Water supply and sanitation in Latin America
Encyclopedia
Water supply and sanitation in Latin America is characterized by insufficient access and in many cases by poor service quality, with detrimental impacts on public health
. Water and sanitation
services are provided by a vast array of mostly local service providers under an often fragmented policy and regulatory framework. Financing of water and sanitation remains a serious challenge.
]Access to water and sanitation remains insufficient, in particular in rural areas and for the poor. It also differs substantially among and within countries. According to the Joint Monitoring Program of the World Health Organization
and UNICEF, in 2004 the share of population which was connected to an improved water source
varied from 54% in Haiti to 100% in Uruguay. All together, 50 million people or 9% of the population of Latin America and the Caribbean did not have access to improved water supply, and 125 million or 23% did not have access to improved sanitation
. Increasing access remains a challenge, in particular given the poor financial health of service providers and fiscal constraints on behalf of central and local governments.
As far as sanitation is concerned, only 51% of the population has access to sewers. Only an estimated 15% of the collected wastewater finds its way into wastewater treatment
plants, which often are not properly functioning. 26% of the population has access to forms of sanitation other than sewers, including septic tanks and various types of latrine
s., a level that is about as high as in the United States and almost twice as high as in Central Europe. The highest water use can be found in some utilities in Chile and Argentina, where water resources are abundant and water use is almost 500 liter/capita/day. The lowest water use is in Aguas de Illimani serving La Paz
, the capital of Bolivia
, with less than 50 liter/capita/day. In rural areas water use is sometimes even lower than this level.
, Colombia
, Ecuador
, Guatemala
, Mexico
and Peru
. In some countries, such as in Colombia and Mexico, municipalities took over this responsibility from national service providers during the decentralization
of the 1980s. Subsequently, especially the larger municipalities have often created specialized municipal (and sometimes inter-municipal) public utilities, whose finances are kept separate from the city's finances. While in most cases the companies are public, in a few notable cases they are mixed or private companies operating under concession
, lease
or management contracts. Chile
and Venezuela
are examples of countries that have created regional water companies; however, in the case of Venezuela, the United Nations reports that Venezuela remains one of the poorest in water service provision in this region. State-level regional water companies also exist in all 26 states of Brazil, where they provide services on behalf of some (but not all) municipalities in each state. National public water and sewer companies, which have for the most part been created in the 1960s and 1970s, still exist in Costa Rica
, the Dominican Republic
, El Salvador
, Haiti
, Panama
, Paraguay
and Uruguay
. About 90% of urban water and sanitation services in Latin America are provided by public entities. Many private concession contracts signed during the 1990s in Latin America have been either renegotiated or cancelled. The most notable cancellations include the concession for Aguas Argentinas in Buenos Aires
, Argentina, and the concessions for Cochabamba
and La Paz
, Bolivia. Private and mixed companies, however, continue to provide services in many cities of Colombia, in most of Chile, some Brazilian cities, and in Guayaquil
, Ecuador.
In rural areas, the provision of water services is usually the responsibility of community organization
s (Juntas de Agua). While the infrastructure is funded primarily by transfers from the national governments, typically community labor and sometimes cash contributions are mobilized. When communities are associated in the choice of service level and other key choices, this instills a sense of ownership that makes it more likely that communities will maintain the infrastructure.
At the level of national governments, responsibility for policies in water and sanitation is typically fragmented between various Ministries, making the development of coherent policies in areas such as transfers to local service providers a challenging undertaking. The economic regulation of service providers is sometimes entrusted to Ministries and sometimes to autonomous regulatory agencies. These agencies sometimes cover only water and sanitation or multiple infrastructure sectors; they can be either at the national (as in Chile
, Colombia
and Peru) or at the state level (as in Argentina
and in some states of Mexico
). Their functions vary and may include tariff approvals, monitoring of service quality and handling of complaints. Environmental regulation is entrusted to environmental agencies and the regulation of drinking water quality to Ministries of Health.
In Honduras
support to community organizations (Juntas de Agua) is entrusted to the Social Fund FHIS, in cooperation with a national agency for technical assistance in water and sanitation (SANAA). In El Salvador
it is done by the Social Fund FISDL and various NGOs. In Peru it is carried out through NGOs and municipalities with the support of a national program (PRONASAR) implemented by the Ministry of Housing. In Paraguay it is the responsibility of a national agency in charge of promoting specifically water supply and sanitation in rural areas and small towns (SENASA). In Ecuador
it is carried out under a national program (PRAGUAS) by consultants working for the Ministry of Housing. In Panama such support is provided by the Ministry of Health. In Haiti
such support is provided by NGOs, some of which are under contract with the national urban water agency SNEP and its specialized unit for rural areas. There thus is a wide variety of institutional arrangements to support community organizations, so that one cannot speak of a uniform model for such support in Latin America.
countries. Based on a sample of 23 major cities in Latin America the average residential water tariff for a monthly consumption of 15 cubic meter was US$0.41, equivalent to a monthly bill of only about US$6.
, as well as in Pereira
and Manizales
in Colombia
.
Despite the ostensibly high levels of tariffs and cost recovery estimated based on the sample of utilities analyzed, utilities do not generate sufficient revenue to finance a substantial share of their investments internally, or to be credit-worthy enough to mobilize commercial, long-term credit
. The reasons include low levels of operational efficiency, as detailed further below, poor recovery of bills, poor procurement
practices and political corruption
.
. For the households in the poorest income decile
expenditures on water are higher, varying from 0.6% in rural Panama to 6.5% in Kingston, Jamaica. However, these figures have to be interpreted with caution. First, it is not clear how water expenditures were defined in the surveys. It seems that in some cases expenditures to buy bottled water and water from tankers were included, while in other cases they were excluded. Second, the sample includes both households with and without access to piped water systems. Therefore, especially in rural areas where coverage tends to be low, the shares are only a poor indication on the affordability of water bills. Third, it is not explicit if sewer bills are included in the analysis, although this is most likely the case, since sewer bills are always a surcharge on the water bill and are thus perceived by most households as part of their water expenditures.
The level of investment in water supply and sanitation in Latin America is tentatively estimated at 0.12% of GDP
in the 1990s. A large share of these investments is needed to maintain and rehabilitate existing infrastructure. However, the World Bank has estimated that the investments needed to increase access to achieve the Millennium Development Goals (MDGs) in water and sanitation in Latin America by itself is 0.12% of GDP, not taking into account maintenance and rehabilitation. It can thus be concluded that, on average, a significant increase in investments is needed to achieve the MDGs.
and some utilities in Brazil
and Mexico
, rely on commercial credit financing. However, the vast majority of utilities relies on transfers from national governments. These can take various forms: In Colombia
municipalities are legally entitled to receive transfers calculated through a formula based on their costs and poverty levels; in Mexico
municipalities can apply for matching federal grants provided they fulfill certain conditions that vary by program; in Ecuador
municipalities receive transfers based on a formula that takes into account their choice of management model and improvements in cost recovery; and in other countries utilities simply receive transfers that can vary from one year to the other without any conditions. The level of transfers from national governments is highly variable and often far from sufficient to increase coverage and improve service quality. Some countries pass loans from international financial institutions on to utilities in the form of credits. However, these international loans only account for a relatively small share of water and sanitation financing in Latin America.
and non-revenue water
(water losses). In terms of labor productivity, the most productive utilities have less than 2 employees per 1000 connections. They include EPM
in Colombia, SEDAPAL in Lima
, Aguas del Valle in Chile's 4th region, as well as Aguas de Formosa
and Aguas de Salta
in Argentina. The utility with the lowest labor productivity in the sample is EPSEL from the Lambayeque Region
in Peru with more than 15 employees per 1000 connections. The average of the sample is about 5 employees per 1000 connections.
Concerning non-revenue water, the average of Latin American utilities in the sample considered is 40% and thus much higher than estimates of efficient levels, which vary between 15 and 25%. The highest level (73%) is registered by Interagua, the utility serving Guayaquil
in Ecuador. The lowest level of any larger utility with a high share of household metering, which is a precondition to accurately measure non-revenue water
, is registered in Aguas Cordillera in Chile with 20%.
even those countries on track to achieve the MDG targets face tremendous challenges in improving service quality, in particular to attain continuity of supply and to increase wastewater treatment. To meet these challenges Latin American and Caribbean countries, according to the World Bank, would have to advance on several fronts, including:
Utilities
Regulators
Other Entities
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...
. Water 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...
services are provided by a vast array of mostly local service providers under an often fragmented policy and regulatory framework. Financing of water and sanitation remains a serious challenge.
Access
World Health Organization
The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...
and UNICEF, in 2004 the share of population which was connected to an improved water source
Improved water source
According to the Joint Monitoring Program for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" water sources:* household connections* public standpipes* boreholes* protected dug wells...
varied from 54% in Haiti to 100% in Uruguay. All together, 50 million people or 9% of the population of Latin America and the Caribbean did not have access to improved water supply, and 125 million or 23% did not have access to improved sanitation
Improved sanitation
According to the Joint Monitoring Programme for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" sanitation:* connection to a public sewer* connection to a septic system* pour-flush latrine...
. Increasing access remains a challenge, in particular given the poor financial health of service providers and fiscal constraints on behalf of central and local governments.
As far as sanitation is concerned, only 51% of the population has access to sewers. Only an estimated 15% of the collected wastewater finds its way into wastewater treatment
Wastewater Treatment
Wastewater treatment may refer to:* Sewage treatment* Industrial wastewater treatment...
plants, which often are not properly functioning. 26% of the population has access to forms of sanitation other than sewers, including septic tanks and various types of latrine
Latrine
A latrine is a communal facility containing one or more commonly many toilets which may be simple pit toilets or in the case of the United States Armed Forces any toilet including modern flush toilets...
s., a level that is about as high as in the United States and almost twice as high as in Central Europe. The highest water use can be found in some utilities in Chile and Argentina, where water resources are abundant and water use is almost 500 liter/capita/day. The lowest water use is in Aguas de Illimani serving La Paz
La Paz
Nuestra Señora de La Paz is the administrative capital of Bolivia, as well as the departmental capital of the La Paz Department, and the second largest city in the country after Santa Cruz de la Sierra...
, the capital of Bolivia
Water supply and sanitation in Bolivia
Bolivia’s water and sanitation coverage has greatly improved since 1990 due to a considerable increase in sectoral investment. However, the country continues to suffer from what happens to be the continent’s lowest coverage levels as well as from low quality of services...
, with less than 50 liter/capita/day. In rural areas water use is sometimes even lower than this level.
Quality of service
Even for those having access to water supply, poor quality of service is often experienced, in the form of intermittent supply, low pressure and poor drinking water quality. However, differences in service quality between countries and between cities in Latin America are vast, and some service providers achieve a quality of service on par with developed countries.Institutional responsibility
See also List of responsibilities in the water supply and sanitation sector in Latin America and the CaribbeanService provision
Responsibility for water supply and sewerage service provision in Latin American countries is vested either in municipalities, or in regional or national companies. Municipalities are in charge of water and sanitation service provision in BrazilWater supply and sanitation in Brazil
Water supply and sanitation in Brazil is characterized by both achievements and challenges. Among the achievements is an increase in access to piped water supply from 66% to 77% between 1990 and 2006; an increase in access to improved sanitation from 71% to 77% in the same period; a functioning...
, Colombia
Water supply and sanitation in Colombia
Water supply and sanitation in Colombia has been improved in many ways over the past decades. Between 1990 and 2004, access to sanitation increased from 82% to 86%, but access to water increased only slightly from 92% to 93%.. In particular, coverage in rural areas lags behind. Furthermore, despite...
, Ecuador
Water supply and sanitation in Ecuador
Water supply and sanitation in Ecuador is characterized by a number of achievements and challenges. One key achievement is a significant increase in both access to an improved water source and adequate sanitation...
, Guatemala
Guatemala
Guatemala is a country in Central America bordered by Mexico to the north and west, the Pacific Ocean to the southwest, Belize to the northeast, the Caribbean to the east, and Honduras and El Salvador to the southeast...
, Mexico
Water supply and sanitation in Mexico
Water supply and sanitation in Mexico is characterized by achievements and challenges. Among the achievements is a significant increase in access to piped water supply in urban areas as well as in rural areas between 1990 and 2006; a strong nationwide increase in access to improved sanitation ...
and Peru
Water supply and sanitation in Peru
The water and sanitation sector in Peru has made important advances in the last two decades, including the increase of water access from 30% to 62% between 1980 and 2004. Sanitation access has also increased from 9% to 30% from 1985 to 2004 in rural areas. Advances have also been achieved...
. In some countries, such as in Colombia and Mexico, municipalities took over this responsibility from national service providers during the decentralization
Decentralization
__FORCETOC__Decentralization or decentralisation is the process of dispersing decision-making governance closer to the people and/or citizens. It includes the dispersal of administration or governance in sectors or areas like engineering, management science, political science, political economy,...
of the 1980s. Subsequently, especially the larger municipalities have often created specialized municipal (and sometimes inter-municipal) public utilities, whose finances are kept separate from the city's finances. While in most cases the companies are public, in a few notable cases they are mixed or private companies operating under concession
Concession (contract)
A concession is a business operated under a contract or license associated with a degree of exclusivity in business within a certain geographical area. For example, sports arenas or public parks may have concession stands. Many department stores contain numerous concessions operated by other...
, lease
Lease
A lease is a contractual arrangement calling for the lessee to pay the lessor for use of an asset. A rental agreement is a lease in which the asset is tangible property...
or management contracts. Chile
Water supply and sanitation in Chile
Water supply and sanitation in Chile is characterized by high levels of access and good service quality. Compared to most other countries, Chile's water and sanitation sector distinguishes itself by the fact that all urban water companies are privately owned or operated...
and Venezuela
Water supply and sanitation in Venezuela
Water supply and sanitation in Venezuela has been extended to an increasing number of people during the 2000s, although many poor remain without access to piped water. Service quality for those with access is mixed, with water often being supplied only on an intermittent basis and most wastewater...
are examples of countries that have created regional water companies; however, in the case of Venezuela, the United Nations reports that Venezuela remains one of the poorest in water service provision in this region. State-level regional water companies also exist in all 26 states of Brazil, where they provide services on behalf of some (but not all) municipalities in each state. National public water and sewer companies, which have for the most part been created in the 1960s and 1970s, still exist in Costa Rica
Water supply and sanitation in Costa Rica
Costa Rica has made significant progress in the past decade in expanding access to water supply and sanitation, but the sector faces key challenges in low sanitation connections, poor service quality, and low cost recovery.- Access :...
, the Dominican Republic
Water supply and sanitation in the Dominican Republic
The Dominican Republic has achieved impressive increases in access to water supply and sanitation over the past two decades. However, the quality of water supply and sanitation services remains poor, despite the country's high economic growth during the 1990s....
, El Salvador
Water supply and sanitation in El Salvador
Access to water supply and sanitation in El Salvador remains low, despite recent increases in coverage, which leads to negative impacts on productivity and health in particular of the rural poor. Water resources are heavily polluted and the great majority of wastewater is discharged without any...
, Haiti
Water supply and sanitation in Haiti
Haiti faces key challenges in the water supply and sanitation sector:Notably, access to public services is very low, their quality is inadequate and public institutions remain very weak despite foreign aid and the government's declared intent to strengthen the sector's institutions...
, Panama
Water supply and sanitation in Panama
Water supply and sanitation in Panama is characterized by relatively high levels of access compared to other Latin American countries. However, challenges remain especially in rural areas.- Access :...
, Paraguay
Water supply and sanitation in Paraguay
Despite many years of concerted efforts and achievements in expanding coverage and improving service sustainability, many issues remain to be addressed in the water and sanitation sector...
and Uruguay
Water supply and sanitation in Uruguay
Uruguay is the only country in Latin America that has achieved quasi universal coverage of access to safe drinking water supply and adequate sanitation . Water service quality is considered good, with practically all localities in Uruguay receiving disinfected water on a continuous basis...
. About 90% of urban water and sanitation services in Latin America are provided by public entities. Many private concession contracts signed during the 1990s in Latin America have been either renegotiated or cancelled. The most notable cancellations include the concession for Aguas Argentinas in Buenos Aires
Buenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...
, Argentina, and the concessions for Cochabamba
Cochabamba
Cochabamba is a city in central Bolivia, located in a valley bearing the same name in the Andes mountain range. It is the capital of the Cochabamba Department and is the fourth largest city in Bolivia with an urban population of 608,276 and a metropolitan population of more than 1,000,000 people...
and La Paz
La Paz
Nuestra Señora de La Paz is the administrative capital of Bolivia, as well as the departmental capital of the La Paz Department, and the second largest city in the country after Santa Cruz de la Sierra...
, Bolivia. Private and mixed companies, however, continue to provide services in many cities of Colombia, in most of Chile, some Brazilian cities, and in Guayaquil
Guayaquil
Guayaquil , officially Santiago de Guayaquil , is the largest and the most populous city in Ecuador,with about 2.3 million inhabitants in the city and nearly 3.1 million in the metropolitan area, as well as that nation's main port...
, Ecuador.
In rural areas, the provision of water services is usually the responsibility of community organization
Community organization
Community organizations are civil society non-profits that operate within a single local community. They are essentially a subset of the wider group of nonprofits. Like other nonprofits they are often run on a voluntary basis and are self funded...
s (Juntas de Agua). While the infrastructure is funded primarily by transfers from the national governments, typically community labor and sometimes cash contributions are mobilized. When communities are associated in the choice of service level and other key choices, this instills a sense of ownership that makes it more likely that communities will maintain the infrastructure.
Policy and regulation
Water supply and sanitation in Chile
Water supply and sanitation in Chile is characterized by high levels of access and good service quality. Compared to most other countries, Chile's water and sanitation sector distinguishes itself by the fact that all urban water companies are privately owned or operated...
, Colombia
Water supply and sanitation in Colombia
Water supply and sanitation in Colombia has been improved in many ways over the past decades. Between 1990 and 2004, access to sanitation increased from 82% to 86%, but access to water increased only slightly from 92% to 93%.. In particular, coverage in rural areas lags behind. Furthermore, despite...
and Peru) or at the state level (as in Argentina
Water supply and sanitation in Argentina
Water supply and sanitation in Argentina is characterized by relatively low tariffs, mostly reasonable service quality, low levels of metering and high levels of consumption for those with access to services. At the same time, according to the WHO, 21% of the total population remains without access...
and in some states of Mexico
Water supply and sanitation in Mexico
Water supply and sanitation in Mexico is characterized by achievements and challenges. Among the achievements is a significant increase in access to piped water supply in urban areas as well as in rural areas between 1990 and 2006; a strong nationwide increase in access to improved sanitation ...
). Their functions vary and may include tariff approvals, monitoring of service quality and handling of complaints. Environmental regulation is entrusted to environmental agencies and the regulation of drinking water quality to Ministries of Health.
Supporting community organizations
Supporting the numerous community organizations that provide water and sanitation services in Latin America - mainly in rural areas - is a key public function that is often underestimated and neglected. Responsibility for this function, if it is defined at all, can be assigned to a government Ministry and its regional branches, a Social Fund or municipalities. Often NGOs also carry out this function, either on their own initiative and with their own resources, or under contract by the government.In Honduras
Water supply and sanitation in Honduras
Water supply and sanitation coverage in Honduras has increased significantly in the last decades. However, the sector is still characterized by poor service quality and poor efficiency in many places. Coverage gaps still remain, particularly in rural areas....
support to community organizations (Juntas de Agua) is entrusted to the Social Fund FHIS, in cooperation with a national agency for technical assistance in water and sanitation (SANAA). In El Salvador
Water supply and sanitation in El Salvador
Access to water supply and sanitation in El Salvador remains low, despite recent increases in coverage, which leads to negative impacts on productivity and health in particular of the rural poor. Water resources are heavily polluted and the great majority of wastewater is discharged without any...
it is done by the Social Fund FISDL and various NGOs. In Peru it is carried out through NGOs and municipalities with the support of a national program (PRONASAR) implemented by the Ministry of Housing. In Paraguay it is the responsibility of a national agency in charge of promoting specifically water supply and sanitation in rural areas and small towns (SENASA). In Ecuador
Water supply and sanitation in Ecuador
Water supply and sanitation in Ecuador is characterized by a number of achievements and challenges. One key achievement is a significant increase in both access to an improved water source and adequate sanitation...
it is carried out under a national program (PRAGUAS) by consultants working for the Ministry of Housing. In Panama such support is provided by the Ministry of Health. In Haiti
Water supply and sanitation in Haiti
Haiti faces key challenges in the water supply and sanitation sector:Notably, access to public services is very low, their quality is inadequate and public institutions remain very weak despite foreign aid and the government's declared intent to strengthen the sector's institutions...
such support is provided by NGOs, some of which are under contract with the national urban water agency SNEP and its specialized unit for rural areas. There thus is a wide variety of institutional arrangements to support community organizations, so that one cannot speak of a uniform model for such support in Latin America.
Tariffs
According to a 2006 World Bank study average water tariffs in Latin America are the highest of any region of the developing world. Tariffs are about four times higher than in South Asia, three times higher than in Eastern Europe and Central Asia and almost twice as high as in East Asia. However, tariffs are less than half as high as in OECDOrganisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
countries. Based on a sample of 23 major cities in Latin America the average residential water tariff for a monthly consumption of 15 cubic meter was US$0.41, equivalent to a monthly bill of only about US$6.
Cost recovery
It appears that most utilities in Latin America recover more than their operating costs and thus generate surpluses to self-finance a portion of their investments. The average recovery coefficient of operating costs among a sample of 48 private and public utilities from 8 countries was 1.64. The highest coefficients of more than 2 can be found in utilities in ChileWater supply and sanitation in Chile
Water supply and sanitation in Chile is characterized by high levels of access and good service quality. Compared to most other countries, Chile's water and sanitation sector distinguishes itself by the fact that all urban water companies are privately owned or operated...
, as well as in Pereira
Pereira, Colombia
Pereira is the capital city of the Colombian department of Risaralda. It stands in the center of the western region of the country, located in a small valley that descends from a part of the western Andes mountain chain. Its strategic location in the coffee producing area makes the city an urban...
and Manizales
Manizales
Manizales is a city and municipality in central Colombia, capital of Department of Caldas and part of the region of Colombian Coffee-Growers Axis, near the Nevado del Ruiz volcano....
in Colombia
Water supply and sanitation in Colombia
Water supply and sanitation in Colombia has been improved in many ways over the past decades. Between 1990 and 2004, access to sanitation increased from 82% to 86%, but access to water increased only slightly from 92% to 93%.. In particular, coverage in rural areas lags behind. Furthermore, despite...
.
Despite the ostensibly high levels of tariffs and cost recovery estimated based on the sample of utilities analyzed, utilities do not generate sufficient revenue to finance a substantial share of their investments internally, or to be credit-worthy enough to mobilize commercial, long-term credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
. The reasons include low levels of operational efficiency, as detailed further below, poor recovery of bills, poor procurement
Procurement
Procurement is the acquisition of goods or services. It is favourable that the goods/services are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location...
practices and political corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
.
Affordability
There are few studies on the affordability of water and sewer bills in Latin America. The Pan-American Health Organization (PAHO) analyzed multi-purpose household surveys conducted between 1995 and 1999 in 10 countries to assess the share of household income spent on water supply services. These data show that the expenditures on water vary between 0.4% of total expenditures in rural Panama to 3.0% in Kingston, JamaicaKingston, Jamaica
Kingston is the capital and largest city of Jamaica, located on the southeastern coast of the island. It faces a natural harbour protected by the Palisadoes, a long sand spit which connects the town of Port Royal and the Norman Manley International Airport to the rest of the island...
. For the households in the poorest income decile
Decile
* In descriptive statistics, any of the nine values that divide the sorted data into ten equal parts, so that each part represents 1/10 of the sample or population* In astrology, an aspect of 36 degrees-See also:*Percentile*Quantile*Quartile*Summary statistics...
expenditures on water are higher, varying from 0.6% in rural Panama to 6.5% in Kingston, Jamaica. However, these figures have to be interpreted with caution. First, it is not clear how water expenditures were defined in the surveys. It seems that in some cases expenditures to buy bottled water and water from tankers were included, while in other cases they were excluded. Second, the sample includes both households with and without access to piped water systems. Therefore, especially in rural areas where coverage tends to be low, the shares are only a poor indication on the affordability of water bills. Third, it is not explicit if sewer bills are included in the analysis, although this is most likely the case, since sewer bills are always a surcharge on the water bill and are thus perceived by most households as part of their water expenditures.
Investment
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
in the 1990s. A large share of these investments is needed to maintain and rehabilitate existing infrastructure. However, the World Bank has estimated that the investments needed to increase access to achieve the Millennium Development Goals (MDGs) in water and sanitation in Latin America by itself is 0.12% of GDP, not taking into account maintenance and rehabilitation. It can thus be concluded that, on average, a significant increase in investments is needed to achieve the MDGs.
Financing
The modalities of financing water and sanitation infrastructure differ substantially between countries. Some countries that have reached higher levels of cost recovery, such as ChileWater supply and sanitation in Chile
Water supply and sanitation in Chile is characterized by high levels of access and good service quality. Compared to most other countries, Chile's water and sanitation sector distinguishes itself by the fact that all urban water companies are privately owned or operated...
and some utilities in Brazil
Water supply and sanitation in Brazil
Water supply and sanitation in Brazil is characterized by both achievements and challenges. Among the achievements is an increase in access to piped water supply from 66% to 77% between 1990 and 2006; an increase in access to improved sanitation from 71% to 77% in the same period; a functioning...
and Mexico
Water supply and sanitation in Mexico
Water supply and sanitation in Mexico is characterized by achievements and challenges. Among the achievements is a significant increase in access to piped water supply in urban areas as well as in rural areas between 1990 and 2006; a strong nationwide increase in access to improved sanitation ...
, rely on commercial credit financing. However, the vast majority of utilities relies on transfers from national governments. These can take various forms: In Colombia
Water supply and sanitation in Colombia
Water supply and sanitation in Colombia has been improved in many ways over the past decades. Between 1990 and 2004, access to sanitation increased from 82% to 86%, but access to water increased only slightly from 92% to 93%.. In particular, coverage in rural areas lags behind. Furthermore, despite...
municipalities are legally entitled to receive transfers calculated through a formula based on their costs and poverty levels; in Mexico
Water supply and sanitation in Mexico
Water supply and sanitation in Mexico is characterized by achievements and challenges. Among the achievements is a significant increase in access to piped water supply in urban areas as well as in rural areas between 1990 and 2006; a strong nationwide increase in access to improved sanitation ...
municipalities can apply for matching federal grants provided they fulfill certain conditions that vary by program; in Ecuador
Water supply and sanitation in Ecuador
Water supply and sanitation in Ecuador is characterized by a number of achievements and challenges. One key achievement is a significant increase in both access to an improved water source and adequate sanitation...
municipalities receive transfers based on a formula that takes into account their choice of management model and improvements in cost recovery; and in other countries utilities simply receive transfers that can vary from one year to the other without any conditions. The level of transfers from national governments is highly variable and often far from sufficient to increase coverage and improve service quality. Some countries pass loans from international financial institutions on to utilities in the form of credits. However, these international loans only account for a relatively small share of water and sanitation financing in Latin America.
Efficiency
There are wide differences in the operational efficiency among urban water and sanitation utilities in Latin America. The two most common measures of operation efficiency are labor productivityLabor productivity
Workforce productivity is the amount of goods and services that a worker produces in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity can be measured for a firm, a process, an industry, or a country...
and non-revenue water
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 terms of labor productivity, the most productive utilities have less than 2 employees per 1000 connections. They include EPM
EPM
- Science and technology :* Electronic protective measures; see Electronic counter-countermeasures* Electropositive metal; see Electropositive shark repellent* Elevated plus maze, a rodent model of anxiety...
in Colombia, SEDAPAL in Lima
Lima
Lima is the capital and the largest city of Peru. It is located in the valleys of the Chillón, Rímac and Lurín rivers, in the central part of the country, on a desert coast overlooking the Pacific Ocean. Together with the seaport of Callao, it forms a contiguous urban area known as the Lima...
, Aguas del Valle in Chile's 4th region, as well as Aguas de Formosa
Formosa, Argentina
Formosa is the capital city of the Argentine province of Formosa, on the banks of the Paraguay River, about from Buenos Aires, on National Route 11. It has a population of about 210,000 as per the ....
and Aguas de Salta
Salta
Salta is a city in northwestern Argentina and the capital city of the Salta Province. Along with its metropolitan area, it has a population of 464,678 inhabitants as of the , making it Argentina's eighth largest city.-Overview:...
in Argentina. The utility with the lowest labor productivity in the sample is EPSEL from the Lambayeque Region
Lambayeque Region
Lambayeque is a region in northwestern Peru known for its rich Moche and Chimú historical past. The region's name originates from the ancient pre-Inca civilization of the Lambayeque.-Etymology:...
in Peru with more than 15 employees per 1000 connections. The average of the sample is about 5 employees per 1000 connections.
Concerning non-revenue water, the average of Latin American utilities in the sample considered is 40% and thus much higher than estimates of efficient levels, which vary between 15 and 25%. The highest level (73%) is registered by Interagua, the utility serving Guayaquil
Guayaquil
Guayaquil , officially Santiago de Guayaquil , is the largest and the most populous city in Ecuador,with about 2.3 million inhabitants in the city and nearly 3.1 million in the metropolitan area, as well as that nation's main port...
in Ecuador. The lowest level of any larger utility with a high share of household metering, which is a precondition to accurately measure non-revenue water
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...
, is registered in Aguas Cordillera in Chile with 20%.
Strategy to improve services
The Millennium Development Goals (MDG) aim at halving, by 2015, the proportion of people without sustainable access to safe drinking water and adequate sanitation, from a base year of 1990. According to a 2006 World Bank brief, this is achievable for some countries in Latin America and the Caribbean, while it represents a mammoth task for others. According to the World BankWorld Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
even those countries on track to achieve the MDG targets face tremendous challenges in improving service quality, in particular to attain continuity of supply and to increase wastewater treatment. To meet these challenges Latin American and Caribbean countries, according to the World Bank, would have to advance on several fronts, including:
- Improving the efficiency of service providers to allow them to generate more internal resources to cover costs and fund investment. This includes better collection of bills, reduction of administrative losses (clandestine connections, under-metering) and physical losses, better procurement practices, the use of low-cost technologies and a reduction of overstaffing.
- Increasing investments in water and sanitation from the current low level of 0.15 percent of GDP. Investment needs are estimated to exceed 0.2 percent of GDP.
- Introducing innovative mechanisms for commercial financing. This includes tapping domestic capital marketCapital marketA capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...
s where feasible and the judicious use of guarantees and guarantee facilities, while managing contingent liabilities prudently. - Targeting subsidies better and improving cost recovery. Implicit and explicit subsidies through low tariffs mostly benefit the better-off. Increasing tariffs is often a necessity. But in order to make this more equitable, such measures would have to be complemented by actions to enhance collection efficiency, reduce the incidence of illegal connections, increase the share of metered connections (see water meterWater meterA water meter is a device used to measure the volume of water usage. This article provides an overview of technical aspects of water meters. The worldwide prevalence of metering as well as its economic benefits and costs are covered in the separate article on water metering.In many developed...
s), revise tariff structures and introduce means-tested subsidies where feasible. - Expanding access to water and sanitation services, especially to the poor, while ensuring that these services are accessible, efficient, and sustainable. Low-cost technologies such as condominial sewerSanitary sewerA sanitary sewer is a separate underground carriage system specifically for transporting sewage from houses and commercial buildings to treatment or disposal. Sanitary sewers serving industrial areas also carry industrial wastewater...
s can play an important role in that respect, as can legalizing land tenureLand tenureLand tenure is the name given, particularly in common law systems, to the legal regime in which land is owned by an individual, who is said to "hold" the land . The sovereign monarch, known as The Crown, held land in its own right. All private owners are either its tenants or sub-tenants...
and finding innovative ways to provide services to those without land titles. - Improving service quality. Without continuous supply, reliably good drinking water quality, and the prevention of sewer overflows, health is endangered and especially if customer service is poor and billing complaints not resolved swiftly it is difficult to justify a higher degree of cost recovery.
- Strengthening the capacity of service providers. This is essential, especially given the high turnover of senior staff in municipal utilities as a result of frequent changes in municipal governments. It is important to make municipal service providers more autonomous, to insulate them as much as possible from political influence, and to provide training and a career path for utility employees.
- Redefining the role of the private sector in service provision. Private sector participation in water and sanitation in Latin America and the Caribbean has had mixed results. Some international operators have lost interest in the sector, sometimes citing governments’ failure to abide by contracts. However, local private operators continue to play a major role in the sector, helping to improve efficiency and service quality, especially if state supervision is adequate.
- Strengthening information systems and impact evaluations. Utilities often have only very limited information available on the quality of their services and their assets. Regulators and governments often have even less, and there are frequently only rudimentary data available on how projects and programs have influenced coverage and service quality. The strengthening of local and national information systems and impact evaluations is therefore a priority for the region.
- Improving regulatory frameworks. A regulatory framework that ensures that the interests of both the consumer and the investor are adequately represented is essential. However, experience with utility regulation (see economic regulation)in the region is sobering, given the limited autonomy and resources of many regulators, as well as the limited ability of many service providers to fulfill norms set by regulators.
Sources
- Foster, Vivien: Ten Years of Water Service Reform in Latin America: Toward an Anglo-French Model, World Bank, Water Supply and Sanitation Sector Board Discussion Paper Series No. 3, January 2005.World Bank 2005 Water
- WHO/UNICEF: Joint Monitoring Program (JMP) for Water and Sanitation at JMP
- Pan-American Health Organization (PAHO)/Division of Health and Environment: Regional Report on the 2000 Evaluation in the Americas - Drinking Water and Sanitation. Current State and Perspectives, Washington DC, 2001.PAHO 2000
- Rangel Soares, Luiz Carlos et al.: Inequities in access to and use of drinking water services in Latin America and the Caribbean, Public Health 11(5/6), 2002
- World Bank: Infrastructure in Latin America and the Caribbean. Recent Developments and Key Challenges, Washington DC, 2005. World Bank 2005 Infrastructure
Further Reading
- The World Bank, 2010. The World Bank on private water operations in rural communities
- The World Bank, 2009. The World Bank on public-private water mechanisms for urban utilities
Regional
- The World Bank on water and sanitation in Latin America World Bank
- The World Bank's Water and Sanitation Program (WSP) for Latin America WSP LAC
- The Inter-American Development Bank (IDB) on water and sanitation IDB
- WHO's Panamerican Sanitary Engineering Center - Centro Panamericano de Ingeniería Sanitaria y Ciencias del Ambiente (in Spanish)CEPIS
- WHO's 2000 Water and Sanitation Regional Evaluation: Information by Countries (in Spanish) http://www.bvsde.paho.org/eswww/eva2000/infopais.html
- PAHO's water and sanitation information system - Sistema Interamericano de Información en Saneamiento Ambiental - Componente de Agua Potable y Saneamiento (in Spanish) SISAM
- ADERASA - The regional network of water and sanitation regulators ADERASA
- The Central American water and sanitation network RRASCA
Country-specific
Information Systems- Bolivia - National Water and Sanitation Information System SIAS
- Brazil - The national water and sanitation information system SNIS
- Colombia - Public Services Information System SUI
Utilities
- Costa Rica - The national water and sewer utility Instituto Costarricense de Acueductos y Alcantarillados AyA
- El Salvador - The national water and sewer utility ANDA
- Haiti - The national water company in charge of small towns and rural areas SNEP
- Nicaragua - The national water and sewer utility ENACAL
- Panama - The national water and sewer utility IDAAN
- Uruguay - The national water and sewer utility OSE
Regulators
- Bolivia - SISAB
- Chile - SISS
- Colombia - CRA
- Honduras - ERSAPS
- Panama (multi-sector) ANSP
- Paraguay - ERSSAN
- Peru - SUNASS
Other Entities
- Honduras - The national water and sewer company in charge of providing technical assistance to municipal service providers, SANAA SANAA
- Mexico - The National Water Commission CNA
- Paraguay - The national entitiy in charge of supporting water supply and sanitation in rural areas and small towns SENASA
See also
- Micro credit for water supply and sanitationMicro credit for water supply and sanitationMicro credit for water supply and sanitation is an innovative application of micro credit to provide loans to small enterprises and households in order to increase access to an improved water source and sanitation in developing countries...
- Wastewater discharge standards in Latin AmericaWastewater discharge standards in Latin AmericaWastewater discharge standards in Latin America are made to protect water sources and maintain the quality and quantity of them. Mostly in all Latin American countries, there is a general norm that rules both drinkable water supply and wastewater discharges. Also, in most cases is specified other...
- Water managementWater managementWater management is the activity of planning, developing, distributing and managing the optimum use of water resources. In an ideal world. water management planning has regard to all the competing demands for water and seeks to allocate water on an equitable basis to satisfy all uses and demands...