, Electricity, and the Poor: Who Benefits from Utility Subsidies? – Komives et al.
25. 25
Who are the urban poor?
Typically use multiple sources and differentiate drinking from other
uses - purchase small quantities if a free source is available:
May share a house or yard tap with multiple families – design
standards underestimate number of users
May purchase from a neighbor – poor households are often
heterogeneous; differentiate demand as slums may have mixed
densities, income levels
May use a public standpipe/standpost/kiosk – the level of
consumption is constrained by distance traveled, time spent
collecting water
May rely on small-scale private sector when services do not meet
their needs – choose to have water delivered to house rather than
walking to and queuing at the standpipe
BUT: poor households do pay for water often at higher rate (per
cubic meter) than wealthy households
26. 26
How to improve services for the poor?
The long term utility solution: a private -
house/yard -connection for all
Standpipes – from free to paid service
Augmenting small-scale service providers
How to deal with self provisioning?
27. 27
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
28. 28
The Role of the
Central Government
Click the button to play a 4 minute video
clip.
(Windows Media; 7,526k)
29. 29
Overview
Introduction
∼ Key steps in reforms
∼ Balancing progress in utility and environment
Video interviews with three speakers
∼ Triggers and obstacles to reform
∼ Key success factors in reform
∼ Taking care of the poor in reforms
∼ Role of central government in reforms
∼ Leadership
30. 30
The political economy of reform
Reforms must provide returns for the political
decision makers who are willing to make the
changes….
Initiate reform where there is a powerful need, and
demonstrated demand, for change
Nothing succeeds like success
Best fit rather than best practice
∼ Realistic goals and timeline
∼ Develop a sequenced, prioritized list of reforms…
∼ Match available human, financial and knowledge resources
∼ Take one step at a time, but lock in progress