Water supply and sanitation in Costa Rica

Costa Rica Costa Rica Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east.... : Water and Sanitation

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!align="center" bgcolor="lightblue" colspan="3"|Data
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!align="left" valign="top"|Water coverage (broad definition)
|valign="top"| 97%
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!align="left" valign="top"|Sanitation coverage (broad definition)
|valign="top"| 92%
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!align="left" valign="top"|Continuity of supply (%)
|valign="top"| n/a
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!align="left" valign="top"|Average urban water use (l/c/d)
|valign="top"| n/a
|-
!align="left" valign="top"|Average urban water and sewer bill for 20m3
|valign="top"| US$5/month
|-
!align="left" valign="top"|Share of household metering
|valign="top"| 96%
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!align="left" valign="top"|Share of collected wastewater treated
|valign="top"| 4%
|-
!align="left" valign="top"|Annual investment in WSS
|valign="top"| US$5/capita (1991-1998 average)
|-
!align="left" valign="top"|Share of self-financing by utilities
|valign="top"| 40%
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!align="left" valign="top"|Share of tax-financing
|valign="top"| 30%
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!align="left" valign="top"|Share of external financing
|valign="top"| 30%
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!align="center" bgcolor="lightblue" colspan="3"|Institutions
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!align="left" valign="top"|Decentralization to municipalities
|valign="top"| Very limited
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!align="left" valign="top"|National water and sanitation company
|valign="top"| Yes
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!align="left" valign="top"|Water and sanitation regulator
|valign="top"| Yes, multi-sector
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!align="left" valign="top"|Responsibility for policy setting
|valign="top"| Ministry of Health
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!align="left" valign="top"|Sector law
|valign="top"| No
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!align="left" valign="top"|Number of urban service providers
|valign="top"| n/a
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!align="left" valign="top"|Number of rural service providers
|valign="top"| n/a
|-
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Costa Rica

Costa Rica

Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....

has made significant progress in the past decade in expanding access to water supply

Water supply

Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...

and sanitation

Sanitation

Sanitation is the hygienic means of promoting health through prevention of human contact with the hazards of wastes. Hazards can be either physical, microbiological, biological or chemical agents of disease. Wastes that can cause health problems are human and animal feces, solid wastes, domestic...

, but the sector faces key challenges in low sanitation

Sanitation

connections, poor service quality, and low cost recovery.

Access

		Urban (61% of the population)	Rural (39% of the population)	Total
Water	Broad definition	100%	92%	97%
Water	House connections	99%	81%	92%
Sanitation	Broad definition	89%	97%	92%
Sanitation	Sewerage	48%	1%	30%

Source: Joint Monitoring Program WHO

Who

Who may refer to:* Who , an English-language pronoun* who , a Unix command* Who?, one of the Five Ws in journalism- Art and entertainment :* Who? , a 1958 novel by Algis Budrys...

/UNICEF(JMP/2006). Data for water and sanitation based on the "Global Water Supply and Sanitation Assessment" (2000) from the Water Supply and Sanitation Sector
Questionnaire (1999).

Costa Rica, with a population of 4.3 million, of which about 61% are located in urban areas, has made meaningful progress in expansion of water services in urban areas over the past decade.

Approximately 99% of the urban population is connected to water supply (as compared to an average of 90% in the LAC region), a significant increase from 92% in 1990. Around 48% had urban sanitation connections to public sewerage or had individual septic tanks. In 2006 the Japanese Bank for International Development (JBIC) signed the Metropolitan San José

San José, Costa Rica

San José is the capital and largest city of Costa Rica. Located in the Central Valley, San José is the seat of national government, the focal point of political and economic activity, and the major transportation hub of this Central American nation.Founded in 1738 by order of Cabildo de León, San...

Environment Improvement Project loan to develop sewer plant, installation of sewage pipes, and consulting services.

Rural coverage is lower, with about 92% of the 1.7 million rural inhabitants connected to public water supply and about 97% connected to sanitation services, mostly through the use of septic tanks..

Service quality

The countrywide increase in coverage rates in water and sanitation masks shortcomings in the quality of service. In 2005, only about 70 % of the population received water of potable quality. Furthermore, 96% of all urban wastewater

Wastewater

Wastewater is any water that has been adversely affected in quality by anthropogenic influence. It comprises liquid waste discharged by domestic residences, commercial properties, industry, and/or agriculture and can encompass a wide range of potential contaminants and concentrations...

collected is discharged into rivers and receiving bodies without any treatment, generating public health

Public health

Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals" . It is concerned with threats to health based on population health...

risks and water resources contamination.

In most of the regions of the country, water production capacity is very close to current demand, so the risk of facing water deficits in the near future is high and in fact, various cities already suffer from water shortages and rationing.

Pollution

The existing on-site sanitation installations, such as septic tank

Septic tank

A septic tank is a key component of the septic system, a small-scale sewage treatment system common in areas with no connection to main sewage pipes provided by local governments or private corporations...

s, are not always an adequate solution. Some of them contaminate aquifers which are used as water supply sources. Furthermore, the sludge removed while cleaning septic tanks is usually disposed of in rivers and constitutes a source of pollution in addition to the discharge of raw sewage mentioned above.

Recent developments

AyA’s management is politically nominated and frequently replaced on the basis of political cycles. The sanitation services that it provides are deficient and its financial situation has been deteriorating since 1999.

AyA is aiming to increase rural coverage to 98% in the next three or four years with the agreement between the Banco Popular and the Central American Bank for Economic Integration (CABEI) signed on March 2007. The main goals of the agreement are to promote ASADAS sustainability and to help it achieve 100% coverage, as well as to register ASADAS into an automated information system to improve operations records and tariff collections.

Policy and regulation

The main institutions involved in the policy and regulation of the Costa Rica water and sanitation sector are:

the Ministry of Health (MINSALUD), which oversees the water sector;
the Regulatory Authority for Public Services (ARESEP) created in 1999, which is responsible for economic regulation including tariff setting, monitoring and control of efficiency and quality of service, among other duties; and
the Ministry of Environment and Energy (MINAE), which is responsible for water resource management in Costa Rica in accordance with the Environment Law, as well as for environmental licensing.

Other Ministries also have a role in the sector, sometimes with overlapping functions and responsibilities.

De facto AyA has an important indirect policy and regulatory role since it monitors the compliance with technical norms, can take over failing systems and advises the Ministry in the development of the sector. This double role implies a conflict of interest.

Service provision

According to the Drinking Water Law of 1953 the country's 81 municipalities (called cantons

Cantons of Costa Rica

This is a list of the cantons of Costa Rica.Cantons are the second-level administrative division of Costa Rica. The country's seven provinces are subdivided into 81 cantons , and these are further subdivided into districts .A unique feature of the cantons is that they are the only administrative...

) are responsible for the provision of water and sanitation services. However, in reality service are provided by the following entities:

The Costa Rican Water and Sanitation Institute (AyA), which is a centralized public institution reporting to the Minister of Health. AyA is in charge of directly administering and operating water and sanitation systems serving 46% of the population, mostly in urban areas. AyA directly serves 3% of the rural population;
Municipalities, which in total serve 16% of the population;
The Heredia
Heredia, Costa Rica
Heredia is a city located in the Heredia province of Costa Rica and is the capital of that province. It is currently undergoing a rapid process of industrialization and is located 10 kilometers north of the country's capital, San José....

Public Services Company (ESPH S.A.), which is an autonomous multi-services public utility constituted under private law that provides water, sewer and electricity services to Heredia
Heredia, Costa Rica
Heredia is a city located in the Heredia province of Costa Rica and is the capital of that province. It is currently undergoing a rapid process of industrialization and is located 10 kilometers north of the country's capital, San José....

in the North of the country, which serves 5% of the country’s population;
Administrative Committees of Rural Water Systems (CAARs) and Administrative Associations of Rural Water and Sanitation Systems (ASADAS), which serve a total of 24% of the country’s population in 1,620 communities.
other private organizations that operate water systems, such as housing developers, serving about 5% of the population.

Article 5 of ARESEP’s Law allows the provision of water supply services by the private sector. However, in practice the private sector does not play any role in the sector.

In addition to its role of service provicer in its service area AyA is responsible for:

providing support to rural communities outside of its service area;
monitoring the compliance with technical norms;
guaranteeing the continuity of provision of service nationwide (to the point of being able to assume actual operation of failing systems not operated by AyA); and
leading the development of the sector nationwide.

In particular, the Rural Works Department within AyA is responsible for the planning, design, financing and construction of rural water supply and sanitation systems. It is also in charge of the provision of technical assistance to the water and sanitation associations.

Economic efficiency (water losses)

Non-revenue water

Non revenue water is water that has been produced and is “lost” before it reaches the customer. Losses can be real losses or apparent losses . High levels of NRW are detrimental to the financial viability of water utilities, as well to the quality of water itself...

("water losses") in Costa Rican water companies is high, as most systems are operating with losses usually over 50%, a value which reflects a high level of inefficiency and compromises continuity of service.

Tariffs and cost recovery

Water and sewer tariffs in Costa Rica are approved by the regulatory agency ARESEP. Revenues in the Costa Rican water and sanitation sector do not cover operation and maintenance costs and the financial situation of the sector is precarious.
Tariff levels do not allow for full cost recovery. In the case of AyA, there are cross-subsidies from the metropolitan area of San José

San José, Costa Rica

to the other urban and rural areas of the country. The tariff is set based on short term cash flow needs rather than on real economic costs of service provision. AyA requests tariff increases when its financial situation is precarious and not a result of long-term investment planning. The regulator tends to approve these requests only partrially..

AyA has not been compensated by the government for assuming its role played as the main subsidy provider to the rural sector. This situation puts a high financial burden on AyA and is one of the reasons for AyA’s financial problems. Since the government does not directly subsidize the rural sector it is not aware of the magnitude of the problem and of its financial impact on AyA.

In rural areas tariffs do not allow for cost recovery either. Rural tariffs vary and stood at an average equivalent to US$ 0.18 per cubic meter in 2001, compared to US$ 0.25-0.28 per cubic meter charged by AyA.

Investment and financing

Great efforts and large investment to the Costa Rican water and sanitation sector are required to improve water and sanitation services. In the past, over 60% of the sector investments came from government resources, half of which was financed by multilateral loans. However, given the current investment needs of the sector, the government can no longer maintain such a high share of sector financing. Consequently, there is a need for increasing internal cash generation by service providers and for the mobilization of commercial financing.

According to the Controlaría General de la República, US$ 203 million were invested in water supply and sanitation from 1990 to 2006, which is on average US$ 3.3 per capita and year. The investment reached its peak in 1999, when it was US$ 6.3 per capita. Since 2000, it fell back substantially until reaching only US$ 0.7 in 2005 and US$ 1.1 in 2006. Compared to other Latin American countries, this investment level is very low.

Most of the investments in rural areas are being financed through grants

Grant (money)

Grants are funds disbursed by one party , often a Government Department, Corporation, Foundation or Trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal...

channeled through AyA.

In 2002 AyA proposed a sector modernization program (2001–2020), which envisages maintaining urban water coverage at 98.5% and drastically increasing coverage of urban sewerage to 89% by 2020. It also envisages an increase in rural water coverage to 90% by 2020. The total investment required for implementing this program amounts to US$1.6 Billion or approximately US$80 million per year, and reflects the many years of neglect in the maintenance of AyA’s assets. This corresponds to four times the average annual investment during 1991-1998. AyA estimated in 2002 that, taking into account increased cash generation and efficiency improvements, only about 40% of the investment would still have to be financed by the government.

External support

The major donors involved in the water sector are JBIC, KfW

KFW

KFW may refer to:*Keith Fullerton Whitman , an American musician*KfW or Kreditanstalt für Wiederaufbau, a German public-sector financial institution...

, and CABEI (the Central American Bank for Economic Integration) which had or have ongoing loans to AyA. The IDB

IDB

IDB can mean:* Inter-American Development Bank, also known as IADB* IDB Communications Group, Inc., a constituent of MCI Inc.* Illegal Diamond Buying, the term used at the turn of the 19th-20th century for diamond trading outside the De Beers cartel....

assists the government in designing a water and sanitation subnational program. AyA has received a JBIC Loan for the wastewater project of San José

San José, Costa Rica

and the CABEI/Banco Popular rural loan.

Japanese Bank for International Cooperation

Metropolitan San Jose Environment Improvement Project

Relevant laws

Law 1634 of 1953, General Drinking Water Law http://www.aya.go.cr/html_datos_principal/Digesto_aya/DOCUMENTOS/Normativa/leyes/Ley%20general%20agua%20potable.PDF
Law 2726 of 1961, Law creating AyA http://www.aya.go.cr/html_datos_principal/Digesto_aya/DOCUMENTOS/Normativa/leyes/Ley%202726%20Constitutiva%20de%20AyA.PDF
List of all relevant laws http://www.aya.go.cr/html_datos_principal/Digesto_aya/NORMATIVA/leyes_digesto.htm

Situational Reports [SIREPS]

In Ciudad Colon water will be turned off without notice and has remained off sometimes 20+ hrs in a day,
Calls to local municipalities will yield various answers but the general belief is that water rationing is occurring.

Access

Service quality

Pollution

Recent developments

Policy and regulation

Service provision

Economic efficiency (water losses)

Tariffs and cost recovery

Investment and financing

External support

Japanese Bank for International Cooperation

Relevant laws

Situational Reports [SIREPS]

See also