Incorporating life cycle costing into water service provision
1. SUSTAINABLE WASH LEARNING EVENT
Patrick Moriarty
IRC International Water and Sanitation Centre
31/01/2011 Patrick Moriarty, IRC
2. 1 Capital investment is only the start
Capital
Costs of capital expenditure
Operational and
minor
Indirect support maintenance
cost expenditure
Capital
maintenance
expenditure
Direct support
costs
31/01/2011 Patrick Moriarty, IRC
3. 2 Priorities shift as the sector matures
~ US$ 5/capita/year for
hand pumps
Danger zone: as basic infrastructure is
~provided, coverage risks stagnating at
US$ 20/capita/year
for around 60 - 80% due to insufficient
small piped Management/Recurrent
networks
investment in management while costs
capital investment remains high due to
need for rehabilitation
Costs
Capital costs (capital
maintenance dominates)
Capital costs (capital
investment dominates)
25% 50% 75% 100%
Coverage rates
31/01/2011 Patrick Moriarty, IRC
4. 3 Service levels
High service: people access a
minimum of 60l/c/d of high quality
water on demand
Intermediate service: people access a
minimum of 40l/c/d of acceptable quality
water from an improved source spending
no more that 30 minutes per day
Basic service: people access a minimum
of 20l/c/d of acceptable quality water
from an improved source spending no
more that 30 minutes per day
Sub-standard service: people access a
service that is an improvement on having
no service at all, but fails to meet the
basic standard on one or more criteria
No service: people access water from insecure
or unimproved sources, or sources that are too
31/01/2011 Patrick Moriarty, IRC consuming or are of poor quality
distant, time
6. A first step….identifying the building blocks
All costs summed over service Source of
lifetime (e.g. 20 years) Activities Cost finance
Per
total person
Initial development of
borehole and equipment
Capital investment with handpump 10,000 33 NGO
Occasional minor
Operational expenditure maintenance 1,900 6 Users
Capital maintenance Replacement of handpump
expenditure (every 10 years) 2,000 7 Local government
District level monitoring –
Direct support costs technical backstopping 5,700 19 Local government
Indirect support costs N/A
Costs of capital N/A
Total life-cycle cost 19,600 65
31/01/2011 Patrick Moriarty, IRC
